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IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd. IVC-MEITAR HIGH-TECH EXITS 2015 REPORT 2015 exits peak at $9.02B – 3 rd strongest year in 10 years

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Page 1: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

IVC-MEITAR HIGH-TECH EXITS 2015 REPORT

2015 exits peak at $9.02B – 3rd strongest year in 10 years

Page 2: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech Exit Highlights

• $9.02B exit proceeds in 2015 – up 16% from 2014

• 2015 average exit rises to $87 million – 43% above 10-year average

• VC-backed exits reach an outstanding $4.98B – highest in 10 years

• Software topped all exits with $3.88B, due to $1.2B Fundtech exit

• $609 million raised in 2015 IPOs – down from 2014 with an exceptional

$2.1B

• M&A deals below $1B peak in 2015, reaching $7.16 billion

• M&A deal averages on the rise due to a change in the deal-size mix

• 30% of deals involve Israeli high-tech companies on both the acquiring and

acquired side

2

Page 3: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech Exits 2006 - 2015

Israeli high-tech exits totaled

$9.02 billion in 2015, 16% up

from 2014 exit proceeds, placing

it third in the past 10 years.

The amount was a mere 7%

below 2012’s $9.75 billion, which

included the NDS $5B

acquisition, and 16% less than

the $10.75 million in exit

proceeds recorded in 2006,

which included two major deals

totaling $6B (M-Systems &

Mercury acquisitions).

A hundred and four exits were

made in 2015, 10% below the

2014 figures, but in line with the

average 100 deals per year.

10.75

4.42

2.70 2.65 2.63

5.38

9.75

6.71

7.78

9.02

116 118

87

8184

107

91

97

116

104

0

20

40

60

80

100

120

140

0

2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exit Amount $B # of Exits

$B #

3

Page 4: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech Exits* in 2006–2015 – deals below $1B

Since deals above $1 billion

largely skew data for the top

years, somewhat obscuring the

actual trend, we recalculated the

data for all deals below this

amount.

In general, there have been 6

deals of more than $1B each in

the past 10 years, including the

three mentioned earlier, as well

as the Waze acquisition in 2013,

the Mobileye IPO in 2014 and

the Fundtech acquisition in

2015.

Without these deals, the chart

clearly shows 2015 to be the

strongest exits year yet, both in

terms of the total proceeds and

the average amount per deal -

$75M, as compared with a 10-

year average of $48M.

4.69 4.42 2.70 2.65 2.63 5.38 4.75 5.52 6.75 7.77

114118

8781

84

107

9096

115

103

0

20

40

60

80

100

120

140

0

1

2

3

4

5

6

7

8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Exit Amount $B # of Exits

$B #

*Without deals above $1B

4

Page 5: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech Exits Proceeds by Deal Size Range* 2015 vs. 2014

Since there were somewhat less

deals in 2015 as compared with

2014, the reason for the

continued growth is the deal

size.

Looking at the top end of exits -

at deals above $50 million - in

2015 as compared with 2014,

we found that while the number

of deals above $500 million has

not changed, there was a

marked increase in the number

of deals within the $50 million to

$100 million range as well as in

the $100 million to $500 million

range.

The proceeds from the two

groups therefore expanded from

a total of $4.17B in 2014 to

$5.44B in 2015, an increase of

more than 30%.

In total, the three groups made

up nearly 50% of the deals in

2015, and over 76% of the

proceeds.T

otal $mT

otal # of Deals

*Deals between $50m and $1B

1,005 1,281

3,167

4,161

1,592

1,429

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2014 2015

1318

18

21

2

2

0

5

10

15

20

25

30

35

40

45

2014 2015

$50m-$100m $100m-$500m $500m-$1000m5

Page 6: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Top Ten Exits in 2015

All top exit deals for 2015

exceeded $200 million in

proceeds* - an unprecedented

cluster of top ten deals.

