The radiology sector Down Under is expected to close 2025 with a bumper deal count, driven by private equity (PE) firms, with several deals in the pipeline and growing portfolio maturity set to support further activity.

“We could well see 2025 ending with a bumper deal count, and deal flow is expected to roll into 2026,” said Clifford Chance managing partner Mark Currell. If interest rates continue to go down, debt will become cheaper, contributing further to deal volumes next year, he explained. Note that Australia’s central bank has cut interest rates 75 basis points this year across three moves, lowering the base rate to 3.6%.

Radiology M&A in Australia and New Zealand has recorded eight deals so far in 2025, surpassing the seven in the whole of 2024, according to Mergermarket data. Of these, seven had undisclosed values, while one transaction by Quadrant Private Equity was reportedly valued at USD 130m. This represents the highest year-to-date (YTD) deal count since 2019, when six transactions were announced.

The radiology sector, which comprises strong cash-generating businesses, with revenue often backed by government-funded support, will continue to have strong macro drivers that will not change, Currell said. Catalysts include population growth and an aging population, a greater focus on health, and efficiencies increasingly being driven by technology, including artificial intelligence (AI), he said.

The Australian government also supports the radiology sector primarily through Medicare subsidies for services listed on the Medicare Benefits Schedule (MBS), which reduces costs for patients. According to research firm IBISWorld, revenue for the sector in Australia is forecast to reach AUD 5.8bn (USD 3.7bn) in 2025 and is estimated to grow to around AUD 8.7bn by 2030. There are more than 2,800 radiology businesses operating in the country.

According to Cognitive Market Research, Asia-Pacific radiology revenue was estimated at USD 6.2bn in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 9.0% between 2024 and 2031.

PE at the fore

Sector activity is being heightened by PE investors, with Affinity Equity Partners among the headline makers. The firm, which scooped Mergermarket’s prestigious Private Equity Deal of the Year for its USD 659.13m acquisition of Lumus Imaging from Healius in September 2024, bolted on New South Wales-based In Focus Radiology in May, with more deals expected, as reported.

Another busy player is Quadrant PE, which acquired a significant stake in Carlisle Health in August, with the radiology operator announcing that it plans to fund acquisitions using the support of its new sponsor.

It is perhaps unsurprising that radiology M&A is heating up, as several existing portfolio investments approach or exceed typical fund holding periods, with some funds actively seeking to divest their radiology assets, explains Divesh Patel, PE and M&A partner at K&L Gates.

All eyes are expected to be on Permira-backed I-MED, which is reportedly on the block again after a paused sale process in 2024. Permira bought I-MED, which could be valued at AUD 3bn (USD 1.9bn), from EQT Partners in 2018 for an undisclosed sum.

However, we are also likely to see an increase in secondary sales to PE funds that are either new to the radiology sector or have previously exited healthcare investments, leveraging their prior experience, Patel added.

Moreover, we could also see more radiology portfolio businesses that are partly owned by doctors buying out PE owners, “particularly if private credit is readily available to support the buy-out”, Patel said. For example, Jones Radiology announced in August that its partner doctors would buy out I-MED’s 49% stake in the business.

Ones to watch

With sector activity picking up, there are several Australian radiology situations to keep a close eye on. These include Advent-backed Imaging Associates, which told Mergermarket in May that it remains open to further buys following its April purchase of DiagnostiCare for an undisclosed sum. Interestingly, as reported by Mergermarket in August, Imaging Associates itself could also be on the block.

Crescent Capital Partners has been reshuffling its current radiology assets, including Quantum Radiology and Medscan, which it acquired in 2024 reportedly for around AUD 200m. It is also thought to be in advanced negotiations to acquire Western Radiology.

Other potential targets include Qscan in Australia, where New Zealand-based infrastructure investor Infratil in September announced a strategic review of its 57% holding, acquired in 2020 for AUD 280.6m. The Morrison & Co Growth Infrastructure Fund also holds a 14.1% stake in Qscan, with the remaining 29.7% owned by doctors and management.

And PRP Diagnostic could enter the M&A fray at some point, with backer IFM Investors on 2 October announcing its intention to exit its Australian PE strategies. IFM took a stake in the radiology firm in 2022, along with UniSuper, for an undisclosed sum.

The radiology sector in Oz has been in the spotlight in 2025, and looks set to remain firmly in the headlines throughout 2026 as well.