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12/13/2006

Elron Group Company, Completes $52 Million Investment Round

Galil Medical Ltd., an Elron group company, has completed a $52 Million financing led by Thomas, McNerney & Partners and The Vertical Group and joined by Investor Growth Capital, all leading U.S. venture capital funds. As part of the financing round, the new investors purchased shares from certain existing shareholders of Galil Medical, including Elron's subsidiary, RDC – Rafael Develoment Corporation ("RDC"), for approximately $8 million and $4 million of existing shareholders loans were converted into shares of Galil Medical. Following the transaction, Elron holds directly approximately 12% and RDC holds approximately 17% of Galil Medical's outstanding shares.

Commenting on the above transactions, Doron Birger, Elron's President and Chief Executive Officer said: “The acquisition of the urology cryotherapy business with annual revenues in excess of $20 million and the significant financing round completed by Galil field. These transactions will enable expansion of Galil Medical's sales as well as research and development and clinical programs to support existing and new applications for Galil Medical's cryotherapy technology”.

Elron Electronic Industries Ltd. also announced recently that further to its latest announcements, 3DV Systems Ltd., another Elron group company, has completed the first of two transactions of a $15 million investment round, led by new investors, Kleiner Perkins Caufield & Byers, a leading U.S. venture capital fund, and Pitango Venture Capital, a leading Israeli venture capital fund.

Existing shareholders, Elron and its subsidiary, RDC Rafael Development Corporation Ltd. ("RDC"), also participated in the investment round. In addition, as part of the transaction, Elron and RDC converted approximately $5.1 million of shareholder loans into shares of 3DV Systems. Following the completion of the aggregate investment, Elron will hold directly and indirectly through RDC, approximately 37% of the outstanding shares of 3DV systems.

Doron Birger, President & CEO of Elron commented: “We are very pleased with the investments by Kleiner Perkins and Pitango in 3DV. We believe that 3DV, with its strong technology base and enhanced resources, has the ability to become a leading company in its field.”

3DV Systems has developed, and launched, a unique video camera technology capable of capturing the depth dimension of objects in real time, enabling it to sense motion and recognize shape within a dynamically defined three-dimensional space. The technology can revolutionize man-machine interface in multiple fields, and the company aims to initially supply camera chipsets to the video gaming and PC webcam markets.

Elron Electronic Industries Ltd., a member of the IDB Holding group, is a leading Israel-based technology holding company directly involved in the long-term performance of its group companies. Elron identifies potential technologies, creates strategic partnerships, secures financing, and recruits highly qualified management teams. Elron's group companies currently comprise a diverse range of publicly traded and privately held companies primarily in the fields of medical devices, information & communications technology, clean technology and semiconductors.

For further information, please visit www.elron.com