A Diagnostics & Imaging Week

RadNet (Los Angeles), a national provider of diagnostic imaging services through a network of fully-owned and operated outpatient imaging centers, reported that GE Healthcare Financial Services has agreed to arrange for RadNet a $445 million senior secured credit facility.

The credit facility includes a $45 million revolving line of credit, expected to be largely unfunded at the closing of the refinancing, and a $400 million term loan.

The credit facility is intended to refinance substantially all of RadNet’s existing indebtedness and will provide liquidity and working capital for future expansion.

Mark Stolper, RadNet’s CFO, said that the refinancing is expected to result in annual interest cost savings of about $5.4 million. The financing is intended to be concluded in August.

RadNet has a network of 132 owned and operated outpatient imaging centers. Its core geographical markets include California, Maryland and New York.

SonoSite (Bothell, Washington), a maker of hand-carried ultrasound devices, reported its intention to offer, subject to market and other conditions, $150 million aggregate principal amount of convertible senior notes due 2014.

In certain circumstances, the notes will be convertible into cash up to the principal amount. Any conversion value above the principal amount will be settled in shares of SonoSite’s common stock. The interest rate, conversion rate and other terms of the notes will be determined by negotiations between SonoSite and the underwriters of the notes.

The company expects to grant to the underwriters a 30-day option to purchase up to $22.5 million aggregate principal amount of additional notes to cover any over-allotments.

The company said it intends to use the net proceeds from this offering to fund acquisitions from time to time of one or more complementary businesses or product lines. Any net proceeds that are not used for acquisitions will be used for general corporate purposes, which may include repayment of debt, capital expenditures, investments in its subsidiaries or as additions to working capital. Net proceeds may be temporarily invested prior to use.

In connection with the offering, SonoSite said it may use a portion of the proceeds of the offering to enter into a convertible note hedge transaction with an affiliate of one of the underwriters, which would cover about 67% of any notes converted, and would be intended to reduce the potential dilution to SonoSite’s common stockholders upon any such conversion. The company may also enter into a warrant transaction with the option counterparty concurrently with the convertible note hedge transaction.

JPMorgan is the sole book running manager for the offering, and Piper Jaffray and Savvian are serving as co-managers for the offering.

In other financing news:

• TheraGenetics (London), a personalized medicine diagnostics company focused on central nervous system disorders, reported the completion of a $6 million ( 3 million) Series A venture financing round.

Swarraton Partners led the financing with participation from Tudor Capital, IP Venture Fund, IP Group’s venture capital fund, which was raised in partnership with the European Investment Fund, and existing investor IP Group.

As part of the transaction, Stephen Brooke, managing partner of Swarraton Partners, joined TheraGenetics’ board.

TheraGenetics is developing a portfolio of pharmacogenetic diagnostic tests.

• Image Technology Laboratories (ITL; Kingston, New York) reported that it has concluded $650,000 in debt financing.

“This financing will enable the company to move forward with a focus on expanding our sales and marketing efforts, as well as enhancing our technical support infrastructure,” said Lewis Edwards, CTO and chairman.

ITL is a medical image and information management company in the healthcare IT market. The company has developed a single database “Radiology Information System/Picture Archive and Communication System,” known as RIS/PACS, for managing patient information and medical images by hospitals and diagnostic imaging centers.

• Johnson & Johnson (J&J; New Brunswick, New Jersey) reported that its board has approved a share repurchase program, authorizing the company to purchase up to $10 billion of the corporation’s shares of common stock. The company currently has about 2.9 billion outstanding shares.

The company said it will finance the buyback plan with available cash and debt, and expects to retain its triple-A credit rating.

J&J can ultimately buy back about 5.5% of its outstanding stock at the current price level. As of March 31, the company had just over $5 billion in cash.

“This share repurchase program is consistent with our strategy of providing value to our shareholders while maintaining flexibility to continue to invest in future growth opportunities,” said William Weldon, CEO and chairman.

Share repurchases will take place on the open market based on market conditions. The program has no time limit and may be suspended for periods or discontinued at any time. Any shares acquired will be available for general corporate purposes.

J&J said it will discuss the repurchase plan during its 2Q earnings conference call July 17.

Debt rating agency Standard & Poor’s Ratings Services said its “AAA/Stable” ratings on the healthcare company isn’t affected by the buyback program. It said that although J&J will likely use debt financing for most, if not all, of the share repurchases, the agency expects financial measures will remain consistent with the superior rating.

S&P surmised that “an anticipated weakening in operating performance, driven mainly by the pending loss of market exclusivity for significant products while replacements are either new to the market or still finishing development, is a factor leading to management’s decision to embark on this largest-ever repurchase program.”