Merger Talks End for Alliance Imaging

Alliance Imaging Inc. and U.S. Diagnostics Labs Inc., a Florida operator of diagnostic services, have called off merger discussions, Alliance said Wednesday.

U.S. Diagnostic balked at terms of a proposed stock swap, and could not reach agreement with some of Alliance’s lenders, Alliance said.

Responding to rumors in the marketplace, the two companies had disclosed the merger discussions 12 days ago. U.S. Diagnostic, based in West Palm Beach, Fla., had planned to acquire Alliance through an exchange of stock valued at $65 million to $71 million.

The announced merger talks surprised analysts, who noted that Alliance has been aggressively acquiring smaller operators in the industry. Alliance operates mobile MRI (magnetic resonance imaging) units.

Richard N. Zehner, chairman and chief executive officer of Alliance, said the company remains “committed to our growth strategy.”

On Tuesday, in fact, Alliance announced that it has bought Sun MRI Services Inc., a magnetic resonance imaging services company based in Northern California. Terms of the deal were not disclosed.

Alliance said the acquisition should generate more than $1.2 million in yearly revenue. Alliance Imaging had revenue of $31.3 million in the six months ended June 30.