GE investing $10 million in biotechnology firm InSightec

InSightec has developed a non-invasive technology for treating growths
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General Electric (NYSE:GE) is investing $10 million in biotechnology firm InSightec, at a company value of $85 million post-money.

Elbit Medical Imaging (Nasdaq:EMITF) owns 73.5% in InSightec. EMI is part of the Motti Zisser group.

The investment, which will be carried out through General Electric Medical System, is to grant General Electric 11.8% of the share capital after full dilution.

In addition, GEMS will convert its 5% holdings in the InSightec subsidiary TxSonics into an additional 5% stake in InSightec.

After the deal closes, EMI's holdings will drop to 61.14%.

GEMS is to receive an option to acquire another 5% in InSightec. Should this be exercised, GEMS is to own 20.7% in InSightec after full dilution.

The deal is expected to be closed by the end of the year.

Insightec specializes in non-invasive technology for treating benign and cancerous growths. Its system uses highly focused ultrasound guided by magnetic resonance imaging.

Its ExAblate system provides an alternative to invasive surgery procedure for treating abdominal and chest growths.

The company believes that the system will significantly decrease surgery complications and the incidence of surgery-related deaths, as well as the need for hospitalization.

ExAblate is today used by ten medical centers worldwide. The company hopes to install another ten systems by the end of next year.

InSightec has recently received the approval of the U.S. Food and Drug Administration for commencing with clinical trials of its system for treating benign breast tumors.

University of Texas MD Anderson Cancer Center, the Mayo Clinic in Rochester, Minnesota, Brigham and Women's Hospital in Boston, Massachusetts are among the hospitals running Phase II clinical trials of the system.