Optibase Ltd. (Nasdaq: OBAS) has completed the sale of its video division to French company Vitec Multimedia SA, three months after first announcing the deal. The sale of these activities comes after the company decided to enter the income producing property sector.

In March, Optibase announced that it would be selling its video development activities to Vitec for $8 million and with the conclusion of the deal, the company will focus exclusively on real estate.

Optibase's video division will now be a fully owned subsidiary of Vitec called Optibase Technologies Ltd. The French company acquired Optibase in order to expand its digital video compression and transmission capabilities.

The new entity Optibase Technologies will continue to work in Herzliyah, and the French owned company hopes to diversify into the medical market, in addition to its current communications activities in the government and military markets.

In addition to the $8 million Optibase will receive from Vitec for its video division, the French company will also pay 45% of any revenue over $14 million during the next year. Optibase revenue was $13.1 million in 2009, down 34% from 2008.

Optibases's share closed at $1.35 on Nasdaq yesterday, giving a market cap of $22.34 million.

Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2010

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