from the May 2008 issue

IBM buys Israeli start-up

IBM Corp. (NYSE: IBM) signed a definitive agreement to acquire Israeli data recovery start-up FilesX Inc. IBM did not state the price tag for FilesX, but sources close to the transaction have estimated that it is $70-90 million.

FilesX develops data recovery and back-up solutions for business continuity. The company's founders are Jacob Herbst, Irit Many-Meitav, and Assaf Sarfati, none of whom hold management positions. The company has raised $20 million since it was founded in 2000 from Benchmark Capital, Genesis Partners, and Index Ventures. This is Genesis's second exit in as many months, following the acquisition of Kidaro Ltd. by Microsoft Corp. (Nasdaq: MSFT)

IBM intends that the FilesX technology will become part of the Tivoli Storage Manager family of products, IBM's flagship suite of leading data protection and information infrastructure offerings. With its patented technology, FilesX helps IT staff restore data from virtually any type of failure and from nearly any point in time. FilesX offerings may be particularly attractive in environments where IT skills and budgets are limited, as it is considered easy to use and offers self-managing features. In January, IBM acquired XIV Ltd. (now IBM XIV Israel) for $300 million. IBM's storage division is reportedly in talks to acquire Israeli start-up Diligent Technologies Corp.

Reprinted from the Israel High-Tech & Investment Report May 2008

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