QualiTest buys US co Orasi software testing activity

Ayal Zylberman Photo: Shay Oknin

The price of the deal is estimated at NIS 35 million.

Israeli company QualiTest, the world's largest software testing company, is acquiring the software testing division of US company Orasi. Informed sources estimated the price of the deal at NIS 35 million.

QualiTest's annual volume of business amounts to $240 million, which the company believes will grow to $400-500 million by 2020, according to QualiTest CEO Ayal Zylberman. "Its testing activity has a turnover of $30-40 million annually. Actually, Orasi has two lines of business. They are the largest distributors for HP in the US, and the other is the testing services that we acquired. The acquisition puts us among the top five testing services companies in the US." The structure of the acquired testing division will be maintained. The Orasi testing division has 300 employees and over 100 customers.

Zylberman said that the company had made a strategic decision to expand last year, among other things with an emphasis on mergers and acquisitions. "At the beginning of this year, we assessed our activity with the help of an analyst and analyzed the state of the market. We realized that we had officially become the world's largest software testing company. We formulated the company's strategy with the aim of being the leader in the global testing market, which amounts to over $16 billion a year," he explained. The testing market includes software testing companies, testing services companies, and general testing companies. According to Zylberman, QualiTest's has a 12% share of the global software testing market and a 1.2% share of the global testing market. "We want to lead both of them," Zylberman says.

Zylberman adds that for this purpose, "We have prepared a global growth plan that includes both organic growth and a major effort in mergers and acquisitions. Actually, we have set up an entire section to deal just with this. This is a fairly rare direction in the Israeli market. Our aim is to do what Check Point did in the cyber sector and what Teva did in the pharmaceutical sector."

Following its strategic decision, QualiTest acquired three companies in 2017, two of them in the UK. QualiTest also acquired US company Pytheus in February 2018. The price of this acquisition was not disclosed, but Zylberman did say that the acquisition revealed today was the first for which more than $10 million was paid. QualiTest's activity in the US, which totaled $70 million before the acquisition, is now likely to grow substantially.

Up until now, Israel accounted for 40% of QualiTest's business, but this is now expected to drop. At the same time, Zylberman asserts that the Israeli market will remain significant for the company in the future. "Our biggest asset is our base in Israel. We are very close to the entire world of technology here, and Israel is usually either the first adaptor of every global trend or the second after the US. For example, we are the only company in the world that has developed a comprehensive practice for testing artificial intelligence (AI) systems. We did this because we work with the world' largest concerns in this sector, and many of them have their development centers in Israel," Zylberman explained.

Ayal Zylberman Photo: Shay Oknin
Ayal Zylberman Photo: Shay Oknin
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