Tamir Fishman Ventures, the largest shareholder in CopperGate (30%) today confirmed the report in “Globes” yesterday that Mellanox is to buy CopperGate for $200 million. The report caused shares in Mellanox, which develops chips for communications between enterprise computing resources, to lose 17% of their value, while shares in Tamir Fishman rose 25% today.
The fund’s announcement said, “A non-binding memorandum of understanding has been signed between CopperGate and one of the potential buyers at a company value of $200 million.” Tamir Fishman stressed that “at the time of reporting this memorandum of understanding is not in force.” However, Tamir Fishman also said that “CopperGate is likely to continue talks in connection with its possible acquisition by potential buyers.”
The deal, as reported yesterday, is due to be carried out at a value of close to $200 million in cash and shares. Final details will be agreed between the companies towards the end of the month.
Tamir Fishman has been associated with CopperGate almost since it was founded and has invested a total of $9 million in it. Alongside Tamir Fishman, Carmel Ventures, The Challenge Fund II ETGAR, Motorola Ventures, TechnoPlus, and ETV have invested in CopperGate. As far as the funds are concerned, this is a fairly successful investment, though not as much as they hoped. Over the past two years, during which it became profitable, CopperGate examined ways of liquidating the stakes of its shareholders. At first, it sought to do so through a flotation at a value of $500 million, and afterwards through an acquisition at a much lower value.
Among the companies that considered buying CopperGate was reportedly another Israeli chip company, Zoran The synergy between CopperGate and Zoran would have been more obviously successful, at least on the technology/business level, since CopperGate and Zoran both aim at the domestic consumer and not at the enterprise market like Mellanox.
Tamir Fishman CEO Eldad Tamir told “Globes” today, “We have been with CopperGate from the moment it was set up, when it had three employees. We were the first venture capital fund to invest money in it, and for a long period also the only one, since other investors failed to show interest in it. For a certain period, when one of the entrepreneurs left, Shai Saul managed the company on our behalf. We have had quite a few exits in the past: ModemArt, Chromatis, and Native Networks.” Asked whether the CopperGate exit surprised the firm, Tamir said that it did not but “it isn’t yet finished.”
Published by Globes [online], Israel business news - www.globes.co.il - on August 5, 2009
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