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Exits in the Israeli high-tech industry in the first half of 2018 were worth a total of $ 6.22 billion in 58 transactions, according to IVC-Meitar's exit report. This total includes two transactions worth more than $ 1 billion each: the acquisition of the Orbotech automated inspection equipment company by KLA-Tencor for 3.4 billion dollars. 39; euro; and the $ 1 billion NDS acquisition by Permira. These two one-off transactions brought the average outflow to $ 107 million in the first half compared to $ 31 million in the first half of 2017.
Excluding these two transactions, the remaining 56 outlets in the first half of 2018 were totaled $ 1.82 billion, an average of $ 32.5 million, down almost 50% from the 2015 and 2016 averages. The number of releases in the first half of 2018 decreased by 20%, continuing a downward trend that began in the first half of 2015 was 72 outings. The total amount of transactions in the range of $ 100 billion to $ 1 billion amounted to $ 1.1 billion, or 30 to 35% of the total amounts in the same range for each semester between the first half of 2014 and the first half of 2016. 19659002] Mergers and acquisitions (M & A) dominate the exit activity in Israel, both in number and in amount. In the first half of 2018, there were 53 mergers and acquisitions (excluding two mega-outs) totaling $ 1.71 billion. There were few outflows in the $ 100-500 million range, which contributed to the slowdown. According to the IVC-Meitar report, this range usually captures the largest share and is responsible for most returns. The number of transactions in this range has halved in recent years, from 13 transactions in the first half of 2015 to six in the first half of 2018. The first half of 2018 recorded only three IPOs, against eight during the corresponding period. The amounts raised by the IPOs totaled $ 115 million in the first half of 2018, compared to $ 247 million for the corresponding period.
"Usually, the second half is lower than the first half of the year and declining numbers and amounts of output indicate that 2018 will end with poor performance at the exit. However, despite the gloomy first half of 2018, the annual output activity could increase in a second half stronger, "said Marianna Shapira, research director at the IVC Research Center.
The multiple multiple average (return on invested capital on average of companies that made an outflow during this period), excluding mega-outs, decreased in the first half of 2018, reaching only 3.06 vs. 5.4 in 2014
The comparison between the amount of outflows and the amount raised by acquired companies suggests The continued rise in capital raised between 2013 and 2016 is not supported by the exit activity: the multiple means are decreasing. since 2014, but the decline in non-venture capital outflows since 2014 is much stronger.
IT & Software Life sciences accounted for the largest number of releases in the first half of 2018. The share of life science companies in the total number of outlets jumped to 21% from 6% in the first half of 2014. Three of the largest T outputs in the first half of 2018 were in this sector. Life sciences companies launched three IPOs: Sol-Gel, Entera Bio and Motus GI Medical
The main technology centers that stood out in the first half of 2018 are the same as those of the last five years: Cyber, Adtech, AI and Pharmatech. Alon Sahar, partner of Meitar Liquornik Geva Leshem Tal, said: "It is important to draw attention to the link between the mobilization of capital and mergers and acquisitions or public offerings. In recent years, there has been an increase in the number of companies that collect a significant amount of high value capital. In 2016, 27 companies raised capital of $ 30 million or more. In 2017, the number of businesses grew, and in the first half of 2018, another record was broken, with 26 companies raising more than $ 30 million.
"Contrary to these figures, we see a decline in the number of merger and acquisition transactions in general (and in particular, in values over $ 100 million), and a decline in the number of companies operating in the direction of an IPO on the NASDAQ
"justify the investment, and provide return for investors, the industry will have to produce a greater number of sales or sales. Offers at a price range of hundreds of millions of dollars.The gap between the price of companies for the purpose of raising capital and the number and value of exit events may explain the decline in the number of merger transactions and acquisitions in recent years.A growing number of companies want or can be considered important businesses, a phenomenon that "moves away" from the release date and reduces the number of transactions. For some firms, the gap between the cost of capital raising and exit prices can become a serious problem and will require transactions below the cost of raising capital. We have no choice but to follow the link above, which will have a major impact on the entire industry. "
Talzen Shamgar, partner of Meitar Liquornik Geva Leshem, said:" There are a lot of cases where local businesses are playing the same field and compete for the talent they want to recruit, the technology that they have. they develop, and customers. If we want to build bigger companies and fill in the gaps as presented by Adv. Alon Sahar, we will need to see more domestic transactions and cooperation facing challenges outside of Israel.
Published by Globes [online] Israel Economic News – www.globes-online.com – July 11, 2018
© Copyrights of Globes Publisher Itonut ( 1983) Ltd. 2018
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