Dot Hill Systems Corporation (Nasdaq: HILL) has acquired Israeli intelligent storage networking solutions developer Cloverleaf Communications Inc. for $12.5 million in stocks and cash. The cash component of the deal is $2.5 million.
Dot Hill president and CEO Dana Kammersgard is in Israel for the acquisition, and plans to set up another R&D center in the country. He told "Globes", "We intend to increase our activity in Israel with development and testing people." 25 of Cloverleaf's 30 employees are based at its Israeli R&D center.
The exit is a poor one for Cloverleaf's investors; the company raised $43 million since it was founded in 2001, including $35 million from venture capital funds, and the rest in loans.
Cloverleaf CTO Elic Yavor and COO Joseph Klein founded the company as a spinoff from Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) unit Elta Systems. They developed the company's technology while at Elta during the 1990s. The company is headquartered in Woodbury on Long Island, New York, and has its R&D center in Petah Tikva.
Cloverleaf's investors include Genesis Partners, Catalyst Investments LP, Hyperion Israel Venture Partners, Kreos Capital, and Elta. The company's private investors include Brocade founder Kumar Malavalli
Cloverleaf is Genesis's third storage company sale, following the acquisition of StorAge Networking Technologies Inc. by LSI Corporation (NYSE: LSI), and the sale of FilesX to IBM Corporation (NYSE: IBM). Genesis managing partner Eddy Shalev, who serves as chairman of Cloverleaf, told "Globes", "Of the three companies, Cloverleaf was the most ambitious, but it apparently was ahead of its time. Besides, the market changed, and the valuations of 2006 are no longer of value."
Dot Hill has a market cap of $96 million, after its share doubled over the past six months.
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2010
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