RadNet to buy teleradiology staffer ONRAD for $350Mn plus stock
- RadNet will pay $350 million in cash plus 5 million RadNet shares for ONRAD.
- An earnout of up to $210 million is tied to ONRAD’s 2027 EBITDA target.
- ONRAD has more than 130 contracted radiologists serving over 225 hospital facilities.
- The deal is expected to close in early 2027.
CALIFORNIA, UNITED STATES — RadNet, an outpatient diagnostic imaging provider, has agreed to acquire ONRAD, a teleradiology and in-hospital radiology staffing company, for $350 million in cash and 5 million RadNet shares.
ONRAD shareholders can receive up to $210 million more through an earnout tied to a 2027 earnings target. ONRAD serves hospitals and health systems through more than 130 contracted radiologists.
A third business line for RadNet
RadNet announced the definitive agreement in a press release on Oct. 26. The deal is expected to close in early 2027, subject to customary regulatory review and closing conditions.
On closing, ONRAD will become the foundation of a new reportable segment, Radiology Professional Services, alongside RadNet’s imaging centers and its DeepHealth digital health tools, which use artificial intelligence (AI).
ONRAD supports more than 225 hospital facilities across 26 states. RadNet expects it to add $190 million to $200 million of revenue and $60 million to $65 million of adjusted EBITDA in its first year after closing.
“This is the next step in building an imaging company with comprehensive solutions that brings technology, radiology professional services and imaging operations together to address some of healthcare’s most pressing challenges and needs,” said Howard Berger, president and chief executive officer of RadNet.
Moving into hospital radiology
Hospitals and health systems account for more than 50% of U.S. diagnostic imaging volume, according to RadNet. The company said U.S. imaging demand growth is outpacing the supply of trained radiologists.
ONRAD has grown revenue by 10% to 20% a year over the last several years, with adjusted EBITDA margins above 30%, RadNet said.
The earnout is payable in cash, RadNet common stock or a combination of both, at RadNet’s election.
ONRAD is a portfolio company of Housatonic Partners. Robert W. Baird & Co. is serving as its exclusive financial advisor.
“For 20 years, ONRAD has built long-standing relationships with hospitals and health systems delivering reliable, high-quality radiology coverage,” said Dave Engert, president and chief executive officer of ONRAD.
What it means for buyers
For hospitals that send radiology reads to outside readers, the deal puts a teleradiology provider inside a company that also runs imaging centers and sells AI tools.
Health systems weighing healthcare outsourcing for imaging coverage can ask how telehealth reads will be prioritized after closing.
They can also compare providers on OA’s list of the top healthcare outsourcing companies in the United States.
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