Elron gets go-ahead for Elbit sale

Elron Electronic Industries has reached an agreement with the Israeli government over the sale of its subsidiary, Elbit Medical Imaging of Haifa, according to a March 22 company statement. The government’s approval had been in question since the beginning of the month, when Israel’s Office of the Chief Scientist hinted that it wouldn’t support the sale until it had finished an investigation, and that Elron might be required to reimburse the government for past R&D loans (SCAN 3/31/99).

After meeting with officials from the Office of the Chief Scientist and executives from Europe Israel—Elbit’s buyer— Elron announced that “the parties have reached a complete understanding.” The conflict between Elron and the Israeli government seemed to be resolved in part by assurances that Elron, Europe Israel, and Elbit will continue to support Israeli high-tech concerns.

Tel Aviv-based Europe Israel and Elbit plan to invest a total of $45 million in Israeli high-tech industries, including $10 million to $20 million for image-guided therapy R&D. Haifa-based Elron emphasized that—with last December’s sale of Elscint’s MRI, nuclear medicine, and CT businesses to General Electric and Picker International (SCAN 12/16/98), as well as the sale of Elbit—Europe Israel, GE and Picker will contribute approximately $150 million to Israeli high-tech industries, a third of which will come from the two U.S. firms.

In other news, Elscint last month announced its fourth quarter and fiscal 1998 results (end-December). The company posted net income for the fourth quarter of $29.9 million. Revenues for the period were $35.8 million, compared with $80.4 million in 1997. Operating loss for the quarter was $20.3 million, which Elscint attributed to its low sales from October to November. Net income for the year was $28.2 million, up from 1997’s $709,000, while consolidated revenues were $262.1 million, compared with $303 million the year before.