| BUSINESSWEEK ONLINE : FEBRUARY 22, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- FINANCE
Israel Hears the Call of the Continent's IPO Markets Most Americans would be surprised to know that after Canada, the foreign country with the most NASDAQ listings is Israel. The over-the-counter market has long been home to the Jewish state's thriving high-tech sector, with over 100 companies traded there. Among the names on NASDAQ are some of the country's biggest success stories: ECI Telecom, Scitex Corp., Amdocs, and Comverse Technologies. Over the years, Israel's high-tech companies have turned to NASDAQ because of restrictions on the Tel Aviv market that make it difficult, if not impossible, for them to trade locally. But now, they're also hitting a wall in the U.S. The international financial crisis has made it tougher for many Israeli high-tech companies to tap the U.S. market. In fact, since July, 1998, no Israeli company has launched an IPO on Wall Street. The negative climate has led the Israelis to look at another option closer to home: the newly emerging European stock markets. "MORE SUITABLE." Last year, only three Israeli companies went public in Europe, two on France's Nouveau Marche and one in Brussels. But the trend is picking up steam, and many local investment bankers believe the figure could rise threefold or more. Next month, Supercom Ltd. plans to become the first Israeli company to go public on Brussel's two-year-old EASDAQ market. The developer of identification documents that are difficult to forge is looking to raise $30 million. "Our main market is in Europe, so a listing on EASDAQ is more suitable for us," says Moshe Gold, Supercom chief financial officer. Belgium's KBC investment bank will lead the offering. A European listing has other advantages. Gold points out that it takes only three months to prepare an offering in Europe, less than half the time needed in the U.S. But it's not just the bureaucracy. "It's very difficult these days for Israeli high-tech companies with a valuation of less than $150 million to go public in New York," says Edouard Cukierman, chairman of Cukierman, Singer, Barnea & Co. Ltd., a Tel Aviv-based investment bank. The firm has been by far the most the most active in selling European markets to the local high-tech industry. "For Israeli companies with valuations of between $50 million to $150 million, Europe is a real option," says the French-born Cukierman. WAITING FOR THE WINDOW. Not everyone is flocking to Europe, though. Optibase Ltd., a developer of compression systems for the digital-video market, toyed with the idea of a European offering when the possibility of a Wall Street IPO looked remote. "We decided once the window of opportunity reopened recently to return to our original plan of going public in the U.S.," says Zvi Halperin, Optibase CFO. To keep the Israeli companies coming, European investment bankers have been making their way to Tel Aviv in increasing numbers in recent weeks. But they still have lots of catching up to do. "The big Wall Street firms have a huge head start as they have been active here for years, and many have local offices," notes Ofer Segev, partner at Ernst & Young Israel. His office is currently handling six IPOs for NASDAQ and two for European markets. And the firm is holding a first-of-a kind conference later this month on NASDAQ vs. Europe for Israeli high-tech companies. Most Israeli experts believe that NASDAQ will retain its premier position among local high-tech companies -- even with the increased competition from Europe. But unlike in the past, Israeli companies now at least have an option to look elsewhere. By Neal Sandler in Tel Aviv _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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