Profound Medical closes $6m Philips Sonalleve MR-HIFU biz buy

Profound Medical (TSX:PRN) said today it closed its $6 million acquisition of Royal Philips (NYSE:PHG) Sonalleve MR-HIFU business

Philips Sonalleve MR-HIFU platform features real-time MR imaging and thermometry alongside high intensity focused ultrasound for incision-free ablation of tissue, Toronto-based Profound Medical said.

“This transaction with Philips is truly transformative for Profound, and represents an opportunity for us to immediately transition from a development-stage to a growth-stage company,. From a commercial perspective, our strengthened MR-Ultrasound ablation technology platform not only benefits Profound by significantly increasing the total opportunity size and creating synergies, but also benefits hospital customers by providing them with the ability to better utilize their MR system assets.  In addition to the contribution the acquisition of the Sonalleve MR-HIFU business will make to our revenue base, we believe that it will also help accelerate our growth going forward,” Profound CEO Dr. Arun Menawat said in a press release.

Through the agreement, Philips will continue to distribute Profound’s Tulsa-Pro system, designed for prostate tissue ablation.

The 2 companies said they expanded their non-exclusive strategic sales relationship to now include distribution of the Sonalleve MR-HIFU system, with Philips providing other services including manufacturing and installation for a limited time.

“We are excited about our enhanced close collaboration with Profound, as we aim to accelerate the development of new clinical applications and address the evolving needs of our current and future customers,” Philips diagnosis and treatment chief biz leader Rob Cascella said in a prepared release.

The deal, announced in late June, called for Profound Medical to put up 7.4 million shares at 84.9¢ (C$1.10) apiece, representing a 22% premium over its closing price June 29. The total deal value was $6.3 million (C$8.1 million)

The agreement also included earn-outs pegged to future revenues of 5% to 7% of Sonnalleve sales through 2020, the company said.

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