Malam Systems acquires 51% of QualiTest for NIS 6.5m

Malam Systems is about to raise NIS 45 million in a private placement.

Malam Systems (TASE:MLAM) of the Gad Zeevi group, is entering the software testing market. Sources inform “Globes” that Malam today completed the acquisition of 51% of QualiTest from Advanced Logistics Development (ALD) (TASE:ALD) for NIS 6.5 million in cash, plus a percentage of QualiTest's revenue, subject to meeting targets. Malam also undertook to invest NIS 3.8 million in QualiTest.

ALD bought its stake in QualiTest in late 2000 for $360,000. The company reportedly has a high profit margin.

QualiTest currently has 200 employees and is expected to post NIS 30 million in revenue in 2004, compared with NIS 17 million in 2003. Most of the company's business is in Israel, but it plans to expand overseas in the coming years.

QualiTest is considered one of Israel's top three software testing companies, alongside TesCom (TASE:TSCM) and Tesnet (TASE:TSNT).

QualiTest specializes in testing software and hardware, setting up and managing testing teams for enterprises and carrying out testing projects. Its customers include Microsoft (Nasdaq:MSFT), IBM (NYSE:IBM), Electronic Data Systems (NYSE:EDS), Hewlett-Packard (NYSE:HPQ), Intel (Nasdaq:INTC), Motorola (NYSE:MOT), Amdocs (NYSE:DOX) and Comverse Technology (Nasdaq:CMVT).

Sources also inform “Globes” that Malam is about to hold a NIS 45 million private placement led by Poalim IBI Underwriting and Investments (TASE:PIU) and Apex Mutavim. Malam plans to use the proceeds to expand its business.

Malam bought back NIS 23.5 million worth of CPI-linked bonds during 2002-03. Ranked A by Maalot - The Israel Rating Company, the bonds currently bear a gross return of 6.17%.

Published by Globes [online] - - on August 10, 2004

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