from the March 2012 issue

Report on 2011 Exits - Summary
Israeli high-tech M&As in 2011 up 134%
IPOs on the decline again

The following summarizes exits of Israeli and Israel-related high-tech companies in merger & acquisition deals and initial public offerings in 2011. The data are based on information derived from IVC-Online Database and developed by IVC Research Center, which for more than 15 years has been at the forefront of Israeli high-tech, venture capital and private equity research. Additional details about Israeli high-tech exits will be published in the IVC 2012 Yearbook due to be published in April.

Exits involving Israeli and Israel-related high-tech companies in 2011 totaled $5.23 billion. M&A deals involving Israeli and Israel-related companies that were acquired or merged were valued at $5.1 billion, a 134 percent increase from $2.18 billion in 2010 and the second highest amount in a decade, after the $10 billion worth of deals in 2006. At the same time, only $126 million was raised in five IPOs, down five percent from $133 million raised in 11 IPOs in 2010. Koby Simana, CEO of IVC Research Center said, "the M&A route continued as the preferred liquidity channel for investors in 2011, and we expect it to remain as such in 2012. The financial needs of Israeli technology companies coupled with the shortage of investor capital indicate that more Israeli companies can be expected to go the M&A route in 2012."

Eighty-five Israeli companies were acquired or merged in 2011, 27 percent more than the 67 companies that were acquired or merged in 2010, and four percent more than the previous five-year average of 81. The average deal size increased nearly 85 percent to $60 million from $32.5 million in 2010. This increase in deal size reflects a relatively high number of deals above $100 million, with 18 percent of the number of deals accounting for 75 percent of total M&A deal proceeds. Five M&A deals exceeded $300 million and one deal - the acquisition of on line advertising company MediaMind by DG - surpassed the $500 million mark. VC-backed M&A deals (33) totaled $2.52 billion, a 102 percent increase from $1.25 billion (26) in 2010. Nine of the 15 deals above $100 million had been VC-backed.

Global IPO markets for technology companies have been less than hospitable in the past four years. While the Israeli IPO market tried to offer high-tech companies a more accommodating environment, and made some success of it in 2010, the numbers fell once again in 2011. Only five IPOs by Israeli high-tech companies were completed in 2011, raising $126 million. While above 2008-2009 figures, the amount failed to reach the $133 million raised by 11 Israeli companies in 2010. Continuing the pattern of the previous year, four of five Israeli high-tech IPOs in 2011 were made on the Tel Aviv Stock Exchange. Three of the IPOs were by life science firms, and the fourth was completed by clean energy company Rosetta Green. Imperva completed the only global technology IPO by an Israeli company in 2011, raising $90 million on the NYSE Amex exchange and accounting for 72 percent of total IPO proceeds by Israeli high-tech companies in 2011. An interesting detail is that 2010's largest IPO was made by MediaMind, the company that was logged as 2011's largest M&A deal. MediaMind, which raised $62.3 million on Nasdaq in August 2010, based on a $148 million valuation, was acquired less than a year later by DG Inc. for $517 million. In the last decade, Israeli high-tech companies raised approximately $15 billion from investors, compared to more than $37 billion received in M&A and IPO exits

Reprinted from the Israel High-Tech & Investment Report March 2012

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