Israel private equity deals down in Q1

deal  merger  picture: photo to go
deal merger picture: photo to go

IVC-GKH Private Equity Survey reports that 14 Israeli private equity deals accounted for $310 million in the first quarter of 2015.

14 Israeli private equity deals accounted for $310 million in the first quarter of 2015, down 55% from $696 million invested by Israeli and foreign private equity investors in the preceding quarter, and down 34% from $471 million invested in the corresponding quarter, reports the IVC-GKH private equity survey.

The largest deal in the quarter, which accounted for 52% of quarterly investments, was the $162 million investment by foreign private equity fund Northleaf Capital and geothermal company Ormat Technologies Inc. (NYSE: ORA; TASE: ORMT) in a new joint venture.

In the first quarter of 2015, Israeli private equity fund investments of $77 million accounted for 25% of all investments. This compared to $217 million and $262 million in the preceding and corresponding quarters respectively. All private equity transactions involving Israeli private equity funds in the first quarter of 2015 were valued at under $40 million.

Israeli high-tech deals captured $263 million or 85% of total private equity investments in the first quarter of 2015, compared with 71% and 41% in the preceding and corresponding quarters respectively. Even though the amount invested in high-tech deals was down 47% from the previous quarter, it was up 37% from the amount invested in technology companies in the corresponding quarter of 2014.

Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. (GKH) partner and head of M&A Rick Mann said, "The strong growth in the portion of PE transactions that involve technology companies is an important trend. When non-tech deals occur, they are often led by local PE funds. Foreign PE funds continue to show a strong interest in Israel in tech deals and despite the lower overall figures in the first quarter of 2015, we expect higher results in the coming quarters."

IVC Research Center research manager Marianna Shapira said,"On the one hand, the first quarter of 2015 demonstrated a marked slowdown in Israeli private equity dealmaking, mostly due to the decline in Israeli PE fund activity. On the other hand, PE fund raising has already surpassed our earlier projections. From the beginning of 2015, three Israeli private equity funds raised approximately $1.5 billion, and 11 other funds are currently engaged in fund raising. This in large part explains the drop in PE transactions at the beginning of the year, as most funds were short of capital and focused on capital raising efforts. We expect the situation in the Israeli PE market to improve significantly later this year both in terms of deal value and number of transactions as newly raised funds start engaging in investment activity. Moreover, we expect growth in Israeli PE fund involvement both in technology and non-technology transactions throughout 2015."

The IVC-Online Database maintains data on 34 active Israeli private equity management companies with a total of $7.4 billion under management. Currently, 11 funds are raising capital, and are expected to close some $800 million.

Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

deal  merger  picture: photo to go
deal merger picture: photo to go
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