Elron Electronic Industries Ltd. (Nasdaq: ELRN; TASE: ELRN) announced yesterday that it plans to float three subsidiaries on the Tel Aviv Stock Exchange (TASE): BrainsGate Ltd., Sela - Semiconductor Engineering Laboratories Ltd., and Starling Advanced Communications Ltd.
Elron did not say what the aggregate size and company value of the flotations would likely be, but market sources believe that BrainsGate will be floated at a company value of at least $40-50 million. Elron directly owns 22% of BrainsGate, which is developing a device to electrically stimulate the spheno-palatine ganglion (SPG) to increase cerebral blood flow and to increase the permeability of the blood-brain barrie
BrainsGate was founded in 2001 by Yossi Gross, who previously founded VisionCare Ophthalmic Technologies Ltd., TransPharma Medical Ltd. and other companies.
Six months ago, Elron announced that it had invested $7 million in BrainsGate, and it now owns 22% of the company, which means that the investment was made at a value of $35 million. Boston Scientific Inc. (NYSE:BSX) invested $5 million in the same financing round, and a further $5 million was invested by Pitango Venture Capital, Israel Infinity Venture Capital and MB Venture Capital. Pintango owns 20% of the company and Boston Scientific owns 15%.
Elron and Rafael Armament Development Authority Ltd. own large stakes in Sela and Starling through their joint investment arm, Rafael Development Corporation (RDC). RDC was founded in 1993 to examine civilian applications of military technologies developed by Rafael, and has been responsible for the success of Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) and Galil Medical Ltd.
Elron directly owns 39% of Sela, plus an indirect stake held through RDC’s 51% holding in the company. Sela was founded in 1992 and is located in Yokne’am. It develops technology for spotting flaws in manufacturing processes of silicon wafers. The company’s customers include Motorola Inc. (NYSE:MOT), STMicroelectronics NV. (NYSE:STM), and Taiwan Semiconductor Manufacturing Company (NYSE: TSM; TSEC: 2330) (TSMC). According to IVC Online, the company had $5 million in sales in 2004.
Elron directly owns 50% of Starling, plus an indirect stake held through RDC. Starling was founded in 2003. It is developing two-way Ku band antenna systems for broadband connectivity for aircraft. The system is designed to provide high-speed Internet access and a range of operator applications during flight. The company raised $5 million in late 2004.
Published by Globes [online], Israel business news - www.globes.co.il - on April 30, 2007
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