IVC-MEITAR HIGH-TECH EXITS H1/ 215 REPORT IVC-Meitar 214 Exits Report Prepared by IVC Research Center Ltd.
Israeli High-Tech Exit Highlights Exit proceeds in H1/215 reached ¾ of total exits for 214 Average exit grew 51% compared with last year H1/215 was the 2-nd strongest half-year for M&A activity Acquisitions by Israeli companies continue their pace, reaching almost 5% of 214 which was the strongest in the past 6 years
Israeli High-Tech Exits 21 - H1/215 Israeli high-tech exits activity has accelerated to total $5.29 billion in H1/215-76% of the total exit proceeds in 214 and 8% of the total proceeds in 213. $b # 12 17 17 1. 1 91 88 8. 84 8 The average exit deal hit $98 million in H1/215, compared with the $65 million annual average in 214. 6. 4. 9.74 6.62 6.98 54 6 4 Number of exits in H1/215 reached 5% of the 214 figure and 6% of the 213 deals. 2. 2.53 5.34 5.29 2. 21 211 212 213 214 H1/215 Exit Amount $b # of Exits Source: IVC Research Center
High-Tech Exits H1/21 - H1/215 Throughout H1/215, 54 Israeli high-tech companies performed exits with a total deal value of $5.29 billion the highest half-year in a decade, second only to the exceptional H1/212 total of $8.33 billion. Average deal size in H1/215 reached $98 million, compared with $54 million and $83 million in H1/214 and H1/213, respectively. $b # 1. 58 54 52 8. 45 45 4 6. 4. 8.33 5.29 7 6 5 4 3 2 2. The $1.25 billion acquisition of Fundtech, an enterprise applications company, by D+H, an international fintech company, accounted for almost 24% of the total exit proceeds.. 2.66 3.33 3.14.89 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 Exit Amount $b # of Exits Source: IVC Research Center 1
Average Exit 21-H1/215 Average VC-backed exit in H1/215 totaled $84 million, a 15% increase from the 214 average, while non VC-backed exit average jumped 8% from $6 million last year to $18 million in H1/215 $m 16. 14. 12. 1. 14.4 115.3 18.3 VC-backed exits averaged 23% less than non VCbacked exits 8. 6. 42.5 62.4 73.3 73.1 6.1 83.8 4. 41.9 46.1 2. 22.5. 21 211 212 213 214 H1/215 Avg. non-vc Backed Exit $m Avg. VC-backed Exit $m Source: IVC Research Center
Israeli High-Tech Exits by Sector 21 - H1/215 (%) Software was a leading sector for exits in H1/215, with 15 deals totaling $2.6B the highest figure for the sector in past 6 years 55% of the total sector amount, mostly because of Fundtech s acquisition. Internet exits have grown in the last four years, reaching 17% of total exits in H1/215. The value of communications exits shrunk from 62% of the total capital proceeds in 212 to 17% in H1/215. Almost no life sciences exits were recorded in H1/215. Software, Internet, and communications led exit dealmaking in H1/215, capturing 74% of the total number of deals. H1/215 3% 214 6% 213 1% 212 % 211 1% 11% 21 % 17% 21% 32% 26% 17% 48% 1% 7% 7% 12% 28% 11% 2% 2% 5% 2% 34% 2% 6% 62% 2% 16% 9% 7% 5% 34% 13% 11% 7% 23% 11% 23% 21% 1% 18% % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% Cleantech Communications Internet IT & Enterprise Software Life Sciences Miscellaneous Technologies Semiconductors Source: IVC Research Center
VC-backed Exits Non VC-backed Exits Top Ten Exits in H1/215 $1.2b The top five non-vc-backed exits contributed 44% of total Israeli capital proceeds, while the 5 largest VC-backed exits accounted for 22% of the total. Five of the ten largest acquisitions were performed in the software industry. Borderfree acquisition captured 5% of total Internet intakes, while Annapurna deal accounted for the bulk of semiconductor exits, at 95%. Two acquisitions of subdivisions of Comverse accounted for 38% of communications exit proceeds s in this period. $45m *$272m *$175m $16m $36m $23m $2m $2m $15m Semiconductors Communications Software Internet
IPO HIGHLIGHTS IPO transactions continued in H1/215 with $38M
Israeli High-Tech IPOs 21 - H1/215 Israeli high-tech IPO activity has continued with 6 companies going public, although the deal volume is somewhat modest $38 million or just 6% of total proceeds in H1/215. Only 2 of the 6 companies that went public were venture-backed, compared with more than half of IPOs by VC-backed companies in 214. While IPO activity to date peaked in 214, more than 2 Israeli companies are currently planning to go public in 215-216, and at least 3-4 deals are scheduled to close by yearend, for a total of up to $5 million. $M # 22 18 2 16 16 18 14 16 12 14 12 9 1 1 8 25 8 8 6 5 6 6 4 4 2 2 361 38 127 126 21 211 212 213 214 H1/215 IPO Total $M # of IPOs Source: IVC Research Center
