In a sign that the teleradiology market is heating up, Mednax Inc., a publicly traded provider of pediatric subspecialty and anesthesia physician services, announced it is purchasing Virtual Radiologic (vRad), a teleradiology services company, in a cash deal valued at $500 million.
Sunrise, Fla.-based Mednax is a national medical group comprised of neonatal, anesthesia, maternal-fetal and pediatric physician subspecialty service providers. Its Pediatrix Medical Group division includes neonatal physicians who provide services at more than 370 neonatal intensive care units. Mednax’s anesthesiology division includes more than 2,400 anesthesiologists.
An outsourced radiology physician services and telemedicine company with 350 physicians, vRad interprets more than 5 million patient studies annually—and processes over 1.2 billion images on its teleradiology PACS—for its 2,100 client hospital, health system and radiology group facilities.
In a written explanation of the impetus behind the acquisition, Mednax CEO Roger Medel, M.D., said, “We believe vRad is an excellent platform for growth in teleradiology and the broader telemedicine market. Radiology is a large, fragmented industry with total revenue of roughly $18 billion, and it is evolving rapidly to include teleradiology as an economic and clinical necessity for customers.”
In a press release, the companies said vRad’s current management team, including CEO Jim Burke, would join Mednax as part of the transaction, and vRad’s headquarters and 24/7 operations and client support center would continue to be based in Eden Prairie, Minn.
A story in the Minneapolis/St. Paul Business Journal noted that vRad completed an initial public offering in 2007 and then went private in 2010 following its sale to Providence Equity Partners for $294 million.
The South Florida Business Journal reported that Mednax spent $490 million on acquisitions in 2014, buying eight anesthesiology practices, three pediatrics practices, a medical billing company and a consulting firm.