MediVision Medical Imaging is teaming up with Agfa. MediVision Medical Imaging, a small Yokne’am-based company, which develops digital imaging devices for ophthalmic applications, has received a seal of approval from the Belgian medical imaging giant. Agfa will invest some $3.6 million in MediVision in exchange for a 25% holding (the deal was made at a company value of $14.4 million, after money).
The deal was priced at double the market price of MediVision, whose share is traded on the Belgian stock exchange at about $1. At the same time, the deal price is far below the $3.2 issue price of 18 months ago. “I don’t want to relate to the stock exchange price,” MediVision CEO Noam Allon said today. “but to the Company itself. At the time of the issue, MediVision’s sales were $1.4 million. A few months after the issue we bought OIS, a company operating in the sector, and in the first half of the year our sales were $3.6 million, and our loss was only $400,000.”
”Globes”: But your coffers are getting empty.
Allon: “We’re a company that can keep itself afloat on its own. We’re selling and cutting our losses.”
This may be true, but as of the end of June, there were only $200,000 left in MediVision’s coffers. Allon insists that Agfa’s investment is not a life-or-death issue, but it is difficult to envision the company developing without a significant investment.
At the same time as the investment agreement was concluded, the two companies also signed a development and marketing agreement. “We have unique equipment allowing for a swift transition from ophthalmic diagnosis, especially the retina, to the treatment stage. Under the agreement with Agfa, we’ll jointly open a digital imaging archive based on Agfa’s system, which enables photography, storage, and transmission over a communications network.”
Can’t Agfa go it alone?
” Following the merger, MediVision is a recognized company in the ophthalmic field. In our small niche, we control about 30% of the market. We make over 1,000 installations around the world for over 15 years, with dominance of the US market and a reasonable penetration in Europe. Up until now we dealt mainly in photography and less in transmitting the information to clinics, and the agreement with Agfa allows us to expand our product basket. Agfa is a leading player in supplying work stations to clinics, hospitals and physicians. The stations enable immediate reception of information following the photography stage. In addition, this is a marketing agreement. Agfa will market the systems in segments and territories in which it’s strong, and we’ll help market the systems in our segment.”
Agfa’s investment won't be immediate.
”Yes. We’re talking about three stages. The first stage, in which $1 million are invested, will be immediate. The remainder of the investment will be made according to milestones.”
What are the milestones?
”I’m prevented from disclosing them, but these aren’t business targets we cannot meet."
Will you become profitable at the end of the process?
”We’ll break even in the first or second quarter of 2002, provided sales continue at the present pace.”
Do you believe that sales will increase?
”Sales will increase in the second half of the year, although it will be only a small increase.”
Published by Israel's Business Arena on 30 September, 2001