Microsoft may be looking to make the stylus a bigger part of its business.
The tech giant is reportedly spending at least $200 million to buy Israel-based digital pen provider N-trig, according to Israeli financial websites Calcalist and Globes.
Microsoft already uses N-trig's digital pens for its Surface tablets and is a leading investor in the company, taking part in four funding rounds since 2009, according to CrunchBase. N-trig, founded in 1999 and based in Kfar Saba, also develops chips for touchscreens.
Representatives from both Microsoft and N-trig representatives declined to comment.
The deal could provide Microsoft with significantly more control over the digital pen maker as it grows the Surface division and could ensure N-trig doesn't start offering its pens to rivals. Last month, Microsoft said the Surface tablet division pulled inin sales in the final three months of 2014, a 24 percent jump from a year ago. It also unveiled the , a business-meeting-focused, 84-inch digital whiteboard that can be used with a stylus.
N-trig was valued at $75 million last February, Reuters reported, though it has raised more than twice that amount in 10 funding rounds since 2006. The company's revenue totaled $20.6 million in the first half of 2014, when it sold 1.3 million digital pens, though posted a loss of $5.1 million, Reuters said.
Most of N-trig's 190 employees will be absorbed by Microsoft's Israel operations, Calcalist reported, citing unnamed sources.