Israeli holding company Discount Investment Corporation Ltd. (TASE:DISI) has notified the Tel Aviv Stock Exchange (TASE) that it has signed an agreement to sell its 59.1% stake in its technology investment arm Elron Ventures (TASE: ELRN) for $53.2 million. The sale is to a relatively anonymous family office called Arieli EL at a company valuation of $90 million for Elron, a 50% premium on its market cap.
Elron Ventures is a veteran Israeli technological incubator founded in the 1960s and which held its IPO in 1975, and which invests in early-stage medical devices, cybersecurity and software companies. Among the companies that were developed by Elron were Elbit Systems, Orbotech, Given Imaging, Netvision and Elscint. A recent presentation by Elron said it has been involved since 2010 in 14 exits worth $1.8 billion, of which its share was worth $660 million.
Elron, currently managed by CEO Yaron Elad, has a market cap of NIS 222 million, up 16% over the past year, although it has lost 33% of its value over the past three years. The company has investments under management worth NIS 300 million, considerably higher than its market cap.
Arieli EL managing partner Lisya Bahar-Manoah told "Globes, "The families whose money we manage trust us to create wealth for them that will pass down the generations. We have offices in the US, UK and Israel. We are linking our investments to the network of investments we have established around the world, with the goal of investing in Elron being to provide families (investing in the Family Office) with unique access to the high-tech field."
Bahar-Manoah’s background is in mechanical engineering. In the past she says she lived for over a decade in Austria and Germany and other countries, then entered the world of investments including venture capital acquisitions.
What led you to Elron?
"Elron is a name we trust. It has investments in a variety of growing companies in the technology field, with holdings in cybersecurity. This is one of the areas we wanted to invest in: immunity for companies in the cybersecurity field and business continuity. Elron has a portfolio with 19 companies, from cybersecurity fields through the health sector, data protection and more.
She said, "We are focused on supporting and maintaining Elron's portfolio companies. There are companies that we will have to strengthen and give them more support, some of them are growth companies. We will also look for new investments in the areas of business continuity, supply chain security and others. I have full confidence in Elron's management, and in its partnership with Rafael (through the RDC joint venture set up in the early 1990s, to commercialize military technologies developed at Rafael for civilian uses).
Arieli EL declines to provide details about prominent investors, or reveal the extent of the assets managed by them. "It's a very discreet business and I can't give out names. But these are families who believe in the high-tech field and want to invest in it," stressed Bahar Manoah.
Published by Globes, Israel business news - en.globes.co.il - on July 22, 2024.
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