The $1.25 billion acquisition of

Fundtech by D+H, a global

fintech company, accounted for

almost 14% of the total exit

proceeds in 2015.

Placed second is the acquisition

of Valtech by HeartWare. Since

the bulk of the deal was a share

swap and some of it is

conditioned upon meeting certain

milestones, the amount is

expected to reach $929 million by

the time the milestones have

been met. So far, Valtech

shareholders received nearly

$400 million in HeartWare shares.

Software companies make up

50% of the top ten deals, with a

total of over $2.5 billion

Semiconductors Communications Software Internet Life Sciences

*Estimated/Expected amount

$1.2

b

$45

0m

$36

0m

$23

0m

$929*

m

$50

0m

$32

0m

$27

2m

$250

*m

$22

5m

Page 7: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech Exits by Sector 2006 - 2015 (%)

Thanks to the five deals

exceeding $200 million each,

software was the most

prominent sector in 2015 in

terms of exit proceeds with 43%

of the total amount. Twenty-nine

software deals in total garnered

$3.9 billion - the second highest

for the sector in the past 10

years. The Fundtech deal

accounted for 32% of the total

exits for the sector, and the top

five deals accounted for 65% of

software exit proceeds.

Life science exits came in

second, with 16% due to the

Valtech deal, closely followed by

Internet deals with 15% and

communications with 12%.

Over the past 10 years, the ICT

sectors maintained their top

positions, changing places

mainly among themselves, with

2009 and 2012 being the only

exceptions, when life science

exit proceeds overtook all other

sectors.

3%

3%

17%

1%

1%

1%

6%

3%

6%

29%

10%

13%

24%

11%

62%

32%

19%

12%

6%

10%

4%

2%

11%

33%

2%

5%

21%

15%

62%

23%

41%

16%

26%

14%

15%

20%

26%

43%

8%

12%

37%

31%

20%

11%

9%

35%

9%

16%

5%

2%

5%

1%

7%

6%

2%

1%

6%

18%

18%

3%

16%

17%

23%

5%

5%

18%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Cleantech Communications Internet IT & Enterprise Software

Life Sciences Miscellaneous Technologies Semiconductors

7

Page 8: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

2015 proved to be an

exceptional year for VC-backed

exit deals. Fifty-two VC-backed

exits totaled $4.98 billion, the

highest amount in the past 10

years, bypassing even 2013’s

$4.04 billion, which included the

Waze acquisition.

VC-backed exits accounted for

55% of the total exit proceeds in

2015. This was a noticeable

increase, compared with 2014’s

40% in VC-backed deals out of

the total exit amount and

somewhat below 2013’s record

of 60%.

Half of the deals completed in

2015 were VC-backed, the

highest share for such deals in

the past decade, well above

2014’s 37% or 2013’s 39% of the

total number of exits.

VC-Backed High-Tech Exits in 2006-2015

7.80

2.11

1.11 1.06 1.16

2.76

6.88

2.68

4.70 4.04

2.95

2.31

1.59 1.59 1.46

2.62

2.87

4.04

3.07 4.98

-

2.00

4.00

6.00

8.00

10.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$B

Non-VC-Backed Exits $B VC-Backed Exits $B

8

Page 9: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

IPO HIGHLIGHTS

IPO proceeds in 2015 - $609M - just 3% above the 10-year

average

Page 10: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech IPOs 2006 - 2015

Eight Israeli high-tech IPOs

accounted for $609 million, or a

mere 7% of the total proceeds,

in 2015, as compared with

2014’s outstanding 27%.

IPOs in 2015 yielded a little

more than the $591 million 10-

year average of proceeds, while

the number of deals was

somewhat below the 10 IPOs

average of the past decade.

The number of deals was lower

than expected, as many

companies shelved their IPO

plans after the worldwide IPO

markets in general, and

NASDAQ in particular, no longer

seemed to offer favorable

conditions for initial public

offerings.

Five out of the companies that

did end up choosing the IPO

route in 2015 were VC-backed.

