Diabetes holding company D Medical Industries Ltd. (Nasdaq: DMED); TASE:DMDC) subsidiary NextGen Biomed Ltd. (TASE: NXGN) (formerly Sindolor Medical Ltd.) has signed a non-binding letter of intent to acquire two private Israeli companies - Clear Path Ltd. and Innosense Ltd. In return for all the shares in the two companies, NextGen will allot 61.2% of its shares to Clear Path, and 15.3% to Innosense. A deal would reduce D Medical's holding in NextGen from 57.5% to 12%.
Clear Path is in the medical food industry and Innosense develops functional beverages. Both companies are due to launch their first products in the first quarter of 2011.
D Medical CEO Efri Argaman said, "Ahead of the launch of our products in five target markets - Mexico and the BRICs - in 2011, it is important that the company's focus will be on products for the treatment of diabetes and drug delivery. This proposed deal will enable us to invest all resources in the successful launch of the company's products, and at the same time to continue to hold NextGen as it embarks on a new road."
D Medical's share closed at $5.15 on Nasdaq on Friday, giving a market cap of $31.5 million. The share price rose 0.7% in morning trading on the TASE today to NIS 18.50. NextGen's share price rose 1.4% to NIS 0.142, giving a market cap of NIS 25 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2010
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