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About one-fourth of the ECtel (Nasdaq:ECTX) (ECTX) stock recently sold by ECI Telecom (Nasdaq:ECIL) in a private placement was bought by Israeli institutional investors for an estimated $6 million, TheMarker has learned. After the placement, ECI owns some 59% in ECtel.

ECI announced on February 11 that it sold roughly 13% of its ECtel stake for $22 million. The deal closed at $14 per share, 7.3% below ECtel's market price.

Institutional investors estimate that the deal would have collapsed without the Israeli institutional purchases. Foreign institutional investors were not interested in the placement due to technology sector malaise, and the shadow cast by ECI.

ECI originally planned to sell its ECtel stake to strategic investors. At the time, ECI-parent Koor (NYSE:KOR) announced it was negotiating with four potential strategic buyers. However, analysis of the recent placement suggests ECI found it difficult to locate even financial investors.

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Last year was an especially successful year for ECtel, which posted 35% growth over 2000, on $80 million sales. Net profit increased to about $12 million, up 40% from 2000. Despite market conditions, the share price has climbed 32% since the beginning of 2001.

ECtel develops solutions for fraud prevention, quality service, and communications billing mediation for traffic and services provided on existing and next-generation networks. The company's $245 million market cap constitutes 70% of ECI's market cap.