$M #

687 693

22

127 126

361

2100

609

20

27

1

9

5

8

17

8

0

5

10

15

20

25

30

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

IPO Total $M # of IPOs

10

Page 11: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

48

561

AIM NASDAQ

Israeli High-Tech IPOs by Stock Exchange ($m) - 2015

Unlike earlier in the decade, when

TASE constituted a valid IPO

alternative for companies –

particularly in the life science sector

- all 2015 IPOs were performed

outside Israel, with the majority in

NASDAQ, similarly to the year

before, 6 of 8 deals in 2015, as

compared with 12 of 17 in 2014.

The largest IPO was by Novocure,

which raised $165 million based on

a $1.84 billion valuation, followed

by SolarEdge with $165 million

raised at a $685 million valuation –

both on NASDAQ.

Life science companies comprised

half of the deals and 55% of the

IPO proceeds in 2015.

The total valuations of the

companies at the time of their IPOs

was $3.54 billion, and stands at

$3.8 billion market cap as of the

beginning of 2016, mostly due to

SolarEdge adding nearly 68%

percent in market cap since it’s IPO

in March.

11

Page 12: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

HIGH-TECH MERGERS &

ACQUISITIONS

2015 M&A performance of $8.41B – 3rd highest in a decade

Page 13: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Israeli High-Tech M&As 2006 - 2015

Since M&As are traditionally the

more prominent form of exit for

Israeli technology startups (at an

average ratio of about 10 to 1 in

favor of M&As), the chart and

trend depicting M&As over the

past decade closely reflects the

data and trends for all exits (see

pg. 3).

Here as well, 2015 is third,

following 2006 and 2012, with

$8.4 billion in 96 deals (top

chart*), but takes the lead with

$7.16 billion, and is a definite

leader in terms of average M&A

deal size, after deals above $1

billion are excluded (bottom

chart**).

10.06

3.732.70 2.63 2.50

5.26

9.75

6.35 5.67

8.41

9691 87

8075

10291 89

99 96

0

20

40

60

80

100

120

0

2

4

6

8

10

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

4.01 3.73 2.70 2.63 2.50 5.26 4.75 5.16 5.67 7.16

94 9187

8075

102

9088 99

95

0

20

40

60

80

100

120

0

1

2

3

4

5

6

7

8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

M&A Total $B # of M&A Deals

$B#

**Without deals above $1B

*With deals above $1B

13

Page 14: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Average Israeli M&A Deals* 2006–2015 ($m)

The overall average M&A deal

reached $88 million in 2015.

Excluding deals above $1 billion,

the average ‘drops’ to $75.4

million per deal, revealing a clear

increase in deal size in 2015,

with a 29% increase from the

previous record holder – 2013

with $58.6 million*, and 58%

above the 10-year average of

$47.6 million*.

The average deal size climbed

markedly since the beginning of

2011, and the past four years

averaged $59 million*.

Throughout the past 10 years,

the average VC-backed M&A

was significantly larger than the

average M&A deal, by about

34%, dropping to an average

difference of 29% since 2011.

This demonstrates that the

change in an average deal size

is true for the entire industry,

rather than only for VC-backed

companies.

42.6 41.0

31.0 32.9 33.3

51.5 52.8

58.6 57.3

75.4

55.059.5

39.8

49.0 48.9

65.970.1

77.0 72.8

95.8

0

10

20

30

40

50

60

70

80

90

100

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average M&A Deal ($M) Average VC-Backed M&A Deals ($M)

*Without deals above $1B

The average VC-backed M&A peaked in 2015 at a whopping $95.8 million*, 51% above the

10-year average of $63.4 million*, and 24% above 2013’s $77 million*.

Despite a minor decline in 2014, as compared with 2013, the average VC-backed M&A has

been growing since 2008 at an average rate of 14%. If the trend is to continue into 2016, we

may see the average VC-backed M&A deal surpass the $100 million mark by the end of the

year.

