Oaktree, MTS Health Investors grab stake in KKR’s Alliance Imaging

The two groups have bought a majority stake in imaging services provider Alliance Imaging from KKR in a deal worth about $153m.

Los Angeles-based investment management firm Oaktree Capital and New York-based private equity firm MTS Health Investors have jointly agreed to acquire nearly 25 million shares of US imaging services provider Alliance Imaging from Kohlberg Kravis Roberts for about $153 million (€204 million).

The deal is expected to finalise during the first half of 2007.

Following completion of the transaction, Oaktree and MTS will own a total of about 50 percent of the company. KKR will own less than three percent of the company’s common stock, Alliance said in a statement. KKR-affiliated directors of Alliance’s board will resign and three nominees from Oaktree and MTS will replace them.

Oaktree and MTS have also agreed to reimburse Alliance up to $1.25 million of expenses.

Alliance’s products include fixed site imaging centers and radiation oncology centers. It provides services to hospitals and other healthcare providers. The company has about 489 diagnostic imaging systems serving 1,000 clients in 43 states. Paul Viviano is the company’s chief executive officer and chairman.

MTS Health Investors invests in healthcare service providers like managed care and health insurance providers, distributors of medical products, providers of outsourced services and low-technology medical product manufacturers. It focuses primarily on US companies valued at less than $100 million. Its portfolio companies include Orland-based oxygen and respiratory therapy services provider Aerocare Holdings; New Jersey-based home health aide services provider Loving Care Agency; and Reno, Nevada-based disease management company Alere Medical.

Founded in 1995, Oaktree has about $47 billion in assets under management. In addition to private equity, the firm makes investments in real estate, Asian and emerging market equities, power infrastructure, distressed debt and mezzanine debt. Its clients include large public pension funds, Fortune 100 companies, university endowments, private foundations and high net worth individuals. It has offices in the US, Japan, Singapore, China, the UK and Germany. The firm bought UK ice cream maker Richmond Foods for about $339 million last May and planned to combine the business with a portfolio company, Italian gelato maker Roncadin.