After three failed deals, access network solutions developer Teledata Networks Ltd. is being sold to its fourth buyer. Canada's Enablence Technologies Inc. (TSX: ENA) has sold the company to Israeli private equity fund Taldan Capital Ltd. for a nominal cash payment, and the assumption of Teledata's $2.8 million working capital liability.
Enablence acquired Teledata for $50 million from Elron Electronic Industries Ltd. (TASE: ELRN) and Kardan Israel Ltd. (TASE:KRIS) in April 2010. That investment has gone down the tubes.
Teledata is one of Israel's high-tech veterans that is still in business, although it has unquestionably known better times. Founded in 1981, it develops next-generation network (NGN) upgrade products and solutions for access switchboards, and has 100 employees in Herzliya Pituach. In the past couple of years, the company has been struggling with rising competition from large communications equipment makers.
The sale to Taldan is Teledata's fifth exit: an IPO on Nasdaq in the 1990s, a takeover by Poalim Investments, acquisition by ADC Telecommunications Inc. (Nasdaq: ADCT) in 1999, repurchase by Teledata's management and Kardan Israel in 2004, and the acquisition by Enablence. Teledata's condition looks likely to only worsen.
Last year, Enablence reported unsuccessful attempts to sell Teledata, and described a 55% drop in sales from activities, mainly based on Teledata, which were discontinued in the second half of 2011, to $20 million.
Taldan managing partners Uzi Hadar and Daniel Keren founded the company in 2010. They say that they have been following Teledata for a long time. They intend to restructure the company and change its strategy to boost operations in the US market in order to exploit US federal subsidies for broadband communications. They also plan to appoint executives and directors from the telecommunications industry.
Published by Globes [online], Israel business news - www.globes-online.com - on March 20, 2012
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