Alliance Healthcare Services Establishes Partnership with The Pain Center of Arizona
Alliance HealthCare Services, Inc. (NASDAQ:AIQ) , a leading national provider of radiology and radiation oncology services, today announced a new partnership with The Pain Center of Arizona, PC (TPC), Arizona’s center of excellence for the diagnosis and treatment of people with chronic pain disorders with 12 locations statewide. TPC’s affiliated billing and collection company is also part of the transaction. The deal is expected to be immediately accretive to earnings. Alliance acquired a 59% ownership stake for approximately $27 million in cash and its proportion of assumed debt of approximately $2.9 million at close, with future earn out payments due if TPC meets certain milestones. For the last twelve-month period ending October 31, 2014, consolidated revenue of TPC totaled approximately $30 million.
After the initial investment, Alliance will own a majority of the entity, while TPC’s current physician partners, including founder and CEO, Dr. Steven Siwek, will hold the remaining interests. Through this partnership, Alliance is executing against its goal of launching a new growth division focused on providing interventional therapeutic care, and TPC physicians are achieving their goal of aligning with an operating and capital partner to expand their clinical vision on a national scale.
Tom Tomlinson, Chief Executive Officer and President of Alliance HealthCare Services, stated: “This partnership advances our strategy of expanding into adjacent segments of healthcare services. Interventional pain management is the largest segment within the interventional therapeutic services space and is a natural complement to our diagnostic radiology business. TPC has an industry-leading reputation for excellence and a strong management team that will form the nucleus of this new, high growth division within Alliance. We look forward to expanding the business with the TPC team and will share more information regarding this exciting strategic growth driver on our upcoming year-end 2014 earnings call in March 2015.”
With a national reputation for excellence, TPC is a leading provider of interventional pain management services throughout Arizona, with 12 locations statewide. Having developed a unique, comprehensive and multidisciplinary approach to pain management, TPC offers the most advanced pain management solutions and therapeutic procedures. And, through their partnership with HOPE Research Institute, TPC is focused on groundbreaking research aimed at finding new solutions to relieve pain.
Dr. Steven Siwek, CEO of TPC, commented: “We are excited to be joining the Alliance team. As we evaluated our strategy to continue expansion of our clinical vision, it was clear that Alliance was the right partner. Their combination of national scale, deep relationships with providers and hospitals, and operating expertise made the choice for TPC very clear. We believe the partnership we are creating will improve care to patients by advancing the way in which pain management is accessed and delivered nationwide.”
Already an industry-leading provider of diagnostic radiology and radiation oncology services across the nation, Alliance will report TPC-related revenue and expenses as part of its newly formed Interventional Division. As an adjacent service line, Alliance’s dedicated business development efforts in the interventional space over the last several months have built a strong pipeline of growth opportunities-a number of which are with existing hospital customers where Alliance is currently providing diagnostic radiology services. The investment into and partnership with TPC, combined with the organic growth and planned expansion of Alliance’s Interventional Division, will position Alliance to meet the current and future demand for interventional radiology and pain management services across the nation.
About Alliance HealthCare Services
Alliance HealthCare Services (NASDAQ:AIQ) is a leading national provider of outsourced healthcare services with a 30+year track record of award-winning patient care/satisfaction and service line expertise. Providing diagnostic radiology services through its Radiology Division (Alliance HealthCare Radiology), interventional radiology & pain management services through its Interventional Services Division (Alliance HealthCare Interventional Services) and radiation oncology services through its Oncology Division (Alliance Oncology), Alliance is the nation’s largest provider of advanced diagnostic mobile imaging services, an industry-leading operator of fixed-site imaging centers, and a leading provider of stereotactic radiosurgery nationwide. As of September 30, 2014, Alliance operated 495 diagnostic imaging and radiation therapy systems, including 122 fixed-site imaging centers across the country; and 29 radiation therapy centers, including 19 stereotactic radiosurgery (SRS) facilities. With a strategy of partnering with hospitals, health systems and physician practices, Alliance provides quality clinical services for over 1,000 hospitals and other healthcare partners in 43 states where approximately 1,800 Alliance Team Members are committed to providing exceptional patient care and exceeding customer expectations. For more information, visit www.alliancehealthcareservices-us.com.
About The Pain Center of Arizona
The Pain Center of Arizona is a market-leading provider of pain management services within Arizona. With a 12-year track record of providing exceptional multi-disciplinary care, TPC’s award-winning Centers of Excellence provide a myriad of treatment options to address the needs of patients dealing with chronic pain. The Pain Center is dedicated, through its clinical care teams, patient advocates, and professional management team, to changing the landscape of pain across the nation. For more information, visit www.thepaincenter.com.
This press release contains forward-looking statements relating to future events, including statements related to Alliance’s expansion into adjacent segments of healthcare services, including interventional radiology and pain management, the expected growth of Alliance’s newly formed Interventional Division and the anticipated benefits of the TPC transaction on Alliance’s operations and earnings. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Alliance’s expectations. Such uncertainties and risks include, among other things, the possibility that the expected benefits of the TPC transaction may not materialize as expected due to unexpected costs or liabilities, risks related to integration or other factors; the effect of intense levels of competition in Alliance’s industry; changes in the methods of third party reimbursements for diagnostic radiology, interventional radiology/pain management and radiation oncology services; fluctuations or unpredictability of Alliance’s revenues, including as a result of seasonality; changes in the healthcare regulatory environment or other governmental laws and regulations affecting Alliance’s operations; Alliance’s ability to keep pace with technological developments within its industry; the growth or lack thereof in the market for imaging, radiation oncology and other services; the disruptive effect of hurricanes and other natural disasters; adverse changes in general domestic and worldwide economic conditions and instability and disruption of credit markets; difficulties Alliance may face in connection with recent, pending or future acquisitions, including unexpected costs or liabilities resulting from the acquisitions, diversion of management’s attention from the operation of Alliance’s business, and risks associated with integration of the acquisitions; and other risks and uncertainties identified in the Risk Factors section of the Company’s Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission (the “SEC”), as may be modified or supplemented by our subsequent filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Alliance does not undertake to update its forward-looking statements except as required under the federal securities laws.
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