RadNet finalizes $103M acquisition of breast AI vendor iCAD amid legal opposition

RadNet Inc. has finalized its $103 million acquisition of artificial intelligence vendor iCAD, the outpatient imaging center operator said Thursday. 

First announced in April, the deal has RadNet paying $3.61 per share of common stock for the Nashua, New Hampshire, AI vendor. ICAD dates to 1984, offering the “industry leading” ProFound Breast Health Suite of imaging software for detecting and evaluating cancer risk. 

RadNet is working to integrate iCAD’s team of nearly 70 employees and portfolio of products into its AI division, adding an installed base of 1,500 clients in the process.

“We are excited to welcome the iCAD team to DeepHealth,” Kees Wesdorp, PhD, president and CEO of RadNet’s Digital Health segment, said in a statement July 17. “Our combined capabilities position us for accelerated growth and rapid delivery of transformative, AI-powered population health solutions,” he added later. 

RadNet provides 1.9 million or 4.4% of all mammograms per year in the U.S., along with 50,000 breast biopsies. Adding iCAD’s installed customer base will boost the total to a combined 10 million annual mammograms impacted by its AI offerings, across 1,700 sites in 50 countries. ICAD also brings $19.6 million in additional annual revenue (based on 2024 figures) and a “strong” workforce with expertise in AI research and development, RadNet leaders said in April. 

Upon completion of the merger, iCAD CEO Dana Brown and Chief Financial Officer Eric Lonnqvist are receiving retention bonuses of $200,000 and $62,500, respectively. In addition, each of the members of the iCAD board ceased their service, according to a July 17 filing with the U.S. Securities and Exchange Commission.  

“Such departures were not related to any disagreement with iCAD on any matter related to iCAD’s operations, policies or practices,” the filing states. 

At the last meeting of iCAD stockholders held in May, there were 17,471,410 shares present, or nearly 64% of total company stock. Roughly 17 million votes were cast in favor of the merger versus about 486,000 against and 34,000 abstentions, according to a separate SEC filing. ICAD’s board had advised stockholders to vote unanimously in favor of the sale to RadNet. 

However, two iCAD shareholders filed suit against the transaction on June 18 in the Supreme Court of the State of New York. They claim financial estimates used in the deal are misleading, failing to disclose key company information. The shareholders also allege negligent misrepresentation and concealment, seeking an injunction stopping the transaction, while also asking the court for other compensation, according to another SEC filing.

“ICAD and its directors intend to vigorously defend against each merger litigation and any subsequently filed similar actions,” the regulatory filing states. 

RadNet on Thursday touted the acquired vendor’s “extensive AI portfolio,” which includes software for assessing breast density, cancer risk and arterial calcification, a measure of potential heart disease. 

The acquirer operates a total of 400-plus outpatient imaging centers concentrated in Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas. It has bought several other artificial intelligence vendors in recent years, among them, Cambridge, Massachusetts-based DeepHealth in 2020 for around $44 million, along with Dutch AI firms Quantib and Aidence in 2022 for nearly $100 million. RadNet stock was up nearly 3% Thursday following news of the merger’s closing.