Do you remember Quicktionary, the translating pen introduced by Aharon Lipman and his friend, Meir Shamir? Wizcom Technologies (XETRA: WZM), founded in the mid-1990s, developed a pen with an electronic scanner that translated words from various languages. The company made mainly losses.
At the time, the company was considered the next big thing. It was the subject of quite a feature press stories, and its shareholders were talking about a Nasdaq issue at a fantastic company value of $400 million.
Wizcom failed to live up to expectations. Today, Lipman Electronic Engineering (Nasdaq: LPMA; TASE: LPMA) and Mivtach Shamir Holdings (TASE: MISH) are completing the sale of their 32.5% stake in the company to Elad Properties, owned by Ronen Elad. As reported exclusively in "Globes", Elad will buy Lipman and Mivtach Shamir’s holdings for $2.26 million, reflecting a company value of $7 million for WizCom,, far below the company’s $150 million value in its 1999 IPO on the Neuer Markt in Frankfurt.
Simultaneously with the sales of its shares, WizCom is acquiring Migdal Haemek-based Galil Microwaves Ltd. for $1.25 million, plus another amount contingent upon the latter’s results. Galil Microwaves is a subcontractor for manufacturing and assembling of electronic modules used in microelectronics and microwaves.
As far as is known, Galil Microwaves is a profitable company, which had $1-2 million in revenue in 2004, projected to grow to $2-3 million this year. Elad says that, following the acquisition, WizCom will transfer its manufacturing to Galil Microwaves’ plant, and the two companies’ procurement, storage and logistics systems will be consolidated. Part of WizCom’s manufacturing has been carried out at Taliran, another Elad group company, for a long time.
With the completion of the deal, Elad will own 35% of Wizcom, and will be appointed chairman in place of Netafim president and CEO Erez Meltzer.
Lipman and Shamir are selling their WizCom stakes after a long recovery process in the company, which included lay-offs, business focus, and closing down unprofitable activity. Managed by WizCom president and executive VP Raz Itzhaki, the company has focused its marketing and sales efforts in recent years. WizCom has begun operating in a few countries through business partners, rather than directly.
WizCom lost $845,000 on revenue of $8.2 million in 2004, compared with a $1.5 million loss on revenue of $7.8 million in 2003. WizCom earned a $30,000 profit in the fourth quarter of 2004. Following the improvement in its results and the acquisition of Galil Microwaves, the company is expected to earn a profit in 2005.
Published by Globes [online] - www.globes.co.il - on May 2, 2005