Will medical device company ET View Medical Ltd. (TASE: ETVW) produce the next Israeli exit in this sector? The company today announced, "A multinational medical equipment company recently expressed interest, and asked for information about the company for the purpose of assessing a possible acquisition of the company or its business. Confidentiality agreements were subsequently signed, and specific information was provided." ETView nonetheless stressed that the contacts were only at a preliminary stage, and no concrete offers had been received.
When it published its 2014 reports, ETView announced that it was considering business cooperation, and the company board of directors approved an agreement with an investment bank for the purpose of locating a potential buyer for the company. The information about the interest expressed in the company was reported to the Tel Aviv Stock Exchange (TASE) today, in view of ETView's planned rights issue "given the company's urgent need for an injection of capital," as reported by the company.
A going concern warning was attached to the company's reports, and it had less than NIS 1 million in cash at the end of the third quarter. It recently secured a NIS 1 million line of credit from Trendlines Group Ltd., its controlling shareholder. ETView is traded at a relatively modest NIS 31 million market cap, following a 33% decline in the company's share price in 2015. The company share zoomed 15.6% yesterday.
ETView develops a product for use in selective single-lung artificial respiration. The product, a bronchoscope, is actually a special pipe for inserting a camera that can be directed more precisely. It is used in pulmonary surgery requiring the isolation of one lung.
The potential buyer for the company could be a medical equipment company in the artificial respiration segment, such as Covidien (now part of Medtronic) or Hudson, which have substantial market shares in the segment. The main competitors in bronchoscope devices are Olympus and Pentax.
ETView's rights issue, scheduled in the coming days, is expected to raise NIS 5 million for the company. ETView signed an agreement with an investor who undertook to inject NIS 2 million at NIS 2 per share (around the current price), provided that the company raises at least NIS 3 million (also at NIS 2 a share) by March 2016.
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016