- 17% premium to undisturbed share price
- Intelligent Ultrasound has struggled to grow
- Simulation Business is ‘particularly attractive’
Yet another unloved UK company has agreed to a takeover by an overseas buyer, further deleting the ranks of firms listed on the London stock market.
The latest name to throw in the towel is Intelligent Ultrasound (IUG:AIM), an ultrasound AI software and simulation minnow which has recommended a £45 million takeover by Surgical Science Sweden (SUS:STO), news that sent the shares up 15% to 12.75p.
WHAT IS INTELLIGENT ULTRASOUND?
A Cardiff University spin-out, Intelligent Ultrasound describes itself as the ‘classroom to clinic’ ultrasound company. In short, it is a leader in integrated AI-driven image analysis tools designed to make ultrasound smarter and more efficient.
The company has agreed to a takeover by Stockholm-listed medical simulation leader Surgical Science in an all-cash deal priced at 13p per share and valuing Intelligent Ultrasound at £45.2 million.
While the 16.9% premium to the undisturbed share price looks ungenerous, the bid price does represent a near-80% premium to the 7.25p closing price on 17 July 2024, the day before Intelligent Ultrasound announced the balance sheet-strengthening sale of its Clinical AI Business to GE Healthcare (GEHC:NASDAQ) for £40.5 million in cash.
INTELLIGENCE ON THE DEAL
Despite its strong reputation and innovative products – it has been on Surgical Science’s radar for some time - Intelligent Ultrasound is lossmaking and has struggled to sustainably growth its niche simulation business as a standalone entity.
As non-executive chairman Riccardo Pigliucci explained: ‘Recognising the difficulties of quickly achieving scale, combined with shareholders’ strong preference for an efficient return of the majority of the proceeds from the sale of the Clinical AI Business, the Intelligent Ultrasound board believes that the sale to Surgical Science allows Intelligent Ultrasound to both efficiently return capital to shareholders, as well as providing the majority of employees and broader stakeholders with the advantage of joining a considerably larger, broad-based simulation focused business that we believe will provide the scale, resources and investment to be successful and sustainable in the global simulation market.’
In Surgical Science’s view, Intelligent Ultrasound’s simulation arm is ‘particularly attractive due to its strong reputation for delivering high-quality training solutions that improve the skills of healthcare professionals. With a solid customer base in medical schools, hospitals, and training institutions, Intelligent Ultrasound is well-positioned to capitalise on the growing demand for advanced training solutions in the healthcare sector.’
The acquisition will enable the Swedish group to establish a firm footprint in the UK, with a new research and development site as well as a comprehensive commercial organisation.
In addition, it plans to leverage its existing expertise in medical simulation while integrating Intelligent Ultrasound's specialised knowledge in ultrasound training.
WHAT DID SURGICAL SCIENCE SAY?
Surgical Science’s CEO Tom Englund stressed that the ultrasound market is developing rapidly with a strong increase in the number of systems sold, ‘highlighting the need for simulation training that will enable practitioners to utilise the systems to their full potential.’
Englund added: ‘Through the acquisition of Intelligent Ultrasound, we further diversify our product portfolio and expand our geographical reach and sales network, enabling us to provide a comprehensive suite of ultrasound simulation products across the world, benefitting customers and reinforcing our market leadership.’
