ATX buys transmission solutions co Arcos
ATX Networks will pay up to $26 million for the Petah Tikva-based start up, which targets the home video network market.
Arcos CEO Yariv Reches and CTO Avi Eliyahu founded the company in 2005.
ATX will pay $12.5 million when the deal is signed, of which $1.15 million will be in escrow for 18 months. It will pay an additional $13.5 million from royalties on Arcos sales, if any, over three years from the signing of the agreement, including up to $2.5 million in royalties from sales in 2012 of Arcos's current product, and up to $11 million from royalties on sales of the company's new products in 2012-14.
Arcos will also distribute a $450,000 dividend when the sale is closed.
Xenia Venture Capital Ltd. (TASE:XENA), which owns 35.2% of Arcos, will make NIS 35 million ($9.2 million) from the sale. C. Mer Industries Ltd. (TASE: CMER) subsidiary Rotal Networks Ltd. owns 23.8% of Arcos. Mer's chairman Chaim Mer will be eligible for a finders fee of 2% of the Arcos sale proceeds.
Xenia CEO Anat Segal said, "We are pleased by the sale of Arcos, which is a major exit for Xenia that validates its business model and proves its ability to identify projects with potential, invest in them, and assist them to commercial success."
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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