A Diagnostics & Imaging Week

RadNet Management (Los Angeles) was provided a $405 million senior secured security by GE Healthcare Financial Services to finance the acquisition of Radiologix (Dallas) by Primedex Health Systems (Los Angeles).

The acquisition, first disclosed in July, creates the largest owner and operator of fixed diagnostic imaging centers in the U.S.

The financing, which consists of $270 million in first lien facilities and a $135 million second lien loan, funded a portion of the cash purchase of Radiologix, refinanced existing debt and provides liquidity for working capital and other general corporate purposes.

Primedex reported stockholders have approved the company's acquisition of Radiologix. Primedex will acquire Radiologix in a cash and stock transaction valued at about $211 million, net of debt. The deal was first disclosed in July. Radiologix shareholders received an aggregate consideration of 22,621,922 shares of Primedex common stock and $42.95 million in cash. Based upon Primedex's closing share price on Nov. 14, 2006, each Radiologix shareholder received $1.79 in cash for each Radiologix share, plus one share of Primedex common stock for a total consideration of $4.59. With 134 locations throughout the U.S., the combined company will be the largest owner and operator of fixedsite diagnostic imaging centers in the country.

After the acquisition, Primedex will have 83 centers in California, 31 centers in Maryland, 12 centers in New York and eight centers in other states, including Florida, Kansas, Colorado and Minnesota. The acquisition of Radiologix, a national provider of imaging services, allows Primedex to expand its presence in California, and gives the company a concentrated platform outside of California that it plans to optimize and grow. Primedex will use the acquisition to further its strategies of geographic clustering, exclusive capitation contracting and multi-modality product offerings, which it will now be able to pursue on a national scale.

"Despite this transaction, which creates the largest operator of fixed imaging centers, the $100 billion diagnostic imaging landscape remains highly fragmented and full of further opportunity," said Howard Berger, president/CEO of Primedex. "I believe this acquisition positions us in the near future to capitalize on the dynamic changes I foresee in our industry in the years to come."

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RadNet, a GE customer for more than two decades, most recently tapped GE in March 2006 for a $161 million recapitalization of the company. That strategic transaction helped set the stage for the Radiologix acquisition.

The acquisition of Radiologix, a national provider of imaging services, allows the company to expand its presence in California, and gives the company a concentrated platform outside of California that it plans to optimize and grow. RadNet will use the acquisition to further its strategies of geographic clustering, exclusive capitation contracting and multi-modality product offerings, which it will now be able to pursue on a national scale.

In other dealmaking news:

Reflect Scientific (RSI; Orem, Utah) should have a full platter of acquisitions to feast on by the time this year's Thanksgiving dinner bell rings.

Reflect has signed an agreement to acquire Image Labs International (Bozeman, Montana), its fourth acquisition of the year, Michael Dancy, a spokesman for the company told Diagnostics & ImagiWeek.

The company has agreed to pay $1 million before Dec. 31, unless otherwise agreed to by the parties, for development of the Image Labs business.

No other financial terms were disclosed.

Reflect reported its intentions to acquire Image Labs in September. Dancy said Image Labs is projected to rake in up to $5.1 million in revenue for Reflect in 2007.

Reflect will employ Brian Smithgall, president of Image Labs, for an initial three-year term. It also will employ another person associated with a business segment of Image Labs.

Kim Boyce, CEO of Reflect, said the acquisition "complements our analytical tools business including additional automation engineering. Our management team feels this acquisition will add significantly to the production of our Cryometrix products, which has demonstrated tremendous opportunity for our company's growth."

On the heels of that deal, Reflect also signed the final merger agreement to acquire All Temp Engineering (ATE; San Jose, California), which it first reported it intended to buy in August.

ATE will be integrated with Reflect's Cryometrix business unit, and the company said that the addition of ATE staff is "integral to RSI's growth plans."

"The ATE staff provides Engineering, Sales and Service for existing ULT freezer systems and have a unique opportunity to engage customers and inform them of the recent ULT freezer system advances made by Cryometrix," said John Hammerman, Cryometrix general manager. "We feel this acquisition will expedite the sale of freezers developed by the Cryometrix business unit which manufactures ULT freezers that demonstrate significant improvements and customer benefits over mechanical freezers currently in service."

ATE has been providing engineered solutions and services to the cryogenics industry for more than 23 years.

Reflect reported the acquisition of another California company, Cryomastor, earlier this year.

Cryomastor develops ultra-low temperature freezers for the biotech, life science, hospitals, military, research and disease control industries.

The cost of one freezer starts at $80,000, and it is not uncommon for a company to have several thousand units, Dancy said. He said ATE is the service arm of Cryomastor.

That deal followed the company's acquisition of JMST Systems (Colorado Springs, Colorado) in April, an OEM making chemical detection instruments used in the pharma, biotech and homeland security markets.

Reflect said it began eyeing the acquisitions last year after completing its reorganization as a public company, putting it in position to target an acquisition strategy and leverage equity funding to "take advantage of the numerous biotechnologies available to the company."

Reflect has been in business for nearly 14 years, Dancy said, supplying the "stuff you would see in a CSI lab."

"They have built a pretty significant customer base and good relationships wih the universities," Dancy said. "They went public to acquire these companies and make their technologies available to their customers and create some more synergies."

• Sentigen Holding (Philipsburg, New Jersey) said its stockholders approved the adoption of the agreement and plan of merger with life sciences company Invitrogen (Carlsbad, California).

The transaction, which is valued at $3.37 a share, or about $25.9 million for all shares currently issued and outstanding, was approved by more than 50% of the shares outstanding.

Sentigen said the merger with Invitrogen will be completed within the next several weeks.

Invitrogen said Sentigen's Tango Assay System and division-arrested Assay Ready Cells will bolster its position in assay development by providing a new approach to screen G-protein coupled receptors and other key drug target classes, as well as providing a methodology to convert live cell assays into ready-to-use consumable products. Sentigen will become a part of Invitrogen's Discovery Sciences business (Madison, Wisconsin).