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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

19 DECEMBER 2024

RECOMMENDED CASH ACQUISITION

of

Intelligent Ultrasound Group plc ("Intelligent Ultrasound")

by

Surgical Science Sweden AB ("Surgical Science")

to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

·      The boards of Surgical Science and Intelligent Ultrasound are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition to be made by Surgical Science for the entire issued and to be issued ordinary share capital of Intelligent Ultrasound (the "Acquisition"). It is intended that the Acquisition be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (the "Scheme" or "Scheme of Arrangement").

 

·      Under the terms of the Acquisition, Intelligent Ultrasound Shareholders shall be entitled to receive:

13 pence in cash for each Intelligent Ultrasound Share held (the "Acquisition Price")

·      The Acquisition Price values the entire issued and to be issued ordinary share capital of Intelligent Ultrasound at approximately £45.2 million on a fully diluted basis.

 

·      The Acquisition Price represents a premium of approximately:

 

·      16.9% to the Closing Price per Intelligent Ultrasound Share of 11.13 pence on 18 December 2024 (being the last Business Day prior to the publication of this announcement);

 

·    31.1% to the volume-weighted average price per Intelligent Ultrasound Share of 9.91 pence for the 12-month period ended 18 December 2024 (being the last Business Day prior to the publication of this announcement); and

 

·      79.3% to the Closing Price per Intelligent Ultrasound Share of 7.25 pence on 17 July 2024 (being the last Business Day prior to the publication of the announcement of the sale of the Clinical AI Business).

 

·      If, on or after the date of this announcement and on or prior to the Effective Date, any dividend, distribution, or other return of value is declared, made, or paid or becomes payable by Intelligent Ultrasound, Surgical Science reserves the right to reduce the Acquisition Price by an amount up to the amount of such dividend, distribution or other return of value in which case any references to the Acquisition Price will be deemed to be a reference to the Acquisition Price as so reduced. In such circumstances, eligible Intelligent Ultrasound Shareholders shall be entitled to retain any such dividend, distribution, or other return of value declared, made, or paid.

Unanimous Intelligent Ultrasound Recommendation

·      The Intelligent Ultrasound Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Intelligent Ultrasound Directors, Cavendish has taken into account the commercial assessments of the Intelligent Ultrasound Directors.

 

·      Accordingly, the Intelligent Ultrasound Directors intend to recommend unanimously that Intelligent Ultrasound Shareholders vote in favour of the Scheme at the Court Meeting and vote in favour of the Resolution to be proposed at the General Meeting as the Intelligent Ultrasound Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 2,381,952 Intelligent Ultrasound Shares representing, in aggregate, approximately 0.7% of the issued ordinary share capital of Intelligent Ultrasound in issue as at the Latest Practicable Date.

Background to and reasons for the Acquisition

·      Surgical Science has established itself as a leader in medical simulation, dedicated to enhancing medical training through innovative technologies. Surgical Science has closely monitored the developments at Intelligent Ultrasound for some time. Following Intelligent Ultrasound's strategic decision to sell its Clinical AI Business to GE HealthCare, this moment presents a unique opportunity for both companies to join forces in a way that can significantly benefit both companies' long-term goals.

 

·      In Surgical Science's view, Intelligent Ultrasound's Simulation Business is particularly attractive due to its strong reputation for delivering high-quality training solutions that improve the skills of healthcare professionals. Intelligent Ultrasound has developed a suite of products that are widely recognised for their effectiveness in ultrasound education, including realistic simulation scenarios and user-friendly interfaces. With a solid customer base in medical schools, hospitals, and training institutions, Intelligent Ultrasound is well-positioned to capitalise on the growing demand for advanced training solutions in the healthcare sector.

