The premium that the capital market is giving Tzahi Sultan for his stake in Modiin Energy LP (TASE:MDIN.L) is reaching biotechnology company ProCognia (Israel) Ltd. (TASE:PRCG). Yesterday, the company announced that its controlling shareholder, Sharro Trustees Ltd. - a consortium of Apax Partners, Evergreen Venture Partners, Koor Industries Ltd. (TASE:KOR), Star Ventures, and Vitalife Life Sciences Venture - is negotiating the sale of its 30.3% stake in the company to Sultan and Nir Peleg.
Procognia's share price jumped 34.5% today to NIS 0.476, giving a market cap of NIS 16.8 million.
Investors apparently hope that the value creation that Sultan achieved in Modiin Energy will be repeated at ProCognia. Sultan acquired control of Modiin Energy in September 2009, when it had neither cash nor business, whose trading was restricted, and which had a market cap of just a few million shekels. Under Sultan, the company began acquiring rights in oil and gas licenses. He led several financing rounds in the company, and brought in Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) into the controlling core. Modiin Energy now has NIS 300 million in cash and a market cap of around NIS 845 million.
ProCognia will be happy with the new blood. The venture capital funds that have controlled it until now have apparently lost hope in a rapid recovery by company when they floated it on the TASE four years ago.
ProCognia, founded in 2000, was considered promising, but it has yet not been able to turn its technology into a major product. The company's glycoanalysis technology examines the structure of protein-based sugar molecules, which improves predictions about how a drug will function. It may also show molecules whose presence in a patient indicates the presence of a disease.
Published by Globes [online], Israel business news - www.globes-online.com - on January 17, 2011
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