Digirad Shares Up on Plan to Sell Mobile Medical-Imaging Unit

Digirad will sell DMS Health Technologies, a provider of mobile medical-imaging services, for $18.8 million.
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Digirad (DRAD) - Get Report said on Tuesday that it would sell its DMS Health Technologies unit, a provider of mobile medical-imaging services, for $18.8 million.

A statement from the Suwanee, Ga., holding company didn't identify the buyer. 

Digirad has businesses in health care, building and construction, and real estate and investments. 

DMS Health provides diagnostic imaging including computerized tomography and magnetic resonance imaging, nuclear medicine, and healthcare expertise through a mobile service. In 2019, DMS Health generated $41.3 million of revenue.

The deal is expected to close in January subject to customary closing conditions, the company said in a statement.

Digirad said it would use the proceeds from the sale to pay down debt and finance its growth strategy.

Divesting the unit will enable the company's health-care division to focus on selling and servicing its Digirad branded solid-state imaging cameras and providing on-site imaging services to hospitals and physicians nationwide, Chief Executive Matt Molchan said in the statement.

DMS Health in 2019 generated about 40% of the health-care division's revenue.

The sale improves the balance sheet and enables the company to fund high-return investments into its current businesses, Chairman Jeff Eberwein said.

The funds also enable Digirad to pursue acquisitions, in health care, building and construction, or a new sector, Eberwein said. 

In August, Digirad reported a second-quarter net loss of 58 cents a share against a loss of 59 cents in the year-earlier quarter. Shares outstanding rose 49% to 3 million. Revenue fell 13% to $22.3 million.

At last check Digirad shares were 14% higher at $2.90.