Maayan Ventures makes swift exit from Audiodent

The incubator has signed a memorandum of understanding to sell the company for $3.5 million plus royalties.

Maayan Ventures Ltd. (TASE:MAYN) said yesterday that its medical device portfolio company, Audiodent Israel Ltd. which develops hearing aids that are fitted inside the mouth, has signed a memorandum of understanding for its sale for $3.5 million plus royalties. $1.5 million will be transferred immediately with the remaining $2.5 million conditional on the achievement of agreed milestones. Maayan Ventures added that there was no certainty that the deal would be signed.

Maayan Ventures holds 47% of Audiodent. It invested $3 million in the company when it was founded ($690,000 at the shekel-dollar exchange rate at that time, of which $300,000 was a loan from the Chief Scientist which will be returned if and when the company is sold), and participated in a financing round for Audiodent a few months ago, which raised a further $350,000 at a value of NIS 4 million ($1.1 million).

Audiodent is one of Maayan Ventures' flagship companies. If it is eventually sold for $3.5 million, the incubator will record a return of 1.8 on its investment within two years - an exit which in percentage terms is reasonable but which is very small in terms of actual size. Only if a substantial amount of royalties are generated will the deal become substantial.

Audiodent has developed a hearing aid that is fitted inside the mouth and therefore hidden from view. The company says it also offers better sound quality. The device has just completed the prototype stage. Since devices like these usually gain US Food and Drug Administration (FDA) approval under a 510K abbreviated procedure, it will probably be on the market within a year to a year and a half.

Published by Globes [online], Israel business news - www.globes-online.com - on September 4, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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