Comprehensive diagnostics (ASX:IDX)which operates diagnostic imaging services in Australia and New Zealand, has obtained clearance from the Australian Competition and Consumer Commission (ACCC) for its proposed acquisition of Capitol Health (ASX:CAJ)subject to the disposal of a key clinic in Melton, Victoria.
Melbourne-based Capitol Health operates diagnostic imaging services in Victoria, Tasmania, South Australia and Western Australia. Its brands include Capital Radiology, Direct Radiology and Future Medical Imaging Group (FMIG). The company operates 61 imaging sites, of which 46 are located in Victoria.
The ACCC’s decision removes a key regulatory hurdle, paving the way for the merger of two of Australia’s largest diagnostic imaging providers. The sale of the Melton clinic addresses competition concerns in the local market, where the ACCC feared the merger would reduce bulk billing rates or increase prices for imaging services.
The acquisition, first announced on 17 June 2024, will proceed via a scheme of arrangement, with final approval by the Federal Court expected on 10 December 2024.
Following approval, Capitol Health shares will be suspended from trading on December 11, Capitol shareholders will receive IDX shares on December 20, and the company will be delisted on December 23.
The acquisition will significantly expand Integral Diagnostics’ presence in diagnostic imaging, adding 60 Capitol Health radiology centers to its existing network of 70 centers. The combined network will increase the group’s market presence in metropolitan and regional areas and strengthen its position in key growth markets.
The merger is expected to deliver operational synergies and an expanded service offering.
IDX shares closed 1.03% higher at $2.93 yesterday. CAJ shares closed 2.7% higher at $0.38.