14

Page 15: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

M&A Deals: Deal Size Mix (# of deals vs. $m)

The reasons for the up-trend in

the average M&A size is easily

explained by breaking the deals

into size ranges. The analysis

shows a clear upward shift of the

deal size along the range in all

groups.

2015 has seen M&A deals above

$50 million increase both in

numbers and total proceeds, at

the expense of smaller deals. The

number of deals below $10M

dropped from the previous

average - 53% of the deals - to

less than a third of all deals in

2015 (32%).

Deals ranging between $10M and

$50M dropped in number as

compared with 2014, but brought

12% more in proceeds, implying

that the deals in this group were

on the higher end of the range,

compared to 2014.

In the top three groups in 2015,

both the number of deals and the

proceeds topped the 2014 figures.

$m

#

5347 46

51

37

4954

45 45

31

1823 26 18

21

31 19

2531

27

9 9 8

1

10

5

55

5

17

13 12 7

107

16

1011

1618

3

1

3 3

23

0

20

40

60

80

100

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

383 509 574 401 458 751 404 560 644 722 562 638 606 704 387

342 331 425 1,200

2,134 2,481

1,399 2,051

1,254

3,504

2,475 2,571 2,920

3,734

6,851

517

6,434

2,816 1,592

2,679

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

<$10m $10m-$50m $50m-$100m $100m-$500m >=$500m15

Page 16: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Total number of M&A deals vs. deal amounts by deal size

(2006-2015)M&A deals in 2015 also followed

closely what we call the deal size

“hump” paradox of Israeli high-tech

exits, where the bulk of the dollar

proceeds is generated by deals in

the $100M to $500M range, more

than the capital generated in deals

above $500M and $1B combined.

The chart on the right shows that this

trend holds true for all deals in the

past 10 years, reflecting an

additional observation for 2015 –

deals above $1B tend to generate

more dollar proceeds than deals

between $500M and $1B, although

there are usually more deals in the

latter group.

Lastly, while small deals below $50M

tend to make up the majority of deals

(up to 77%), they generate less than

12% of proceeds, fixing $50M dollar

deals at the equator where the

trends flip. It may be interesting to

observe how this model changes, if

and when the average M&A

continues to climb.

Deals ranging $100m-

$500m accounted for 43% of

total dollar volume

542 542 1,515

4,130

5,774

25,912

8,019

13,504

430

79

114135

81

128

11 5

0

50

100

150

200

250

300

350

400

450

500

-

5,000

10,000

15,000

20,000

25,000

30,000

<5 5-10 10-20 20-50 50-100 100-500 500-1000 >1000

M&As Total $M # of M&As

$m #

*Without deals above $1B

16

Page 17: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

M&As – THE ACQUIRER SIDEIsraeli high-tech companies continue playing a role on the

spending side of the M&A equation

Page 18: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

2015 High-Tech M&As: Acquirers by Country of Origin

An analysis of acquiring companies

– the companies on the other side

of the exit deal by geography -

revealed that, as expected, North

American companies are the

largest prospects for Israeli M&As –

with 43 acquirers in 47 deals from

the US, and 3 deals for two

Canadian acquirers – accounting

for 53% of the deals, up from a

44% share in 2014.

Israeli companies were second in

line as acquirers, with 30% of the

deals involving Israeli companies

on both sides of the deal. The

number reflects a slight decline

compared to 2014’s 34%.

Companies from the UK and

Europe placed third with a total of

10% of the deals, while Asian

investors placed fourth at 5%

(including East Asian and Indian

acquirers).

53%

30%

6%

3%

4%2%

United States & Canada Israel United Kingdom East Asia

Mainland Europe & Russia India Brazil Australia & New Zealand

18

Page 19: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Acquisition Made by Israeli High-Tech Companies 2006-2015

Analyzing all acquisitions made by Israeli high-tech

companies, we revealed that the number of local tech

companies to choose M&As as a form of expansion has

remained steady in the past two years at 48 companies,

though the number of deals initiated by Israeli high-tech

companies in 2015 was up nearly 11%, to 72 deals, the

second highest in a decade.

