Lunit, a Kosdaq-listed medical AI company, said Thursday that it has signed an agreement to acquire New Zealand-based AI cancer screening platform company, Volpara Health Technologies, for $193.1 million.

Volpara specializes in breast cancer screening, with an office in Seattle, performing active clinical and sales activities in the U.S.

Volpara's products are used by more than 2,000 healthcare organizations, representing one-third of all mammography screening centers in the U.S., establishing a strong presence in the U.S., with a 42 percent market share as of last year, Volpara said.

The acquisition marks Lunit's first overseas acquisition of a healthcare AI company since its founding, giving Lunit its own sales network for AI solutions in the U.S.

Lunit plans to fund the acquisition of Volpara through external borrowings and is expected to take approximately three to six months to complete the merger.

Volpara generated sales of NZD 19.7 million ($12.2 million) in 2021, up 57 percent year-on-year, and NZD 26.1 million in 2022, up 32 percent year-on-year, with a compound annual growth rate (CAGR) of 63 percent over the last five years.

In particular, 96.5 percent of Volpara's sales are generated in the U.S., and the sales structure is generated in the form of annual subscriptions such as SaaS through long-term contracts with hospitals, so it is expected to continue a stable revenue stream in the future.

However, Volpara has been recording operating losses since its establishment as a technology innovation company that has been focusing on research and development (R&D). However, the losses have been declining from NZD 16.4 million in 2022 to NZD 9.8 million this year.

Given Volpara's strong presence in the U.S., Lunit will have the opportunity to offer additional Lunit AI solutions to Volpara platform installations in the U.S. Furthermore, Lunit plans to maximize revenue by distributing the Volpara AI platform in countries outside the U.S.

"The Volpara Board of Directors unanimously agreed that this transaction is in the best interests of our shareholders and accepted the proposed acquisition," said Teri Thomas, CEO and Managing Director of Volpara. "This transaction will enhance shareholder value, mitigate business risk, and allow us to develop products that no other company can match, positioning both companies as global leaders in cancer screening."

"Lunit's acquisition of Volpara is the fastest and most effective way for Lunit to enter the U.S. market and an opportunity for Lunit to accelerate the development of powerful solutions for the early detection of cancer," said Brandon Suh, CEO of Lunit. "The process of acquiring Volpara, which began in the third quarter of this year, has demonstrated our strong commitment to conquering cancer. I am confident that it will serve as a great foundation for us to strengthen our collaboration and explore global markets in the future."