Sources inform "Globes" that two Chinese funds, CDH and ZZ Capital, are competing for the acquisition of Israeli company ironSource at a company value of $1 billion (substantially less than the value mentioned in previous reports several months ago). Regarded as Israel's largest Internet company, ironSource distributes and promotes smartphone apps and advertising. This sector is developing rapidly, but is also exposed to many rapid changes, as well as to extremely intense competition from both Israeli and global companies. Companies' value can therefore rise or fall within a short time span.
CDH, a private equity fund founded in 2002, currently manages assets worth an aggregate $19 billion, according to the company website. The fund, which focuses primarily on investments in China, has offices in Hong Kong, Singapore, Beijing, Shanghai, Shenzhen, and Jakarta. ZZ Capital, founded in 2011, has its main offices in Beijing. The fund is active all over the world, but mainly in the US, UK, Germany, Japan, and Israel. Its share is listed on the Hong Kong Stock Exchange at a market cap of $310 million, following a 75% rise this year. As far as is known, ironSource's owners want to sign a deal with one of the funds by the end of the year, with final closure of the deal no later than the first quarter of 2017. According to its emerging outlines, the deal will take place in two stages (like the huge deals in which Keter Plastics and Iscar were sold). In the first stage, the foreign fund will acquire 70-80% of ironSource, with an option on the rest of the shares at a later stage.
ZZ Capital managing director Manor Zemer, who represents the fund in Israel, said in response to the news, "We are constantly examining investment opportunities everywhere in the world. We do not wish to respond concerning ironSource." ironSource CEO Tomer Bar-Zeev said, "From time to time, the company receives offers from Chinese and other concerns, but there has been no concrete offer."
Published by Globes [online], Israel business news - www.globes-online.com - on November 16, 2016
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