Detection Technology Plc has today 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 TFT (Thin-Film Transistor) 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.
The enterprise value of Haobo Imaging is around EUR 14 million. It has solid product platforms and strong knowhow in static and dynamic TFT flat panel detectors based on a-Si (Amorphous Silicon) and IGZO (Indium Gallium Zinc Oxide) technologies. The company was founded in 2018 and is located in Shanghai, China. Its net sales totaled EUR 3.0 million in 2022.
“The acquisition marks a cornerstone in the DT-2025-strategy. We have been pioneering the line-scan and CT (computed tomography) detector solutions and are building CMOS (complementary metal oxide semiconductor) 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.
“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.”
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 an option to acquire the shares of the Haobo Imaging management when certain performance targets are met.
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. The acquisition is estimated to be closed by the end of June 2023.
“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 next three years.”
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 leader 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.