Fonar Corporation (FONR) is going private, and shareholders are getting a solid payday for their trouble. The medical imaging company announced Tuesday that it's signed a definitive merger agreement with Fonar, LLC and Fonar Acquisition Sub, Inc., sending shares up more than 25% in premarket trading.
The buyout is a classic management-led affair. CEO Timothy Damadian is heading up the Acquisition Group, which includes various Fonar management members, board directors, and some third-party investors. They're taking the whole thing private and planning to delist from Nasdaq once the deal wraps up.
What Shareholders Are Getting
The buyer will acquire all outstanding shares except those already owned by the buyer group or sitting in the company's treasury. The pricing breaks down by share class: $19.00 for common stock, $19.00 for Class B common, $6.34 for Class C common, and $10.50 for Class A non-voting preferred stock.
For common stockholders, that $19.00 per share represents some meaningful premiums. You're looking at 31.5% above the last closing price, 21.9% over where shares traded on July 8, 2025, and a hefty 39.7% premium to the 90-day average ending June 30, 2025. Not a bad exit for existing investors.
The deal got the thumbs up from a special committee of independent directors, who unanimously recommended the merger. The full board approved it too, minus a few members who recused themselves.
How They're Paying For It
The financing structure is what you'd expect for a management buyout: a mix of new debt, equity contributions, and rolled-over company securities. The biggest piece is a $35 million debt facility from OceanFirst Bank. On top of that, the Acquisition Group and third-party lenders are kicking in roughly $10 million in additional debt and $45 million in equity. The third-party debt sits junior to the OceanFirst facility in the capital stack.
If everything goes according to plan, the transaction should close in the third quarter of 2026, subject to the usual closing conditions. Once it's done, Fonar will say goodbye to its Nasdaq listing and operate as a private company.
The company is scheduled to release its second-quarter results in February 2026, giving investors one more earnings report before the deal closes.
Price Action: Fonar shares jumped 25.51% to $18.39 in premarket trading Tuesday, hitting a new 52-week high.
