Globes exclusive: Microsoft acquires Israeli start-up Maximal for $20 million

In the past, Microsoft bought a stake in Israeli company Panorama, for a similar sum. Maximal Innovative Intelligence has developed a data analysis solution which works with Microsoft SQL Server 2000 Analysis Services over almost any type of data.

Globes has learned that Microsoft yesterday acquired Israeli start-up Maximal Innovative Intelligence. Company co-founder and CTO Eran Megiddo confirmed the news. Megiddo declined to reveal the purchase sum but the amount is apparently similar to the $20 million paid by Microsoft for a stake in Israeli company Panorama in 1996. The 11 remaining members of Maximal's development staff will be transferred to Microsoft's Redmond campus. Five other staff members have elected not to leave Israel and will find other employment. The company's US-based CEO Ken Volet will leave the company after the merger is complete.

Maximal Innovative Intelligence has developed the Max data analysis solution which works with Microsoft SQL Server 2000 Analysis Services over almost any type of data. The company operates in the field of business intelligence. Max is intended to enable decision-makers to locate data rapidly in applications such as Excel. The company's customers include CNN, Compaq Europe, Siemens Microsoft, Retalix (Nasdaq: RTLX), Novapharm, Turner Broadcasting, Cap Gemini and others.

Maximal Innovative Intelligence was founded in 1998 by chairman and co-founder Yoram Meriaz and Megiddo. To date, the company has raised only $6.5 million, with $2 million raised in the first round of funding from Shrem Fudim Kelner (SKF), Dassault Development and private investors.

The second round of financing, led by the AIG-Orion fund, raised $4.5 million, of which $3 million came from AIG-Orion, and the remainder from existing investors along with private investors. These included Check Point co-founder Shlomo Kramer. The second round was done at company value of $20 million, before money. Microsoft is among AIG-Orion's investors; with the current acquisition, the company recoups something of its initial investment.

According to Megiddo, in recent months the company had conducted negotiations for sale with a number of interested parties. He refused, however, to disclose their identity. However, he said, the Microsoft offer was the highest received yet for the company. Apparently, one of the other interested parties was SAP of Germany, which acquired Israeli company Top-Tier Software earlier this year.

Maximal Innovative Intelligence had a workforce of 40 employees but half the employees were let go in the last few months. The company had offices in London, Chicago, Texas, Virginia, New Jersey and Canada, most of which were closed. The latter three will stay open, Megiddo said, because sales in those regions justified their existence.

Published by Israel's Business Arena on June 20, 2001

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