Toronto-based Profound said the deal calls for it to put up 7.4 million shares at 84.9¢ (C$1.10) apiece, representing a 22% premium over its closing price yesterday. The total deal value is $6.3 million (C$8.1 million)
The agreement also has earn-outs pegged to future revenues of 5% to 7% of Sonnalleve sales through 2020, the company said. Philips, which already sells Profound’s Tulsa-Pro prostate ablation system, also pledged to distribute the Sonalleve device which is mostly used to ablate uterine fibroids.
“This agreement with Philips is in keeping with our commitment to invest in the powerful combination of real-time MR-guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative technology to clinicians,” Profound CEO Dr. Arun Menawat said in prepared remarks. “From a commercial perspective, taking this technology platform approach not only benefits Profound by significantly increasing our total opportunity size, but also benefits hospital customers by providing them with the ability to better utilize their MR system assets. In addition to the immediate contribution this transaction will make to our revenue base, we believe that it will also help accelerate our growth going forward.”
“We strive to provide clinicians with a broad portfolio of targeted therapy solutions for the treatment of complex diseases such as cancer,” added Philips diagnosis & treatment chief business leader Rob Cascella. “We recognize the broader value MR-guided HIFU therapies can bring to clinicians and their patients, and we appreciate Profound’s strengths in the area of MR-guided ultrasound ablation therapy. We believe that the increased scale of the business as a result of the transfer of Philips’ MR-HIFU activities to Profound and the resulting enhanced close collaboration will accelerate the development of new clinical applications for this promising technology, while better serving the needs of our current and future MR-HIFU customers. We look forward to our continued participation in the future of MR-HIFU via both our collaboration with, and minority shareholdings in, Profound.”
($1 = C$1.29622)