US giant 3M has paid some $10 million for 4.5% of the Israeli company BATM, which is traded on the AIM stock exchange in London. The deal also grants 3M the option of raising its holdings in BATM to 9.9% in a year’s time.
The transaction was made with 3M’s telecom division, which is based in Austin, Texas. This is 3M’s first-ever investment in an Israeli company.
The deal is based on a BATM share value of 4.35 pounds sterling, which reflects a company value of $220 million. This was BATM’s share price on the London stock exchange in April, but it has since zoomed to 8 pounds sterling, which reflects a company value of some $400 million - nearly double the value on which the 3M transaction is based.
3M’s chief scientist will arrive in Israel on Saturday night to look for investment opportunities in various Israeli infrastructure companies. The visit apparently results from 3M’s increasing exposure to the Israeli market due to its close ties with BATM. The Israeli companies expected to be included in the 3M chief scientist's visit apparently belong to the Industry and Trade Ministry Chief Scientist’s incubator project.
BATM’s phenomenal success may also be attributable to rumors of the impending agreement with 3M, but the excellent financial results recently posted by the company must also have played a part.
BATM, which posted its results for the second half of 1998 a month ago, registered record sales of $18 million, a 71% rise from the previous year. This is a particularly impressive achievement in view of the fact that as recently as 1993 BATM’s revenues were still no higher than $2.86 million.
BATM’s net profit soared 140% in 1998 from the 1997 figure to $3.6 million.
BATM was set up in 1991 by Zvi Marom, currently general manager, and Gershon Baras, who was a passive investor, and who sold his stake in the company last year.
BATM develops and manufactures data communications equipment for linking PCs, servers and mainframe computers into a single network. BATM’s competitors include American giants such as Cisco, Lucent, HP, and Dell Computers.
Published by Israel's Business Arena June 1, 1999