Redlen specializes in medical imaging and baggage scanner semiconductors.
Canon Inc., best known for its cameras, is showing strong interest in a British Columbia chipmaker as it prepares to enter the medical device market.
In a deal that values the Saanichton-based company at just north of $400 million, the Japanese multinational will pay about $345 million (30 billion yen) to increase its 15 percent ownership stake in Redlen Technologies Inc. to 100 percent.
The company based in B.C. specializes in producing semiconductors for medical imaging systems and baggage scanners.
“It’s an exciting development for us because we can see how much they can help us in the areas where we’re weak,” he said, adding that Redlen executives will stay on to oversee future expansion plans.
“Now we really need to scale it up and drive the costs down and they can really help us in that area.”
Canon joined Redlen as a strategic investor in 2018, and Bindley said the new parent company is fully supportive of the company’s $40 million plan to expand its 50,000-square-foot manufacturing facility outside of Victoria.
Meanwhile, the West Coast firm will increase its workforce from 200 to 450 employees by 2025, hiring everything from automation experts to product engineers.
“In many respects, it’s easier to bring people into Victoria than it is to Vancouver because there is a little bit of an advantage in terms of cost of living,” Bindley said.
Canon will use Redlen’s cadmium zinc telluride chips in the development of the next-generation of CT (computer tomography) systems.
Current CT systems, according to Bindley, are comparable to a one-megapixel camera that can only shoot in black and white. The next generation of CT scanners, known as photon-counting CT scanners, would be comparable to upgrading to a camera with 10 megapixels and full color capability.
“If you think of the automobile industry, there’s a sea change from internal combustion to electric vehicles. CT is in is in a similar situation,” Bindley noted.
Canon’s medical devices would be able to take clearer images while exposing patients to lower levels of x-ray radiation thanks to Redlen’s chips.
Canon Medical Systems Corp., a Redlen customer and a Canon Inc. subsidiary, announced last month that it would begin a trial of these next-generation medical imaging systems as part of a research project with Japan’s national cancer center. As part of the trial, Redlen’s chips will be used in the new technology.
“It really is going to make a huge difference to just innumerable patients,” Bindley continued.
Pangaea Ventures Ltd., based in Vancouver, previously led a $5.5 million financing round for Redlen in 2014 and now owns 20% of the company ahead of the acquisition’s official close, which is expected at the end of the month.
“They stepped in and led the round to pull us back from the brink and recapitalize the company,” Bindley explained, referring to a crash crunch Redlen faced during early efforts to commercialize.
“They’ve been very, very, very supportive.”