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iCAD To Acquire Xoft For $13.1 Million In Cash And Stock

Last updated: 23:30 16 Dec 2010 GMT, First published: 00:30 17 Dec 2010 GMT

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iCAD (Nasdaq: ICAD), a provider of image analysis solutions for cancer detection, announced today that it will buy privately-held Xoft in a stock and cash deal valued at about $13.1 million.


The deal consists of 8.47 million iCAD shares and $1 million in cash plus potential payments up to $40 million based on Xoft’s revenues over the next three years.   


California-based Xoft is the maker of the Axxent System, an FDA-approved machine which delivers electronically-controlled radiation therapy directly to cancer areas without exposing healthy tissue to radiation.  According to New Hampshire-based iCAD, there are 58 Axxent systems installed worldwide, 56 of which are in the U.S. 


 Xoft is expected to have about $5.5 million of sales in 2010.


"The acquisition of Xoft will transform iCAD from a company focused on image analysis for the early detection of cancers to a broader player in the oncology market,” said Ken Ferry, CEO of iCAD.


After the closing of the deal, the shareholders of Xoft will own about 15.6% of iCAD’s outstanding shares. 


Including the Xoft acquisition iCAD said it forecasts having revenues in the range of $34 million to $38 million for 2011.  Gross margins are expected to be in the low to mid 70%.


The deal is expected to close by the end of the year.   


iCAD’s shares are up 5% to trade at $1.43 as of 2:22 pm EST.

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