Mergers and acquisitions (M&A) involving Israeli high-tech and pharmaceutical companies fell 7% to $2.54 billion in 2009 from $2.74 billion in 2008, and were 33% less than the $3.79 billion in 2007, the IVC Research Center reported today. The ten biggest ten M&A deals totaled $2.02 billion, 80% of all deals last year. Four deals were larger than $200 million, and five were for $100-200 million.
63 Israeli high-tech and pharmaceutical companies were acquired or merged in 2009, 28% fewer than the average of 87 companies in 2006-08. However, the average deal size rose 21% to $40 million in 2009 from $33 million in 2008.
The 28 venture capital-backed deals totaled $1.55 billion in 2009, 3% more than 35 deals worth $1.5 billion in 2008.
The biggest deals in 2009 were Siemens AG's (NYSE: SI; XETRA: SIE) acquisition of Solel Solar Systems (now Siemens Concentrated Solar Power Ltd.) for $418 million; Medtronic Inc’s (NYSE: MDT) acquisition of Ventor Technologies Ltd for $325 million; and IBM Corporation's (NYSE: IBM) acquisition of Guardium Inc. for $225 million.
Israeli high-tech and pharmaceutical companies acquired 15 foreign companies during 2009 for a total of $380 million, only a fraction of the 39 foreign acquisitions for $9.5 billion in 2008. The 2008 figure includes Teva Pharmaceutical Industries Ltd's (Nasdaq: TEVA; TASE: TEVA) of Barr Pharmaceuticals for $7.46 billion (nto including debt).
Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Pink Sheets:FRUTF) was the most active Israeli high-tech company in terms of acquisitions last year; it acquired three foreign companies: Oxford Chemicals Ltd. in the UK for ₤8.25 million, Flavors Specialties Inc. in the US for $17.2 million, and the savory activity of Christian Hansen GmbH in Germany for €5.3 million.
Only one Israeli high-tech and pharmaceutical company held an IPO in 2009: D-Pharm Ltd. (TASE: DPRM, which raised $22 million. There were no IPOs by Israeli high-tech companies in 2008.
IVC CEO Koby Simana said, "Notwithstanding the increase in average deal size, 2009 was successful for buyers due to a sharp decrease in company valuations." He added, “We expect considerable M&A activity in 2010, providing attractive deals for companies eager to capitalize on the many current opportunities. From the standpoint of investors in high-tech companies, M&A deals will be welcome, even at moderate valuations, in order to receive an immediate payback."
So far in 2010, Teva has acquired German generic drug company Ratiopharm for €3.625 billion. Several Israeli life science companies have held IPOs or reverse mergers on the TASE, including Intec Pharma Ltd. (TASE: INTP), UltraShape Medical Ltd. (TASE: USLP), and Proteologics Ltd. (TASE: PRTL).
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2010
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