Last week, Pitango Fund 1 (formerly Polaris Fund 1), controlled by Shrem Fudim Kelner (SFK) & Co., realized most of its holding in QualiTau. QualiTau has almost doubled its market value since early November.
Pitango, which owns 7.7% of QualiTau, sold 180,000 shares (5.5% of QualiTau’s equity) at a price close to QualiTau’s NIS 38 share price on the Tel Aviv Stock Exchange (TASE), earning NIS 7 million. Since Pitango 1 had already repaid its partners’ investments in the fund, and even yielded them high profits, the entire sale will be recognized as profit, mostly accruing to SFK.
QualiTau is traded on the TASE at a market value of $30 million and is controlled by CEO Gadi Kreieger. The company develops and manufactures electronic test equipment for semiconductor process reliability, providing forecasting of failure rates and performance degradation in Integrated Circuit (IC) devices. QualiTau develops hardware, operating and analysis software and related tools, which are combined into comprehensive reliability testing systems.
QualiTau’s market has been volatile in recent years. The company underwent hard times during industry recessions in 1996 and in the second half of 1998, although its business results were still quite impressive.
QualiTau's sales rose 30% in the first nine months of 2001 to NIS 74.1 million, but its gross profit fell from 66% to 63%, due to the increase in deals in competitive markets, the recession in the semiconductor industry, large increases in wages, and a one-time depreciation of inventory. The company’s operating profit in January-September 2001 was NIS 15.1 million, similar to the corresponding period in 2000, and its net profit was NIS 11 million.
Pitango Fund 1’s sale of QualiTau shares was one of a series of successful realizations. Pitango Fund 1 raised $20 million in 1993, and is considered to be the best of the Yozma funds supported by the Office of the Chief Scientist. Pitango Venture Capital, managed by Rami Kalish, has since launched two follow-up funds, Pitango 2 and Pitango 3.
Pitango Fund 1 posted a phenomenal 400% return on its investments, which included Point-of-Sale (now Retalix (Nasdaq: RTLX) , VocalTec Communications (Nasdaq: VOCL), Scorpio Communications (now US Robotics Technologies, a subsidiary of US Robotics), Radcom (Nasdaq: RDCM), Card Guard Scientific Survival (SWX: CARDG), VCON Telecommunications (Nouve Marche: VCON), Shany Computers, and Medinol.
Published by Israel's Business Arena on 7 January 2002