Detection Technology Plc has signed an agreement to acquire Shanghai Haobo Imaging Technology Co., Ltd., an x-ray flat panel detector provider, to almost double its total addressable market.
This acquisition enables Detection Technology to enter the thin-film transistor (TFT) flat panel detector market segment, which is estimated to represent over 40% of the total digital x-ray detector market of EUR 3.1 billion by 2025. The main application for TFT flat panel detectors is in medical x-ray imaging, and there is also growing demand in industrial and veterinary.
Haobo Imaging
Haobo Imaging was founded in 2018 and is located in Shanghai, China
Haobo Imaging has solid product platforms and strong know-how in static and dynamic TFT flat panel detectors based on amorphous silicon (a-Si) and indium gallium zinc oxide (IGZO) technologies. The company was founded in 2018 and is located in Shanghai, China.
“The acquisition marks a cornerstone in the DT-2025 strategy. We have been pioneering the line-scan and computed tomography (CT) detector solutions and are building complementary metal oxide semiconductor (CMOS) flat panel and photon-counting detector product portfolios."
"Now, we have taken a significant step to cover even a much wider market. In the future, we will be able to service the full spectrum of the global digital x-ray imaging markets,” says Hannu Martola, President and CEO of Detection Technology.
Offer will cover all digital x-ray imaging detector technologies
Hannu Martola adds, “Our offering will cover all digital x-ray imaging detector technologies, and we will have comprehensive x-ray flat panel competence in both Finland and China after technology transfer."
"We see the acquisition as an enabler for achieving our growth targets and long-term success. This strategic move creates customer and technology synergies to be exploited, and there are no overlaps in the current offering.”
Enterprise value of Haobo Imaging
Detection Technology has agreed with an option to acquire the shares of the Haobo Imaging management
The enterprise value of Haobo Imaging is around EUR 14 million. In the first phase, Detection Technology will acquire 90% of the shares in Haobo Imaging from its founders and main owner, which is Guangzhou Haozhi Imaging Technology Ltd., a Haozhi Capital Ltd. Group company.
The founders and management of Haobo Imaging will continue to hold 10% of the shares. Detection Technology has agreed with an option to acquire the shares of the Haobo Imaging management when certain performance targets are met.
In the financial period 1 January to 31 December 2022, net sales of the business to be acquired totalled EUR 3.0 million (2021: 3.0). Operating margin was 5.2% (2.3%). At the end of 2022, the balance sheet of Haobo Imaging was EUR 2.7 million with an equity of EUR 1.4 million. Apart from possible normal working capital items, no material liabilities will transfer in the acquisition.
Acquired business
The acquired business is estimated to be earnings-positive in 2025. The acquisition will be financed with existing cash and a new term loan. In addition, Detection Technology has agreed on an increase in the existing revolving credit line.
Detection Technology has agreed on an increase in the existing revolving credit line
The acquisition is estimated to be closed by the end of June 2023. The final purchase price will be determined at the time of the closing. At the moment, it is not possible to accurately assess the price.
Hannu Martola stated, “In the coming two to three years, we will embark on an accelerated development path. We plan to invest in developing and introducing new TFT flat panel detector solutions to current and new customers. This development path will come at a cost and will have an impact on our relative profitability over the next three years.”
Imaging technology company
Haobo Imaging is an imaging technology company that designs and produces a-Si, IGZO and CMOS X-ray flat panel detectors. Its solutions comprise both hardware and software.
The company has been granted several patents in China. It has a well-established customer base, and it employs around 40 professionals in Shanghai.
“Detection Technology is a pioneer in the line scan and CT markets, and together we have what it takes to become a leader in the global digital x-ray flat panel detector markets. I personally and our entire team are excited to join Detection Technology,” says Wei Chunlin, CEO of Haobo Imaging.