Corporate News: Acquisition-related surge in earnings: MeVis Medical Solutions taking over a substantial part of Siemens joint venture

New group structure creating the basis for a significant increase in business

  • Executive Board announcing forecast for 2009: Revenues of approx. EUR 19 million and EBIT of approx. EUR 6.5 million
  • MeVis BreastCare joint venture repositioned for a significant increase in business with Siemens Healthcare
  • Transaction involves the joint venture’s business with Hologic, a world-wide industry leader in women’s health
  • Purchase price a maximum of EUR 17.5 million payable in installments through 2015

Bremen, October 21, 2008 - MeVis Medical Solutions AG (ISIN: DE000A0LBFE4), a world leader in the development of software for image-based medicine, has today acquired all of MeVis BreastCare’s business with Hologic, Inc.. MeVis BreastCare, a MeVis joint venture established with Siemens, provides diagnostic imaging software solutions for the early detection and diagnosis of breast cancer to medical industry leaders Siemens AG and Hologic Inc.. The business activities with Hologic have now been extracted from MeVis BreastCare GmbH & Co. KG. The share attributable to Siemens was acquired by MeVis Medical Solutions AG.

The MeVis BreastCare joint venture will now fully concentrate on business with Siemens and extend these activities to include software solutions for other diseases. “We are very pleased with this joint step with our partner Siemens,” says Dr. Carl J. G. Evertsz, CEO of MeVis Medical Solutions AG. “Via this acquisition, we are able to immediately increase our profitability and thus also enhance the value of our company. At the same time, it allows us to develop new software solutions dedicated to Siemens within the remaining part of the joint venture. Development work on special applications for the diagnosis of breast cancer using other imaging methods such as magnetic resonance imaging and 3D ultrasound is already underway.”

At the same time, the full integration of the Hologic business within the MeVis Medical Solutions consolidated group provides new scope and resources for intensifying business relations with Hologic, the world’s leading medical technology company for women’s health.

Continues Evertsz: “After the sharp increase in software license sales in the first half of 2008, which demonstrated our strong market position as an independent, worldwide leading producer of software for the image-based early detection and diagnosis of breast cancer, we are now able to implement our growth strategy even more consistently with the full takeover of the MeVis BreastCare business with Hologic.”

To date, the MeVis BreastCare joint venture has been the main source of the MeVis Medical Solutions Group’s revenues and has been consolidated on a proportionate basis to reflect the 51% of shares owned by MeVis Medical Solutions. Until now, the profitable Digital Mammography segment was solely represented by MeVis BreastCare in the Group’s financial reports. Following today’s acquisition, the business with Hologic will be fully consolidated within MeVis Medical Solutions AG Group.

The transaction is taking retroactive effect as of June 30, 2008 for the purposes of German tax and commercial law. However, today’s date is decisive in terms of IFRS reporting as it is the date on which the contract was signed.

The future full consolidation of the business with Hologic will result in a sharp rise in revenues in the Digital Mammography segment in the consolidated financial statements next year. “Thanks to this strategically important acquisition, we are able to communicate our successful business model even more clearly to investors,” says Dr. Olaf Sieker, CFO at MeVis Medical Solutions. “On account of the complete allocation of the results of this profitable segment in the future, we may be able to announce a dividend earlier than planned.”

The effects on the current financial year are moderate due to the late date of full consolidation. However, the Executive Board projects revenues of approximately EUR 19 million and EBIT of approximately EUR 6.5 million for the financial year 2009, which include the positive effects of this acquisition.

The object of the transaction concerns the 49 percent share held by Siemens in the assets of the MeVis BreastCare GmbH & Co. KG joint venture attributable to the Hologic business. Accordingly, all rights such as intellectual property, source codes, etc., as well as all employees attributable to these business activities, are being transferred. These assets also include cash and cash equivalents of around EUR 4 million.

The purchase price for the acquisition of the Hologic business has been set at a maximum of EUR 17.5 million and will be payable in several installments through 2015. The amount of these installments will be contingent on certain conditions being met. The purchase price to Siemens comprises a cash component payable over a period up until 2012 as well as the grant of license credits between 2010 and 2015.

MeVis BreastCare was established in 2001 as a joint venture between MeVis Medical Solutions AG and Siemens AG. The world-leading MeVis BreastCare software facilitates the image-based early detection and diagnosis of breast cancer. To date, more than 4,500 software licenses have been sold all around the world by Hologic, Inc. and Siemens AG. As a result, MeVis Medical Solutions has evolved into one of the world’s leading producers of image-based software solutions for the early detection and diagnosis of breast cancer.

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