Sources inform "Globes" that, last Monday, venture capital firm Qumra Capital submitted an offer to buy drones company Convexum, which is being rehabilitated under court supervision. The offer, submitted through Adv. Erez Haver, calls for Qumra Capital to buy the company and inject tens of millions of dollars into it, to hire more employees and to set up independent marketing and sales and finance operations for it. A few days ago, the offer was forwarded to the company's trustee, Adv. Ori Gaon, with a short deadline in order to allow Qumra Capital to take over the company immediately, retain its employees, and set out on a new path.
Behind the offer is the intention of covering the company's debts, splitting it off from NSO, and turning it into an independent company in the field of air defense against drones that will develop new defensive capabilities, based, among other things, on cellular communications. Crime organizations and terrorists are making increasing use of drones, for example to make drug deliveries or for reconnaissance, and the need for a solution for intercepting them without using live fire has become a critical one for agencies such as prison services, police forces, and airports.
Two years ago, Convexum was acquired by NSO, producer of the Pegasus spyware program, for $4 million and tens of millions more in milestone payments that in the end did not materialize. Although it maintained independent status, with separate offices from those of NSO (in the prestigious ToHa Tower in Tel Aviv), Convexum was tied to cyber company NSO by the fact that the latter provided it with marketing, sales and finance services. Convexum employs over thirty people dealing in software and hardware development only.
If the proposed deal goes ahead, Convexum and NSO will presumably continue to work together, at least for the period of time immediately following the acquisition.
In January, a trustee was appointed to Convexum in the Tel Aviv District Court after a dispute broke out between the investors in the NSO group - the BRG fund and a group of company managers headed by Shalev Hulio - over the financing of the subsidiary. The two investment groups eventually agreed to continue financing Convexum under a trustee, in order to rehabilitate the company and sell it to the highest bidder.
As far as "Globes" is aware, two bids have been received so far: one form shareholder BRG, to buy the company for tens of millions of dollars, and the more recent one from Qumra. Nevertheless, no substantial discussion has yet taken place between the trustee and the shareholders, and as far as "Globes" is aware no information room has been opened. The trustee has another few days in which to respond to Qumra Capital's acquisition offer.
Convexum has annual revenue of a few million dollars, and its debts to suppliers are estimated at NIS 4.5 million. Last February, NSO reported that Convexum had just $1.7 million cash and a further debt to it of several million dollars. Moreover, Convexum has been in the news since January as a company at the focus of a legal dispute, and suffers from an image problem, hence Qumra's sense that it is necessary to act quickly.
Convexum trustee Adv. Gaon said in response, "Naturally there are players with different and opposing interests who are stirring things and trying to apply pressure by various means, including through the press and media. As a representative of the court appointed to act on its behalf, I have only one consideration, and that is the good of the company, its employees, and its creditors, and that is how I am acting."
A statement on behalf of NSO said, "We were surprised to hear of the offer, and if such an offer has indeed been submitted, it ought to be brought to the notice of all the relevant parties, including the court, the company's employees, and NSO."
Published by Globes, Israel business news - en.globes.co.il - on April 13, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.