Virtual Radiologic Corporation, an Eden Prairie-based provider of teleradiology solutions to the medical industry, announced Monday that it will purchase NightHawk Radiology Holdings, Inc., for $6.50 per share-or about $170 million.

The cash transaction represents a 100 percent premium over NightHawk's closing stock price on Friday, which was $3.25 per share. The transaction is expected to be completed during the first quarter of 2011, pending customary closing conditions, and NightHawk's board has recommended that its stockholders approve the sale.

NightHawk, a Scottsdale, Arizona-based provider of radiology solutions, serves physicians in the United States, Australia, and Switzerland. The merged companies will encompass 325 radiologists at about 2,700 health care facilities in all 50 states.

“Local radiology practices and hospitals are under intense pressure to deliver the highest quality care in the most efficient manner possible,” Virtual Radiologic President and CEO Rob Kill said in a statement. “The need for expanded access, improved quality, and reduced costs is clear. Both Virtual Radiologic and NightHawk have been delivering these benefits in partnership with local radiologists for many years.”

NightHawk President and CEO David Engert said in a statement that the acquisition-which was unanimously approved by the company's board of directors-will provide “significant, immediate value” to NighHawk's stockholders.

Under the terms of the acquisition, Kill will serve as president and CEO of the combined entity, and Engert will serve as a board advisor. Virtual Radiologic said that the rest of the merged company's leaders will be chosen from the current management teams of both companies.

Virtual Radiologic, now a private company, was previously one of Minnesota's largest public companies based on its revenue, which totaled $120.7 million in 2009. The company was acquired by Rhode Island-based Providence Equity Partners in July for about $294 million.