NightHawk Radiology Holdings takes its name from nighttime helicopter missions that one of its founding managers used to fly over Vietnam. The company provides overnight teleradiology services for hospitals, doctors and researchers across the United States during the late night and early morning hours. If you need an X-ray interpreted at 3:15 in the morning, it’s a company like NightHawk that will be on call.
In order to get qualified radiologists to work what is essentially the graveyard shift in the United States, the company has based its radiologists in Australia. At the company’s facility in Sydney, employees work during normal working hours, which are the late- night and early morning hours in the United States. The American-certified physicians working there can send a transcribed radiology report back to U.S.-based physicians in an average of 20 minutes, the company says.
NightHawk, which has its corporate headquarters in Coeur D’Alene, Idaho, was looking to change its finances to give its founders control and have capital for expansion. It raised $25 million from private equity and venture capital firm Summit Partners. The financing was a roughly equal combination of subordinated debt and equity.
Prior to Summit’s involvement, a group called Radiology Associates of Northern Idaho (RANI) held a majority ownership of NightHawk to the tune of approximately 60%. With this deal, the company’s founders become the majority shareholders.
“It was somewhat obvious that NightHawk was the clear market leader,” says Scott Carter, a Summit Partners vice president. He adds that NightHawk, which serves medical groups in 46 states, is the only company in its field that’s able to scale to a national level. Summit General Partner Peter Chung will be one of five members of the company’s board of directors, while Carter will be an observer.
“We really wanted to take this company to the next level,” says Night-Hawk Vice President John Berger. He says that the company plans to open another teleradiology service facility in Switzerland and have it operational by the end of the year. It also plans to double its 80 employees in a year.
Warren Gouk, a managing director with Cascadia Capital, which was a financial advisor on the deal, predicts that “an IPO may be available probably in the next 18 to 24 months. It would be game over for anybody who is viewed as a competitor in this space.”
He expects NightHawk to follow the example set by Summit portfolio company Pediatrix Medical Group, which went public in 1995.