Bloomberg News

More M&As As Apple to IBM Acquire: Israel Overnight

July 08, 2012

Israeli technology developers are poised to lure global acquirers after International Business Machines Corp. (IBM:US) and Apple Inc. (AAPL:US) entered the market, said Shlomo Kramer, who co-founded the world’s second-largest security networks maker.

Israel is a “clear target for mergers and acquisitions because the quality of innovation is at par with the best areas in the world,” Kramer, the chairman of Imperva Inc. who helped found Check Point Software Technologies Ltd. (CHKP:US), said by phone on July 6 from Tel Aviv. “Even when times are tough, Israel’s technology is at the top of the list for major organizations looking to spend on innovation.”

Israel is the second-biggest source of foreign listings on the Nasdaq Stock Market behind China and technology developers led gains on the Bloomberg Israel-US Equity Index (ISRA25BN) this year, with Mellanox Technologies Ltd. (MLNX:US)’s share price more than doubling. The gauge was little changed last week and is up 0.9 percent this year. The TA-25 fell 0.6 percent at the close in Tel Aviv today, bringing the drop for the year to 0.8 percent.

Mounting interest in Israeli technology has surfaced this year as initial public offerings remain dormant and companies seek quicker access to cash, Kramer said.

IBM said on Jan. 31 that it will buy New York-based Worklight Inc., while Apple acquired Herzliya-based Anobit Technologies Ltd. on Jan. 10. EMC Corp. purchased Herzliya, Israel-based XtremeIO for $430 million in May. Caesar Stone Sdot Yam Ltd. (CSTE:US), a maker of stone products, was the only company to hold an initial public offering in New York this year.

Facebook, Intel Acquire

With 82 deals totaling $5.4 billion in 2012, Israel is the No. 2 take-over target in the Middle East and Africa after Egypt, according to data compiled by Bloomberg.

Covidien Plc (COV:US) bought Oridion Systems Ltd., the Israeli medical-safety device maker, on July 3 for a cash payment of $295 million, according to data compiled by Bloomberg.

Facebook Inc. (FB:US), owner of the world’s largest social- networking website, last month acquired Face.com, the Israeli maker of technology that helps users tag photos and find images online by distinguishing facial features.

Intel Corp. (INTC:US), the largest semiconductor maker, bought Israeli security company Insightix Ltd. for $5 million in cash in February.

‘Key Players’

“There are a lot of key players like Apple and Intel that love the Israeli technology,” Alon Harnoy, head of mergers and acquisitions at Shiboleth LLP, said in an interview at Bloomberg headquarters in New York on June 27. “The trend of acquisitions by the big tech names is going to continue as more companies try to establish a presence there.”

Israel, whose population of 7.8 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.

More than 100 companies globally, including at least 13 technology companies representing a total deal size of $1.17 billion, postponed or withdrew initial public offerings this year, according to data compiled by Bloomberg. The average size of those deals was about $100 million.

Caesar Stone, which had its initial share offering in New York on March 21, has added 9 percent to $12 since the listing.

Mellanox Leads

Mellanox, based in Yokneam Elit, Israel, is the best performing New York-traded Israeli stock this year with a gain of 127 percent to $73.72. The Tel Aviv shares have surged 135 percent. They were down 3.9 percent today to 292 shekels, or the equivalent of $73.99.

Perrigo (PRGO:US), the largest U.S. over-the-counter drugmaker, fell 0.2 percent to $118.08 in New York on July 6, paring its five- day advance to 0.1 percent. The Tel Aviv shares lost 1 percent to 464 shekels, or $117.58.

The Allegan, Michigan-based drugmaker was downgraded to equal weight from overweight at Morgan Stanley, according to a July 6 report.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net


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  • IBM
    (International Business Machines Corp)
    • $163.23 USD
    • -5.87
    • -3.6%
  • AAPL
    (Apple Inc)
    • $102.47 USD
    • 2.71
    • 2.64%
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