Buffalo’s Second-Largest Operator of Diagnostic Imaging Centers Explains Why It Sold to Private Equity

The second-largest diagnostic imaging center operator in the Buffalo, New York, area explained why it decided to sell to private equity in an interview published Tuesday.

Founded in 1959, Southtowns Radiology announced in November that it was selling its imaging center business to Rezolut. The addition of the three centers brought the Atlanta-based private equity platform firm’s total to 43 at the time, including 19 in the Northeast.

The executives discussed the decision in an interview with Buffalo Business First.

“The benefits and challenges of running an imaging center have really caused our physicians to take a step back,” said Dan Strauch, director of operations at Southtowns Radiology and COO at SRA Medical Imaging LLC. “The other part is that there is a lot of activity from private equity groups like Rezolut. You don’t want to miss out on an opportunity if there is someone who is interested.

Under the terms of the agreement, the physician owners who sold the company continue to operate the three locations. They do this through an agreement with SRA Medical Imaging, which also provides contract services to Catholic Health and Niagara Falls Memorial Medical Center.

Southtowns Radiology served nearly 500,000 patients last year, making it the second largest imaging center operator in the region. Great Lakes Medical Imaging came in first with nearly 646,000 patient encounters in 2023, according to the publication.

The practice became the second major radiology player in the region to sell to private equity after Windsong Radiology signed a partnership with US radiology specialists in late 2020.

The article does not address some of the potential downsides of selling to private equity, which may include higher productivity requirements, decreased physician autonomy, and increased burnout.

Read the rest of the interview here: