8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

October 13, 2015

DIGIRAD CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	000-50789	33-0145723
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1048 Industrial Court,

Suwanee, GA 30024

(Address of principal executive offices, including zip code)

(858) 726-1600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.Entry into a Material Definitive Agreement.

Stock Purchase Agreement

On October 13, 2015, Digirad Corporation (“Digirad” or the “Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Project Rendezvous Holding Corporation (“PRHC”) and the stockholders of PRHC named therein (collectively, “Stockholders”) and Platinum Equity Advisors, LLC as the Stockholder representative (the “Stockholder Representative”), pursuant to which, subject to the satisfaction or waiver of certain conditions, the Company will purchase from the Stockholders all of the issued and outstanding common stock of PRHC (the “Transaction”). Upon closing of the Transaction, PRHC would be a wholly owned subsidiary of the Company. PRHC is the ultimate parent of DMS Health Technologies, Inc. (“DMS Health”), a provider of mobile diagnostic imaging and related sales and services to small and regional hospitals throughout the United States, with a large concentration in the upper Midwest region.

The purchase price for the Transaction is $36 Million in cash (the “Purchase Price”), subject to certain adjustments. The Company expects to fund payment of the Purchase Price with a combination of cash-on-hand and the committed financing described below.

The completion of the Transaction is subject to customary closing conditions. The Transaction is not subject to approval by the Company’s stockholders. The Purchase Agreement contains representations, warranties and covenants of PRHC, the Stockholders and Digirad that are customary for a transaction of this nature. The Purchase Agreement also contains indemnification obligations of the parties thereto.  Assuming the satisfaction or waiver of the closing conditions, the Transaction is expected to close by December 31, 2015.

Between the date of the Purchase Agreement and the closing date, PRHC has agreed to, and agreed to cause its subsidiaries (including DMS Health) to, (1) operate their respective businesses in the ordinary course in all material respects consistent with past practice, (2) to keep its business and operations intact, retain its present officers and employees and preserve its material rights, franchises, goodwill and relations with its clients, customers, lessors, suppliers and others with whom it does business so that they will be preserved after the closing of the Transaction, and (3) to comply with certain other operating covenants.

The Purchase Agreement provides Digirad and PRHC with certain termination rights, including if the closing of the Transaction has not occurred by January 15, 2016, or such later date as mutually agreed to in writing by Digirad and PRHC.

The foregoing summary of the Purchase Agreement is qualified in its entirety by reference to the text of the Purchase Agreement, which will be filed as an exhibit to the Company’s Current Report on Form 8-K to be filed in connection with the closing of the Transaction.

Committed Financing

In connection with the Transaction, the Company entered into a commitment letter, dated as of October 13, 2015 (the “Commitment Letter”), with Wells Fargo Bank, National Association (“Wells Fargo”) pursuant to which Wells Fargo committed, on the terms and conditions set forth in the Commitment Letter (the “Commitments”), to provide the Company with a senior secured credit facility in the aggregate amount of $40 million (the “Credit Facility”). The Commitments under the Commitment Letter are subject to various conditions, including consummation of the Transaction. In the event the initial funding under the Credit Facility does not occur on or prior to January 15, 2016, then Wells Fargo’s commitment to provide the Credit Facility will automatically expire on such date.

Item 7.01. Regulation FD Disclosure

On October 14, 2015, the Company issued a press release relating to the Transaction.  A copy of the press release is furnished as Exhibit 99.1 attached to this Form 8-K and incorporated into this item 7.01 by reference.

A presentation the Company will be using during its conference call described below is furnished as Exhibit 99.2 attached to this Form 8-K and incorporated into this item 7.01 by reference.

A conference call is scheduled for 11:00 a.m. EDT on October 14, 2015 to discuss the Transaction and management’s outlook. The call may be accessed by dialing 877-407-9039 (international callers: 201-689-8470) five minutes prior to the scheduled start time and referencing Digirad. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investors page of the Digirad website at http://drad.client.shareholder.com/events.cfm; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

Cautionary Statements Regarding Forward-Looking Statements

This Current Report on Form 8-K contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of those words or other comparable terminology, or in specific statements such as the Company’s ability to deliver value to customers, the ability to grow and generate positive cash flow, the ability to execute on restructuring activities, and ability to successfully close and execute the acquisition of DMS Health and other acquisitions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These risks are detailed in Digirad’s filings with the U.S. Securities and Exchange Commission, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports. Readers are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Digirad undertakes no obligation to revise or update the forward-looking statements contained herein.

Item 9.01.Financial Statements and Exhibits.

(d)  Exhibits.

99.1 Press Release, dated October 14, 2015.

99.2 Investor Slide Presentation, dated October 14, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DIGIRAD CORPORATION
By:	/s/Jeffry R. Keyes
	Jeffry R. Keyes Chief Financial Officer

Date:    October 14, 2015

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated October 14, 2015.
99.2	Investor Slide Presentation, dated October 14, 2015.

EX-99.1

Exhibit 99.1

News Release

For immediate release	For more information contact:
October 14, 2015	Jeffry Keyes
	Chief Financial Officer
	858-726-1600
	ir@digirad.com

DIGIRAD CORPORATION ANNOUNCES AGREEMENT TO ACQUIRE

DMS HEALTH TECHNOLOGIES FOR $36 MILLION IN CASH

• $36 million transaction anticipated to increase Digirad’s pro forma revenue and adjusted EBITDA to over $125 million and $17 million annually

• Transaction expected to be immediately accretive to Digirad’s earnings and cash flow on an adjusted basis

• Combined company will have significantly expanded geographies, customer base, and product and service offerings

• Industry-leading service offerings will be significantly diversified among multiple imaging modalities

• Wells Fargo has provided Digirad with a Commitment Letter for a senior secured credit facility of up to $40 million

• Digirad’s regular quarterly cash dividend will remain unchanged

SUWANEE, GA & FARGO, ND - October 14, 2015 - Digirad Corporation (“Digirad”) (NASDAQ: DRAD), the leader in providing healthcare solutions on an as needed, when needed, and where needed basis, today announced that it has entered into a definitive agreement to acquire all the outstanding equity of Project Rendezvous Holding Corporation, the ultimate parent company of DMS Health Technologies, Inc. (“DMS Health”), for $36 million in cash from Los Angeles-based Platinum Equity.

Headquartered in Fargo, North Dakota, DMS Health has approximately 250 employees and provides mobile diagnostic imaging and related sales and services to small and regional hospitals throughout the country, with a large concentration in the upper Midwest region.

“We believe this acquisition represents a significant milestone in Digirad’s history, and should generate considerable value for our customers and our shareholders and enhanced opportunities for the employees of both companies,” commented Matt Molchan, Digirad’s President and CEO. “The integration of DMS Health and Digirad will enable the combined company to expand its range of customers serviced as well as provide significant geographical and service level diversification. DMS Health is an ideal strategic fit for us and our commitment to providing healthcare solutions on an as needed, when needed, and where needed basis.”

DMS Health generated over $65 million in revenues in 2014. Once the integration is complete, the Company expects, based on current information, the consolidated Digirad entity to generate pro forma annual revenue and adjusted EBITDA of over $125 million and $17 million, respectively.

“Today is an exciting day for the entire DMS Health team and for the future of our company,” said William Vogel, DMS Health’s CEO. “Digirad is an ideal fit for our company; they know the industry and our market very well, and we believe the Digirad team is uniquely suited to help us grow in the future.”

Mr. Molchan continued, “DMS Health has a significant presence in the upper Midwest, a region that is currently absent in our Diagnostic Services business map, and specializes in the provision of mobile MRI, CT, and PET/CT imaging, all modalities that we do not currently offer. Further, DMS Health has a long standing partnership with Philips Healthcare North America equipment sales and service. These are just a few of the numerous synergistic and diversification opportunities this acquisition provides to Digirad. We believe the new, combined Company will be much stronger than either company would be on its own.”

Transaction Details

The aggregate consideration for DMS Health will be $36 million in cash at closing. In connection with the acquisition, Digirad has obtained a commitment letter from Wells Fargo Bank, N.A. for a total senior secured credit facility of up to $40 million that the Company intends to use to partially fund the transaction, along with cash on hand.

Digirad remains committed to its current quarterly dividend of $0.05 per share and its capital structure post-closing of the transaction is intended to support this important component of value to Digirad shareholders.

The transaction is expected to close before the end of the year and is subject to the satisfaction of customary closing conditions.

Conference Call Information

A conference call is scheduled for 11:00 a.m. EDT on October 14, 2015 to discuss the transaction and Management’s outlook. The call may be accessed by dialing 877-407-9039 (international callers: 201-689-8470) five minutes prior to the scheduled start time and referencing Digirad. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investors page of the Digirad website at http://drad.client.shareholder.com/events.cfm; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

About Digirad

Digirad delivers convenient, effective, and efficient healthcare solutions on an as needed, when needed, and where needed basis. Digirad is one of the largest national providers of in-office nuclear cardiology and ultrasound imaging services, and also provides cardiac event monitoring services. These services are provided to physician practices, hospitals and imaging centers through its Diagnostic Services business. Digirad also sells medical diagnostic imaging systems, including solid-state gamma cameras, for nuclear cardiology and general nuclear medicine applications, as well as provides service on the products sold through its Diagnostic Imaging business. For more information, please visit www.digirad.com. Digirad^® and Cardius^® are registered trademarks of Digirad Corporation.

About DMS

DMS Health Technologies’ diverse portfolio of medical equipment and diagnostic imaging services provides physicians the access to technology necessary to provide exceptional patient care in today’s rapidly changing healthcare environment. DMS Health’s complete portfolio of healthcare solutions and healthcare equipment, coupled with over three decades of serving healthcare facilities, exceptional customer service and quality patient care, demonstrates DMS Health’s expertise and professionalism in healthcare.

Use of Non-GAAP Financial Measures

In addition to financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), information containing non-GAAP financial measures is disclosed herein. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Management encourages readers to rely upon the GAAP numbers, but includes the non-GAAP financial measures as supplemental metrics to assist readers.

The Company presented the non-GAAP financial measure “adjusted EBITDA.” Company management uses this non-GAAP financial measure and other non-GAAP financial measures to evaluate the Company's performance. As the Company's core business is providing healthcare services and products to the healthcare industry, Company management finds it useful to use financial measures that do not include charges associated with restructuring and integration activities, acquired intangible asset amortization, acquisition-related income tax adjustments, or acquisition related contingent consideration adjustments. While we may have these types of items and charges in the future, Company management believes that they are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, and that may obscure the trends and financial performance of the Company's core business. Further, Company management believes the exclusion of interest, taxes, depreciation, amortization, and stock-based compensation is very commonly utilized in the investment community and it helps Company management benchmark its operations and results with the industry.

The limitation associated with using non-GAAP financial measures is that these measures exclude items that impact the Company's GAAP operating results. This limitation is best addressed by using non-GAAP financial measures in combination with “net income” (the most comparable GAAP measure).

Forward-Looking Statements

This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation ReformAct of 1995. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of those words or other comparable terminology, or in specific statements such as the Company’s ability to deliver value to customers, the ability to grow and generate positive cash flow, the ability to execute on restructuring activities, and ability to successfully close and execute the acquisition of DMS Health and other acquisitions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These risks are detailed in Digirad’s filings with the U.S. Securities and Exchange Commission, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports. Readers are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Digirad undertakes no obligation to revise or update the forward-looking statements contained herein.

EX-99.2

DMS Health Technologies, Inc. ACQUISITION OVERVIEW OCTOBER 14, 2015 Exhibit 99.2

FORWARD-LOOKING STATEMENTS “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The presentation and information contained herein contain statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of those words or other comparable terminology, or in specific statements such as the Company’s ability to deliver value to customers, the ability to grow and generate positive cash flow, the ability to execute on restructuring activities, and ability to successfully close and execute the acquisition of DMS Health and other acquisitions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These risks are detailed in Digirad’s filings with the U.S. Securities and Exchange Commission, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports. Readers are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Digirad undertakes no obligation to revise or update the forward- looking statements contained herein. This presentation reflects management’s views as of the date presented. Non-GAAP Financial Measures: The financial information included in this presentation includes Non-GAAP financial measures. Definitions can be found on the Securities and Exchange Commission website at www.sec.gov in Exhibit 99.1 of our form 8-K filed on October 14, 2015. 2

