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2 Firms to Buy InSight Health Services

July 03, 2001|MARC BALLON | TIMES STAFF WRITER

InSight Health Services Corp., a Newport Beach diagnostic imaging company, said Monday that it has agreed to be bought for about $54 million by two private East Coast equity firms.

InSight said J.W. Childs Associates in Boston and Halifax Group in Washington, D.C., agreed to pay $18 a share in cash. The price is about 7% higher than Monday's close of $16.85 a share, which is 85 cents lower than Friday's close on Nasdaq. The stock has more than doubled in value this year.

Though it did not say whether any jobs will be lost, the company noted that senior management, including President and Chief Executive Steven T. Plochocki, will continue to manage operations at the company's current site.

InSight, formed by the June 1996 merger of American Health Services Corp. and Maxum Health Corp., has 1,500 employees and operates 150 fixed and mobile imaging centers in 30 states.

InSight is benefiting from the growing popularity of imaging services, a market generating about $90 billion in revenue a year and growing at a double-digit rate. The growing number of older Americans and falling prices for procedures have increased the use of magnetic resonance imaging and computerized axial tomography, known more commonly as MRI and CAT scans, respectively.

With financial support from the new owners, InSight will be able to increase its purchases of imaging centers, said Thomas V. Croal, its chief financial officer.

The company hired a financial advisor in February to help explore a possible sale or merger. Carlyle Group Inc., a Washington buyout company, and its affiliates, General Electric Co. and GE Fund, own about 67% of InSight's shares and have agreed to vote for the transaction, InSight said.

The company almost changed hands in mid-1999 when Carlyle and another investor group offered $10 a share for the remaining stock. The bid was withdrawn after a group of shareholders filed suit, claiming the price was too low.

The deal is expected to close in late September or early October, InSight said.

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Bloomberg News was used in compiling this report.

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