The volume of deals has sky-rocketed from $3.2 billion in

2014 to $48.2 billion in 2015, a direct result of Teva

Pharmaceuticals aggressive expansion strategy over the

past year, with five acquisitions of foreign companies, that

cumulatively accounted for 95% of Israeli acquisitions this

year.

Teva wasn’t the only company to pursue global expansion

plans. Frutarom, a worldwide leader in the food ingredients

and extracts market, was another dynamic player closing 12

deals – nearly 17% of the number of deals made by Israeli

acquirers in 2015 – though spending a fraction of Teva’s M&A

expenditures, at nearly $330 million. Ten other Israeli high-

tech companies made two acquisitions in 2015, further

demonstrating that Israeli companies are indeed seeking

growth and expansion.

Perhaps, more interestingly, in the past two years these

expansion efforts are very clearly focused on local companies:

more than $1 billion were spent by Israeli high-tech

companies on M&As in Israel in either of the past two years

(bottom chart).

41 79 68 53 53 61 35 47 65 72

37

5652

36 39 41

28

36

48 48

0

10

20

30

40

50

60

70

80

90

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

# of Acquisitions made # of Israeli High-Tech Acquirers

163

840

55

254

445326

199132

1,165 1,180

0

200

400

600

800

1000

1200

1400

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$M spent in two-side Israeli high-tech M&As

19

Page 20: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

THE NON-EXIT ALTERNATIVES

FOR LIQUIDATIONTechnology buyouts are an alternative exit rout for investors

while an option for the company to remain independent

Page 21: IVC-MEITAR HIGH-TECH EXITS 2015 REPORT Exits Report 2015-Final.pdf · Fundtech by D+H, a global fintech company, accounted for almost 14% of the total exit proceeds in 2015. Placed

IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

Exits vs. Technology Buyouts – liquidation without exit

When discussing exits in this report, we use the term in

accordance with the globally accepted terminology that

reflects a company’s exit strategy as indicating either an

initial public offering (IPO) or a merger/acquisition deal.

These types of deals provide liquidation not just for the

company’s shareholders, but for entrepreneurs, employees

and the company itself.

In some of these cases, the company itself ceases to exist

as an independent entity, such as after an acquisition, where

the company becomes a division of the acquiring

corporation, or a merger, where an entirely new company

emerges from the two (or more) merging entities.

IPOs allow shareholders’ liquidation, but turn a private

company into a public one. Some management teams and

boards find this route unsuitable for their needs, opting for

another form of shareholder liquidation that allows the

company to remain an active, independent, private

company.

While they are sometimes referred to as “acquisitions”,

purely speaking, buyouts performed by private equity

investors are not exits. Although some or all of the previous

investors of the company are able to liquidate and possibly

profit from the sale, management and the entrepreneurs are

able to keep the company running independently, with a new

board of directors in place, allowing the company a chance

to grow with possibly less shareholder pressure.

In some cases, buyouts are a way for a public company to

go back to the relative anonymity of a private company

without having to go through an unnecessary reputation-

damaging delisting. For some companies, it is not about

problematic trade volumes or generating market interest –

they get plenty of those – but it is about the freedom of

management to go about “navigating the ship” without

having to deal with the various implications of being a public

company, as they keep growing their business.

Buyouts are a win-win-win situation, when a company is

acquired but remains active and continues to grow: the

current shareholders get some return on their equity while

not having to wait too long for liquidation, while the new

investor gets a chance to take the company to the next

level.

Who Exits ? Technology buyouts aren’t exactly M&As

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IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

2015 High-Tech Buyouts

2015 has seen seven technology

buyouts, where Israeli or Israel-

related companies were

“acquired” by private equity

investors, for a total of $1.1

billion, dominated by two deals,

where public companies were

bought out by private equity

funds.

