Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) technology holding company Elron Electronic Industries Ltd. (Pink Sheets: ELRNF; TASE: ELRN) is continuing the sell-off of assets with the sale of its full stake in cryotherapy cancer treatment developer Galil Medical Ltd.. Elron's parent company Discount Investment Corporation (TASE: DISI) and Rafael Development Corporation (RDC - owned in equal shares by Elron and Rafael Advanced Defense Systems Ltd.) are also selling their shares in the company. They are selling their aggregate stake in Galil Medical to its other shareholders for $1.33 million altogether.
Galil Medical is currently raising $6.4 million from its shareholders, including Elron, Discount Investment, and RDC. Galil Medical will convert existing debt owed to the three into senior shares. When the fundraising is complete, Elron will own 8.6% of Galil Medical, Discount Investment will own 9.2%, and RDC will own 12.34%.
According to Galil Medical, its other shareholders are US healthcare venture capital firms Thomas, McNerney & Partners, Investor Growth Capital, and Vertical Group.
Galil Medical was founded in 1997 on the basis of technology developed at Rafael and commercialized through RDC, and is considered a promising start-up.
If within two years, Galil Medical is sold to, or merged with, a third party, Elron, Discount Investment, and RDC will be eligible for additional payment based on the difference between a third of the proceeds of that transaction and the $1.33 million.
Elron has already sold a number of assets in the past few months, including the intellectual property of DV3 Ltd., fabless semiconductor developers Sela Ltd. and ChipX Ltd., and its stake in Internet services provider and international calls carrier NetVision Ltd. (TASE: NTSN), a sister company. The company has put insulin pump developer Medingo Ltd., one of its core businesses, up for sale.
Elron's share closed at $8.43 in New York yesterday, and the share was unchanged today on the TASE at NIS 30.89.
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2010
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