Israeli High-Tech IPOs by Stock Exchange ($m) H1/215 NASDAQ continued as the preferred stock market for Israeli high-tech companies in H1/215, with 4 IPOs accounting for 84% of IPO proceeds. The largest IPO of H1/215 was SolarEdge, which raised $126 million on NASDAQ. The remaining 5 IPOs were all under $1 million each. 48 When taking into account the actual amount raised in IPOs, companies' valuations at the time of the IPO totaled $1.3 billion in H1/215 (subsequently changing when a company has been listed). AIM NASDAQ 26 Source: IVC Research Center
HIGH-TECH MERGERS & ACQUISITIONS H1/215 M&A performance of $4.98B exceeded 214
Israeli High-Tech M&As 21 - H1/215 M&A performance in H1/215 has accelerated, with $4.98 billion in 48 deals exceeding the total 214 M&A dollar volume of $4.93 billion, partially due to Fundtech acquisition (25% of total M&A proceeds). However in terms of number of deals, H1/215 reached half of the annual M&A activity in the past 6 years. $b # 12. 12 12 1. 1 88 91 83 8. 75 8 6. 6 48 4. 4 2. 2 The average M&A deal was the second highest in the past 6 years, at $14 million.. 2.4 5.22 9.74 6.26 4.93 4.98 21 211 212 213 214 H1/215 M&A Total $B # of M&A Deals Source: IVC Research Center
Israeli High-Tech M&As H1/21 - H1/215* Israeli high-tech M&A activity shows increased total dollar proceeds in H1/215, at $3.73 billion in deals below $1B. The amount was 42% higher than the $2.62 billion in H1/214 and 77% higher than the $2.1 billion in H1/213. The average high-tech M&A deal totaled $79 million the highest in 6 years, compared with $5 million and $58 million average M&A in H1/214 and H1/213, respectively. $B # 4. 3.5 51 52 47 3. 4 41 2.5 36 2. 1.5 1..5..84 2.63 3.33 2.1 2.62 3.73 H1/21 H1/211 H1/212 H1/213 H1/214 H1/215 M&A Total $B # of M&A Deals Source: IVC Research Center *Excluding deals above $1B 6 5 4 3 2 1
M&A Deals: Deal Size Mix (# of deals vs. $m) In H1/215, M&A deal size patterns were similar to the 6-year M&A patterns. Deals in the $1-5 million range accounted for 54% of M&A proceeds in H1/215. H1/215 saw a slight increase in the $5-1 million range 13% of the total M&A proceeds, compared with the average share of 6% of the total for these deals in the past four years. There were no M&A deals in the $5-1, million range in H1/215. The number of deals under $5 million declined to 18% of the total, compared with 42% of total M&As in the past 6 years. 12 1 8 6 4 2 1 9 8 7 6 5 4 3 2 1 # $m 7 9 21 38 1254 1 16 5 51 51 517 354 6434 2475 2571 4 41 292 2689 69 387 454 711 342 246 425 672 84 99 44 82 56 59 63 91 3482 21 211 212 213 214 H1/215 2816 9 125 <$1m $1m-$5m $5m-$1m $1m-$5m >=$5m Source: IVC Research Center 29 3 1 5 19 3 11 4 1 16 5 25 28 21 211 212 213 214 H1/215 Source: IVC Research Center 1 13 9 14 11
M&As THE ACQUIRER SIDE Israeli high-tech acquirer activity accounted for 23% of total number of M&As in H1/215
H1/215 High-Tech M&As: Deals by Country of Acquirer 11 of the 48 Israeli hightech M&As in H1/215 were acquired by other Israeli companies (23% of the total), compared with 29 deals (32%) in 214. 1 9 8 4 5 9 1 India Australia East Asia United Kingdom Partial Comverse and Nice Systems sale deals accounted for 63% of total Israeli acquisitions, while Check Point acquired two Israeli companies in the first half of 215. 7 6 5 4 29 1 3 3 2 2 Mainland Europe & Russia Israel United States & Canada As in previous years, the US continued to be the main target market for Israeli exits, with 54% of total Israeli M&A deal-making in this period. 3 2 1 11 43 26 214 H1/215 Source: IVC Research Center
Acquisitions Made by Israeli High-Tech Companies 21 H1/215 We examined all M&As in which an Israeli high-tech company was the buyer, regardless of the identity of the acquired company. H1/215 saw continued activity in Israeli high-tech acquisitions performance, at 51% of 214 levels, with 24 high-tech companies making at least one acquisition for a total 32 acquisitions. The year s largest deal by an Israeli buyer was the $3.2B acquisition of Auspex Pharmaceuticals by Teva. Playtech, Comverse and Check Point each made acquisitions exceeding $1 million. Frutarom was the most active buyer in H1/215, with 5 acquisitions. It is still premature to say whether, in terms of M&A activity, 215 will match 214, which was the strongest in the past 6 years for the Israeli high-tech sector. However, as M&As prove to be a valid and effective means of company growth, 215 should be prolific, in light of the general trend in the Israeli market, as more and more growth-stage companies seek expansion. 7 6 5 4 3 2 1 63 59 5 44 47 41 35 37 32 34 28 24 21 211 212 213 214 H1/215 # of Israeli High-Tech Acquirers # of acquisitions Source: IVC Research Center
