SyntheticMR

SynthethicMR AB has entered into an agreement to acquire all shares and securities in the Finnish company Combinostics. Combinostics is a leading player in medical technology and software solutions, focusing on cloud-based and AI-driven platforms that offer advanced diagnostic tools and clinical decision support for healthcare providers. The acquisition is a strategic step in SyntheticMR's growth plan and is designed to strengthen the Company's market position and future competitiveness by combining the technology and expertise of the two companies.

The total purchase price for the acquisition amounts to EUR 4.3 million (corresponding to approximately SEK 49.6 million), of which approximately EUR 3.93 million (corresponding to approximately SEK 45.3 million) will be paid in cash at closing, of which EUR 0.86 million (corresponding to approximately SEK 9.9 million) will be placed in escrow for one year from closing, while the remaining amount of approximately EUR 0.37 million (corresponding to approximately SEK 4.3 million) will be settled through a promissory note. The promissory note will be offset against newly issued convertibles in SyntheticMR. The convertibles are issued at a conversion price of SEK 12 per share and will be automatically converted into shares in SyntheticMR after the publication of the Company's quarterly report for the third quarter of 2027, however no later than 30 November 2027. Upon full conversion of issued convertibles, the number of shares in the Company will increase by 356,907 shares and the share capital by SEK 7,923.3354, which means a dilution of approximately 0.85 percent.

The transaction is conditional upon the approval of both the acquisition and the issue of convertibles by SyntheticMR's general meeting.

About Combinostics                  

Combinostics is active in medical technology and software solutions, with a focus on cloud-based and AI-powered platforms. Their solutions, including cNeuro® cDSI, cMRI, cPET and cDAT, offer clinical decision support and advanced image analysis to support healthcare professionals in making informed and evidence-based decisions. The products are designed to integrate with existing systems such as PACS, increasing efficiency and improving workflows within healthcare facilities.

In 2023, Combinostics' net sales amounted to approximately SEK 5.94 million and EBITDA to approximately SEK -18.3 million. The annual recurring revenue (ARR) was SEK 6.23 million for 2023, SEK 3.17 million for 2022 and SEK 1.19 million for 2021, corresponding to an average annual growth of 129% between the years 2021 - 2023. For the last twelve months (Q3 2023 - Q2 2024), net sales amounted to approximately SEK 10.5 million and EBITDA to approximately SEK -3.3 million. ^[2][3]

Combinostics has a strong foundation in scientific research and collaborates with leading medical institutions globally. They focus on developing innovative solutions that fulfil existing needs in clinical care, particularly in the diagnosis of neurodegenerative diseases. By combining knowledge of neurological conditions with advanced technology, they aim to improve patient care and quality of life for patients and their families.

Background and reasons for the acquisition

By combining SyntheticMR's ability to provide brain tissue characterisation and Combinostics’ segmentation algorithms, the two together meet customer demand for a combined capability, particularly related to neurodegenerative diseases such as MS and Dementia. Combinstics' support for differential diagnosis is currently based on parameters from e.g. images, spinal fluid tests and demographic data to identify and classify disease patterns using AI. Here, opportunities arise to weigh in myelin data to find more combinations and patterns and thus a stronger predictive model to guide referrers and radiologists. The offering of the combined solution will be unique while addressing customer preferences.

Combinostics’ business model is primarily based on annual subscriptions and has an established base of ARR customers with high customer satisfaction. This is expected to strengthen the ability of SyntheticMR to pursue plans in the same direction with subscribing customers. This is realised through the platform provided by Combinostics via a cloud solution. Conversely, there are customer groups that require on-site installation and there the companies complement each other as both solutions intend to be delivered on the respective platform.

SyntheticMR sees several benefits and opportunities through the acquisition of Combinostics. Among other things, the acquisition is expected to significantly accelerate the Company's existing development plans. Combinostics also has a well-developed network of clinical and industrial partners. SyntheticMR intends to combine the companies' respective technologies, which, according to the Company's assessment, would constitute a unique offering on the market. In addition, SyntheticMR will use the existing sales organisation to expand Combinostics' existing products in several major markets.

"We have identified significant underlying value in Combinostics, which we believe can be realised by, among other things, accelerating sales activity and through the synergies that an acquisition brings within the SyntheticMR group. We believe that the expertise and commitment of the employees within Combinostics are central to Combinostics' success and it is our strong belief that there is good potential to realise Combinostics' underlying value and growth with a common ambition. As part of SyntheticMR, there are very good growth opportunities and we see good opportunities to significantly expand our customer offering already in 2025, as well as generate a significant increase in sales already in the short term.

We look forward to continuing to develop Combinostics' offering as part of SyntheticMR and see this as a milestone in our vision to become the leading provider of analysis and imaging methods for magnetic resonance imaging", comments SyntheticMR's CEO Ulrik Harrysson.

"With Combinostic's ambition to provide effective decision support, objectivity and thus better patient outcomes, the journey forward with SyntheticMR is seen as a key factor. With quantification of brain characteristics combined with AI-driven statistical analysis, we gain an ability to provide an insight into the state of the brain like no other. We are confident of strong synergies, both organisationally and commercially”, Comment Combinostics, CEO Lennart Thurfjell

Financing

Closing of the transaction is expected to take place on or around 2 January 2025. The cash portion of the purchase price will be financed at closing through a loan issued by the Company's main shareholder, Swedia Invest AB. The loan carries an annual interest rate of 10% and matures on 23 February 2025. In addition, the Board of Directors intends to resolve to issue convertibles to the Class A shareholders of Combinostics, subject to the subsequent approval of the Extraordinary General Meeting. In order to finance the cash proceeds of the acquisition, through repayment of the loan provided by Swedia Invest AB in connection with the takeover, and at the same time strengthen the capital structure after the acquisition, the Board of Directors of SyntheticMR further intends to resolve on a new share issue of approximately SEK 65 million with preferential rights for existing shareholders. The details of the upcoming rights issue will be published separately.

Advisors

Foyen Advokatfirma is acting as legal advisor to SyntheticMR in connection with the acquisition.

For further information, please contact:

Ulrik Harrysson, CEO                 
 Phone: +46 70 529 29 87
E-mail: ulrik.harrysson@syntheticmr.com

This information is information that SyntheticMR AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2024-11-28 22:55 CET                         .

About SyntheticMR 

SyntheticMR develops and markets innovative software solutions for Magnetic Resonance Imaging (MRI). SyntheticMR has developed SyMRI®, delivering multiple, adjustable contrast images and quantitative data from a single 5-minute scan. The SyMRI product is available in different packages. SyMRI NEURO delivers multiple contrast images, tissue segmentations and quantitative data on the brain. SyMRI MSK provides multiple contrast images and quantitative data for knee and spine anatomies. SyMRI NEURO is CE-marked, and FDA 510(k) cleared and SyMRI MSK is CE-marked. SyMRI 3D is 510(k)-pending and CE-marked. SyMRI is a registered trademark in Europe and the USA. SyntheticMR is listed on the Spotlight Stock Market Exchange in Stockholm, Sweden. For more information, visit www.syntheticmr.com