Sarin Technologies Ltd. (SGX:SGD), a manufacturer of technological tools for the diamond industry, has acquired Galatea Ltd. for $10.8 million in cash and shares. Galatea develops proprietary technology for the automated evaluation of internal features in diamonds.
Sarin said that Galatea's technology would significantly improve the realized yield of rough stones. It added that there is no similar cost-effective automated system for the evaluation of a diamond's internal features on the market.
Sarin will pay $9 million in cash and the rest in an issue of 6.9 million new shares. Galatea's shareholders will also receive additional payments over four years from additional sales, and revenue generated from use of the product in Sarin’s service centers and potential future application of the technology.
Sarin said, “The commercialization of this technology will not only increase the group’s revenue through expanding its product range, but is also expected to boost the sales of Sarin’s existing rough diamond planning products." Sarin CEO Zeev Leshem predicted that the benefits of the acquisition would materialize next year.
Sarin added that Galatea posted a net loss of $1.3 million in 2007 and had a $22,000 negative balance in net tangible assets at the end of the year.
Sarin acquired 23% of IDEX International Diamond Exchange Online in March. Sarin's share has fallen 21% since January and it is now traded on the Singapore Stock Exchange at a market cap of $73 million. The company had $25.3 million in cash at the end of 2007.
Published by Globes [online], Israel business news - www.globes-online.com - on April 16, 2008
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