FONAR receives $17.25 per share acquisition proposal from insider group

MELVILLE, NY - FONAR Corporation (NASDAQ:FONR), a pioneer in MRI technology, announced Friday it has received a proposal from a group led by Timothy Damadian to acquire all outstanding shares not currently owned by the group for $17.25 per share in cash. The company, currently valued at approximately $100 million in market capitalization, appears undervalued according to InvestingPro analysis.

The proposed price represents a premium of approximately 27% over the average closing price of FONAR’s stock for the 90-day trading period ending June 30, 2025, according to the supplemental proposal letter dated July 17. The offer comes as FONAR demonstrates strong financial health, with InvestingPro data showing the company holds more cash than debt and maintains a healthy current ratio of 10.05.

This follows an initial expression of interest from the same group on July 7, which prompted FONAR’s board to form a Special Committee of independent directors to evaluate potential transactions.

The Special Committee will review the proposal with independent financial and legal advisors to determine the best course of action for the company and its shareholders. No action is required by shareholders at this time.

FONAR cautioned that the proposal is only an indication of interest and does not constitute a binding commitment. The company noted there is no assurance that any agreement will be executed or that the proposed transaction will be approved or consummated.

The company stated it does not anticipate making further public statements about this matter unless it enters into a definitive agreement or determines no transaction will occur.

FONAR, incorporated in 1978, claims to be the first and oldest MRI company in the industry. The company’s signature product is the FONAR UPRIGHT Multi-Position MRI, which allows scanning patients in various weight-bearing positions. The company has maintained profitability over the last twelve months, with a P/E ratio of 12.53 and gross profit margins exceeding 41%. InvestingPro subscribers can access 6 additional key insights about FONAR’s financial performance.

This article is based on information from a company press release.

In other recent news, FONAR Corporation has received a preliminary, non-binding acquisition proposal from a management-led group, including CEO Timothy Damadian, to acquire all outstanding shares not owned by the group at a premium of at least 10% to the average closing market price. The proposal is under review by a special committee of independent directors, and the company has emphasized that it is not a binding commitment. Additionally, FONAR has appointed Robert M. Carrino as a new independent director, bringing extensive public accounting experience to the board. Carrino’s expertise is expected to be valuable as the company transitions into accelerated filer status.

In other developments, FONAR recently held its Annual Meeting of Stockholders, where the existing board of directors was re-elected, and executive compensation was approved by shareholders. The meeting also resulted in the ratification of CohnReznick LLP as the company’s auditors for the fiscal year ending June 30, 2025. These decisions were confirmed through a filing signed by CEO Timothy R. Damadian, ensuring compliance with regulatory requirements. The company continues to maintain its corporate governance standards, as reflected in the recent shareholder meeting outcomes.

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