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.