Israeli and foreign private equity investors entered into 11 deals valued at $606 million, in the third quarter of 2014, down 27% from $835 million in the corresponding quarter of 2013 (22 deals), according to the latest IVC-GKH Private Equity Survey. This third quarter figure is however, higher than the $79 million - the lowest quarterly amount in four years - invested in the second quarter of 2014 (21 deals)
Foreign Private Equity fund Oaktree Capital completed the largest deal in the third quarter, which accounted for 78% of the deal-making, by acquiring Veolia Israel, a provider of water, waste and energy management solutions, for $475 million.
In the first three quarters of 2014, 51 private equity deals by Israeli and foreign PE investors accounted for $1.2 billion, down 27% from $1.7 billion invested in 58 deals in the corresponding period of 2013, and also well below the $2.1 billion and $1.6 billion invested in the corresponding periods of 2012 and 2011, respectively.
In the third quarter of 2014, Israeli private equity funds invested $114 million or 19% of all PE investments made in Israel, up from just $29 million invested in the preceding quarter (the lowest quarter since 2011) and $325 million invested in the corresponding quarter of 2013.
GKH Partner and Head of M&A Rick Mann, "The Israeli private equity market data continues to show that Israeli private equity funds tend to be the most active in the Israeli market, but foreign private equity funds are generally behind the larger size transactions. The quarterly data tends to be influenced by one or two large transactions, and that is a pattern we expect to see continuing with significant investment opportunities in both the technology sector and the financial and industrial sectors."
IVC Research Center Research Manager Marianna Shapira said, "A review of the data shows PE investments in technology companies differ from those in non-technology companies in a number of ways. First, straight equity deals tend to be directed to technology companies, while buyouts and other mechanisms are used mostly in non-technology deals. Secondly, technology investments are, on average, far lower than those for non-technology about half the amount. The first two factors combine into a third: the number of deals in the technology sector is 50% higher than those of non-tech deals by PE funds. Interestingly", points our Shapira, "these investment patterns have been followed by both local and foreign funds in their Israeli investments, while substantially different strategies may be employed in foreign PE markets by the same funds."
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2014
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