Elron Electronic Industries Ltd. (Pink Sheets: ELRNF; TASE: ELRN) has completed the sale of insulin patch developer Medingo Ltd. to Roche Holdings AG (SWX: RO). Elron announced that it received $14 million and that Rafael Development Corporation, its joint venture held in equal shares with Rafael Advanced Defense Systems Ltd. received $94 million in proceeds paid at the closing of the deal.
Elron and RDC are also eligible for up to $3 million and $21 million, respectively, over 24 months from the deposit put in trust for the deal. In addition, Elron and RDC estimate that they will be eligible for up to $3 million and $29 million, respectively, for milestone payments on progress made by Medingo over the next five years.
Elron currently estimates that it will report a capital gain of $59 million on the sale in the second quarter of 2010. It currently estimates an additional capital gain of up to $25 million, which it will report at later dates. This figure will depend on the amounts Elron and RDC receive from the trust deposit and from the provisional proceeds.
Elron is the high-tech investment arm of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH). Elron's share price rose 2.8% in early trading on the TASE today to NIS 22.30, giving a market cap of NIS 643 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010