Merger and Acquisition activity reached a six year high for Israeli hi-tech companies in 2006 as 76 deals valued at $10.6 billion were signed, the Israel Venture Capital Research Center said Tuesday.
"Most Israeli hi-tech companies that were merged or acquired are providing their acquirers with highly accomplished R&D centers, underpinned by strong technology and outstanding human resources," said IVC General Manager Guy Holtzman. "While many talk about India and China or even Eastern Europe, Israeli entrepreneurship and the Israeli experience still have distinct advantages over the near-term, as Israeli managers have prepared to meet the global competitive challenges. We expect foreign interest in Israeli firms to continue in 2007."
While still a long way from the record year for local hi-tech M&A in 2000, which saw transactions worth $16.88b. completed, the IVC noted that 2006 accounted for one-third of the total value for all deals signed in the last seven years.
In terms of the number of deals, however, the 76 of 2006 surpassed even 2000 when 64 transactions were closed.
A comparison to 2005, when 70 deals generated just $2.67b., showed that the size of the deals this year was also significant.
Three deals alone made up for over $7b. of the total, with the biggest transaction being the acquisition of Mercury Interactive Ltd. by Hewlett-Packard for $4.5b., followed by the $1.55b buyout of M-Systems by SanDisk Corp. and the acquisition of Lipman Electronic Engineering Ltd. by VeriFone Holdings Inc. for $793 million.
The IVC figures focused on the hi-tech industry and did not include the $4b. acquisition of Iscar Corporation by Warren Buffett's Berkshire Hathaway.
Meanwhile, 2006 was also a significant year for initial public offerings as 20 Israeli companies raised $693m. on US, European, Asian and Israeli stock exchanges.
The most notable IPOs, the IVC said, included Playtech's $460m. listing on the Alternative Investment Market on the London Stock Exchange; Allot Communications' raising of $78m. on the NASDAQ; and Incredimail's $49m. offering on the NASDAQ Small Cap Exchange.
The venture capital industry was involved in 45 M&A deals worth $2.96b. and six IPOs that raised $148m. in 2006, the IVC said.