Primary Healthcare’s strategy is unclear, but it appears that they’ve approached just about every independent Diagnostic Imaging practice/group in Sydney with offers to buy their businesses. By my count, five have accepted so far, which means that my market has shrunk accordingly, because Primary and the other corporates either fund their Medical Imaging Equipment from cash flow or with finance from longstanding relationships with one of the big banks.
Having purchased Symbion a while back, Primary has lost so many Radiologists that they now appear to be having trouble covering a declining workload. So, the main objective of the current round of acquisitions could be to secure long-term (3-5 years) contracts with additional Radiologists and Nuclear Medicine Physicians. There’s also speculation that Primary may be ‘bulking up’ with the intent of spinning off their Medical Imaging division in a public float.
The Medical Imaging Market went through a major consolidation phase starting in the late 90s and has since diversified with new independents steadily setting up shop. This new round of consolidation won’t last very long, giving way to new independent competition, which means that my market will grow again.