 

·      Despite its strong reputation and innovative products, Intelligent Ultrasound has historically faced challenges in achieving sustainable growth of the Simulation Business as a standalone entity, with the primary obstacles in Surgical Science's view being the niche offering and the lack of organisational scale. In the competitive landscape of medical simulation, having a diverse portfolio of products is crucial for product bundling and cross-selling opportunities, attracting a wider customer base and enhancing customer value. Intelligent Ultrasound primarily focuses on ultrasound simulation, which limits its ability to offer comprehensive training solutions that encompass other medical disciplines. Furthermore, Intelligent Ultrasound, operating independently, may struggle to match the marketing budgets and distribution networks of larger competitors, limiting its ability to reach new customers and expand its market presence effectively.

 

·      On this basis, and considering that the focus on ultrasound simulation aligns strongly with Surgical Science's strategic goal to expand its simulation offering, Surgical Science intends to acquire Intelligent Ultrasound. The acquisition of Intelligent Ultrasound will enable Surgical Science to establish a firm footprint in the UK, with a new research and development site as well as a comprehensive commercial organisation, and leverage its existing expertise in medical simulation while integrating Intelligent Ultrasound's specialised knowledge in ultrasound training. This strategic alignment not only enhances the product portfolio but also positions the combined entity to address the growing demand for advanced training solutions in the healthcare sector.

 

·      The full cash consideration payable under the terms of the Acquisition, together with certain fees and expenses in connection with the Acquisition, will be funded through cash on Surgical Science's balance sheet, including £17 million drawn down pursuant to a short-term bridging loan.

Irrevocable Undertakings and Letter of Intent

·              Surgical Science has received irrevocable undertakings from the Intelligent Ultrasound Directors, holding in aggregate, 2,381,952 Intelligent Ultrasound Shares representing approximately 0.7% of the existing issued ordinary share capital of Intelligent Ultrasound as at the Latest Practicable Date to vote, or procure that their nominees vote, in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting.

·              Surgical Science has received irrevocable undertakings from certain Intelligent Ultrasound Shareholders holding, in aggregate, 131,087,477 Intelligent Ultrasound Shares representing approximately 40.1% of the existing issued ordinary share capital of Intelligent Ultrasound as at the Latest Practicable Date to vote, or procure that their nominees vote, in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting.

·              Surgical Science has also received a non-binding letter of intent from another Intelligent Ultrasound Shareholder holding, in aggregate, 22,025,000 Intelligent Ultrasound Shares representing approximately 6.7% of the existing issued ordinary share capital of Intelligent Ultrasound as at the Latest Practicable Date stating their intentions to vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting.

·              Therefore, Surgical Science has received irrevocable undertakings or a letter of intent in respect of, in aggregate, 155,494,429 Intelligent Ultrasound Shares representing approximately 47.5% of the existing issued ordinary share capital of Intelligent Ultrasound as at the Latest Practicable Date.

·              Further details of these irrevocable undertakings and the letter of intent are set out in Appendix 3 to this announcement.

Timetable and Conditions

·      It is intended that the Acquisition will be implemented by way of a Court-sanctioned Scheme of Arrangement under Part 26 of the Companies Act and that the Acquisition be put to Intelligent Ultrasound Shareholders for approval at the Court Meeting and to the Intelligent Ultrasound Shareholders at the General Meeting, although Surgical Science reserves the right to elect (with the consent of the Panel, and subject to the terms of the Cooperation Agreement) to implement the Acquisition by way of a Takeover Offer. In order to become Effective, the Scheme must be approved by a majority in number of the Intelligent Ultrasound Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75% in value of the Intelligent Ultrasound Shares voted. In addition, a special resolution implementing the Scheme must be passed by Intelligent Ultrasound Shareholders representing at least 75% of votes cast at the General Meeting.

 

·      The Acquisition will be conditional on, amongst other things, the approval of Intelligent Ultrasound Shareholders and the satisfaction or (where applicable) waiver of the Conditions and further terms set out in Appendix 1 to this announcement (which shall be set out in the Scheme Document).

 

·      It is expected that the Scheme Document, containing further information about the Acquisition (including an expected timetable of key events) and notices of the Court Meeting and the General Meeting, together with the Forms of Proxy, shall be published as soon as practicable and, in any event, within 28 days of this announcement or such later date as Surgical Science, Intelligent Ultrasound and the Panel agree, and that the Court Meeting and the General Meeting will be held as soon as practicable thereafter. It is expected that the Scheme will become Effective in the first quarter of 2025. The Scheme Document and Forms of Proxy will be made available to Intelligent Ultrasound Shareholders at no charge to them.

