Vital Images moves to acquire HInnovation

January 28, 2004

Software visualization specialist Vital Images has signed a definitive agreement to acquire HInnovation, a private Milwaukee-based provider of software solutions that allow physicians to use PCs or notebooks to access 2D, 3D, and 4D medical imaging

Software visualization specialist Vital Images has signed a definitive agreement to acquire HInnovation, a private Milwaukee-based provider of software solutions that allow physicians to use PCs or notebooks to access 2D, 3D, and 4D medical imaging applications over the Internet. The agreement calls for a $12 million initial payment to HInnovation, consisting of $6 million in stock and $6 million in cash. Another $6 million will be paid contingent upon reaching milestones in revenue generation, product development, and intellectual property production. This will be composed of $3 million in stock and $3 million in cash. Vital Images will launch and sell HInnovation products once the deal closes and the HInnovation products have been assimilated into the Vitrea product line. Doing so will meet customer demand for greater networking capabilities and less dependence on individual workstations, according to Jay D. Miller, Vital Images president and CEO.

The announcement, made Jan. 8, came on the heels of a disappointing fourth quarter for Vital Images. Preliminary results suggest performance below analysts' expectations. Revenues will range between $5.1 million and $5.4 million with net figures ranging between $150,000 net income and a $400,000 net loss. The reason given for the shortfall was lower than expected sales.