FONAR acquired by Damadian family Acquisition Group: fairness opinion by Marshall & Stevens
Deal terms
Implied value per share by method vs. $19.00 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of Marshall & Stevens to the special committee
Discounted cash flow assumptions
Indicated fair market value of total equity before minority interest of $142,376 thousand; less 29.37% minority interest in HDM ($41,816 thousand) = $100,600 thousand of common equity on a controlling basis; range approximately $97,600 thousand to $104,000 thousand. Weighted 50% in the reconciliation. Tax rate 27%, capex 2.0% of revenue, working capital-to-sales 69.0%, revenue growth 2.0%.
Selected public companies (9)
Ardent Health, Inc. (ARDT) · Astrana Health, Inc. (ASTH) · Bruker Corporation (BRKR) · Community Health Systems, Inc. (CYH) · HCA Healthcare, Inc. (HCA) · Hologic, Inc. (HOLX) · Nutex Health Inc. (NUTX) · RadNet, Inc. (RDNT) · Tenet Healthcare Corporation (THC)
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM Revenue (size-adjusted) | 0.9x | 1.4x | 1.5x | 0.9x–1.1x | — |
| EV / Projected Year 1 Revenue (size-adjusted) | 0.9x | 1.4x | 1.5x | 0.9x–1.1x | — |
| EV / LTM EBITDA (size-adjusted) | 5.9x | 7.9x | 9.3x | 6.0x–7.0x | — |
| EV / Projected Year 1 EBITDA (size-adjusted) | 5.9x | 6.8x | 9.3x | 5.5x–6.5x | — |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Liquidation Scenario - Third Party Collection | Hypothetical liquidation assuming orderly collection of $84,468 thousand of A/R over six years with 5.0% collection costs plus $5,000 thousand MRI asset liquidation net of $2,000/yr removal costs, discounted at 4.0% (sensitivity 4.0%/5.5%/7.0%). PV of liquidation cash flow $75,140 thousand; plus cash $54,276 thousand, less American Transit reserve $2,349 thousand; total equity $127,067 thousand less 29.37% minority interest = ~$89,700 thousand controlling common equity (range ~$87,800 to $89,700 thousand). Weighted 25%. | — |
| Liquidation Scenario - Adjusted Book Value Method | Adjusted book value at 9/30/2025 prepared by Mr. Feigenbaum at request of Valuation Firm A: total value $137,643 thousand less 29.37% minority interest ($40,426 thousand) = ~$97,200 thousand controlling common equity; divided by 6,645 fully diluted shares = $14.63 per share. Considered as a reference point only; no weight in the reconciliation. | $14.63 |
| Reconciled Conclusion of Value / Per Share Value Conclusion | Weighting: DCF 50%, guideline public company 25%, third-party collection liquidation 25%, adjusted book value 0%. Concluded fair market value of total equity on a controlling and marketable basis of ~$96,225 to $103,150 thousand, equating to ~$14.48 to $15.52 per share for Common, Class B and Class C (3:1) stock, versus the $19.00 offered price ($6.34 for Class C). | $14.48–$15.52 |
| Class A Non-voting Preferred Stock Valuation (DLOM / lack of voting discounts) | Applied a 25.0% discount for lack of marketability (put option models 15.0%-17.0%; restricted stock studies 21.9%-34.0%; benchmark range 20.0%-25.0%) and a 5.0% discount for lack of voting rights (empirical studies 1.3%-10.0%, mean 5.3%; court cases 0.0%-9.1%), producing indicated value of ~$10.32 to $11.06 per share versus the $10.50 offered price. | $10.32–$11.06 |
| Guideline Public Company Analysis - equity value indication | Indicated enterprise value range ~$92,400 to $110,800 thousand; after adding cash of $54,276 thousand, deducting the $2,349 thousand American Transit reserve and $0 debt, and applying a 29.37% minority interest adjustment, indicated controlling common equity of ~$101,900 to $114,900 thousand (mid $108,400 thousand). | — |
Engaged July 29, 2025 on a fixed fee basis; $120,000 fee for rendering its opinion, paid in full and not contingent upon completion of the transaction or the conclusion reached. No other services provided to Parent or the Company.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $109M | $111M | $113M | $115M | $118M | 2.0% |
| Revenue growth | 2.1% | 1.9% | 2.1% | 1.9% | 2.0% | |
| EBITDA | $17.7M | $19.2M | $19.2M | $19.3M | $20.8M | 4.1% |
| EBITDA growth | 9.3% | 8.5% | 0.0% | 0.5% | 7.8% | |
| EBITDA margin | 16% | 17% | 17% | 17% | 18% | |
| Implied EV / EBITDA | 3.9x | 3.6x | 3.6x | 3.6x | 3.3x |
Year-1 growth is against LTM at announcement ($106M revenue, $16.2M EBITDA); later years are year over year.
FONAR management provided Projections representing 10-year unlevered after-tax free cash flow forecasts (with terminal value in year 11), prepared for internal use in evaluating a going-private transaction and approved by the Special Committee for Marshall & Stevens' reliance. Key assumptions were nominal revenue growth of 2.0% per year, gross margins consistent with recent historical levels, capex of 2.0% of revenue, working capital at 69.0% of sales and a 27% tax rate; TTM 9/30/2025 revenue was $105.4 million with $14.8 million EBITDA and Projected Year 1 revenue $107.5 million with $16.2 million EBITDA. Successive versions were provided (July, November and December Projections); only the December Projections underpinned the December 23, 2025 opinion, with the July and November-based preliminary presentations (August 11 and December 2, 2025) not relied upon by the Special Committee.
Process notes
Other Specialty Outpatient Facilities fairness opinions
- Alliance Healthcare Services / Tahoe Investment Group Co. 2017 · 5.7x EV/EBITDA
- Surgical Care Affiliates / Optum 2017 · 16.4x EV/EBITDA
- AmSurg / Envision Healthcare Holdings 2016 · 12.0x EV/EBITDA
- NovaMed / Surgery Partners 2011 · 7.8x EV/EBITDA
- HealthTronics / Endo Health Solutions 2010 · 8.7x EV/EBITDA
- Dialysis Corporation of America / U.S. Renal Care 2010 · 14.1x EV/EBITDA
All Specialty Outpatient Facilities opinions → · Marshall & Stevens opinions