Bloomberg News

Apple Said to Acquire Israel’s Anobit for About $390 Million

January 12, 2012

Jan. 12 (Bloomberg) -- Apple Inc. acquired Anobit Technologies Ltd. for about $390 million, paying below the price sought by the Israeli maker of a flash-memory drive part for the iPhone, people familiar with the purchase said.

Negotiations continued for more than two weeks after Israel’s Calcalist newspaper reported Dec. 20 that Apple bought Herzliya-based Anobit for as much as $500 million. Apple finally signed the agreement Jan. 6 to buy the Israeli company, according to two Anobit shareholders, who spoke on condition of anonymity because Apple didn’t want details disclosed.

An Apple spokesman confirmed the acquisition Jan. 10 while declining to comment on the price. “Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans,” Steve Dowling, a spokesman for Cupertino, California-based Apple said. Anobit Chief Executive Officer Ehud Weinstein didn’t immediately return a call seeking comment that was answered by a receptionist.

The deal helps Apple secure supplies of a key component for its top-selling devices. Anobit makes high-performance controllers used to optimize the memory capabilities inside products such as the iPhone and iPad. Apple is the world’s largest buyer of NAND flash memory, accounting for about 23 percent of consumption last quarter, according to a Jan. 6 report from Sanford C. Bernstein & Co.

The Anobit deal is the company’s first acquisition in Israel, where Intel Corp., Hewlett-Packard Co. and Microsoft Corp. have established operations.

Microsoft Center

Apple doesn’t typically make multi-billion-dollar acquisitions like rivals such as Hewlett Packard, Microsoft or Google. The company has made a series of small acquisitions of privately-held companies that can bring in new employees or technology to be integrated into Apple’s products.

Earlier acquisitions include Siri Inc., whose technology was used for the new voice-control software in the iPhone 4S; Quattro Wireless Inc., which became Apple’s mobile advertising platform iAd; music service La La Media Inc.; Poly9, a maker of mapping technology; and chip companies PA Semi Inc. and Intrinsity Inc.

Israel, with a population similar in size to Switzerland’s at 7.7 million, has about 60 companies traded on the Nasdaq Stock Market, the most of any nation outside North America after China. Israel is also home to the largest number of startups per capita in the world.

Microsoft opened a research and development center in Israel in April 2006, according to the Redmond, Washington-based software maker’s website. Intel, which began operations in Israel in 1974 with five employees, has 6,600 workers in the country, according to the chip manufacturer’s website.

Israel Acquisitions

“The acquisition is further proof that Israel’s innovation overcomes boundaries and that the semiconductors industry is an innovative and leading field in Israel,” Koby Simana, head of the Israel Venture Capital Research Center in Tel Aviv said by phone. “In 2012 we will continue to see mergers and acquisitions as a central cash flow channel for technology investors and hope that also IPO opportunities will arise when international markets will allow.”

CSR Plc, the U.K. maker of chips used in Nokia Oyj mobile phones, completed the acquisition of the Israeli developer Zoran Corp. on Sept. 1, according to Bloomberg data. Citi Venture Capital International, a private equity investor and investment adviser focused on developing markets, paid $307 million in cash last year for Tel Aviv-based Ness Technologies Inc., an information technology company.

Anobit had raised $76 million from investors, including Battery Ventures and Pitango Venture Capital, before Jan. 10, according to an online fact sheet. The Israeli company says its memory signal processing technology uses proprietary signal- processing algorithms to improve the performance of flash-memory chips.

While Apple didn’t acknowledge buying Anobit until Jan. 10, Israel’s prime minister’s office welcomed the company to the country in a Dec. 20 post on Twitter.

--With assistance from Adam Satariano in San Francisco. Editors: Robert Valpuesta, Simon Thiel, Jeffrey Tannenbaum

To contact the reporters on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net; Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net

To contact the editors responsible for this story: Andrew J. Barden at barden@bloomberg.net; Claudia Maedler at cmaedler@bloomberg.net


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