There are winners and losers from the sale of MobileAccess Ltd. to Corning Inc. (NYSE: GLW), reportedly for $150-200 million. MobileAccess, which raised $73.4 million, always interested Israeli and foreign investors, but not all of them will report a success exit from the sale.
MobileAccess did not always find it easy to raise capital, and it held eight financing round. Most of them, except for the first, totaled at least $10 million, and by now it is difficult to figure out the precise holdings of each of the investors.
The losers are clear - they are the venture capital funds that did not stay the course to the exit, including Apax Partners, Genesis Partners and Eurofund (which no longer has an active fund).
The winners are also clear. The most prominent is Viola Private Equity, which is making its first ever exit. It participated MobileAccess' last financing round, putting up $8.5 million of the $15.5 million raised. Viola will likely make a return of several hundred percent on its investment.
Viola Private Equity, founded in 2008, has $164 million under management. It focuses on mature public and private and technology companies. It has made six investments to date: MobileAccess, Amiad Filtration Systems Ltd. (AIM:AFS), unmanned aerial vehicle (UAV) manufacturer Aeronautics Ltd., real-time 3D broadcast graphics solutions developer Orad Hi-Tec Systems Ltd. (XETRA: OHT), online marketer Adsmarket Ltd., and medical devices maker Degania Silicone Ltd.
Viola Private Equity is part of Viola Group, which manages almost $2 billion. Viola Private Equity's partners are Harel Beit-On, Jonathan Kolber, Osnat Ronen, and Sami Totah.
Pitango is the second big winner, and MobileAccess is its third exit in the past 14 months, after the acquisition of Dune Networks Ltd. for $180 million by Broadcom Corporation (Nasdaq: BRCM) in November 2009, and the acquisition of Convergin Ltd. by Oracle Corporation (Nasdaq: ORCL) for $85 million in February 2010.
Pitango can be quite happy today, as it invested in MobileAccess out of the Pitango III Fund, which raised $500 million in 2000. A year after raising the fund, the dot.com bubble burst, making it virtually impossible to make follow-on investments. According to California Public Employees' Retirement System (CALpers), which invested in the Pitango III Fund, the fund still has a negative return, although it is nearing the break-even point.
According to the Israel Venture Capital Association, the Pitango III Fund has chalked up 28 exits, some of which were quite small and at a loss. Some of the fund's portfolio companies still have a chance of making a substantial return on investment, including business transaction management solutions developer OpTier Ltd., broadband wireless systems on a chip developer Provigent Ltd., and medical device company Brainsgate Ltd. The fund has written off ten investments, including in Negevtech, which developed wafer inspection and yield control solutions for the semiconductor industry, and closed in 2008 after raising $150 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2011
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