iCAD completes Xoft purchase for approximately $14M

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iCAD, a developer of image analysis and workflow technologies for the identification of cancer, has completed the previously announced acquisition of Xoft, developer of the Axxent eVx electronic brachytherapy system.

In the purchase, initially announced in December 2010, iCAD acquired 100 percent of the outstanding stock of Xoft in exchange for approximately 8.65 million shares of iCAD common stock and approximately $800,000 in cash to certain Xoft stockholders, for a total consideration at closing of approximately $12.9 million, based on the average of the closing sale price of the company’s common stock over the 30 trading days immediately preceding the closing date. iCAD also paid certain transaction expenses of Xoft’s totaling approximately $1 million.

Pursuant to the terms of the merger, iCAD said the representative of the Xoft stockholders has the right to nominate one designee for a three-year period to iCAD’s board of directors, who is acceptable to iCAD’s nominating and corporate governance committee and its board of directors, subject to any required stockholder approval. Michael Klein is the initial designee. In addition, Somu Subramanian, a stockholder and board member of Xoft, also will serve as a member of iCAD’s board of directors from the closing date until the next annual meeting of iCAD’s stockholders. Klein and Subramanian were approved by iCAD’s nominating and corporate governance committee and determined by the board to be independent under iCAD’s corporate governance principles. The iCAD board also increased its size from six to eight members.

The portable Axxent system, which delivers electronically-controlled radiation therapy to cancer sites, is FDA-approved for the treatment of early stage breast cancer, endometrial cancer and skin cancer, as well as for the treatment of other cancers or conditions where radiation therapy is indicated. The Axxent technology also is approved for accelerated partial breast irradiation (APBI), which can be delivered twice daily for five days or it can be administered immediately following the lumpectomy procedure, also known as intraoperative radiation therapy (IORT), according to the Nashua, N.H.-based iCAD.