Adelaide-based x-ray technology company Micro-X (ASX:MX1) has gained major bragging rights as the leading independent manufacturer of x-ray tech components Varex Imaging Corporation has invested $15 million into the business, thus commencing an equity partnership. 

As per the agreement, Varex will pay $7.5 million—in five ‘milestones’ for an exclusive licence fee to use Micro-X’s NEX technology to design, manufacture and sell multi-beam x-ray tubes. This technology has not even been used by Micro-X yet. 

Varex will invest another $7.5 million at a 10% premium, taking a 9.9% stake in Micro-X. The initial 4.9% is to be placed immediately with remainder subject to the Australian Government’s Foreign Investment Review Board (FIRB) approval, which is expected to be received by December 2022 due to Varex being an American company, trading on the NASDAQ with a market cap of more than $1 billion. 

Micro-X Managing Director Peter Rowland commented, “This investment recognises the value of Micro-X’s world-leading technology with Varex, one of the world’s most innovative x-ray technology companies, validating the future importance of cold-cathode x-ray technology.” 

With a turnover of approximately $1 billion in 2021, Varex is a globally-leading independent supplier of x-ray tubes and associated components which are sold to x-ray imaging system manufacturers worldwide for a range of medical and industrial applications.

Varex’s existing credibility as a trusted supplier and its scale of manufacturing increases the potential of Micro-X to access global market opportunities across various industries.

The total funds of $15 million will not only boost Micro-X’s reputation, but it will also support its future activities, including final preparations to launch the Argus product in coming months and continue significant developments in the Checkpoints programme.

This strategic collaboration also provides Micro-X with a commercial opportunity to profit off an area of its core technology without impacting its existing or future plans. The global medical imaging market is expected to display continued growth owing to the rise of lifestyle-related diseases, rising demand for early detection tools, technological advancements to speed up turnaround times, increased government investment, and the expansion of new facilities in developing countries. 

Rowland added, “This collaboration contributes hugely to our future growth and allows us to continue to focus on future medical and security imaging applications for our proprietary NEX Technology.” 

Additionally, as part of the agreement, the Company will investigate how Varex’s photon-counting detectors might extend the performance of its emerging CT products. And as a shareholder, Varex will bring on a nominee to join the Micro-X board so as to bring international commercial radiology market experience, and expand global reach and expertise. 

Varex Imaging CEO Sunny Sanyal concluded, “We are pleased to continue to invest in nanotube technology to not only diversify but also deepen our expertise in this area. With several hundred carbon nanotube based systems in the field, Micro-X is an ideal company to collaborate with and further advance adoption of these technologies.”

That said, the agreement may be terminated in case of any uncured, material breach, such as the use of Micro-X intellectual property outside this limitation and failure to pay any amounts due. 

Following this announcement, MX1 shares ended the day at $0.17, a 26% increase on their previous $0.135 close.