One of the most highly publicized disputes in the business sector is about to end. Dr. Koby Richter, founder and controlling shareholder of medical technology company Medinol, is negotiating with venture capital fund Polaris, of the Shrem-Fudim-Kelner group, to buy its shares in the company, "Globes" has learnt.
The parties agreed on a company value of $800 million for Medinol, from which 30%-40% will be deducted for the purpose of the deal, which will be a cash deal. According to these figures, Richter will pay Polaris about $50 million, most of which will be recognized as profit.
The dispute between Richter and Yitzhak Shrem, head of the Shrem-Fudim-Kelner group, broke out recently after Polaris general manager Rami Kalish was ousted from Medinol’s board of directors. So far, there has been no contact between the parties, with Shrem group members arguing that Richter was withholding from Polaris information bearing on its investment, and seeking to get Polaris out of Medinol. Polaris also approached lawyer Yigal Arnon with the request that he represent it in the dispute.
Recently there has been a rapprochement between the two parties, and their relations improved, which means that the deal is about to be completed. The Shrem-Richter dispute is not the first in which Medinol has been involved. At the end of 1996, Professor Ben’ad Goldwasser, one of the founders, left the company, alleging a hostile attitude on Richter’s part. Goldwasser sold his shares for $23 million, or half the value at which the Polaris-owned shares are about to be sold.
Published by Israel's Business Arena September 15, 1999