Virtual Radiologic Corp. (NSDQ:VRAD) is heading private in a $294 million acquisition, three years after its $68 million IPO.

Rhode Island-based private equity firm Providence Equity Partners agreed to buy out the radiology outsourcing firm, according to a press release (PDF).

Since late 2007, Virtual Radiologic stock price has fallen 43 percent. CEO Rob Kill told MedCity News that the company didn’t feel it was "being valued properly."

Under Virtual Radiologic’s sale agreement, Providence would acquire all outstanding common shares of the company for $17.25 a share, a 4.2 percent premium over its $16.86 close May 14. The deal is expected to close in the third quarter.

Speculating about the reason for the sale, Brooks O’Neil, an analyst with Minneapolis-based investment bank Doughtery & Co. told MedCity News, "There’s no doubt in my mind that Virtual would be a successful company in the long term." O’Neil said he wouldn’t be surprised if Virtual goes public again in the future.

Virtual Radiologic co-founder and chief medical officer Dr. Eduard Michel, who owns a 6 percent stake in the company, and private equity firm Generation Partners, which owns 25.3 percent, will vote in favor of the deal, according to the press release.

The firm provides teleradiology services and software to remotely connect hospitals and clinics around the country with radiologists who analyze and interpret MRI and CT scans. The company has been growing rapidly, to $121 million in revenue in 2009 from $86 million in 2007. Providence Equity has invested in more than 100 companies since 1989, according to its website, including Hulu and Kerasotes Theatres, but few firms in the health space. The company manages more than $22 million in equity capital.