LONDON: Seed, a London-listed company, said Thursday it has entered into non-binding heads of terms and an exclusivity agreement to acquire Spanish AI-driven imaging diagnostics firm Cuarta Dimension Medica SL (“4DM”).
The proposed deal would see Seed issue new shares to 4DM’s shareholders, who would own approximately 90% of the enlarged company, while Seed’s existing shareholders would hold around 10%. Based on an intended placing price of 1.75 pence per share, the transaction implies a valuation of approximately £33.3 million for 4DM and £3.7 million for Seed on a fully diluted basis.
4DM, backed by Spanish-listed investment fund Substrate AI, specializes in AI-powered diagnostic imaging primarily for the veterinary market, with applications in broader healthcare. The company integrates diagnostic equipment from major manufacturers like Samsung, Philips and General Electric with its proprietary AI software.
Completion of the deal remains subject to due diligence, shareholder approval, an equity fundraising for working capital, and regulatory clearance, including a prospectus approval by the U.K.’s Financial Conduct Authority (FCA). Seed cautioned that there is no certainty the transaction will proceed.
The acquisition aligns with Seed’s strategy to invest in high-growth sectors, despite potential deviations from its environmental, social and governance (ESG) criteria. The veterinary diagnostics market is expanding rapidly, with Europe’s sector valued at $23.6 billion in 2021 and projected to grow at a 5.5% annual rate through 2028, according to Grand View Research. North America’s market is forecast to reach $23.12 billion by 2034, growing at 6.8% annually.
Damion Greef, Seed’s chairman, called the deal a “unique opportunity” for shareholders to access a profitable AI diagnostics platform in a growing industry.
Seed’s shares were suspended from trading on the London Stock Exchange on Thursday morning pending further details on the transaction. The company has appointed Beaumont Cornish Limited as its financial adviser and sponsor for the proposed re-admission.
The Takeover Panel will assess whether Seed needs a waiver under Rule 9 of the U.K. Takeover Code, given the potential for 4DM’s vendors to hold a controlling stake post-transaction.