Medical imaging AI developer Lunit will acquire Volpara Health Technologies, a producer of AI software for mammography, for $193 million (AUD 292 million).

Aiming to grow its presence, especially in the U.S. market, Lunit will pay AUD 1.15 ($0.77) for each of Volpara's shares through a New Zealand scheme of arrangement.

Volpara produces AI-powered medical image analysis solutions that improve the quality of mammograms and other breast health exams to help radiologists identify early signs for and prevent cancer. Based in Wellington, New Zealand, the company has over 100 patents and several regulatory registrations, including FDA clearance and CE mark status.

The acquisition, if successful, will provide Lunit access to Volpara’s repository of over 100 million high-quality mammogram images to refine its Lunit INSIGHT suite, specifically its Lunit INSIGHT MMG solution, which is FDA-cleared and CE-marked and already trained on more than 240,000 mammography cases, including up to 50,000 breast cancer cases. Based in Seoul, South Korea, Lunit has deployed its suite in more than 3,000 hospitals and medical institutions in over 40 countries.

“Volpara's AI-powered mammography solutions, operational in over 2,000 U.S. medical sites, would catapult Lunit into the forefront of the American market," said Brandon Suh, CEO of Lunit, in a statement.

For Volpara, the per-share cash offer is a 47.4% premium to its last closing share price of AUD 0.78 ($0.52) and under the scheme, the company can continue to be a publicly-listed company.

While both organizations are prohibited from negotiating with or providing information to third parties, should a superior offer be made to Volpara and there be a need to respond to fulfill statutory or fiduciary obligations, the company can engage with the competing proposal.

According to the Volpara board, the deal would accelerate a capital return to shareholders and reduce risks associated with executing Volpara’s strategic plan for growth over time.

“By combining Lunit and Volpara, the group would have the opportunity to develop products that no other company is in a position to do," said Teri Thomas, CEO and managing director of Volpara.

The scheme requires approval from Volpara shareholders and the New Zealand High Court, regulatory clearances from the New Zealand Overseas Investment Office, and fulfillment of other customary conditions.

Volpara shareholders will vote at a scheme meeting in the early second quarter of 2024.

Lunit expects to finalize the deal by the same quarter.

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