Siemens Financial Services (SFS), the financing arm of
industrial goods manufacturer
), recently offered a customized financial package to medical
imaging company Tri-State Imaging Group to refinance its existing
debt and fund its expansion plans in Florida. In addition to
strengthening the business relationship with one of Siemens'
existing healthcare clients, the transaction is mutually
beneficial for both the subsidiary and the parent company.
The Key Takeaways
In order to increase liquidity and boost the working capital
requirements, SFS provided Tri-State with a $50 million loan
payable in 5 years. Tri-State is likely to utilize a part of the
loan proceeds to refinance its existing debt to reduce its
interest burden. The remainder of the proceeds is likely to be
used to expand its presence in the outpatient diagnostic imaging
services market in Florida through the purchase of 16 new medical
The transaction reinforces the long-standing business
relationship of Tri-State with Siemens. At the same time, it
offers additional revenue stream for Siemens through new orders
for medical imaging equipment and extension of equipment
maintenance service contract with Tri-State.
On the other side of the spectrum, the transaction augments SFS'
position as a leading financier in the healthcare sector. This
Siemens' subsidiary provides structured finance and commercial
finance in the energy, healthcare and infrastructure sectors and
plays a key role in financing the supply chain of the industry by
leveraging its financial expertise and technical know-how.
Siemens Healthcare is one of the rapidly growing segments of the
company with a healthy underlying profitability. The financing
solution package with Tri-State, one of the leading independent
providers of outpatient diagnostic radiology services in the
Delaware Valley, offers more and new opportunities for the
segment to augment its revenues.
Siemens continues to deliver innovative technological and
financing solutions for its customers. It aims to provide
solutions that give the maximum operational benefit to its
clients. Siemens focuses on key areas like information services,
automation and controls, medical equipment, power generation,
transportation systems, automotive electronics, lighting, and
other similar areas. Given its product breadth and geographic
diversity, the company is a major beneficiary of increased
spending as developing nations build up their infrastructure.
Siemens currently has a Zacks Rank #2 (Buy). Other players in the
industry worth reckoning include
Mistras Group, Inc.
), each carrying a Zacks Rank #2 (Buy).
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