Ilex Medical Ltd. (TASE:ILX) wants to expand its business in a big way: it has set aside NIS 100-200 million for one or more acquisitions in the coming months, with the objective of entering new fields of activity. The company is considering acquiring Israeli companies, but it says that it has not ruled out a foreign acquisition.
Ilex chairman and CEO Dr. Moshe Benshaul owns 70.5% of the company, which markets diagnostic equipment of international companies, such as Abbot and Novartis AG. Ilex also develops and markets its own laboratory software products. Most of Ilex's business is in Israel and South Africa.
Ilex had NIS 85 million in cash at the end of March, and in May it set a policy to distribution a quarterly dividend of up to a third of its annual net profit. The company now intends to use its cash flow toward acquisitions as well.
Ilex's posted a net profit of NIS 8.5 million in NIS 62.7 million revenue for the first quarter of 2010.
Benshaul told "Globes", "Ilex is a growing company and we're in good shape. We nevertheless think that we can boost another business that will add NIS 100-150 million to our turnover. We're trying to diversify into other areas that supplement our activity, such as medical equipment and biotech. Our objective is to expand our reach beyond diagnostics."
Benshaul said that Ilex was already in contact with several companies for this purpose. "Some are more interested than others," he said, adding that there are companies interested in being acquired, but that Ilex had not yet found a suitable target.
"Globes": What kind of company are seeking to acquire?
Benshaul: "We looking for companies that already have sales. If possible, they should also be profitable. But if not, we can buy and improve them. In the medical equipment industry, we're seeking manufacturers or representatives of products that have a market and solid foundations. We not looking for start-ups with no sales, because we're seeking something more mature that a green banana."
Ilex is looking for cardiovascular, cardiology, and special imaging companies. "We're interested in high-tech products, not commodities, such as pumps, where there are a thousand manufacturers with no great difference between them," said Benshaul.
He added, "In biotech, we're mainly seeking research products. It's less important to us whether a company has US Food and Drug Administration (FDA) certification, because we focus on the domestic market, and we can undertake clinical trials for FDA approval later on."
Ilex Medical's share price rose 0.5% in morning trading to NIS 34.91, giving a market cap of NIS 349 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 9, 2010
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