Mergers & Acquisitions in Israel
Nov 05, 2013
Ray Q acquired by TTI
Ray Q ,cooperating with Bi Pitron, was featured in last RVC Israel report as example of successful cooperation between Russian and Israeli technology companies. Bi Pitron is an engineering company from St Petersburg, Russia, member of RUSSOFT. The company specializes in CAD-CAM systems for electronics and optics
Warren Buffets Berkshire Hathaway Inc. subsidiary, TTI, announced it would purchase Ray-Q, a consultant and distributor of electric systems for the defense and aerospace industries. Ray-Q employs 70 employees at its facility in Airport City (Industrial park). The company will continue its operation in Israel. Ray-Q was a distributer of Tyco Electronics, a Raychem division, for Israel, Turkey, Eastern and part of Central Europe and India. Ray-Q have become an independent company in 2000, expending its business from only distribution of electronic systems to design and consulting. The knowledge and expertise of Ray-Q will serve TTI teams, mainly in Asia and Europe according to TTI president of Europe and Asia operation. Ray-Q is not Berkshire’s first acquisition in Israel, in 2006 Berkshire have acquired Iscar, manufacturer of special metal cutting tools. The deal was done in two stages: $4B in 2006 for 80% of Iscar and the remaining 20% in May 2013 for $2.1B. This is not the first acquisition of TTI in Israel as well, in 2010 TTI have acquired Net-Eye, a developer of electrical systems, for several millions of dollars. Berkshire Hathaway had acquired TTI, a distributer of electronic components and semiconductors, in 2006. The company employs more than 3800 employees in more than 100 countries. The new integration of Ray-Q into TTI business would allow TTI to expend its areas of expertise to the defense market and planning of the electronic components. Yigal Funt, Ray-Qs CEO would continue to serve as head of the Israel operation of TTI and expend TTI to new markets, based on Ray-Q business model.
Facebook acquired Onavo
Facebook has acquired Onavo, an Israeli mobile technology services developer and provider, for an estimated amount of $150M-$200M. Guy Rosen and Roy Tiger have founded Onavo in 2009. Onavo developed a cloud-based technology for compression of mobile application data, which have been in use by common apps such as Facebook and Google maps. In recent years, the company have used the data stored in its servers and monitored app usage as a research company. The main investors in Onavo are Magma, Sequoia capital, Horizons capital (fund of Li Ka Shing who is one of the richest people in Asia and recently donated $130 mn to Technion), and Motorola Mobility totaling in an investment of $13M. This is the third acquisition for Facebook in Israel, with Snaptu, which developed a technology to run apps on simple phones, have been acquired in 2011 for $70M and Face.com, which developed a face recognition technology, which was acquired in 2012 for $100M. According to Onavo officials, the acquisition of Onavo may be the base for the foundation of a Facebook development center in Israel.
Technological startups growing needs for banking services are creating new line of banking
Young technology companies have their own specific needs. Normal retail and commercial banks are not always well suited to cater for them. This situation creates an opportunity for new type of banking that knows how to cater for the tech sector and to provide their needs. Quite active scene in specialized banking services and venture lending emerged in Israel.
SVB - Silicon Valley Bank, a major player in the American technology VC market, with BS of $25 bn, have opened its Israeli operation in January 2008, through a subsidiary called SVB Israel Advisors ltd. The subsidiary, SVBs 4th in the world, focuses on providing Israeli high growth technology companies and private equity funds with access to customized financial services. SVB Israel accompanies its clients through all the stages in their business development, from early Venture debt, working capital, growth capital and mid and later stage financing of technology and life since companies. Among SVB clients in Israel are such well-known companies as Wix (a $700M company going on an IPO next Wednesday on NASDAQ), Wilocity, Trusteer, N-Trig, Pontis, Elron and more. The Israeli subsidiary is managed by David Cohen, a former partner and CFO in Gemini VC, along with Gadi Moshe, from its offices in Herzelia Pituah. With eight employees, it is servicing 170 clients and growing by 50% a year. According to David the operations of SVB is divided in to three segments:
Noticeable deals of the bank in Israel were:
Kreos Capital - a Pan European company that operates an office in Tel Aviv, which focuses in investing in high growth technology companies. Kreos is currently the largest growth debt fund for technology companies, with more than ˆ1B invested in 300 portfolio companies in 13 countries. Kreos works in collaboration with SVB in financing in the Israeli market. Kreos is the second largest lending venture fund in Israel, with ˆ650M under management in 3 funds. The Israeli office is lead by Raoul Stein a general partner in the company, his experience includes being an associate in APAX partners Israel. Some of the noticeable portfolio companies in Israel are: Celltick, Pontis, Solaredge, Wilocity, Realmatch, Prime sense and more.
Mizrahi Tefahot - Israel’s third largest commercial bank also engaged in venture lending, although on a smaller scale. It almost impossible to access the exact amount of funds deployed for venture lending but from background conversation with the manager who is running the venture lending department we learned that the bank’s model is to receive stock options in the companies its lending to. One of the main eligibility criteria is sales of several millions dollars to diverse client base. Another important qualifying factor is presence of good quality VC funds or prominent angels in the company’s capital structure. A noticeable deal was the financing of Telemessage a wholly owned subsidiary of Messaging International Plc., with $750k in debt.
