Microsoft Corporation (Nasdaq: MSFT) will later today confirm that it is buying Israeli digital pen companyN-trig, sources inform "Globes." The company has developed a chip for a digital pen and computer screen interface. Microsoft will pay several tens of millions of dollars for the Kfar Saba based company.
Microsoft already owns a stake in N-trig and is by far its largest customer, responsible for 79% of revenue. N-trig has recently been financially-troubled after failing to meet the financial conditions of a loan that it took and a "going concern" warning was attached to its 2014 statement.
N-trig is led by CEO Dan Inbar who took over from Amichai Ben-David 18 months ago. The company has less than 100 employees. Founded in 1999, N-trig changed its business model in 2011 to focus on digital pens. This led to a fall in revenue. The company has raised $130 million over the years in eight financing rounds so that the acquisition by Microsoft will not yield major profits for its investors.
In 2011, when revenue peaked, the company's value was estimated at $200-300 million, when there was talk of a Nasdaq IPO that never materialized. Last year N-trig cancelled a planned IPO on the Tel Aviv Stock Exchange (TASE).
As of June 2014, N-trig had lost $117 million and it had a negative cash flow of $4.4 million from ongoing operations in the first half of 2014. The company had less than $5 million in cash and equity of just $12 million.
This is Microsoft's third acquisition in Israel over the past year after it bought Aorato for $200 million in November 2014 and Equivio for $50 million in December. Its previous acquisition in Israel was 3DV Systems in 2009 for $35 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2015
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