About this report: This report contains information derived from the IVC-Online Database The report summarizes exits of Israeli high-tech companies in merger & acquisition deals and initial public offerings in 21-H1/215 VC-Backed Deals referred to in this report, represent exit deals where at least one venture capital fund was involved as a pre-exit investor. The last section of the report also references M&A deals where Israeli high-tech companies acted as the acquiring party. All Rights Reserved. Copyright of IVC Research Center Ltd. 215
About Meitar Liquornik Geva Leshem Tal: Meitar Liquornik Geva Leshem Tal is Israel s largest law firm and an undisputed leader in the technology sector. The firm's Technology Group numbers over 9 seasoned professionals who specialize in representing technology companies, cooperating with attorneys from complementary practice areas, such as taxation, intellectual property and labor law, and dozens of attorneys from other practice areas. Meitar has played a significant role in the majority of the largest and most prominent transactions recorded in the Israeli technology sector, including mergers and acquisitions and public offerings on foreign stock exchanges. Meitar is uniquely qualified in the entire corporate life cycle. Meitar advises clients from their initial establishment through raising seed capital to successful exit. Alongside emerging companies, Meitar represents high growth companies, and has represented the majority of the Israeli technology companies that have carried out initial public offerings in the US, as well as a diverse range of multinational companies from the US, China and Europe. The firm represents most of the major venture capital funds active in the Israeli technology sector, and played an active role in formation of some of the most successful and well-known funds in the industry. Meitar is unique among Israel s largest law firms in the number of partners who have worked for major international law firms in the US and elsewhere. The firm maintains close working relationships with leading firms from around the world to provide our international and Israeli clients with the highest level of service and quality in line with the finest law firms from across the globe.
About IVC Research Center IVC Research Center is the leading online provider of data and analyses on Israel s high-tech, venture capital and private equity industries. IVC owns and operates the IVC-Online Database which showcases over 12, Israeli technology startups, and includes information on private companies, investors, venture capital and private equity funds, angel groups, incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions, founders, key executives and R&D centers. Among IVC products and publications are: IVC-KPMG Quarterly Survey, which for over 15 years has been analyzing capital raising trends by Israeli high-tech companies, and the most comprehensive guide to Israeli high technology and venture capital The IVC High-Tech Yearbook the Israel High-Tech, Venture Capital, Startup and Private Equity Directory; surveys; research papers and reports; and interactive dashboards. IVC Industry Analytics analysis, research and insights into the status, main trends and opportunities related to exits, investments, investors, sectors and stages IVC products and services are used regularly by high-tech companies, venture capital funds, private investors, financial investors and institutions, as well as public entities such as the Central Bureau of Statistics, the Bank of Israel and the Office of the Chief Scientist at the Economy Ministry. IVC s information is used by key decision-makers, strategic and financial investors, government agencies and academic and research institutions in and outside of Israel.
CONTACT US Marianna Shapira, Research Manager, IVC Research Center +972-()73-212-2339 www.ivc-online.com