US tech fund 21 Ventures has made a strategic investment in Israeli security solutions start-up Hadas Detecting & Decoding Systems (HDDS) Ltd., acquiring 29% of the company for NIS 18 million. The deal will be transacted in two stages, with the fund initially holding 16% of Hadas, and the second stage to be completed by the end of the year.
Hadas specializes in perimeter security solutions for gas and oil pipelines, as well as underground and surface infrastructures, through an advanced electronic signal processing system that detects irregular activity in the vicinity of the protected facility in real time, and relays a precise warning on the nature and location of the activity to a control center. The company provides its solutions to government agencies and civil entities in Israel and other countries.
Hadas, which is co-marketing its systems together with Rafael Armament Development Authority Ltd., recently signed a collaboration agreement with Brazilian energy giant, Petroleo Brasileiro SA (Petrobras) (NYSE: PZE; Bovespa: PETR), under which its perimeter security systems will be installed on Petrobas's gas pipelines for a total of $15 million over three years.
Hadas, which was founded in 2002, is expected to record NIS 20 million in sales for 2006, and the company hopes to double this in 2007. The investment by 21 Ventures reflects a company value for Hadas of NIS 65 million. The company's current shareholders (employees - 30%; Sitobi Group - 26%; Milstein Group - 10%; Gad Schwartz - 15%; Amir Eyal - 5%; Shaul Bar - 5%; Avi Yochanan - 4%, and others - 5%) will be diluted following the completion of the deal.
21 Ventures was founded by a group of American Jewish financiers, with the aim of investing chiefly in young Israeli companies specializing in security, clean energy, and cellular handset software. It plans to invest a further $20 million in Israel over the next eighteen months. Among the companies 21 Ventures has already invested in are BioPetroClean, Agent Video Intelligence Inc., and Orion Solar Ltd..
21 Ventures managing partner David Anthony said, "The investment in Hadas, fits in well with the fund's expanding investments in Israel. Hadas's team has made it a leader in its field, with a range of impressive security-technology developments that provide a solution to a diverse range of threats. These achievements, coupled with the 21 Ventures Group's significant financial capabilities, make us extremely confident of Hadas's continuing success and growth."
Published by Globes [online], Israel business news - www.globes.co.il - on August 2, 2007
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