News

Dec. 6, 2012, Melbourne, AUS – Harbert Australia Private Equity (“Harbert”), the private equity firm targeting lower-middle market investments, today announces the acquisition of a substantial majority interest in Cardioscan Services Pty Ltd (“Cardioscan”), a provider of cardiac testing services to large Australian pathology and hospital groups.

Cardioscan was established in 1984 and is Australia’s oldest continuously operating cardiovascular and respiratory monitoring service provider.  The company provides cardiac testing equipment (mainly ECGs, Holters and Ambulatory Blood Pressure Monitors) and monitoring services to large Australian pathology lab and hospital networks, analyzing cardiac data using its own team of specialized cardiac technicians and cardiologists, and returns test results to clients within 2-4 hours.

Cardioscan intends to use Harbert’s experience and financial capacity to bolster its operational capabilities, expand its management team, and better position the company to execute a number of newly won contracts in addition to continuing to meet its service levels for key customers.  Harbert will also support the company’s aspirations for medium term expansion which include a multitude of identified growth opportunities in its target market and adjacent areas.

The existing  management team will remain in place with Paul Kelly as CEO of Merredea Hudgson as General Manager.  In the past few weeks a number of experienced industry professionals have been recruited to strengthen the management team and ensure the group is appropriately positioned to meet the planned growth.  Commenting on the transaction, Paul Kelly, Cardioscan CEO:

“We are thrilled to have secured Harbert as our partner in Cardioscan.  Harbert brings a depth of experience in working with businesses such as ours and providing access to capital at a time when many small businesses are highly capital constrained.  Harbert shares our vision for the future of the business and we are very excited about working together to achieve this growth and strengthening Cardioscan’s position as the preeminent provider of cardiac testing services to the Australian market.”

Jeremy Steele, Managing Director of Harbert Australia Private Equity said:

“We are delighted to have the opportunity to be part of the Cardioscan growth story and to be able to invest additional capital and resources to support its continued growth.  The company has an exceptionally competent management team who have the necessary experience and skill sets to turn Cardioscan’s growth ambitions into reality.  We look forward to working with management to ensure the company is well positioned to capitalize on the exciting opportunities presented by new and existing customers and also expected market developments in general.”

“The medium term outlook for the Australian cardiac testing market is highly favorable with a number of key demographic trends – such as Australia’s aging population, the rising incidence of cardiovascular disease (“CVD”), and also diabetes and obesity – combining to underpin the growth prospects of this sector.  Cardioscan has a major role to play in the fight again CVD in this country and in reducing its enormous burden on the Australian economy.  In addition, Cardioscan has secured the exclusive Australasian distribution rights for a revolutionary new cardiac monitoring device which will broaden the spectrum of devices with which to combat CVD and increase the rates of detection of difficult arrhythmias.”

Harbert continues to focus on investment in Australian companies within the lower-middle market (i.e. valued between A$10 million and A$100 million).  This market is usually characterized by companies that are not used to dealing with professional investors, have no large scale finance, strategic planning or legals teams and are more reliant on existing management teams’ ongoing commitment and focus on the business.  This investment will be the third investment in Harbert Australian Private Equity Fund II (which will commence fundraising in early 2013).

Advisers to the transaction were M&A Partners and Clarendon Lawyers (Cardioscan), and Middletons and PricewaterhouseCoopers (Harbert).

Click here for the full press release.