Elbit Imaging Ltd. (Nasdaq: EMITF; TASE: EMIT) subsidiary Elbit Medical Technologies Ltd. (TASE:EMTC) reported this morning that it had obtained a $12.5 million investment from a Chinese investment group. The Chinese group includes Shanghai GEOC, Hengtong Investment Limited Partnership, and Fortune China. The financing round, announced by Elbit Medical several months ago, was at a company value of $200 million for InSightec, before money. Elbit Medical owns 37.6% of InSightec.
This investment comes on top of a recent $37.5 million investment in InSightec by the York Fund at the same company value. York is the largest shareholder in Elbit Imaging, and directly or indirectly owns 21% of InSightec.
InSightec treats cancer and other diseases using focused ultrasound to destroy tissue non-invasively. The company markets products for treating benign uterine tumors, non-Parkinson tremors, and secondary cancers in the bones.
The current financing round contains protection for the investors. Among other things, if InSightec's 2014-2015 revenue totals less than $60 million, the share price in the private placement will be reduced in proportion to the gap (in percentages) between the actual revenue and $60 million, but by no more than 8%. InSightec's 2013 revenue totaled $20.6 million.
Elbit Imaging founded Elbit Medical to combine its medical business in a single company, including both InSightec and Gamida Cell. Gamida Cell, in which Elbit Medical has a 31% stake, announced a month ago an investment agreement with international corporation Novartis, which obtained 15% of Gamida Cell for $35 million. The agreement includes an option for complete acquisition of Gamida Cell for an additional $165 million. Together with payment for milestones and royalties, the acquisition proceeds could reach a total of $435 million.
Published by Globes [online], Israel business news - www.globes-online.com - on September 14, 2014
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