Mon | Mar 19, 2018

Elite Diagnostic to list, expand to north coast

Published:Friday | November 24, 2017 | 12:00 AM
Warren Chung, CEO of Elite Diagnostic Imaging Services.
In this September 2013 file photo, Elite Diagnostic radiographer Judy Lawson explains how the MRI machine works.

A medical diagnostic outfit that launched four years ago with backing from local investment houses is about to go public, fulfilling a commitment from its shareholders.

Elite Diagnostic Imaging Services plans to launch an IPO, shortly, and list on the junior market of the Jamaica Stock Exchange. The lead co-brokers of the offer are NCB

Capital Markets and Sagicor Investments Jamaica, both of which hold equity stakes in the diagnostic company.

Elite started in 2013 with roughly $147 million in capital, operating from a single location at Holborn Road in New Kingston. The company opened a second location recently in Liguanea, providing magnetic resonance imaging or MRI, ultrasound services as well as interventional radiology procedures.

"The timing is perfect for where Elite is. The money will be used to reduce our debt that it took to open our new facility and to provide working capital," said Elite CEO Warren Chung in a statement on the plans to list the company.

"Besides the raising of funds to help Elite grow, and the tax break incentive, being a public listed company adds great credibility," he said. Junior stock market companies get 10 years of tax breaks at listing.

Elite announced that profits grew 53 per cent year on year but did not disclose the nominal amount. The company offers MRIs, computed tomography or CT scans, X-rays, ultrasounds and fluoroscopies.

"We focus on providing the highest level of patient care and customer service using state-of-art medical equipment," Chung said.

He noted that patients travel from across the island to access Elite's services.

"Imaging services are on a whole thinly spread out. Only Kingston and Montego Bay are adequately equipped. But we look forward to expanding our services to Montego Bay and Ocho Rios in the coming years," he said.

Elite Diagnostic is owned by a group of private partners through an entity called Excel Investments Inc. The company was launched with equity participation from NCB Capital Markets Limited, Sagicor Investments Jamaica Limited, and Barnett Limited owned by the Kerr-Jarrett family.

Sagicor Investments and NCB Capital Markets initially held 43 per cent of Elite Diagnostic, under a under a $147 million financing deal structured by Sagicor Investments in 2013. The venture capital transaction involved a mix of ordinary shares and convertible mezzanine financing. A year later, their holding was reported to have fallen to 37 per cent as new investors took up equity stakes in the business.

Despite a tougher than expected first year, the company began turning over $8.5 million in monthly revenue, on average.

Chung said the Elite has grown through its marketing efforts at various medical conferences. "Our exposure to the doctors at these conferences establishes Elite as the go-to facility for imaging," he said.