Digirad Announces Sale of its MDSS Service Contracts to Philips North America
December 27 2017 - 4:05PM
Digirad Corporation (Nasdaq:DRAD) (the “Company”) today announced
that it has entered into a definitive purchase agreement (“the
Agreement”) with Philips North America (“Philips”) to sell its
Medical Device Sales and Service (“MDSS”) business unit service
contracts. Total consideration under the Agreement is $8
million.
Digirad President and CEO Matt Molchan said,
“Over the last few months we have been evaluating our opportunity
to run this service business outside our prior Philips
relationship, and we determined that the best value for the
business would be in the hands of Philips. We are very
pleased with the economics and outcome of this Agreement, and this
transaction will better position Digirad to focus on its core
business – providing convenient mobile diagnostic healthcare
solutions.”
The MDSS business unit provided post warranty
contract maintenance services for large diagnostic imaging
equipment, primarily in the upper mid-west region of the United
States, for Philips products.
The Agreement is subject to customary closing
conditions, and is expected to close on January 31, 2018. The
Company expects to apply the net proceeds from the sale to its
existing line of credit with Comerica. As part of the
Agreement, Digirad and Philips agreed to extend its prior
Consolidated Service Agreement to continue to provide installation
and warranty services sold in the same upper mid-west region
through January 31, 2018.
About Digirad Corporation
Digirad delivers convenient, effective, and efficient healthcare
solutions on an as needed, when needed, and where needed
basis. Digirad’s diverse portfolio of mobile healthcare
solutions and diagnostic imaging equipment and services, provides
hospitals, physician practices, and imaging centers through the
United States access to technology and services necessary to
provide exceptional patient care in the rapidly changing healthcare
environment. For more information, please visit
www.digirad.com.
Forward-Looking Statements
This press release contains statements that are forward-looking
statements as defined within the Private Securities Litigation
Reform Act of 1995. Some of these forward-looking statements can be
identified by the use of forward-looking words such as “believes,”
“expects,” “may,” “will,” “should,” “seek,” “approximately,”
“intends,” “plans,” “estimates,” or “anticipates,” or the negative
of those words or other comparable terminology, or in specific
statements such as the Company’s ability to deliver value to
customers, the ability to grow and generate positive cash flow, the
ability to execute on restructuring activities, and ability to
successfully execute acquisitions. These forward-looking statements
are subject to risks and uncertainties that could cause actual
results to differ materially from the statements made. These risks
are detailed in Digirad’s filings with the U.S. Securities and
Exchange Commission, including the Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other reports. Readers are cautioned to not place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. All forward-looking statements are qualified in their
entirety by this cautionary statement, and Digirad undertakes no
obligation to revise or update the forward-looking statements
contained herein.
For more information contact:Jeff KeyesChief
Financial Officer858-726-1600ir@digirad.com
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