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Brendon Nafziger, DOTmed News Associate Editor | November 04, 2011
Oxford Instruments plc. said Friday it would buy Platinum Medical Imaging LLC., a U.S. MRI and CT parts and service firm, for up to $55 million.
The deal calls for an initial $18 million debt-free, cash-free consideration with deferred payments of up to $37 million over the next three years, depending on Platinum's performance.
The purchase, from Platinum's management, will be funded by existing facilities and should be enhancing to earnings per share this year, Oxford said.
Oxford is a high-tech tool business, headquartered in Abingdon, UK, which also runs its own MRI service segment in North America and Japan. The company said it was interested in Platinum, which has 33 employees and is based in Deerfield Beach, Fla. and Vacaville, Calif., because the U.S. third-party service market is growing, in part as imaging facilities face pressures to cut costs due to health care reforms.
The Platinum buy is also Oxford's first in its service sector, and fits with the firm's goal of 14 percent compound annual revenue growth and 14 percent return on sales over the next three years, the company said.
"OI has wanted to grow in service for some time now, so this is a perfect fit, perfect timing," Thomas Freund, general manager with Oxford Instruments Service in Woodbridge, N.J., told DOTmed News.
All told, Oxford's American MRI business will now have about 60 employees, he said.
"MRI service is the cornerstone of our service sector and with Platinum, our position is substantially strengthened in the U.S. market," Jonathan Flint, Oxford's CEO, said in a statement.
Last year, Platinum had sales of $14.1 million and an operating profit (after excluding non-recurring items) of $2.3 million, Oxford said. It also held gross assets of $3.6 million.
