Orbotech Ltd. (Nasdaq: ORBK) has received an additional $9 million, on top of the $58 million in cash flow it reported last week in its financial report for 2010, from the closing of the sale of Orbotech Medical Solutions Ltd. to GE Healthcare. Orbotech can receive an additional $5 million in milestone payments, based on Orbotech Medical Solutions' sales over the next three years.
Orbotech Medical Solutions develops nuclear imaging systems based on cadmium zinc telluride (CZT) crystals, which convert gamma rays into an electrical signal to show which parts of the body received medical treatment. The business is based on Israeli start-up Imarad, which Orbotech acquired for $7 million in 2005 and merged with Orbotech Medical Solutions. The acquisition agreement stipulates that Imarad shareholders could receive up to $33 million, based on sales of its products.
GE Healthcare Nuclear Medicine general manager Nathan Hermony said today, "The acquisition of Orbotech Medical Solutions will enable us to mark an important milestone toward further growth in our nuclear medicine business. Our ability to manufacture CZT crystals, a key component of our Alcyone technology, will help medical teams worldwide provide fast and comfortable tests with lower radiation dosages."
Orbotech CFO Erez Simha told "Globes", "Orbotech decided to sell the business because it requires heavy investment to bring the product to large sales, which we don’t have under our strategic plan." As for the final amount that Orbotech will pay for Imarad, he said, "It is very far from the numbers set out in the agreement."
Orbotech's core business is the manufacture of automated optical inspection equipment for printed circuit boards and flat panel displays. The company's medical business includes Danish company 3D - Danish Diagnostic Development A/S, acquired for several tens of millions of dollars in 2007. 3D develops cardiac imaging systems. Its technology not only monitors the heart's anatomy to identify problems, but can diagnose heart functioning. Orbotech has said that it plans to sell this business, but that it has not yet found a buyer.
Orbotech's share price fell 1.4% in early trading today to $14.16, giving a market cap of $493 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 21, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011