Northstar Healthcare Inc. said Wednesday it would buy a minority stake in four doctor-owned Texas radiation therapy centers for a cash-and-stock deal worth $5.6 million, including the assumption of debt.

Houston-based Northstar, which runs three outpatient surgical centers in West Texas, said it was buying the stake from Dr. Chris Phan, a radiation oncologist and CEO of Expert Oncology Network Solutions LLC., a cancer center consultancy. Phan will now join Northstar as president of a new cancer division, the company said.

Northstar, a publicly traded, for-profit company, said the U.S. radiation therapy market was worth an estimated $7 billion a year, but was "highly unconsolidated," with no company owning more than five percent of the country's nearly 2,000 freestanding or hospital-based centers.

The purchase nets Northstar a 13 to 36 percent stake in the four centers. The remaining ownership interests in the centers, with two in Houston, one in Corpus Christi and another in San Antonio, lie with the other doctor-owners, the company said.

Excluding assumed debt, the purchase is valued at $2.7 million, with $1.8 million of that in cash, $400,000 in convertible promissory notes and $500,000 in common stock from Northstar.

Seventy-seven percent of the purchase, expected to be wrapped up in June after financial audits are finished, will be paid out over the next two years.

Northstar also said its chief financial officer, David Richardson, would leave the company to work as CFO at an unnamed "private equity based healthcare company." Thomas O. Foster, III, an attorney who currently acts as Northstar's director and chairs the audit committee, will serve as interim CFO. He became director in October 2010.

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