Formula Vision Technologies (TASE:FVT) notified the Tel Aviv Stock Exchange (TASE) yesterday that its subsidiary, Transtech Control had signed an MOU to raise $20-25 million in a private placement, at a company value of $25 million, before money. Formula Vision, which owns 65% of Transtech, will invest $5 million of the round, with the rest coming from Israeli and foreign investors. Giza Venture Capital will lead the round. A major US venture capital fund will also participate. Formula Vision estimates that it will record a capital gain of NIS 15 million from the financing round and dilution of its stake in Transtech.
Founded in 1986, Transtech develops and markets advanced control systems for airports' visual navigation aids, surface movement guidance control systems (SMGCS), and the "Intelligent Airport" systems (A-SMGCS). Israel Venture Capital (IVC) reports that Transtech has 80 employees. The company has sold solutions to 120 airports worldwide. Sources inform “Globes” that it is negotiating with the US Federal Aviation Authority (FAA) to test its Intelligence Airport system. This system, which has been under development for four years, handles traffic problems at airports, to prevent collisions between planes on the ground. Transtech plans to use the proceeds from the financing round to complete development of its Intelligent Airport product and market it.
The current round will be Transtech's second large-scale round. Shareholders include Israel Discount Bank (TASE:DSCT) and First Israel Mezzanine Investors. Transtech raised $9.3 million from existing shareholders in early 2003, half of which Formula Vision invested through capitalization of a loan. An external investor invested $1 million in the company in mid-2002. Formula Vision reported a capital gain of NIS 2.5 million from that investment.
Six months ago, Transtech signed an important cooperation agreement with Lockheed-Martin (NYSE:LMT) to develop a command and control system for plane traffic at airports. The two companies are jointly upgrading air control and automation systems, including the development of sensors and advanced display systems.
Published by Globes [online] - www.globes.co.il - on May 31, 2004