Another success story for Israel’s chip industry: AeroScout, a developer of WiFi-based RFID tags used for the tracking and monitoring of valuable enterprise assets, is holding talks for its acquisition at a price of $240 million, Calcalist learned.
According to estimates in the industry, the buyer is a global service and infrastructures company that is expected to turn AeroScout into its development center in Israel. After the acquisition, AeroScout’s executive managers, including co-founder and CEO Yuval Bar-Gil, will likely stay on to head the new R&D center.
Estimates are that the deal’s timing stems from demands by the company’s investors, among them several veteran VC funds, to see some return on their investment and from the realization that although AeroScout is a growing enterprise, it operates in a small-scale market.
The company’s estimated annual revenues are $40-50 million whereas the market for RFID tags for medical or industrial purposes grosses an estimated $150 million altogether, making it hard for companies in the industry to generate high enough values to trade on the stock exchange.
AeroScout was founded in 1999 and has since raised $83 million in six financing rounds. During that time, co-founder Albert Ezra left the company and the founders’ stock was diluted by eight VC funds which invested in the company at various stages.
AeroScout’s largest investor is the Pitango VC fund, which holds a 20% stake in the company. Israeli VC fund Star, which is no longer active on the investment market, holds 18% of the company’s stock and US Menlo Ventures holds an 18% stake as well.
Additional investors include Grey lock Partners, Evergreen and the VC divisions of electronics giants Intel and Cisco, each holding an estimated 7%-9% stake in the company.
Bar-Gil and the executive management own another 15% of the company’s stock.