XTL Biopharmaceuticals Ltd. (Pink Sheets:XTLBY); TASE:XTL) will acquire InterCure Ltd. (TASE: INCR-L), which has developed a device for lowering hypertension, subject to a settlement of the latter's NIS 51 million bond debt. XTL will acquire InterCure together with Medica Venture Partner, which already owns 14.8% of the company.
InterCure is on the TASE's restricted list, with no trading in its shares, which are priced at NIS 0.025, giving a market cap of NIS 618,000. XTL and Medica will invest $3.25 million in the company, at a company value of $1.75 million, before money, including $500,000 in cash, $500,000 in either management services or cash, and $2.2 million in XTL shares at their price when the deal is closed. In addition, Medica will provide InterCure with a $100,000 loan, which the company will try to convert into equity, with the consent of its creditors.
InterCure's RESPeRATE device includes a sensor with training software that provides feedback on a persons' quality of breathing. The device has a proven track record of lowering blood pressure, and it is the only company with US Food and Drug Administration (FDA) approval for a device of this kind.
The hypertension devices market is flourishing, but current devices are implanted and measure physiological activity that is not dependent on a person's activity. Last year, Medtronic Inc. (NYSE: MDT) acquired a company that developed a device that reduces hypertension by stimulating nerves in the area of the kidneys, for $800 million.
InterCure markets its device to the home market, clinics, and via marketing and distribution channels. Sales fell from their NIS 36 million peak in 2007 to NIS 12 million in 2011, and the company's losses ballooned.
XTL's share price fell 0.4% today to NIS 1.18, giving a market cap of NIS 261 million, after falling 1% on Thursday.
Published by Globes [online], Israel business news - www.globes-online.com - on June 17, 2012
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