Diagnostic Health to buy DIS centers

Imaging services provider Diagnostic Health Services of Dallasannounced last week that it has signed an agreement to buy fourhospital-based MRI operations run by Diagnostic Imaging Servicesof Los Angeles. DHS also announced that it has acquired UltrasoundDiagnostic Services, a Phoenix-based provider of ultrasound services.

Diagnostic Imaging Services is owned by Primedex Health Systems,which also operates imaging center chain RadNet and managed-serviceorganization Future Diagnostics. Primedex said in September thatit was "exploring strategic options" for the company,and the Diagnostic Health sale apparently fits that intention(SCAN 10/9/96).

The four MRI operations that Diagnostic Health is buying arebased in southern California and are situated on the grounds ofhospitals, which fits the business model that DHS follows, accordingto chairman and CEO Max Batzer.

"We are not in the freestanding center market,"Batzer said. "Our model is department management. This givesus a chance to enter the department through MRI rather than throughour traditional power alleys of ultrasound and nuclear medicine."

The California operations will also complement Diagnostic Health'sactivity in Nevada and Arizona, the company said. The DIS andUDI acquisitions are expected to add $12 million in annual revenuesto DHS. The UDI deal is complete, while the DIS purchase is expectedto close by March 31. DHS paid $1.1 million in cash and stockfor UDI, but terms of the DIS deal were not disclosed.

Primedex executives declined to comment on whether they willcontinue to divest parts of their company.