RadNet to acquire ONRAD in $350 million cash and stock deal

RadNet, Inc. (NASDAQ: RDNT) has entered into a definitive agreement to acquire ONRAD, Inc., a move that will create a new operating segment for the imaging company. The transaction combines RadNet's outpatient operations and AI technology with ONRAD's hospital-based radiology staffing services.

Under the terms of the agreement, ONRAD shareholders will receive $350 million in cash and 5 million shares of RadNet common stock upon closing. An additional earnout of up to $210 million is payable if target EBITDA levels are achieved in 2027, with RadNet holding the election to pay this amount in cash, stock, or a combination of both. The deal is expected to close in early 2027, subject to customary regulatory review and closing conditions.

ONRAD provides teleradiology and in-hospital professional radiology staffing services to hospitals and health systems through a network of more than 130 contracted radiologists. The company supports more than 225 hospital facilities across 26 states. RadNet projects that ONRAD will contribute between $190 million and $200 million in revenue and between $60 million and $65 million in Adjusted EBITDA during its first year of operation after the acquisition closes.

Upon completion, ONRAD will become the foundation for RadNet's third reportable operating segment, Radiology Professional Services. This addition allows RadNet to address the full range of care settings where imaging is performed, including hospitals, freestanding ambulatory outpatient centers, physician offices, and standalone urgent care and emergency department facilities. The company stated that hospitals and health systems account for more than 50% of U.S. diagnostic imaging volume, a market segment where RadNet previously had limited direct presence.

Dr. Howard Berger, President and CEO of RadNet, described the acquisition as a step toward building an imaging company with comprehensive solutions. He noted that connecting RadNet's AI-enabled digital health technology with ONRAD's professional staffing capabilities unites the necessary elements to address the entire continuum of diagnostic imaging. Dave Engert, President and CEO of ONRAD, said joining RadNet provides the scale and resources to meet growing customer needs while offering an imaging model that spans from outpatient centers to acute care environments.

The strategic rationale for the deal includes addressing a gap in the U.S. market where imaging demand growth is outpacing the supply of trained radiologists. ONRAD has demonstrated consistent annual revenue growth between 10% and 20% over recent years, with Adjusted EBITDA margins exceeding 30%. RadNet believes the platform is capital-light and will require minimal investment to maintain organic growth.

Robert W. Baird & Co. served as the exclusive financial advisor to ONRAD, which is a portfolio company of Housatonic Partners. RadNet plans to host a conference call and webcast on Tuesday, October 27, at 8:00 a.m. Eastern Time to discuss the transaction in further detail.