Integral Diagnostics (ASX:IDX), which operates diagnostic imaging services in Australia and New Zealand, has secured clearance from the Australian Competition and Consumer Commission (ACCC) for its proposed acquisition of Capitol Health (ASX:CAJ), subject to the divestment of a key clinic in Melton, Victoria.
Capitol Health, headquartered in Melbourne, operates diagnostic imaging services across Victoria, Tasmania, South Australia, and Western Australia. Its brands include Capital Radiology, Direct Radiology, and Future Medical Imaging Group (FMIG). The company manages 61 imaging sites, with 46 of those located in Victoria.
The ACCC’s decision removes a key regulatory obstacle, paving the way for the merger of two of Australia’s largest diagnostic imaging providers. The divestment of the Melton clinic addresses competition concerns in the local market, where the ACCC feared the merger would have reduced bulk-billing rates or increased prices for imaging services.
The acquisition, first announced on 17 June 2024, will proceed via a scheme of arrangement, with final approval from the Federal Court expected on 10 December 2024.
On approval Capitol Health’s shares will be suspended from trading on 11 December, Capitol shareholders will receive IDX shares on 20 December, and the company will be delisted on 23 December.
The acquisition will significantly expand Integral Diagnostics’ footprint in the diagnostic imaging sector, adding 60 Capitol Health radiology sites to its existing network of 70 sites. 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 offer operational synergies and expanded service offerings.
Shares in IDX closed 1.03% higher at $2.93 yesterday. Shares in CAJ closed 2.7% higher at $0.38.