It looks like another Israeli startup is getting to another sizable exit. This time it’s 3D sensor manufacturer, PrimeSense, which is perhaps best known for producing (and licensing) the gesture-based technology Microsoft uses in Kinect. Well, back in July my colleague Ingrid Lunden reported that Apple had become interested and was reportedly in acquisition talks with the Israeli startup.

Israeli publication The Calcalist reported at the time that the price tag was $280 million and, while our sources called “BS” on those reports, the rumors that the two companies are in advanced talks came to a boiling point today. This began with further reports today from Calcalist that the company had indeed been acquired.

The Wall Street Journal sort of confirmed those reports today, but said the talks are still ongoing. The news swirled today, as scores of publications reported that the news was a done deal. PrimeSense CEO Inon Beracha, however, told us that the reports of its death, er, acquisition at the hands of Apple was a “recycled rumor.”

The full, “official” denial being distributed by the Israeli company at this point, also reported by ATD:

PrimeSense is the leading 3D technology in the market. We are focused on building a prosperous company while bringing 3D sensing and Natural Interaction to the mass market in a variety of markets such as interactive living room and mobile devices. We do not comment on what any of our partners, customers or potential customers are doing and we do not relate to rumors or re-cycled rumors.

While Apple and PrimeSense would have you believe that the deal is not in fact done, and there is plenty of conflicting information out there, the consensus from our sources is that these talks do seem to be real and in advanced stages. In addition, the price tag on the deal seems to have lifted from the initial reports of $280 by almost $70 million, to around $345 million. There’s reason to believe that talks have stalled at least in part over the valuation and the price tag, but that remains to be seen.

Either way, PrimeSense would be a big score for Apple. It has raised almost $30 million from a range of investors, including Gemini Israel Funds, Canaan Partners, Genesis Partners and Silver Lake Partners. The company bills itself as the maker of technology that gives “digital devices the gift of sight,” and its intellectual property that makes this happen has big appeal to Apple and would provide a nice complement to its existing portfolio.

As Ingrid wrote in July, PrimeSense’s technology could become a key piece of Apple’s “bigger ambitions to develop products that take it further into the living room, specifically with Apple TV.”

Gesture-based technology is working its way to the fore, and it will be interesting to see how quickly Apple can get this deal done. Surely if it can’t pull the strings, some other company will be more than happy to take its place.

Find a PrimeSense demo from CES here and stay tuned for more.

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