4DMedical Ltd (ASX: 4DX) shares are pushing higher on Monday after the medical imaging tech company announced a European acquisition.
At the time of writing, the 4DMedical share price is up 4.28% to $4.14, after reaching an intraday high of $4.29 in early morning trade.
The move adds to a huge run for shareholders, with 4DMedical shares now up around 14% over the past week and more than 1,100% since this time last year.
Let's take a closer look at today's announcement.
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4DMedical pushes into Europe
According to the release, 4DMedical has entered a binding agreement to acquire contextflow GmbH, a Vienna-based medical technology company focused on lung cancer screening and advanced AI-driven imaging.
The deal gives 4DMedical an immediate commercial and clinical platform in Europe, adding a third major region to its existing operations in North America and Australia and New Zealand.
The acquisition includes a CE-marked lung cancer screening product already deployed in Europe. It uses nodule detection technology and is expected to sit alongside 4DMedical's existing lung imaging software.
Management said the deal gives the company an immediate entry point into Europe's respiratory and thoracic imaging market, which it estimates at US$1.5 billion to US$2 billion.
More on the European deal
The deal also looks relatively small against 4DMedical's current cash position.
4DMedical will pay 1.12 million euros, or about $1.86 million, in cash, along with 56,235 shares upfront.
The agreement also includes a potential earnout of up to 2.59 million zero-exercise-price options if performance milestones are met.
The upfront cash component will be funded from 4DMedical's existing cash reserves, while the acquired business is expected to retain 19 million euros, or about $30.8 million, in accumulated tax losses.
Those losses may be used to offset future taxable income generated by the Austrian business.
Management described the acquisition as a capital-efficient way to enter a large healthcare market.
Founder and Managing Director Andreas Fouras said the deal gives 4DMedical a European platform in a market roughly half the size of the United States.
He also said the acquisition increases the company's market opportunity by about 50%, while using only 6.5% of its existing cash balance.
Foolish Takeaway
4DMedical has become one of the ASX's standout healthcare stocks over the past year.
The company now has a market capitalisation of about $2.46 billion, even though it remains loss-making on an earnings per share (EPS) basis.
The next test is whether 4DMedical can turn its growing footprint into stronger commercial adoption across the US, Europe, and ANZ.
