IVC-GKH: Summary of Israeli Private Equity Deals - Q1/2014

Marianna Shapira, Research Manager, IVC Research Center and Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.

6 minutes to read

IVC and GKH report: Q1/2014 private equity deals valued at $349 million.

Key facts: Israeli funds dominate PE investment activity in Q1/2014; Software deals attract 38% of all PE investments; Largest buyout accounted for 33% of all PE deals in Q1/2014

Tel Aviv, Israel, May 13, 2014. In Q1/2014, private equity firms concluded 12 deals valued at $349 million. The number of deals was just under the quarterly average of 13 for both 2013 and 2012. The amount invested was 51 percent above the $231 million invested in eight deals in Q4/2013 and 141 percent up from $145 million invested in 14 deals in Q1/2013. (Figure 1)

The largest transaction in the quarter was a $115 million buyout of NSO, a software security company, by the US's Francisco Partners. The deal accounted for 33 percent of total quarterly deal value. Two additional deals exceeded $50 million each and accounted for 38 percent of total PE deal value.

Marianna Shapira, Research Manager at IVC Research Center said, "In the first quarter of 2014 we saw the comeback of private equity deals in technology industries, which accounted for 62 percent of total PE deal value. While in 2013 both Israeli and foreign investors focused on traditional industry, that year diverged from the norm. In the two previous years – 2011 and 2012 – the majority of private equity activity was in technology fields, reaching 75 percent and 85 percent, respectively. An emphasis on PE transactions in high-technology fields will most likely continue in 2014." (Figure 2)

Israeli private equity funds accelerated their activity in Q1/2014, investing $202 million or 58 percent of all PE investments. This amount is 21 percent below the $257 million 3-year average, but almost three times the $68 million invested in Q4/2013 (the lowest quarter for Israeli PE funds in 2013). The largest deal was Tene Investment Fund's acquisition of Gadot, a chemical transport, storage and distribution company, for $73 million. (Figure 3)

Rick Mann, Partner and Head of M&A at GKH, noted: "The Israeli M&A market continues to show signs of strength, and we have seen increased competition between private equity players and strategic acquirers. Hesitation by local banks in offering acquisition financing may be making it more difficult for those potential acquirers seeking to leverage their transactions. Israeli PE funds continue to be a strong force in the market, and we may see more PE funds targeting the local market."

Israeli private equity deals by type

In Q1/2014, four buyout deals led private equity activity and accounted for $259 million or 74 percent of total deal value. This compares with buyouts of just $59 million (25 percent) in Q4/2013 – the second weakest quarter in three years – and with $65 million (45 percent) in Q1/2013. Interestingly, the quarterly number of buyout transactions remained within the four to five range throughout the last four years.

Eight straight equity deals accounted for $90 million or almost 26 percent of total deal value. In comparison, five straight equity deals were valued at $168 million (73 percent) in Q4/2013, and eight were valued at $40 million (28 percent) in Q1/2013.

Private equity investors

The IVC-Online Database maintains data on 29 active Israeli private equity management companies with a total of $8.4 billion under management. Four Israeli private equity funds raised capital ($398 million) during Q1/2014.


The Summary of Israeli Private Equity Deals 2013 reflects information developed from IVC's Quarterly PE Survey, sponsored by Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co., and reviews Israeli private equity deals involving Israeli and foreign private equity funds and other investors, both Israeli and foreign. The current survey is based on the activity of 102 private equity funds of which 29 are Israeli and 73 are foreign. This survey reviewed the following types of private equity financing deals: straight equity, buyouts, mezzanine, distressed debt and turnaround/distressed equity.

The data are based on information received directly from the funds and from the IVC-Online Database (www.ivc-online.com). Further information regarding the Israeli private equity industry is available in the recently published IVC High-Tech Yearbook 2014.

For additional information:

Marianna Shapira, Research Manager, IVC +972-73-212-2339 marianna@ivc-online.com

Additional survey information will appear on the IVC-GKH Private Equity Survey webpage.

About the authors of this survey:

IVC Research Center is the leading online provider of data and analyses on Israel's high-tech, venture capital and private equity industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies and academic and research institutions in Israel.

  • IVC-Online Database (www.ivc-online.com) showcases over 11,000 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, financing, exits, acquisitions, founders, key executives and R&D centers.

  • Publications include newsletters; Daily Alerts; the IVC High-Tech Yearbookthe 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

Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. is one of Israel's leading corporate and securities law firms, providing superior and innovative legal services. GKH is engaged in all aspects of corporate and commercial legal practice, representing a large number of publicly held corporations traded on US, Israeli and European stock exchanges. The firm also represents international investment banks, privately held corporations of all sizes, newly formed businesses, partnerships and joint ventures. Clients comprise a broad range of industrial, commercial, energy, retail, transportation, financial and service enterprises, including the specialized businesses of telecommunications, banking, biotechnology, pharmaceuticals, electronics, software, real estate, research and development, commodities and venture capital. The firm's expertise includes representation before government ministries, regulatory agencies and the Bank of Israel. The firm's professional staff consists of over 100 professionals, including a large group of attorneys with US and UK licenses and work experience. GKH attorneys have served on several governmental advisory committees.

Material in this work is for general educational purposes only, and should not be construed as legal advice or legal opinion on any specific facts or circumstances, and reflects personal views of the authors and not necessarily those of their firm or any of its clients. For legal advice, please consult your personal lawyer or other appropriate professional. Reproduced with permission from IVC Research Center. This work reflects the law at the time of writing in May 2014.