Akumin Acquisition: Key Details, Impact, and What Comes Next

Stonepeak's acquisition of Akumin marks a significant shift in the healthcare industry. By transitioning Akumin into a private entity, the deal enhances the company's financial flexibility and strategic positioning. This move underscores the growing influence of private equity in healthcare, particularly in radiology and oncology services, and sets a precedent for future industry consolidations.

What Is Akumin?

Founded in 2013, Akumin specializes in outpatient radiology and oncology services. Its core offerings include diagnostic imaging, radiation therapy, and personalized care plans. Akumin differentiates itself with a comprehensive range of services, state-of-the-art technology, and flexible partner solutions. The company provides mobile and fixed-site diagnostic imaging, managed services, and joint ventures, ensuring high-quality care and operational excellence. Akumin's focus on accessibility and convenience enhances patient outcomes and community well-being.

Who Acquired Akumin?

Stonepeak is a leading international alternative investment firm specializing in infrastructure and real assets. The company manages $72 billion in assets and has a significant global presence with over 275 staff and 72 investments across 61 countries. Stonepeak focuses on sectors such as digital infrastructure, energy transition, and transport logistics. Notable portfolio companies include Madison Energy, Cologix, Lineage, and TRAC Intermodal, highlighting its influence and operational expertise in these areas.

When Was Akumin Acquired?

Stonepeak acquired Akumin on February 6, 2024. This acquisition followed a court-supervised financial restructuring process that began in October 2023. The timing of the acquisition is significant as it aligns with broader industry trends of financial restructuring and consolidation. Akumin's transition to private ownership under Stonepeak is expected to provide the financial stability and strategic flexibility needed to navigate the evolving healthcare landscape and invest in future growth opportunities.

Why Was Akumin Acquired?

• Market Expansion: The acquisition of Akumin by Stonepeak significantly enhances market reach. Akumin provides comprehensive radiology and oncology services to approximately 1,000 hospitals and health systems across 48 states. This extensive network positions Stonepeak to tap into a broader healthcare market, leveraging Akumin's established relationships and service footprint.
• Technology Integration: Stonepeak stands to benefit from Akumin's advanced technological capabilities. Akumin is committed to upgrading equipment, deploying new service delivery technologies, and renovating facilities. This focus on technological advancement ensures that Stonepeak can offer cutting-edge diagnostic imaging and radiation therapy services, improving operational efficiency and patient outcomes.
• Competitive Advantage: The acquisition strengthens Stonepeak's competitive position in the healthcare sector. Akumin's integration of clinical and operational expertise with the latest advances in technology and informatics allows for unparalleled patient experiences and outcomes. Additionally, the financial restructuring and elimination of $470 million in debt provide Akumin with the stability and resources needed to maintain its status as a leading provider of radiology and oncology services.

Acquisition Terms

• Acquisition Price: The acquisition involved a $130 million investment by Stonepeak. Additionally, the existing $470 million Stonepeak Note was canceled and converted into common shares of Akumin.
• Payment Method: The transaction included a combination of cash and stock. Stonepeak made a capital contribution of $130 million in new money, and Akumin's existing common stockholders received a total of $25 million in cash and certain contingent value rights (CVRs).
• Key Conditions or Agreements:
  • The transaction was implemented through prepackaged Chapter 11 cases in the Southern District of Texas.
  • Akumin's operations continued as normal during the restructuring process, with trade creditors, employees, and other partners being paid in the ordinary course of business.
  • Senior secured notes due 2025 and 2028 were exchanged for new notes with extended maturity dates and increased interest rates.
  • Stonepeak took 100% control of Akumin’s common shares, and Akumin voluntarily delisted its common stock from the Toronto Stock Exchange and Nasdaq.
  • Existing common stockholders converted their ownership interest into cash or liquid assets.

Impact on Akumin

The acquisition of Akumin by Stonepeak has led to significant changes in the company's operations and management. Akumin has transitioned from a publicly listed company to a private entity, delisting its stock from the Toronto Stock Exchange and Nasdaq. This move was part of a broader financial restructuring process, which included the cancellation of $470 million in debt and a $130 million investment from Stonepeak. The restructuring has provided Akumin with the financial stability needed to continue its operations without interruption, ensuring that trade creditors, employees, and other partners are paid in the ordinary course of business.

In terms of product offerings and services, Akumin plans to continue investing in its business by upgrading equipment, deploying new service delivery technologies, and renovating facilities. The company aims to enhance its position as the outpatient partner of choice for hospitals and health systems, focusing on delivering unparalleled patient experiences and outcomes. While specific employee and customer reactions were not detailed, the leadership has expressed gratitude for the support received from all stakeholders, indicating a positive outlook. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly and efficiently.