The SPAC (special purpose acquisition company) trend has cooled somewhat since the peak of two years ago, but there are still those finding opportunities. At the end of last week, a new SPAC, Israel Acquisitions Corp., was floated in New York, raising $143 million amid high demand. The cash raised is earmarked for investment in the Israeli technology market.
The chairperson of the company is Izhar Shay, a member of Knesset for the Blue & White party from 2019 to 2021 and minister of science and technology from 2020 to 2021. The CEO is Ziv Elul, who managed adtech company Fyber until it was sold for $600m. in 2021. Among the directors are Roy Zisapel, CEO of technology company Radware and Daniel Recanati, founder and CEO of investment company Rhodium.
Possible acquisition targets
The company believes that there are dozens of Israeli companies that are possible acquisition targets, and as far as it is concerned the fact that the number of SPACs has shrunk reduces competition. The company’s prospectus states that it will focus on areas that it views as growth opportunities, among them cloud computing, cybersecurity and fintech.
Asked how Israel Acquisitions Corp. succeeded in its offering in such weak market conditions, Shay told Globes, “There was a combination of circumstances here. At the end of last year, quite a few SPACs returned money to investors and announced that they were ceasing their activity for all kinds of reasons, and the result is a shortage of a product that for a certain category of investor is a popular one – that is, our timing was good.
“The falls in stock prices and the changes in the market in the past year repositioned the SPAC as a good alternative, and against that we presented an excellent and very attractive team, and a strategy focused on the Israeli market, which is a subject all of its own. The investors, who are almost all Americans, believe in this market and want to invest in it. All this together led to the offering going successfully with very nice demand.
“For me, the most heartening thing was the sweeping support for Israeli hi-tech. We talked to dozens of investors who are not characterized by Zionism or Jewishness or any connection to Israel, and the subject of Israeli hi-tech as a source of significant companies arose time and again. All the feedback was supportive.”
“In the past couple of years, SPACs have come to be regarded cynically as a financial instrument with management that disappears after the merger. We have a team with a great deal of experience and the ability to understand companies and business models well, a team capable of providing what is necessary to get to the right deal, and attractive for the companies,” Shay added. “We won’t do a deal and disappear, we’ll continue to help and we’ll build joint value.