Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) high-tech investment arm Elron Electronic Industries Ltd. (Pink Sheets: ELRNF; TASE: ELRN) today announced progress in the sale of its 92% stake in Medingo Ltd. at a company value of up to $200 million. Medingo has developed the disposable Solo4You micro insulin pump for diabetics.
Elron owns Medingo both directly and through Rafael Development Corporation (RDC), its joint technology transfer venture with Rafael Advanced Defense Systems Ltd. Medingo's third shareholder is Radius Ventures.
Elron did not disclose the name of the buyer, but said that, after negotiations, the parties agreed, subject to signing a binding contract, on the main terms of the sale. Elron and Rafael will receive $160 million, subject to adjustments. $29 million of the amount will be deposited with a trustee for up to 24 months, mainly to guarantee possible indemnification payments that will apply on the sellers in the event of breach of contract or future claims against Medingo.
Elron and Rafael will also gradually receive up to $40 million, subject to Medingo achieving preset operational milestones. The parties have provisionally set the milestone period at five years.
Medingo was founded in 2005 by CTO Dr Ofer Yodfat at RDC.
Elron's share closed at $8.06 on the Pink Sheets yesterday. The share price rose 6% today on the TASE to NIS 31.80, giving a market cap of NIS 890 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 1, 2010
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