Elron nears sale of insulin pump co Medingo
If the company is sold, it will be Elron's second sale of a major investment in three months.
Elron did not disclose who made the inquiry. Elron has been selling assets in order to raise capital to repay its $50 million bank debt.
Medingo has developed the Solo miniature insulin dispensing patch pump for diabetics. The company has obtained US Food and Drug Administration (FDA) marketing certification for the insulin pump.
If a sale is made, Elron will report a net capital gain of $54-80 million, while parent company Discount Investment Corporation (TASE: DISI) may report a capital gain of $25-38 million. Elron owns 92% of Medingo, including 83% held through Rafael Development Corporation (RDC), a joint venture held in equal shares with Rafael Advanced Defense Systems Ltd..
If Elron sells Medingo, this will be the second large sale of a portfolio company this year. In August, it sold its 15.24% stake in NetVision Ltd. (TASE: NTSN)for NIS 228 million to Discount Investment and sister company Clal Industries and Investments Ltd. (TASE: CII), as part of Dankner's effort to rationalize IDB's corporate structure. Elron will report a small capital gain on this sale, which it will use to reduce its bank debt.
Elron's share closed at $6.08 on Nasdaq yesterday, giving a market cap of $180 million. The share jumped 19.7% in early trading on the TASE today to NIS 27.90.
Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009
- Tel Aviv market report
- Tel Aviv Stock Exchange
- Israeli stocks in NY
- Arbitrage gaps for dual-listed stocks
- Israeli stocks in Europe
- Israeli stocks on other markets
- Tel Aviv 25 options
- Mutual funds
- Current representative shekel rates
- Historical representative shekel rates
- Bank shekel rates
- Shekel/dollar options