Elron Electronic Industries (Nasdaq:ELRNF) said on Thursday its wholly-owned subsidiary Elron Telesoft agreed to sell its defense activities to Elbit Systems for $5.7 million.
The transaction, which will not effect Elron's financial results, is part of a restructuring at Elron Telesoft, which will remain with its core telecommunications products.
Based on a government unit called NCC that Elron acquired in 1998, Elron Telesoft has a proven record over 18 years of developing defense systems, including communications, information technology and visual intelligence technologies.
Elbit Systems president Joseph Ackerman recently denied negotiations to buy control of the Elisra defense group assessed at about $200 million.
The company's management said the purchase of Telesoft will reinforce its status in monitoring and control infrastructure and visual intelligence, for which there is high demand among modernizing armies.