We have an Israeli high-tech brand name on the Tel Aviv Stock Exchange. It is called Yitzhak Tshuva, and whatever Tshuva touches shoots up wildly. This is at once strange, excessive, irritating, pointless and amusing, but it's also true. Hats off to Tshuva for catching onto the trend and picking up whatever lies to hand in the stock exchange high tech field. On the negative side is the fact that he has become the high-tech prince of the Israeli stock exchange. Rumours that Tshuva is making some purchase, no matter how small, in some technology-related company, suffice to send its shares soaring.
Tshuva, meantime, is regularly in the headlines. On Sunday, he was negotiating with YES. Yesterday, he got off that tree, and the day before yesterday he purchased 10% of Inventech (yesterday's most heavily traded share on the stock exchange). Yesterday he announced that he was adding one more item to his high-tech collection.
Tshuva transacts all these deals through Green, a mere company shell until he acquired control of it. Since then, its share has gone into orbit, gaining 300% since the beginning of the year and 6,000% since the beginning of 1999. Green now has a value of $107 million.
Yesterday, as stated, Green announced that it was negotiating the purchase of shares in the ProSeed venture capital fund. Green will invest NIS 15-20 million in consideration of 51% of the share capital of the fund's management company, subject to the fund's publishing a new prospectus, and subject to orders being placed for the fund's shares in a minimum range of NIS 30-35 million.
The ProSeed venture capital fund published an issuance prospectus three months after its April 1999 founding. The prospectus was cancelled a few days ago, due to the negotiations with Green, and a new prospectus is planned. The fund has not yet started to invest, but has already managed to drum up a few tens of millions of shekels.
ProSeed has a unique financial structure. It was founded as a public company not listed on the stock exchange. This means that its shares are distributed among more than 50 investors, securing it its legal status as a public company. A company fitting this definition is obliged to publish a prospectus and is subject to almost all the obligations of a regular public company, other than that of reporting to the stock exchange. The underwriting companies of First International and Discount Bank will lead the issue.
ProSeed intends to invest in companies at the initial (seed) stages, in contrast to Green's basket of companies, investing in the more advanced stages of technological companies. The fund is managed by its chairman Mendy Irad, formerly Clal Electronic Industries general manager, and by fund general manager Lior Lifschitz, formerly a senior manager with Ilanot Batucha.
Green general manager Yitzhak Inbar told "Globes" today that "the proposed investment in ProSeed is in fact something new for Green. Until now, we have focused on companies that have mature holdings, and now we are investing in companies at the very outset of their development. This is a new departure for Green, and we think that in proper dosage it would be right to integrate such investments, alongside existing investments at the more mature stages of the companies' lives".
The day before yesterday, Green completed the acquisition of 10% of the shares of the Inventech investment company, in off-the-floor deals. Inventech is trading at a market value of $118 million, and has so far invested some NIS 83 million in 19 companies, including Phone-Or, Nova and Visionics, which is currently completing procedures for issuing on the Frankfurt stock exchange.
Inbar told "Globes" that the investment in Inventech is well suited to Green's strategy. "Green is very consistent in its investment directions. It is true that Inventech is not a venture capital fund, but it is a holding company in the high-tech field, and it has very interesting holdings in the field".
"Globes": Do you intend to gain control of Inventech?
"So far, we have reached 10%, with which we are happy. We have not yet worked out our direction on this matter".
Published by Israel's Business Arena January 26, 2000