Shifting Strategies for a Nuclear Pharmacy Network Acquisition

Situation Overview

Triad Isotopes, Inc. (“Triad”), established in 2006 and headquartered in Orlando, FL, is a leading independent radiopharmaceutical company that operates the second largest network of nuclear pharmacies in the U.S.  The company has over 50 pharmacy locations across 22 states that distribute nuclear medicine products to a well-established customer base that includes the largest national GPOs, top tier health systems, large national cardiology clinics, and independent diagnostic imaging centers.

The nuclear medicine industry has faced significant headwinds over the last several years that have resulted in a contraction in product volume, significant increases in vendor drug prices, and a material increase in price competition limiting pass-through of such costs, squeezing margins.  Triad’s senior management was proactive in addressing these adverse trends, however, the company needed assistance to stabilize the operations, faced a highly levered balance sheet, and was unable to meet its debt service obligations.

Carl Marks Advisors (“CMA”) was engaged to serve as interim management as well as the company’s exclusive investment banker to assist Triad in the exploration of its financial and strategic alternatives.  Carl Marks Advisors’ integrated consulting and investment banking platform provided a unique and tailored product offering to quickly address this complex situation.  Our operational consultants served as the “boots-on-the-ground” and managed the day-to-day operations and liquidity of the company while our investment banking team evaluated the strategic options available and executed a value maximizing strategy.

Unique Challenges

This engagement was particularly challenging given changing industry dynamics as well as supplier and customer issues identified by CMA and required the company to evaluate a variety of alternative transactions.  While various paths were explored, the company’s financial performance deteriorated, particularly in 2017, due to the factors discussed above.  The extended time period of the deal, the industry landscape, and the pursuit of multiple strategies all posed significant challenges that Carl Marks Advisors skillfully navigated and guided the company through.

As interim management, Carl Marks Advisors quickly evaluated the operations of the company, its supply chain, and customer contracts and identified several tactical and strategic opportunities to increase profitability while maintaining the high quality customer service that Triad has always delivered.  These initiatives improved profitability and generated the liquidity and runway to allow the Carl Marks Advisors investment banking group to pursue multiple strategic options available.

Over the course of this engagement, CMA and Triad considered several different transactions, including a potential strategic merger with a competitor, the sale of the consolidated business, and a divestiture of select pharmacies to multiple buyers.  Ultimately, the company determined that a strategic combination with a competitor could be an industry transformative transaction wielding significant long-term benefits to Triad and the industry as a whole.  However, during negotiations financial, operational and regulatory risks proved too great to overcome. At this time it became clear that a shift in strategy was needed, and a standalone sale process for Triad was launched.

With the shift in strategy, Carl Marks Advisors ran a comprehensive sale process that targeted both strategic and financial buyers and provided interested parties the flexibility to either acquire the entire pharmacy network or strategic subsets of pharmacy locations.


After a thorough canvassing of the market, several bids were submitted for both the entire enterprise as well as select individual pharmacies.  Carl Marks Advisors evaluated all bids submitted and determined that an offer from Jubilant DraxImage Inc.  (“Jubilant”) not only maximized value, but also provided the highest certainty to close.  Jubilant is a diversified healthcare group based in India with a North American division that develops, produces, and sells radiopharmaceutical products used for both therapeutic and diagnostic molecular imaging applications.  The strategic acquisition provided Jubilant with direct access to hospital networks and helped it forward integrate in the radiopharmaceutical business.  The transaction allowed Triad to continue to operate as a standalone business, preserved the pharmacy network, and saved employee jobs.

Key Takeaways

  • Carl Marks Advisors’ integrated operational consulting and investment banking teams were able to immediately evaluate the situation, identify and execute profitability improvements, and quickly adapt to transactional challenges to maximize value for our clients.
  • Remain nimble and continuously evaluate the preferred strategy. As client needs, risks and deal dynamics change, it’s imperative to be able to reevaluate the situation and quickly pivot and pursue alternative transactions, if necessary.
  • Liquidity is key and a primary driver in both stressed and distressed situations. Carl Marks Advisors’ interim management team was able to quickly improve and stabilize profitability and provide the investment banking team with the required runway to successfully execute the sale of the business.

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