IT integrator Ness Technologies Ltd. (Nasdaq: NSTC; TASE: NSTC) may undergo a change in ownership, 13 years after the company was founded. The company is in acquisition talks with private equity firm Vector Capital at a company value of $300 million.
Following the report, Ness's share price rose 1.4% in early trading on Nasdaq to $6.65, giving a market cap of $254 million, after rising 1.9% on the TASE to NIS 23.22. The deal, if it is closed, reflects a 20% premium on Ness's company value. Ness's share price has risen 70% in the past four months.
The rise in Ness' share price is symbolic. In the four years since Issachar Gerlitz has been CEO, the company has had little luck on the capital market. During most of the economic crisis, its market cap was $100-200 million, and it could not stabilize above that level.
Ness posted $517 million revenue in 2010, and has suffered from a slowdown in its business with US financial institutions and problematic macroeconomic conditions in Eastern Europe in recent years. The company's problems in the past two years apparently prompted the board of directors to go for broke and not wait for a substantial improvement in the company's condition. Since last summer, it has been approached by several private equity companies with acquisition offers at $200-300 million.
Vector Capital was founded in 1997 and has $2 billion in assets under management. It mainly invests in technology companies. It acquired Aladdin Knowledge Systems, founded by Yanki Margalit, for $190 million three years ago.
Published by Globes [online], Israel business news - www.globes-online.com - on April 4, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011