GCIIntelligent Ultrasound announces £40.5m sale of Clinical AI business to GE, shares soar
() , an ultrasound AI software and simulation company, has entered into a conditional agreement for the sale of its Clinical AI business to GE HealthCare for £40.5m in cash. The proposed transaction excludes the NeedleTrainer and NeedleTrainer Plus products, which will remain within along with its Simulation business.
The consideration represents an implied value of 12.4p/share on current issued share capital and a premium of 70.9% to the share price on July 17, 2024, as well as a premium of 30.9% to the volume-weighted share price for the last 12 months. shares jumped c. 47% on the news. The proposed transaction also values 's Clinical AI business at 33.8x its full-year FY23 revenues.
The transaction is subject to shareholder and regulatory approval. said it has received irrevocable undertakings and letters of intent from shareholders, representing c. 54.6% of the ordinary share capital to vote in favour of the transaction.
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Major news from Intelligent Ultrasound as it announces the sale of its Clinical AI business to GE HealthCare for £40.5m in cash. expects the deal to be approved by shareholders. The consideration represents a 71% premium to yesterday's closing price and values Clinical AI at 33.8x its FY23 revenues, prompting a strong reaction from markets. shares jumped c. 90% on the announcement, but have since consolidated to c. +47%.
The disposal excludes 's NeedleTrainer/Trainer Plus product, which will be retained within the remaining Simulation business, which generated revenues of £10.0m in FY23, including £0.8m relating to NeedleTrainer. expects to make a significant return of capital following a review of the growth potential and cash requirements of its post-transaction business - an announcement detailing the proposed use of funds and direction of that business is expected when the transaction completes around September-October 2024.
Intelligent Ultrasound acquired its Clinical AI business in October 2017 through the purchase of Intelligent Ultrasound Limited, a University of Oxford spin-out, for £3.6m, and has since committed to it c. £12.2m. Although managed to develop its Clinical AI business significantly, the group has struggled to grow ScanNAV AI-related revenues quickly enough and secure upfront funding levels matching its competitors.
The decision to dispose of the business at a great ROI solves both problems and materially improves the company's chances of reaching profitability on its current cash runway. In a separate trading update for the 6 months to June 30, 2024, said it reduced cash burn significantly during the half to £2.0m, down from £3.8m in H1 2023, leaving cash on June 30, 2024 of £1.0m. Following the transaction, expects to have c. £39.5m of cash net of transaction-related fees.
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