Elbit Medical Imaging(NASDAQ: EMITF) has announced an add on investment in the private company InSightec. InSightec is a true symbol of Israeli ingenuity. The company develops a product that combines MRI technology with focused ultrasound in order to treat serious diseases such as bone, liver and brain tumors, without the invasive procedures that are currently used. This is clearly a huge development for the medical field.

With this increased fundraising round Elbit Medical now holds 53% of the company. Other investors include GE Capital Equity Holdings Inc., a subsidiary of General Electric Company (NYSE: GE) and MediTech Advisors LLC. The question that has been asked for over two years now is when are they going to do an IPO. The expected valuation of an IPO would be well north of $1 billion. Elbit Medical shareholders are anxiously awaiting an IPO to help unlock value in the parent company's stock.

In an interview to the Israeli business daily Globes, Elbit Medical Imaging president Shimon Yitzhaki, commented on the situation:

"Globes": You originally planned to float InSightec in 2005 and sales haven't risen substantially since then. Are you disappointed?

Yitzhaki: "Not at all. InSightec is an amazing breakthrough company. The board tells us that it will be worth billions, maybe more than all our real estate deals. Just a little patience is needed."

Yitzhaki noted, "We believe that with the products in the pipeline and insurance reimbursement, within two or three years, we'll reach hundreds of millions in sales."

Will you reopen your IPO plans?

"We're waiting on the IPO until we have insurance reimbursement from a number of insurers as well as FDA approval for at least one of our cancer treatments. There are also other options besides an IPO."

Well, isn't that interesting. Other options must be referring to a potential acquisition by a large player in the industry. Interesting times await.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer is long EMITF. He has no position in any other stock mentioned as of 11/30/07.