Sources inform ''Globes'' that the IPO of BrainsGate Ltd. on the Tel Aviv Stock Exchange (TASE) has failed. The company was unable to raise the amount it wanted, and after refusing to compromise on the size or value of the offering, it left the offering open to other investors.
The failure of the institutional tender cannot be attributed to the quality of the company, which is controlled by IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Elron Electronic Industries Ltd. (Nasdaq: ELRN; TASE: ELRN) and backed by Pitango Venture Capital, Israel Infinity Venture Capital, MB Venture Capital, and Boston Scientific Inc. (NYSE:BSX). The company’s technology was developed by well-known entrepreneur Yossi Gross.
The failure was apparently due to BrainsGate’s asking price of $30 million at a company value of $40-50 million, which contrasted with its progress to date. It is only now conducting initial human clinical trials. Timing was another problem, with a great many competing IPOs reaching the market this month. Sources inform ''Globes'' that the institutional tender by EvoGene Ltd. was heavily oversubscribed.
In a separate development, BreathID Ltd. announced that it would hold an IPO with no underwriters, in an attempt to raise NIS 22 million in shares and warrants. The figure is well below the NIS 40 million that the company originally hoped to raise.
Published by Globes [online], Israel business news - www.globes.co.il - on May 29, 2007
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