Tamir Fishman & Co., (TF) founded slightly more than three and a half
years ago, has grown into a full service investment bank. At its
Rothschild Boulevard, Tel-Aviv headquarters it employs 80. Its rapid
growth parallels the dynamic expansion of Israel's high-tech sector.
The Tamir-Fishman group focuses, nearly exclusively, its investment
attention on the technology and emerging growth industries sectors.
A propitious representation agreement, early in 2000, with the
American Dain Rauscher Wessels, links the American's services and
reputation as a global investment bank with TF's understanding and
experience in the turbulent local technology market, where three new
startups are thought to be born each day.
Corporate finance activity involvement totals $3.2 billion, over the
past three and a half years. In a wide ranging discussion with
Danny Fishman, Co-President and CEO of TF he stressed that the "deal
flow is nothing short of fantastic". Over a period of a few months,
TF has been the object of 500 approaches by technology firms to
provide financing. "They reach us by e-mail, they send in their
business plans, they arrange for their names to be brought to our
attention by mutual friends and others make contact by way investment
banks. I expect the surging deal flow to continue, but perhaps the
rate of growth may slow," commented Danny Fishman.
The 40 plus year old executive is most comfortable in describing
cross border banking activities. He spent four years in the
Government's privatization effort to privatize the 250 companies
owned by the Government of Israel. Prior to that he earned his MBA at
the Hebrew University of Jerusalem. The University's economics
department is famous for turning out many graduates who have climbed
to the pinnacle in the business world as well as in academia.
"I served in the Israel Defense Force's intelligence 8200 unit. This
is the unit from which half the country's high-techies have
graduated," states Fishman, with a broad grin on his face.
TF manages two venture capital funds. One is the $ 120 million in
Tamir Fishman Ventures 2, and the other is the $ 55 million
Eucalyptus Fund. The latter has experienced three exits including
RADWare, a highly well received IPO, Chromatis, a $4.5 billion buyout
by Lucent and the most recently in September, ViryaNet Ltd. The
company offered 4 million shares at $8 each in its IPO, raising $32
million through the deal.
In addition TF manages NIS 200 million ($50 million) in mutual funds
and its asset management activities account for NIS 1.5 billion or
$375 million. These moneys are entrusted to TF by high net worth
individuals, many of them flush with large sums derived from M&A
activities and sale of founders' shares. Options management of $3.5
billion covers 25% of Israel's high-tech employees. The offering of
a service to high-tech option holders has only became popular in the
past few years as nearly every high-tech employee receives options
as part of the remuneration package.
In an environment of many mergers and IPOs, cashing in on options
requires knowledge of tax and stock exchange law and practices as
well as a ready access to market brokerage facilities. TF offers this
service and the owner of the options "receives Israeli shekels in his
account. We even arrange for the payment of taxes due," explains
Danny Fishman. Corporate finance activities are in excess of $3.2
billion and with nine IPOs in the pipeline are likely to exceed $4.0
billion.
'The M & A Tax Law is a really bad one..'
Nearly every recent high-tech event has drawn unprecedented
attendance. But the 4th Annual Growth Conference, with a record 125
companies presenting themselves, and an overall attendance of more
than 2,000 is likely to be a' standing room only' event.
IHTIR will be there to cover the Conference
A Jerusalem based research tank expressed the opinion "that any CEO
who insists on registering
a local start up in Israel should be canned".
This comment was widely reported in the media.
"It is an advantage to register as a US company. But the real and
compelling reason is the Merger & Acquisition law in Israel. It is a
really bad one. I think it should be a top priority of the Government
which is losing billions of dollars in corporate and individual
taxes, to make the small changes which will make all the difference.
When Israeli sell companies they do not get paid in cash but in
stock. The tax is due on the merger (sales price) but the shares
received in payment are not saleable immediately and may only be
saleable months or a year later. There is no guarantee that counter
value of the sale will suffice to pay the tax.
"I was involved in an M&A transaction between and Israeli and
American company. The Israeli company was to be sold for $150 million
in stock and the tax liability would be $75 million. The deal did not
go through. In the US you pay tax when you have a real exit. The tax
level should be the same as in the US with the Israelis paying the
same tax as all the world is paying," animatedly pointed out Danny
Fishman, in an uncharacteristic outburst by an otherwise
self-controlled investment banker.