Digital radiography display systems developer Edge Medical Devices Ltd. has been acquired by Dutch company Claymount Assemblies BV. The companies declined to disclose the size of the deal.

Edge Medical president Dr. Albert Zur founded the company. It was once considered a promising company, and raised $20 million from top investors, including Star Ventures, Tamar Technology Investors (Israel) LP) and serial entrepreneur and investor Dr. Shimon Eckhaus, who served as the company's chairman for a while.

Zur and his team believed that there was room for a product that was cheaper and simpler than its competitors, and they decided to redevelop it. They invested their own funds and raised additional capital from Menashe Shohat and his partner, who sold ScanMaster Systems (IRT) Ltd. to Persys Medical Ltd. for $2 million.

Edge Medical raised $4 million in 2009 from Mori Arkin and Dr. Uri Geiger's Accelmed. In March 2010, Edge Medical appointed former Elscint president Jonathan Adereth as chairman. The company succeeded in creating a product that obtained US Food and Drug Administration (FDA) and European Medicines Agency (EMEA) approval.

However, cheaper competing products entered the market in the meantime, including by Korean giant Samsung. Edge Medical could not continue to operate in the competitive market with only one product, and it was decided to sell the company to a larger firm, Claymount, which has promised to preserve Edge Medical's R&D center in Israel.

Market sources believe that, in view of the identity of the buyer and its financial resources, as well as the company's condition in the market, the exit is a small one, amounting to a few tens of millions of dollars at the most, and possibly less.

Edge Medical is Accelmed's second exit, following the sale of a company it acquired, Ophthalmic Imaging Systems Inc., to Merge Healthcare (Nasdaq: MRGE) for $30 million earlier this year. Accelmed made a 230% return in that exit.

Accelmed is also the largest shareholder MCS Medical Compression Systems (DBN) Ltd. (TASE:MDCL), which is in talks to sell its operations to a US orthopedics company for $75 million - a deal that will give Accelmed a 300% return.

Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2011

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