Private equity transactions totaled $216 million in 11 deals in the first quarter of 2011, 68% less the $979 million in 19 in the corresponding quarter of 2010 and 78% less than the $826 million in 17 deals in the preceding quarter, the IVC Research Center and Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. (GKH) law firm reported today.
Deals in the fourth quarter of 2010 included the $576 million buyout of Psagot Investment House Ltd. by Apax Partners, and the first quarter including the $350 million raised by electric car venture Better Place LLC and the $200 million raised by solar energy array developer Brightsource Energy Inc.
Industry accounted for 29% of the total value of private equity deals in the first quarter, compared with 12% of the total in the corresponding quarter and 26% in the preceding quarter. Cleantech, which accounted for 56% of the the total value of private equity deals in the corresponding quarter (Better Place and Brightsource), was off the radar in the first quarter.
The average private equity fell to $20 million in the first quarter from $49 million $51 million in the corresponding quarter.
IVC research manager Marianna Shapira said, "The Israeli private equity industry spreads its investments over diverse sectors, with no specific focus. The most important factor in attracting private equity investment is company revenue levels. Successful companies with international sales and high overall revenues have the best chance of appealing to private equity funds, especially foreign ones."
GHK managing partner Rick Mann said, "What we see from the first quarter 2011 results is that private equity funds with a strong local presence still represent the bulk of all private equity deals in Israel. Foreign private equity funds are typically involved only in the larger private equity deals, and those deals do not occur every quarter. I expect, however, that along with the continued investment activity of the local private equity funds, we will see foreign private equity funds entering into several large transactions during the course of 2011."
In the first quarter, the three largest Israeli private equity deals accounted for 65% of aggregate deal value. Israel Infrastructure Fund (IIF) bought Highway 431 operator Hayovel Lines Ltd. for $55 million; San Francisco-based Silver Lake invested $50 million in Prime Sense Inc.; and First Israel Mezzanine Investors Fund (FIMI) provided Alon Brands with $36 million in mezzanine financing.
IVC lists 27 Israeli private equity companies, with an aggregate $7.1 billion in capital under management. Six of the companies were founded since 2009.
Published by Globes [online], Israel business news - www.globes-online.com - on May 4, 2011
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