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NASHUA, N.H. - Leading proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have both recommended that iCAD Inc. (NASDAQ:ICAD) stockholders vote in favor of the company’s acquisition by RadNet Inc. The AI-powered healthcare technology company, currently valued at $101 million, has demonstrated strong financial health according to InvestingPro analysis, with impressive gross profit margins of 88% and a robust liquidity position.
The all-stock transaction, which will be voted on at a special stockholders meeting on July 14, aims to integrate iCAD’s ProFound AI breast health solutions into RadNet’s DeepHealth portfolio. The deal comes as iCAD has shown remarkable market performance, with a year-to-date return exceeding 100%. InvestingPro subscribers can access 8 additional key insights about iCAD’s financial position and growth prospects through the platform’s comprehensive Pro Research Report.
According to a company statement, both advisory firms cited the board’s review of alternatives, the implied premium, and the opportunity for iCAD stockholders to participate in potential upside of the combined entity in their recommendations.
iCAD’s Board of Directors has unanimously recommended stockholders vote for the merger. Stockholders of record as of May 16 are eligible to vote prior to the special meeting, which will be held virtually.
The acquisition is designed to accelerate deployment of iCAD’s AI-powered breast cancer detection technology across RadNet’s operations, potentially expanding access to early breast cancer detection services. While the company maintains strong liquidity with a current ratio of 3.66 and more cash than debt on its balance sheet, it has yet to achieve profitability, reporting negative EBITDA of $5.08 million in the last twelve months.
iCAD, headquartered in Nashua, New Hampshire, provides AI-powered mammography analysis for breast cancer detection and density assessment. The company estimates its technology has been used to read more than 40 million mammograms worldwide in the past five years.
The merger agreement was previously announced with RadNet filing a registration statement on Form S-4 with the Securities and Exchange Commission on May 6, which was declared effective on May 21.
The transaction remains subject to customary closing conditions, including approval by iCAD stockholders at the upcoming meeting.
In other recent news, ICAD Inc. announced its acquisition by DeepHealth, a subsidiary of RadNet, in an all-stock transaction valued at approximately $103 million. As part of the deal, ICAD shareholders will receive 0.0677 shares of RadNet common stock for each ICAD share they own. The merger, expected to close in the second or third quarter of 2025, aims to enhance RadNet’s capabilities in AI-powered cancer detection, particularly in breast cancer. Laidlaw analysts responded to the acquisition by downgrading ICAD’s stock from ’Buy’ to ’Hold,’ citing the deal as a strategic move in a challenging economic climate. Similarly, BTIG downgraded the stock from ’Buy’ to ’Neutral,’ noting the reasonable valuation and the lack of expected competing offers. The acquisition is anticipated to generate significant cost synergies and expand RadNet’s sales force in the Digital Health segment. Meanwhile, ICAD has appointed Mark Koeniguer as its new Chief Commercial Officer to drive revenue growth initiatives globally. Koeniguer’s extensive experience in the medical technology sector is expected to bolster ICAD’s engagement with global health providers.
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