Despite investing hundreds of millions of dollars in Israel in recent years, the Wolfson family managed to maintain anonymity. Almost all of the investments were made through second and third parties, which reached the headlines instead of the Wolfsons, who remained out of them.
This was the case with its investments in venture capital funds in Israel, which have so far amounted to $25 million. It was also the case with its involvement in Bank Hapoalim. Practically no-one knew the family was the key investor in the Hyperion group, with 2.85% of the bank’s shares.
It is now evident that the family is in the midst of, and possibly toward the end of, another round, which will make it owner of Israel’s largest computing services company. The last stage in setting up this computer empire is the acquisition of Advanced Technologies for $65 million in cash, reported by Tadiran yesterday in an announcement to the Stock Exchange. The buyer is a US company called Ness Technologies, owned by the Wolfson family.
Advanced Technologies is one of Israel’s largest software companies, and is traded on the Tel Aviv Stock Exchange. The company develops software for the Ministry of Defense and giant organizations such as banks and insurance companies, advises on comprehensive information networks and sets up such networks for them. It is also active overseas, mainly in the US, Latin America, Asia and Europe. Advanced Technologies has a payroll of 710, and in 1998 sales amounted to NIS 268 million.
"Globes" has learned that the buyers plan to retain the existing management, and even enable managers to acquire some of the company’s shares through a financing program they are providing.
Advanced Technologies is the fourth computing company purchased by Ness Technologies. Eighteen months ago, Ness purchased Compro, a software company engaged in software development and applications for smart cards, and development and installation of billing systems for communications companies and other large concerns. Compro has a payroll of 300, and is expanding activities overseas, mainly in billing and smart cards spheres.
Six months ago, the Gilad group was purchased, together with owner and general manager Hagai Lavi. Gilad is located in Jerusalem and engages in setting up communications infrastructures and integrating information systems. Altogether, the family invested $24 million in the acquisition of Compro and Gilad.
At the end of the week, the family’s fourth deal was finalized. It purchased Contahal from Tadiran for $98 million. Contahal engages in providing corporate and institutional software solutions, development and delivery of embedded and real time systems, and development of software packages. The company markets some of its products overseas, and its main customers in Israel are government ministries including the Ministry of Defense.
The Wolfson family has accumulated a portfolio of computing companies with a payroll of 1,850 computer experts, and annual sales of more than $200 million. All this was achieved with an investment of only $115 million - a real bargain.
The purchasing spree does not there. Intensive negotiations are currently under way with Ipex, of Australia, for the purchase of its Israeli branch, Ipex-ICS. In this instance, more is being kept vague than disclosed: Sources close to Ness report on a purchase, while at Ipex, they claim that the negotiations are for an investment in the new group and a merger.
Completion of the Ipex deal will create a giant body of more than 2,000 employees, that supplies almost all information infrastructure requirements for large concerns, from installation of the computing and communications infrastructures, to organization management systems, and future communications requirements such as the Internet, security and communications systems. On completion, the new body will be ripe for the real adventure: bursting onto the global market, mainly in Europe and the US, as a muscular, highly capable force.
The Wolfson family is an American Jewish family residing in New York, with offices on Wall Street.
The driving force behind the setting up of the Israeli computer empire is Morris Wolfson (40), who deals with acquisitions in Israel. Sources close to the family said today that in all the deals transacted in Israel, "To date, not one employee or manager has been laid off." The family believes Israel’s main asset is the human capital. All company managers are partners to some degree. In fact, in the Contahal and Advanced Technologies deals too, the Wolfson brothers ensure managers receive a share of the company, by financing their participation in the acquisition.
Published by Israel's Business Arena May 17, 1999