Cancer treatment company GenesisCare filed for U.S. bankruptcy protection in Texas on Thursday, seeking to sell its U.S. business and refocus on its operations in Australia, Spain and the U.K.
GenesisCare, based in Sydney, Australia, broke into the U.S. market in 2020 through its acquisition of 21st Century Oncology. But the merger loaded the company with additional debt and the U.S. business was unprofitable, failing to produce operational synergies GenesisCare had hoped for, according to court documents filed in Houston bankruptcy court.
GenesisCare, which is backed by private equity firms KKR and China Resources Capital, specializes in radiotherapy cancer treatments, with more than 300 locations in the United States, the UK, Australia, and Spain.
21st Century Oncology, which operated a network of local, physician-led cancer treatment centers across the United States, had struggled for years and went bankrupt in 2017 before GenesisCare acquired it.
GenesisCare thought the business was primed for a turnaround after the previous bankruptcy, but it was unable to fix long-term problems related to the poor coordination of data and operations, outdated IT systems and radiotherapy equipment, and increased competition, according to court filings.
GenesisCare said it cannot afford to invest further resources in the U.S. business so it will seek to sell the company to a buyer who is better able to turn things around.
“GenesisCare’s U.S. business has strong potential, with outstanding physicians, valuable relationships with payers, high patient satisfaction, and a desirable footprint in the U.S.,” GenesisCare U.S. president Shaden Marzouk said in a statement.
GenesisCare entered bankruptcy with $1.7 billion in debt. It intends to borrow an additional $200 million to fund its bankruptcy restructuring.
Source: Reuters.com