Digirad Corp. said it will become a diversified holding company and buy ATRM Holdings Inc. as the first step towardsthe change in its corporate structure.
The medical device-maker said the conversion to a holding company will add to earnings and also create a platform for future bolt-on acquisitions.
Digirad and ATRM entered a nonbinding letter, under which Digirad will pay the Oakdale, Minn.-based real estate developer's shareholders 0.4 Digirad common share for each ATRM share held.
The transaction, which has been approved by a special committee of independent directors of both the companies, is expected to close in the first quarter of 2019.
Oberon Securities LLC acted as an adviser to Digirad's special committee.
Suwanee, Ga.-based Digirad on Sept. 1 appointed David Noble as its COO, who will hold the same position in the newly structured company after the deal closes.
The company will also have Jeff Eberwein as chairman, Matt Molchan as CEO of the healthcare imaging division, Dan Koch as CEO of modular building division and Steve Clark as CFO.
Digirad said the transaction will generate cost savings of $3 million to $5 million or more, with 2019 revenue projected to be between $145 million to $155 million.