Elron Electronic Industries Ltd. Announces the Sale of HyNEX Ltd. by Elbit Ltd. to Cisco Systems, Inc.Business/Technology Editors HAIFA, Israel--(BUSINESS WIRE)--June 5, 2000 Elron Electronic Industries Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ELRNF) a leading multinational high technology holding company, announced today that Elbit Ltd. ("Elbit")" (NASDAQ:ELBTF), in which Elron holds approximately 42%, announced that on June 5, 2000 Elbit and its subsidiary, HyNEX Ltd. ("HyNEX"), in which Elbit holds approximately 77% on a fully-diluted basis, signed a detailed agreement for the sale of the assets, properties, rights and certain liabilities of HyNEX to Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , Inc. ("Cisco") (NASDAQ:CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ). Cisco will pay a purchase price of $127 million, of which approximately $9.2 million will be in cash to HyNEX and used to repay a shareholder's loan made to HyNEX by Elbit and the remainder will be in Cisco shares. Under the agreement, Cisco shares representing approximately $12 million from the overall purchase price will be deposited for a twelve-month period in an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account, to secure representations and performance of contractual obligations of HyNEX and its shareholders. Cisco will register for sale those shares that form part of the transaction consideration. HyNEX intends to sell its Cisco shares, including the escrowed shares Escrowed Shares Shares held in an escrow account and in most cases cannot be traded or transfered until certain circumstances like time horizon have been reached. The use of escrow for holding shares is often done during acquisitions and for performance-based executive incentives. following their release from escrow, and distribute the proceeds to its shareholders by way of dividend. Subject to completion of the transaction, release of the escrowed shares, distribution of the dividend and dissolution of HyNEX, Elbit's net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the transaction are estimated at approximately $63 million and Elbit will record a net capital gain of approximately $47 million. Elron will record a gain of approximately $19.5 million from the transaction, if completed. The closing of the transaction is expected to take place within approximately thirty days of the date of signature of the agreement, subject to various conditions, including the consents of governmental entities and third parties to contracts and consents related to employees of HyNEX. The agreement also contains a termination fee termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. provision. HyNEX is an Israeli company engaged in the business of designing, developing, manufacturing and marketing products enabling the functionality of voice and data over public ATM networks. Elron Electronic Industries Ltd. is a multinational high technology holding company based in Israel. Through affiliates, Elron is engaged with a group of high technology operating companies operating company A business that engages in transactions with outsiders. in the fields of advanced defense electronics, communication, semiconductors, networking, software and information technology. For further information, visit http://www.elron.com Any statements in this press release that may be considered forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are subject to risks and uncertainties that could cause actual results to differ materially. Actual results may differ from such forward-looking statements due to the risk factors discussed in periodic reports filed by the Company with the Securities and Exchange Commission which the Company urges investors to consider. |
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