BATM Advanced Communications Ltd. (LSE: BVC) has acquired Israeli start-up Resolute Networks Ltd., a provider of subsystem solutions for circuit-emulation and pseudowire applications, for $2 million. Resolute Networks had raised almost $30 million from investors; they will lose over 90% on their investment.
BATM has not made any official announcement about the acquisitions, since under LSE regulations, no announcement is necessary if a deal amounts to less than 5% of a company's market cap. BATM has a market cap of $254 million.
Resolute Networks was founded in 2004, through the merger of Redux and Lycium, two companies that were struggling to survive the high-tech crisis. Investors in the company included Accel Partners, Benchmark Capital, Delta Ventures, Genesis Partners, Giza Venture Capital, Partech International, and Kreos Capital. The sale of the company at this price amounts to a write-off on their investment. Resolute's remaining cash will be used to pay its debts.
Sources inform ''Globes'' that the venture capital funds decided to turn off the tap, when it became clear that Resolute's target market was not growing as expected, and the company was unable to reach its hoped-for level of sales. BATM was one customer.
Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008