Sagantec, engaged in software development for chip design and located in Tirat Hacarmel, could make an initial public offering on Wall Street soon, in which the company would raise $40 million according to company value of $200-250 million. The IPO would create large capital gains for the Teuza fund, which owns a 48% share of Sagantec, as well as for Motti Zisser’s Europe-Israel company, which holds 24%. Another 24% are held by an Austrian businessman.
Some of the company’s management were in San Francisco last week at an exhibition where the company presented its products. During the exhibition, the company received offered from a series of US investment banks (among the larger were Smith Barney, Lehman Brothers, and Montgomery Securities), from which the leading underwriter and secondary underwriters will be chosen. While preparing the IPO, the possibility of selling the company and its activity to another large company in the chip design field is being examined.
Sagantec used to be a Dutch software company founded in the early ‘80s. In 1993, when it was on the verge of bankruptcy, its technology was acquired by Teuza and Mercazei Shlita, now controlled by Europe-Israel, and most of its development activity was transferred to Israel.
Europe-Israel’s prospectus from last February details Sagantec’s results for the first nine months of ’97.Company revenue for the period amounted to NIS 16.3 million, and net profit amounted to NIS 2.7 million. In Q3 alone, the company posted NIS 6.6 million in revenue and NIS 1.9 million in profits.
The company closed ’97 on NIS 25 million in revenues (about $7 million) in comparison to revenues of NIS 8.3 million for all of 1996. According to estimates and the company’s order backlog, the company could end 1998 on $20 million in revenues.
Sagantec develops software tools for the design and miniaturization of electronic chips. The company’s flagship product is designed to preserve a chip’s old design and transfer it semi-automatically to more up-to-date technology. The process dramatically shortens the development time of new chips and their time-to-market.
Sagantec’s target market is companies that engage in semi-conductor design for the electronics market, in other words, companies like Intel, Motorola, Texas Instruments and others. The big companies in chip design that compete with Sagantec are Caden Design, Synopsis, AVANT! And mentor Graphics. If it is decided to sell the company, the buyer could spring from that group of companies.
Europe-Israel refused to confirm or deny the report.
Published by Israel's Business Arena June 22, 1998