Israeli UAV (unmanned aerial vehicle, or drone) developer Innocon is aiming for an exit in a two-stage move over two-three years. The goal is that within three years, Innocon should make an IPO or be sold to a large defense company.
Initially, the company seeks to raise $2 million in return for a 20% stake, to strengthen its marketing activity. This, it says, will bring it from its current annual level of sales of $2 million to $30 million within three years. Company CEO Michael (Mike) Armon believes this is a realistic goal.
The company intends to raise the money from a strategic investor or a conservative fund that seeks to grow with the company. The expectation is that the exit will be at a value of $50 million before the money (in the event of an acquisition).
Armon says he does not want venture capital funds as investors, but rather, "private investors who won't try to manage us."
"We have in hand requests for price estimates and orders for future projects. The problem is that every such project requires a prototype costing $500,000-750,000." The forthcoming fund raising round is intended to finance three to four such systems, as well as participation in exhibitions and other marketing activity. This money won’t go to the shareholders, but will be entirely invested in the company," Armon says.
Innocon was founded in 2001 by Ziv Nave and his father Zvika Nave, among the founders of Aeronautics Defense Systems. The company's technology enables a UAV and its sensors to be operated entirely from a single ground system. According to Armon, the ground computer allows full control of all stages of flight, including take-off and landing, giving the UAVs better capabilities than is currently the norm. He says the technology has no competitor anywhere in the world.
Among Inncon's customers are Elbit Systems (Nasdaq: ESLT; TASE: ESLT) and BAE Systems. UAVs developed by the company are in use in the US, Israel, and countries in Asia and Africa.
Published by Globes [online], Israel business news - www.globes-online.com - on December 21, 2009
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