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Digirad Corporation Announces Agreement to Acquire DMS Health Technologies for $36 Million in Cash

Press releases may be edited for formatting or style | October 28, 2015
SUWANEE, Ga. and FARGO, N.D., Oct. 14, 2015 (GLOBE NEWSWIRE) -- Digirad Corporation (“Digirad”) (NASDAQ:DRAD), the leader in providing healthcare solutions on an as needed, when needed, and where needed basis, today announced that it has entered into a definitive agreement to acquire all the outstanding equity of Project Rendezvous Holding Corporation, the ultimate parent company of DMS Health Technologies, Inc. (“DMS Health”), for $36 million in cash from Los Angeles-based Platinum Equity.

Headquartered in Fargo, North Dakota, DMS Health has approximately 250 employees and provides mobile diagnostic imaging and related sales and services to small and regional hospitals throughout the country, with a large concentration in the upper Midwest region.

“We believe this acquisition represents a significant milestone in Digirad’s history, and should generate considerable value for our customers and our shareholders and enhanced opportunities for the employees of both companies,” commented Matt Molchan, Digirad’s President and CEO. “The integration of DMS Health and Digirad will enable the combined company to expand its range of customers serviced as well as provide significant geographical and service level diversification. DMS Health is an ideal strategic fit for us and our commitment to providing healthcare solutions on an as needed, when needed, and where needed basis.”

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DMS Health generated over $65 million in revenues in 2014. Once the integration is complete, the Company expects, based on current information, the consolidated Digirad entity to generate pro forma annual revenue and adjusted EBITDA of over $125 million and $17 million, respectively.

“Today is an exciting day for the entire DMS Health team and for the future of our company,” said William Vogel, DMS Health’s CEO. “Digirad is an ideal fit for our company; they know the industry and our market very well, and we believe the Digirad team is uniquely suited to help us grow in the future.”

Mr. Molchan continued, “DMS Health has a significant presence in the upper Midwest, a region that is currently absent in our Diagnostic Services business map, and specializes in the provision of mobile MRI, CT, and PET/CT imaging, all modalities that we do not currently offer. Further, DMS Health has a long standing partnership with Philips Healthcare North America equipment sales and service. These are just a few of the numerous synergistic and diversification opportunities this acquisition provides to Digirad. We believe the new, combined Company will be much stronger than either company would be on its own.”

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