4DMedical (ASX:4DX) signed a binding agreement to acquire Austria-based contextflow, a medical technology company specializing in lung cancer screening and advanced artificial intelligence-driven thoracic imaging, in a deal that includes upfront cash payments of about AU$18.6 million, according to a Monday Australian bourse filing.

The deal also includes 56,235 ordinary shares, plus an earn-out of up to 2.6 million zero-exercise-price options over two years subject to performance milestones

The company said the acquisition establishes an immediate European commercial and clinical platform, with contextflow retaining about AU$30.8 million in accumulated tax losses.

The acquisition introduces insurance reimbursement contracts in Germany and helps expand the company's CT:VQ product across the region, per the filing.

4DMedical's shares jumped nearly 6% in recent Monday trade.