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| EndoPAT--Courtesy of Itamar Medical |
Israeli Viola Private Equity will invest up to $28.4 million in an Israeli publicly listed micro-cap medical device company Itamar Medical. The investment will make the firm the largest shareholder in the cardiovascular and sleep apnea specialist.
Under a private investment in public equity (PIPE) deal, Viola will acquire newly issued shares at NIS 1.449 per share for a total of $24.1 million. As part of that, the company will also issue warrants at an exercise price of NIS 1.642 to acquire an additional 50% of the number of acquired issued shares.
At the same time, existing shareholders will have a rights offering to raise an additional $5.9 million under the same terms as the Viola investment. If these rights remain unexercised, Viola has committed to increase its investment by up to $4.3 million for a total of $28.4 million.
After that, existing shareholders including Medtronic ($MDT) will convert a $1.6 million loan to participate in the rights offering, which would bring the total company investment to $30 million.
Itamar markets noninvasive medical devices, including technology for the diagnosis of cardiovascular diseases and sleep apnea. It counts Medtronic, Philips Respironics and Nihon Kohden among its distribution partners. Its products include the WatchPat sleep apnea monitor and the EndoPat cardiovascular monitor that assesses endothelial function.
The company expects to use the investment to strengthen itself, particularly in cardiovascular diagnostics. As part of the investment. Viola General Partners Jonathan Kolber and Sami Totah will join the Itamar board. Viola and the other major shareholders have agreed to an 18-month lock-up period.
Viola has more than $2 billion under management; it recently sold medical device player Lumenis to XIO Group for $510 million.
"The investment in Itamar Medical is an excellent example of Viola Private Equity's investment strategy - a growth stage tech company, with a run rate of approximately $20 million in annual revenue, which is at a turning point in launching a new strategy," said Kolber in a statement.
He added, "Our large investment is intended to further enhance Itamar Medical's growth, its global expansion and product development. Viola Private Equity brings extensive operating experience in growth investments."
- here is the statement