Boston Scientific buys Aran unit LumenR

Avraham Zakay and Ran Stav Photo: PR

Aran will post a $800,000 profit on the sale of LumenR, which has developed a system for complicated intestinal surgery.

Aran R&D (1982) Ltd.'s (TASE: ARAN) share price rose 3% today, after the company reported the sale of LumenR, a subsidiary, to Boston Scientific. Aran will post an $800,000 capital gain on the sale. LumenR has developed a system for complicated intestinal surgery. The sale agreement includes royalties likely to increase Aran's profit by up to $2.8 million.

Led by chairman Avraham Zakay and CEO Ran Stav, Aran provides services in product design and development, equipment imports for the plastics industry, and the construction of solar energy stations. In recent years, it has also invested in companies and fostered startups. Four of the medical equipment companies it founded were sold shortly afterwards. The sale prices were low in absolute terms, but the deals yielded fine returns on Aran's investment. In addition to LumenR, ac Therapies was also sold to Boston Scientific.

In a 2013 "Globes" story, Stav and Zakay explained, "At a certain point, we realized that we had a collection of brilliant engineers, who in one lunch came up with enough ideas to populate an entire incubator, and were capable of developing them. Startups gradually became a larger part of our activity." One of the first startups in which Aran invested was Percutaneous Valve Technologies (PVT), a pioneer in replacing heart valves through catheterization, a field that has meanwhile become huge. The company was sold to US company Edwards Lifesciences for $155 million, and became that company's R&D center in Israel. Aran finances its activities without venture capital.

In the first half of 2016, Aran posted a NIS 299,000 profit on NIS 48 million in revenue, up 6%, compared with the corresponding period last year, so the profit on the sale of LumenR is significant for Aran. The Aran share has lost 15% of its value this year, leaving it with a NIS 135 million market cap.

Together with the announcement of its exit, Aran also announced that another subsidiary, Endoaid, in which it has a 66% stake, had signed an agreement for the distribution of its products in Turkey. Endoaid is developing a product placed at the end of a colonscope to enhance the latter's activity. Aran also owns 50% of Cardiopass, which is developing a special catheter for treating chronic cardiac patients,

Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Avraham Zakay and Ran Stav Photo: PR
Avraham Zakay and Ran Stav Photo: PR
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