Intelligent Ultrasound completes £40.5m sale of Clinical AI business to GE HealthCare
() , an ultrasound AI software and simulation company, said it completed the sale of its Clinical AI business to GE HealthCare for £40.5m in cash. The deal was initially announced on July 18, 2024. The sale excluded 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. shares are up c. 50% since the deal was announced. The transaction values 's Clinical AI business at 33.8x its full-year FY23 revenues.
said it has undertaken a review of its remaining Simulation business to evaluate its growth potential and associated capital requirements. Simultaneously, the board has taken counsel on structuring a "material return of capital" through distributable reserves, which will be effected via a capital reduction. The reduction is expected to be approved by court order on November 18, after which further plans will be announced.
Riccardo Pigliucci, Chairman of Intelligent Ultrasound, commenting: "We are pleased to complete the sale of our Clinical AI Business to GE HealthCare for £40.5 million ... The remaining simulation business has tremendous potential with an excellent product range particularly in new areas such as needling. Our mission is to make ultrasound easier to learn and simpler to teach, as we aim to support the rising demand for sonographers worldwide.
Over the last six weeks we have been engaged in a comprehensive review of the remaining Simulation Business that has involved evaluating the potential of expanding both our medical simulation product range, as well as our sales operations in both reach and scale."
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Intelligent Ultrasound has completed the sale of its Clinical AI business to GE HealthCare for £40.5m in cash. The transaction prompted a large movement in share price when initially announced, which has since consolidated to +45%. shares rose 4.9% on today's announcement. The deal values Clinical AI at 33.8x its FY23 revenues, prompting the strong reaction from markets.
The disposal excludes 's NeedleTrainer/Trainer Plus products, which are retained within the remaining Simulation business that 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 later in Q4.
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 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. reduced cash burn significantly in H1 2024 to £2.0m, down from £3.8m in H1 2023, leaving cash on June 30, 2024 of £1.0m. Now that the deal with GE has gone through, should have a comfortable cash balance of c. £39.5m net of transaction-related fees.
In a separate business update for H2 2024, said trading was broadly in-line with H1, with the UK still affected by the capex constraints on the NHS and the North American market still slower than expectations, while forecasting reseller revenue from the rest of the world to increase year-on-year.
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