Sensar Reincarnated
By Dafna Zucker
globes.co.il
Published by Israel's Business Arena January 23, 2000
The old dry bones are coming back to life. Sounds hairraising, but on stock exchanges, especially that of Israel, it works just fine. Take some expired stock exchange shell that has aggregated tens of millions of shekels in losses, introduce Internet activity of the something.com type, and life starts to look wonderful.
The device worked just fine for Green, Lavlav and Ranitec, and turned up trumps for Sensar, too. Sensar? Sensar is in a league of its own. The US company's shares are traded on the NASDAQ. Once the high-tech activity infusion is accomplished, it will reflect a value of $800 million at the current Sensar share price.
You will have already guessed that Sensar has some Israeli reinforcements. Well, this was how it happened. Until a year ago, Sensar was a company void of content, whose shares had been trading for the past 13 years on the NASDAQ. Having failed in business, it sold off its assets and activity in 1998. Apart from a relatively poor cash reserve of $3 million, Sensar had nothing to offer. The company's limping performance was clearly reflected in its shares (SCII on the NASDAQ) which faded to less than $1.
The share perked up in April-May to levels of $5-7, but Sensar's major breakthrough came toward the end of 1999. In October, the company announced the acquisition of an Israeli start-up named ITES. The share has since exploded to levels of $70, and last night closed at $65, on an impressive increase in trading volumes.
ITES, as stated, is a start-up, established two years ago by general manager Hemi Davidson. The company developed a technology for transmitting multimedia contents on the Internet to instruments hooked up to cellular networks, such as telephones, faxes, laptop computers, etc. Davidson, having failed in his attempts to raise capital for his technological development, tried his luck in the United States.
He reached the US investors controlling the Sensar shell, who set up Net2Wireless of the US, which in mid-1999 acquired the ITES technology (remember the unexplained advances in the Sensar share at that time). Later, in October, Net2Wireless was assimilated into the Sensar shell, and the shares have since flown to the moon.
Under the terms of the merger agreement (the merger, incidentally, has not yet been completed), 8.5 million new Sensar shares will be issued to the shareholders of Net2Wireless (ITES, actually), and the company will be granted a short-term loan of $2 million. Following the allocation, Sensar's fully diluted share capital will amount to 12.5 million shares. At the current $65 share price, this actually translates into a value of $800 million for Davidson's start-up.
The party is barely underway, and, as usual, there are still a few more drops of oil being squirted into the fire. We refer to the agreement signed by ITES with Partner. Yes, that Partner, the one traded on Wall Street at a value of $4 billion. Partner operates jointly with ITES to develop platforms for multimedia messages to be transmitted to cellular telephones. Beta stage testing is due to take place in the first quarter this year.
Together with the co-operation agreement, Partner obtained an option to purchase, within a year, 10% of the equity of ITES. The exercise price was not reported, but judging by the Sensar share's dazzling performance, it will undoubtedly be deep within money.
So far, this has been a fairly routine tale of the new investment fashion. While it prevails, we expect shares in some way related to the Internet to rocket skyward, because such skyrocketing has become, no matter how surprisingly or pointlessly, a fact of life in the capital markets. Investors are prepared to send share prices soaring whenever they smell an Internet-related something.com.
The company's most piquant story, however, relates to the Rubner family. Former ECI president David Rubner has been appointed company chairman. His wife Zehava is a shareholder in ITES and Yossi, his son, has been appointed the company's vice-president for development. There is, we would hasten to add, no hint of anything improper here. Sensar, it seems, is a sort of baby of the Rubner family. Legitimate.
One especially piquant detail of the whole story is that of ITES's shareholders. Among the shareholders of Davidson's start-up are, for example, a nation-wide series of yeshivas, such as "Shekel Hakodesh", "Kiryat Meir Haim", "Shur Yishuv", "Ohr Sameyach", "Telshe Anonymous", "American Friends of Tiferet Tiberias", and others. On paper, all these yeshivas are worth at least a good few million dollars.
Rubners All
From David via Zehava to Yossi, they're all Rubners. And they're all involved in the Sensar company, as follows:
In the papers submitted to the US SEC, Zehava Rubner is named as the holder of an unspecified number of shares in ITES.
David Rubner was appointed chairman of Net2Wireless and will become chairman of Sensar, once the acquisition of Net2Wireless is completed. Rubner recently resigned as President of ECI Telecom, Israel's largest telecommunications firm, where he had been employed since 1970, being appointed president and general manager in 1991.
In a communique published by Sensar, Rubner said that "the technology being developed by Net2Wireless is particularly exciting. The seamless integration between the Internet and wireless communications holds out tremendous opportunities in the framework of next generation WAP technology.
One week ago, 35-year-old Dr. Yossi Rubner, the son, was appointed senior president for research and development in Net2Wireless. Rubner earned a doctorate in the computer sciences and electrical engineering from Stanford University, specialising in the in the processing of computerised pictures. His previous experience includes image understanding consultation to Xerox at its research centre in Palo Alto.
Prior to that he was involved in the development of desktop publishing systems in Scitex, and served for several years in an IDF technical division, being demobilised with the rank of captain and a citation. In 1991, Rubner gained a B.Sc., summa cum laude at the Haifa Technion in the computer sciences.
Dr. Rubner will be working alongside Net2Wireless general manager and founder Hemi Davidson, working out the strategic direction of the product and the company's focus for future years, and will also be in charge of technical management and guidance in connection with putting existing products on the market.
At the same time as Rubner Junior was appointed, Yitzhak Feldman, too, was made senior vice-president for marketing and sales. Thirty-seven year-old Feldman brings to Net2Wirless twelve years experience in marketing and sales in the telecom industry. He has held senior positions with Intel, Telrad, Tadiran Telecommunications, (Rubner's) ECI Telecom, and recently also Foxcom.
Feldman holds an MBA specialising in marketing from Bar Ilan University, and a M.Sc. in computer engineering from the Jerusalem College of Technology.
Following these two appointments, Davidson noted, in a press communique, that he was "happy that Yitzhak and Yossi have joined our management team. Yitzhak's in-depth experience and his excellent international connections will significantly contribute to penetration of both the local market and international markets. Yossi's academic achievements are exceptional, and his field of technical expertise is directly in line with the technology being launched by Net2Wireless.
"Yossi is considered a leader in the field of image understanding, and brings the team highly valuable knowhow and experience. With the addition of these two, we have filled our senior management positions and are now prepared to cope with the challenges facing us".
That is not all. Also starring among all those names, (and in all fairness, these people can show a proven track record, which makes things promising for Sensar), is Yoav Avtalion, who has joined Net2Wireless as a director. Avtalion was a co-founder of Nice in 1986, and has served in that company as senior vice-president for marketing and business development since it was founded.
So there are names to conjure with, an existing technology, and how we shall see whether all this warrants a $800 million value for the company.
Published by Israel's Business Arena January 23, 2000 |
