Australian medtech engineering company Magnetica announced today that it plans to merge with UK-based Scientific Magnetics and its U.S. subsidiary, Tecmag.
Magnetica specializes in magnetic resonance imaging (MRI) technologies, while Scientific Magnetics designs, manufactures, tests and installs bespoke superconducting magnet systems. Tecmag manufactures instrumentation for the nuclear magnetic resonance (NMR), nuclear quadrupole resonance (NQR) and MRI markets. The merger completion is subject only to Magnetica shareholder approval.
Avingtrans, which owns a majority stake in Scientific Magnetics, plans to acquire the majority of shares in the new business, which will continue to be known as Magnetica. The combined business will become part of Avingtrans’ medical and industrial imaging division, and Scientific Magnetics and Tecmag will become wholly owned subsidiaries of Magnetica.
The combined company will focus on smaller, lighter-weight superconducting MRI systems for dedicated applications such as extremity imaging. This is likely to include cryogen-free models, which require significantly lower infrastructure costs than traditional MRI machines, making them suitable for use in a variety of non-traditional locations, according to the companies.
The deal will create a combined business with total net assets of approximately £5.3 million ($7.2 million) on a proforma basis, according to a news release from Magnetica. Avingtrans also plans to invest up to £3.2 million ($4.4 million) in the combined business to fund new MRI product development and ongoing commercialization of existing prototype products developed by the individual entities to date.
“We believe this merger offers real potential to accelerate our planned move up the value chain in what is a highly specialized and integrated, international medical imaging market,” said Avingtrans CEO Steve McQuillan in the release. “By combining the expertise of Magnetica, Scientific Magnetics and Tecmag in a single entity, there is an exciting opportunity to become a leading MRI systems integrator for a variety of niche markets, as well as the prospect of increasing accessibility to high-quality medical imaging around the world.”
“The proposed merger with Scientific Magnetics and Tecmag will not only expand our product portfolio, but also provide access to core intellectual property, design specifications and key OEM in-house magnet manufacturing capability to allow us to move up the value chain,” added Magnetica CEO Duncan Stovell. “Avingtrans has developed a strong reputation for successfully investing in and growing engineering businesses in highly-engineered, niche markets. When they outlined their vision for the newly merged company to our board, we were unanimous in our agreement that they are the right partner to take the business to the next level and become a disruptive new force as an OEM MRI system provider.”
