Intelligent Ultrasound's Strategic Shift: Selling Clinical AI Business to GE HealthCare

Intelligent Ultrasound Group plc (IUG), a leading ultrasound AI software and simulation company, recently announced the completion of the sale of its Clinical AI Business to GE HealthCare for £40.5 million. This strategic move marks a significant shift in the company's focus and presents both opportunities and challenges for investors.

The sale of the Clinical AI Business, which includes Intelligent Ultrasound Limited and certain other clinical AI-related assets, excludes the NeedleTrainer products that remain within the company. The transaction, which was first announced in July 2024, was subject to customary closing conditions and is expected to close in Q4 2024. The consideration represents an implied value of 12.4p per ordinary share on the current issued share capital and a premium of 70.9% to the ordinary share price on 17 July 2024, as well as a premium of 30.9% to the volume-weighted share price for the last 12 months.

The sale of the Clinical AI Business values the unit at 33.8 times its full-year 2023 revenues. The transaction is subject to shareholder approval under AIM Rule 15, as well as confirmations from the Competition and Markets Authority and the Investment Security Unit that they do not oppose the transaction.



Following the sale, Intelligent Ultrasound will retain its Simulation Business, which generated total revenues of £10.0 million in the financial year ended 31 December 2023. The Board has indicated that it will conduct a comprehensive review of the post-transaction business, focusing on assessing its growth potential and capital requirements. The outcome of this review will likely shape the strategic direction and capital return plans for the company.

The company has received irrevocable undertakings and letters of intent from certain shareholders, including the directors, representing approximately 54.6% of the ordinary share capital, to vote in favor of the resolution. Commenting on the proposed transaction, Riccardo Pigliucci, Chairman of Intelligent Ultrasound, stated that the sale recognizes the achievements of the company in creating first-to-market AI products and building a strong capability in real-time automated ultrasound image analysis.



The sale of the Clinical AI Business to GE HealthCare presents an opportunity for Intelligent Ultrasound to focus on its Simulation Business and potentially return capital to shareholders. The company has indicated that it will make a material return of capital following a review of the growth potential and capital requirements of the post-transaction business. An announcement detailing the proposed use of funds and future strategic direction for the company is expected to be made by the time the proposed transaction completes.

In conclusion, the sale of Intelligent Ultrasound's Clinical AI Business to GE HealthCare is a strategic move that allows the company to focus on its Simulation Business and potentially return capital to shareholders. The transaction recognizes the achievements of the company in creating first-to-market AI products and building a strong capability in real-time automated ultrasound image analysis. As the company moves forward, investors should closely monitor the progress of the post-transaction business and the strategic direction outlined by the Board.