Commenting on the Acquisition, Riccardo Pigliucci, Non-Executive Chairman of Intelligent Ultrasound, said:

"The Intelligent Ultrasound Board is proud of the Intelligent Ultrasound Group's achievements and evolution over the past five years which is, in no small part, due to the hard work and diligence of all our employees. However, with the sale of the Clinical AI Business earlier in the year, the Intelligent Ultrasound Board was faced with the task of re-focusing the Intelligent Ultrasound Group on growing its original but niche ultrasound simulation business.

The medical simulation market is now consolidating and to reach the required scale to efficiently and effectively compete with the larger medical simulation companies, the Intelligent Ultrasound Board would have had to invest a substantial portion of the Clinical AI Business sale proceeds in organic expansion and/or material acquisitions.

Recognising the difficulties of quickly achieving scale, combined with shareholders' strong preference for an efficient return of the majority of the proceeds from the sale of the Clinical AI Business, the Intelligent Ultrasound Board believes that the sale to Surgical Science allows Intelligent Ultrasound to both efficiently return capital to shareholders, as well as providing the majority of employees and broader stakeholders with the advantage of joining a considerably larger, broad-based simulation focused business that we believe will provide the scale, resources and investment to be successful and sustainable in the global simulation market.

As such, we believe that the time is opportune for the shareholders, employees and customers of Intelligent Ultrasound to take advantage of the opportunities being offered with Surgical Science and the Intelligent Ultrasound Board is therefore unanimously recommending this deal to shareholders."

Commenting on the Acquisition, Tom Englund, CEO of Surgical Science said:

"We have followed Intelligent Ultrasound for many years and are impressed with the position that the team has managed to build in the ultrasound simulation market. The ultrasound market is developing rapidly with a strong increase in the number of systems sold, highlighting the need for simulation training that will enable practitioners to utilise the systems to their full potential. Through the acquisition of Intelligent Ultrasound, we further diversify our product portfolio and expand our geographical reach and sales network, enabling us to provide a comprehensive suite of ultrasound simulation products across the world, benefitting customers and reinforcing our market leadership. We look forward to the Intelligent Ultrasound team joining us and to start working together towards our high ambitions in the growing medical simulation market."

This summary should be read in conjunction with, and is subject to, the full text of this announcement and the Appendices. The Acquisition will be subject to the Conditions and further terms set out in Appendix 1 and to the full terms and conditions which will be set out in the Scheme Document. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2. Details of the irrevocable undertakings and the letter of intent received by Surgical Science are set out in Appendix 3. Certain definitions and terms used in this announcement are set out in Appendix 4.

Enquiries

Surgical Science
Tom Englund, CEO Anna Ahlberg, CFO	+46 70 916 16 81 +46 70 855 38 35
Pareto Securities AB (Joint Financial Adviser to Surgical Science)	+46 8 402 50 00
Anthony Leach / Aneesh Khokar Tolis Emmanouil / Marcus Carlsson
Strand Hanson Limited (Joint Financial Adviser to Surgical Science)
James Dance / Christopher Raggett Matthew Chandler / Rob Patrick	+44 (0) 207 409 3494
Intelligent Ultrasound	+44 (0)29 2075 6534
Stuart Gall, CEO Helen Jones, CFO
Cavendish Capital Markets Limited (Rule 3 Independent Financial Adviser, Nominated Adviser and Corporate Broker to Intelligent Ultrasound)
Giles Balleny /Henrik Persson Hamish Waller	+44 (0) 20 7220 0500
Cardew Group (PR Adviser to Intelligent Ultrasound)
Alison Connolly	+44 (0) 7587 453955
Emma Pascoe-Watson	+44 (0) 7774 620415
Jessica Pilling	+44 (0) 7918 584573

 

For the full announcement, please click here.