Israel-Medical-Healthcare

[genisi]

Rumor says the buyer is Roche

Elron nears sale of insulin pump co Medingo

http://www.globes.co.il/serveen/globes/docview.asp?did=1000508193

Adi Ben-Israel 26 Oct 09 10:46

Elron Electronic Industries Ltd. (Nasdaq: ELRN; TASE: ELRN), the high-tech investment arm of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) has received a non-binding offer for portfolio company Medingo Ltd. for $150-170 million in cash. The offer could rise to $185-213 million, depending on milestones to be agreed upon.

Elron did not disclose who made the inquiry. Elron has been selling assets in order to raise capital to repay its $50 million bank debt.

Medingo has developed the Solo miniature insulin dispensing patch pump for diabetics. The company has obtained US Food and Drug Administration (FDA) marketing certification for the insulin pump.

If a sale is made, Elron will report a net capital gain of $54-80 million, while parent company Discount Investment Corporation (TASE: DISI) may report a capital gain of $25-38 million. Elron owns 92% of Medingo, including 83% held through Rafael Development Corporation (RDC), a joint venture held in equal shares with Rafael Advanced Defense Systems Ltd..

If Elron sells Medingo, this will be the second large sale of a portfolio company this year. In August, it sold its 15.24% stake in NetVision Ltd. (TASE: NTSN)for NIS 228 million to Discount Investment and sister company Clal Industries and Investments Ltd. (TASE: CII), as part of Dankner's effort to rationalize IDB's corporate structure. Elron will report a small capital gain on this sale, which it will use to reduce its bank debt.