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Dutton Associates Featured Company: Elron Electronic Industries Ltd. (ELRN)

Elron Electronic Industries Ltd. (NASDAQ: ELRN) is a high-technology holding company directly involved in facilitating the long-term performance of its group companies. Elron seeks out potential technologies, initiates strategic partnerships, attains financing, and recruits the best possible management teams to help improve its invested companies. Their current group of companies consists of a diverse range of publicly-traded and privately held companies that operate primarily in the fields of medical devices, information and communications technology, semiconductors, and clean technology.

Since their inception in 1968, Elron has been overseeing growth of hi-tech ventures in diverse fields and stages, generating an impressive record of IPOs, M&As and restructuring deals. During the early 90’s, Elron was one of the Internet pioneers in Israel, expanding into information technologies and communications by the end of the decade. Landmark companies founded during the 90’s include 013 NetVision, Israel’s largest Internet service provider (ISP), Peach Networks, and HyNEX, as both companies sold in 2000 to Microsoft and Cisco respectively for over $200 million.

In 1978, Elron formed Fibronics, a company dedicated to developing fiber-optic technologies. Three years later, Elron established Optrotech, which became the pioneer of automated optical inspection of printed circuit boards. A merger developed between Optrotech and Orbot which formed Orbotech (NASDAQ: ORBK), a world leader in automated optical inspection (AOI) and imaging, as well as computer-aided manufacturing technologies. During 1983, Elron became aggressively involved in the early stages of the establishment of Zoran, a developer of digital signal processing (DSP) technology. Between 1999 and 2001, Elron sold their shares in Orbotech and Zoran for approximately $100 million.

One of Elron’s subsidiaries, Rafael Development Corporation Ltd. (RDC), founded Given Imaging (NASDAQ: GIVN). Given Imaging has redefined gastrointestinal disease diagnosis by developing friendly products for detecting gastrointestinal disorders. Given Imaging’s IPO in 2001 was the first to be listed on the NASDAQ after the tragic events of September 11. Later on, during 2004, the company issued a second public offering. RDC combines Rafael’s scientific know-how, advanced research and development capabilities, technological innovation and resourcefulness with Elron’s strong financial base, access to capital markets and management expertise.

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