Ray Q ,cooperating with Bi Pitron, was featured in last RVC Israel report as example of successful cooperation between Russian and Israeli technology companies. Bi Pitron is an engineering company from St Petersburg, Russia, member of RUSSOFT. The company specializes in CAD-CAM systems for electronics and optics
Warren Buffets Berkshire Hathaway Inc. subsidiary, TTI, announced it would purchase Ray-Q, a consultant and distributor of electric systems for the defense and aerospace industries. Ray-Q employs 70 employees at its facility in Airport City (Industrial park). The company will continue its operation in Israel. Ray-Q was a distributer of Tyco Electronics, a Raychem division, for Israel, Turkey, Eastern and part of Central Europe and India. Ray-Q have become an independent company in 2000, expending its business from only distribution of electronic systems to design and consulting. The knowledge and expertise of Ray-Q will serve TTI teams, mainly in Asia and Europe according to TTI president of Europe and Asia operation. Ray-Q is not Berkshire’s first acquisition in Israel, in 2006 Berkshire have acquired Iscar, manufacturer of special metal cutting tools. The deal was done in two stages: $4B in 2006 for 80% of Iscar and the remaining 20% in May 2013 for $2.1B. This is not the first acquisition of TTI in Israel as well, in 2010 TTI have acquired Net-Eye, a developer of electrical systems, for several millions of dollars. Berkshire Hathaway had acquired TTI, a distributer of electronic components and semiconductors, in 2006. The company employs more than 3800 employees in more than 100 countries. The new integration of Ray-Q into TTI business would allow TTI to expend its areas of expertise to the defense market and planning of the electronic components. Yigal Funt, Ray-Qs CEO would continue to serve as head of the Israel operation of TTI and expend TTI to new markets, based on Ray-Q business model.
Facebook acquired Onavo
Facebook has acquired Onavo, an Israeli mobile technology services developer and provider, for an estimated amount of $150M-$200M. Guy Rosen and Roy Tiger have founded Onavo in 2009. Onavo developed a cloud-based technology for compression of mobile application data, which have been in use by common apps such as Facebook and Google maps. In recent years, the company have used the data stored in its servers and monitored app usage as a research company. The main investors in Onavo are Magma, Sequoia capital, Horizons capital (fund of Li Ka Shing who is one of the richest people in Asia and recently donated $130 mn to Technion), and Motorola Mobility totaling in an investment of $13M. This is the third acquisition for Facebook in Israel, with Snaptu, which developed a technology to run apps on simple phones, have been acquired in 2011 for $70M and Face.com, which developed a face recognition technology, which was acquired in 2012 for $100M. According to Onavo officials, the acquisition of Onavo may be the base for the foundation of a Facebook development center in Israel.
Technological startups growing needs for banking services are creating new line of banking
Young technology companies have their own specific needs. Normal retail and commercial banks are not always well suited to cater for them. This situation creates an opportunity for new type of banking that knows how to cater for the tech sector and to provide their needs. Quite active scene in specialized banking services and venture lending emerged in Israel.
SVB - Silicon Valley Bank, a major player in the American technology VC market, with BS of $25 bn, have opened its Israeli operation in January 2008, through a subsidiary called SVB Israel Advisors ltd. The subsidiary, SVBs 4th in the world, focuses on providing Israeli high growth technology companies and private equity funds with access to customized financial services. SVB Israel accompanies its clients through all the stages in their business development, from early Venture debt, working capital, growth capital and mid and later stage financing of technology and life since companies. Among SVB clients in Israel are such well-known companies as Wix (a $700M company going on an IPO next Wednesday on NASDAQ), Wilocity, Trusteer, N-Trig, Pontis, Elron and more. The Israeli subsidiary is managed by David Cohen, a former partner and CFO in Gemini VC, along with Gadi Moshe, from its offices in Herzelia Pituah. With eight employees, it is servicing 170 clients and growing by 50% a year. According to David the operations of SVB is divided in to three segments:
- Early stage start-ups with sales of under $5M needing mostly a gaping financing between funding rounds.
- Growing companies with sales of $5M-$75M a year, which are using the financing for management of the working capital. The financing through SVB allows companies to deal with those problems without raising equity avoiding equity dilution.
- Mature companies that are using the usual banking services.
Noticeable deals of the bank in Israel were:
- Solar Edge - funding the company with $8M in debt - July 2011
- Pontis - funding the company with $5M in debt - April 2012
Kreos Capital - a Pan European company that operates an office in Tel Aviv, which focuses in investing in high growth technology companies. Kreos is currently the largest growth debt fund for technology companies, with more than ˆ1B invested in 300 portfolio companies in 13 countries. Kreos works in collaboration with SVB in financing in the Israeli market. Kreos is the second largest lending venture fund in Israel, with ˆ650M under management in 3 funds. The Israeli office is lead by Raoul Stein a general partner in the company, his experience includes being an associate in APAX partners Israel. Some of the noticeable portfolio companies in Israel are: Celltick, Pontis, Solaredge, Wilocity, Realmatch, Prime sense and more.
Mizrahi Tefahot - Israel’s third largest commercial bank also engaged in venture lending, although on a smaller scale. It almost impossible to access the exact amount of funds deployed for venture lending but from background conversation with the manager who is running the venture lending department we learned that the bank’s model is to receive stock options in the companies its lending to. One of the main eligibility criteria is sales of several millions dollars to diverse client base. Another important qualifying factor is presence of good quality VC funds or prominent angels in the company’s capital structure. A noticeable deal was the financing of Telemessage a wholly owned subsidiary of Messaging International Plc., with $750k in debt.