Morgan Keegan Raises Estimates, Price Target On Alliance HealthCare Services

Alliance HealthCare AIQ acquired U.S. Radiosurgery, a stereotactic radiosurgery provider with interests in eight facilities, for $54 million including the assumption of $11 million of debt. Through this transaction, Alliance significantly boosts the size of its radiation oncology division, adding $29 million annual revenues and surpassing its 2011 goal of adding 3-5 radiation therapy sites. Morgan Keegan is raising its 2011 adjusted EBITDA estimate from $155 million to $165 million and 2012 estimate from $170 million to $184 million. Morgan Keegan is raising its price target from $4.00 to $4.75 on this accretive deal. Management raised its revenue expectation by $25 million and adjusted EBITDA guidance by $10 million. The company expects 2011 radiation oncology revenues of $68-$73 million, an increase of 53%-64% from 2010, comprising 13%-15% of revenues. Its Market Perform rating is a reflection of an operating environment of reduced demand for imaging services. It believes the company is performing well given these constraints. AIQ closed Tuesday at $4.50