Medical device company MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL) is looking for someone to buy it. The company today announced an agreement with a US investment bank, which will search for possible investments in the company by third parties through a merger, acquisition of activity, a sale of capital rights, or any other kind of deal. The terms of the agreement with the investment bank reveal the value the company is seeking to obtain.
MCS will pay the bank a $25,000 fee and, should ownership change hands, $900,000 or 2% of the deal value, if it is above $45 million.
If there is no change in control of the company, the investment bank will receive 4% of the proceeds from the investment. MCS's current market cap is a modest NIS 20 million, following a 94.5% crash in its share price over the past two years. The controlling shareholder in the company is Mori Arkin's Accelmed. Accelmed is expected to inject NIS 5 million into the company in the coming days as part of a rights issue.
MCS had $2.3 million cash as of the end of the third quarter of 2015, and its financial statements carry a going concern warning. A struggle between Accelmend and Nissan Medical Industries Ltd. (TASE: NISA), which currently holds a 10.7% stake, for control of the company took place in 2015. Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Yelin-Lapidot, and Pontifax Fund also own shares in MCS.
MCS has developed a device for preventing blood clots in orthopedic surgery. The company announced a streamlining plan in late 2014, and issued a report on progress on the plan a few days ago, including a reduction in the number of sales personnel in the US and a switch to an original design manufacturer (ODM) model.
The company published two positive reports this week. The first was an agreement to lease its devices to a hospital in the US, and the second was the inclusion of treatment for the prevention of vein blockages and pulmonary embolisms in the National List of Reimbursed Drugs - treatment for which MCS's device is suitable.
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2016
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