~ EOY 2015: •Proposed Acquisition of DMS Health Technologies •~$65+ Million in Revenue •Expands Service Offerings, Geographies and Customer Base February 2013: •Core Business Restructured •Return to Profitability Digirad Strategy Update 3 Since Digirad’s restructuring in early 2013, we have focused on value creation, growth, and cash flow generation. We have stated our growth will come from:  Acquisitions  Organic Growth  New Services (Acquisitions or Organic) ● Since early 2013, we have been delivering on this commitment – returning to consistent profitability, paying a dividend, growing our core revenue base, and executing on key acquisitions that diversify our service offerings while growing revenue ● The DMS Health Technologies acquisition is the next step in this overall strategy Jan 2013 Dec 2015 March 2014: •Telerhythmics Acquired •~$5+ Million in Revenue •Cardiac Monitoring Added to Digirad’s Service Offerings March 2015: •MD Office Solutions Acquired •~$3+ Million in Revenue •North / Central California Geography Added November 2013: • Instituted a Regular Quarterly Dividend

DMS Health Technologies Overview 4 DMS Health Technologies (DMS Health) is an integrated health care services company headquartered in Fargo, ND providing mobile, fixed-site, and interim imaging as well as imaging and related equipment product sales and support. ● DMS Health Mission:  Improve healthcare delivery by overcoming capacity and access challenges  Provide unparalleled mobile healthcare solutions to its customers  Become a trusted advisor and partner of choice ● Founded in 1972 ● Approximately 250 Employees ● Over $65 million in revenues in 2014 ● Operations throughout the country, with a large concentration in the upper Midwest

DMS Health Technologies Overview 5 DMS Health Technologies, Inc. 2014 Revenue: ~$65M DMS Imaging Division Medical Equipment Services Division Medical Equipment Product Sales Division ● Mobile Imaging  PET/CT  MRI  CT  Nuclear Medicine  Mammography ● Fixed Site Imaging ● Interim / Short Term Imaging ● Exclusive Partner for Philips Imaging Systems in the Region ● Upper Midwest Service Area ● Service Multiple Imaging Modalities ● Exclusive Partner for Philips Imaging and Monitoring Sales in the Region ● Midwest Sales Area ● Ability to Sell Multiple Imaging Modalities and Related Equipment

Pro Forma Customer Map 6 ● The combined Digirad entity will support customers in 42 states ● Though there is some minor overlap in some states, DMS Health’s highest customer concentrations are in the upper Midwest – all new territory for Digirad ● The long-term benefit will be the ability to leverage existing customer relationships in the respective territories for the new array of modalities offered Existing Digirad Customer Territory Existing DMS Customer Territory Combined DMS / Digirad Territories

Pro Forma Combined Company 7 The combined Digirad entity is anticipated to have the following pro forma metrics once closed: ● Annual Revenues: Over $125 Million ● Annual Adjusted EBITDA: Over $17 Million ● Employees: ~650 ● US States Served: 42 ● Annual Dividend Rate Per Share: $0.20

Key Deal Terms 8 Stock Purchase Agreement ● Purchase Price. $36 Million, all cash. ● Closing Conditions. Customary for a transaction of this type. ● Expected Closing. By December 31, 2015. ● Acquisition Funding. Combination of cash on hand and financing arrangement. Digirad Financing Arrangement ● Total Commitment. $40 million. ● Financing Type. Commitment is spread among a revolving line and term loan tranches. ● Asset Base. Accounts receivable, inventory, machinery and equipment, real property. ● Covenants. Customary covenants on liquidity, maximum leverage, etc. ● Financing Partner. Wells Fargo, N.A.

Key Benefits of DMS Health 9 ● Geography. DMS Health has a strong presence in the upper Midwest – which overlays very well with Digirad, with no current services in the area; expanding geographic opportunities for both companies. ● Modalities. PET/CT, MRI, and CT make up the majority of DMS Health’s imaging operations – all modalities that Digirad currently does not offer. These new modalities introduce diversification and service revenue expansion opportunities. ● Customers. DMS Health mainly services hospitals, while Digirad’s core customer class is physician offices. This customer mix addition further diversifies our combined company and provides opportunities to cross sell services. ● Philips Relationship. With a key partner in Philips, Digirad and DMS Health will have the opportunity to expand their combined product sales and service operations present at both companies. ● Management Depth. The current DMS management team is very seasoned in healthcare. Their experience and industry knowledge complements Digirad’s existing strong management team. ● Immediately Accretive and Strategic. This acquisition will be immediately accretive on an adjusted net income and EBITDA basis. In addition, it will allow Digirad to take further advantage of existing tax net operating loss (NOL) carry forwards.