Elron (ELRN) Receives Non-Binding IOI for Subsidiary Medingo for $150M - $170M Cash Plus Milestone Bonus
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Elron Electronic Industries Ltd. (NASDAQ: ELRN) today announced that a non-binding indication of interest of a third party regarding a potential acquisition of Medingo Ltd., an Elron subsidiary, has been received.
The Indication relates to an acquisition of Medingo's entire share capital for a cash consideration ranging from $150 million to $170 million and a contingent additional cash consideration conditional upon one or more milestone(s) to be mutually agreed, which may bring total consideration up to between $185 million and $213 million. The transaction would be subject mainly to (i) the parties entering into a mutually agreed definitive agreement; (ii) satisfactory completion of a full due diligence by the third party; and (iii) the parties obtaining applicable corporate and regulatory approvals.
In the event of consummation of such transaction, Elron would be expected to record a net gain initially estimated at this stage to be between approximately $54 million and approximately $80 million. This gain includes Elron's share in the net gain expected to be recorded by RDC Rafael Development Corporation Ltd. ("RDC"), through which Elron owns part of its holding in Medingo.
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