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SUWANEE, Ga., March 14, 2014 (GLOBE NEWSWIRE) -- Digirad Corporation (Nasdaq:DRAD), the leader in providing diagnostic imaging services and technology on an as needed, where needed, and when needed basis, announced today that it has acquired all the outstanding membership interest of Telerhythmics, LLC, a 24-hour cardiac event monitoring service used on an outsourced basis by hospitals and physician offices. Based in Memphis, Tennessee, privately-held Telerhythmics provides its monitoring services throughout the eastern region of the U.S.
Total up front consideration for the purchase was approximately $3.6 million, which included a $3.47 million cash payment up front and assumption of approximately $131,000 in debt. In addition, there is an earn-out opportunity of up to $501,000 over approximately three years based on meeting certain EBITDA targets. Telerhythmics will continue to operate from its current facility in Memphis. Further information is contained in a Form 8-K filed today with the U.S. Securities and Exchange Commission.
Digirad President and CEO Matthew G. Molchan commented, "Telerhythmics, like Digirad's DIS operations, is a platform business that can support additional services, and cardiac event monitoring is an important outsourced service. Telerhythmics is also a solid, entrenched enterprise with nearly 20 years in the business and has a high quality reputation in the industry."
Telerhythmics generated approximately $5.6 million in revenue in 2013. Once Telerhythmics goes through a short integration period, it is expected to be accretive on an EBITDA basis. Under Digirad's ownership and at the 2013 level of annual revenue, it is expected the business will generate approximately $350,000 of EBITDA in the first twelve months, and then approximately $800,000 of EBITDA annually thereafter.
Molchan continued, "The addition of Telerhythmics fits squarely in our business model and our mission to provide medical services and technology on an as needed, where needed and when needed basis. Its target market is virtually the same as our target market with DIS, and acquiring Telerhythmics allows us to drive additional services via our existing channels and expand and diversify our business operations, allowing us more opportunities to grow and broaden our geographic reach."