IBM launches first-ever start-up accelerator
The start-up's five founders are expected to rake in $50-85 million from the acquisition.
On Friday, the acquisition of Israeli gesture recognition company PrimeSense Ltd. by Apple Inc. (Nasdaq: AAPL) was closed. The deal, which has not been formally announced, was made at a company value of $300-350 million, and follows lengthy negotiations by PrimeSense with several potential buyers.
PrimeSense, founded in 2005 by president Aviad Maizels, CTO Alexander Shpunt, Dima Rais, Ophir Sharon, and Tamir Berliner, is run by CEO Inon Beracha. The start-up's five founders are expected to rake in $50-85 million from the acquisition.The company initially showed great promise, mainly because of its close relations with Microsoft Corporation (Nasdaq: MSFT). The software giant embedded PrimeSense's technology, which comprises both hardware and software, in the Kinect system used in Xbox 360 game consoles.
PrimeSense earned big money, not just financially, from its successful relationship with Microsoft, reportedly amounting to almost $200 million from Xbox 360 sales, although there was a question mark over the profits on these sales. In early 2011, private equity firm Silver Lake Partners invested $50 million in the company, and it currently holds a 20% stake. The main reason for the generous company value at the time was the agreement with Microsoft. Other investors are Gemini Israel Ventures, Genesis Partners, and Canaan Partners, and Microsoft as a strategic investor. $84.5 million has been invested in PrimeSense to date.
PrimeSense's relations with Microsoft subsequently cooled, and, ironically, the company is being acquired by one of Microsoft's great rivals just when the new version of the Xbox, the Xbox One, which includes Microsoft's in-house developed gesture recognition software, is being launched. Microsoft partly developed the technology on the basis of its acquisition of Canesta, a rival of PrimeSense.
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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