Lumenis’ was bought out for

$510 million by Chinese fund,

XIO. ClickSoftware has been

bought out by the European

branch of Francisco Partners for

$438 million.

2015 lagged behind 2014’s

$1.74 billion in 11 deals, lead by

a $900 million buyout of

Answers Corp., formerly an

Israeli company, by Apax Global,

and Nordic Capital’s buyout of

Vizrt – yet another ex-public

company that became private as

a result of the deal.

Miscellaneous Cleantech Software Internet Life Sciences

$51

0m

$43

8m

$59

m

$50

m

$21

m

$10

m

$6.3

m

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IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

About this report:

• This report contains information derived from the IVC-Online Database

• The report summarizes exits of Israeli and Israel-related high-tech

companies in merger & acquisition deals and initial public offerings in 2006-

2015

• VC-Backed Deals referred to in this report, represent exit deals where at

least one venture capital fund was involved as a pre-exit investor.

• The report references M&A deals where Israeli high-tech companies acted

as the acquiring party.

• The last section of the report refers to buyouts performed by private equity

and financial investors in Israeli and Israel-related high-tech companies.

• Complete information on M&As and public offerings will be published in IVC

High-Tech Yearbook 2016 due April 2016.

All Rights Reserved. Copyright of IVC Research Center Ltd. 2016

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IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

About Meitar Liquornik Geva Leshem Tal:

Meitar Liquornik Geva Leshem Tal is Israel’s leading international law firm and an undisputed leader in the technology

sector. The firm's Technology Group numbers over 100 seasoned professionals who specialize in representing

technology companies, cooperating with attorneys from complementary practice areas, such as taxation, intellectual

property and labor law, and dozens of attorneys from other practice areas.

Meitar has played a significant role in the majority of the largest and most prominent transactions recorded in the Israeli

technology sector, including mergers and acquisitions and public offerings on foreign stock exchanges.

Meitar is uniquely qualified in the entire corporate “life cycle”. Meitar advises clients from their initial establishment

through raising seed capital to successful exit.

Alongside emerging companies, Meitar represents high growth companies, and has represented the majority of the

Israeli technology companies that have carried out initial public offerings in the US, as well as a diverse range of

multinational companies from the US, China and Europe.

The firm represents most of the major venture capital funds active in the Israeli technology sector, and played an active

role in formation of some of the most successful and well-known funds in the industry.

Meitar is unique among Israel’s largest law firms in the number of partners who have worked for major international law

firms in the US and elsewhere. The firm maintains close working relationships with leading firms from around the world

to provide our international and Israeli clients with the highest level of service and quality – in line with the finest law

firms from across the globe.

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IVC-Meitar 2015 Exits Report Prepared by IVC Research Center Ltd.

About IVC Research Center

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital and

private equity industries.

IVC owns and operates the IVC-Online Database which showcases over 14,000 Israeli technology startups, and

includes information on private companies, investors, venture capital and private equity funds, angel groups,

incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions,

founders, key executives and R&D centers.

Among IVC products and publications are:

• IVC-KPMG Quarterly Survey, which for over 15 years has been analyzing capital raising trends by Israeli high-tech

companies, and the most comprehensive guide to Israeli high technology and venture capital

• The IVC High-Tech Yearbook the Israel High-Tech, Venture Capital, Startup and Private Equity Directory; surveys;

research papers and reports; and interactive dashboards.

• IVC Industry Analytics – analysis, research and insights into the status, main trends and opportunities related to

exits, investments, investors, sectors and stages

IVC products and services are used regularly by high-tech companies, venture capital funds, private investors, financial

investors and institutions, as well as public entities such as the Central Bureau of Statistics, the Bank of Israel and the

Office of the Chief Scientist at the Economy Ministry. IVC’s information is used by key decision-makers, strategic and

financial investors, government agencies and academic and research institutions in and outside of Israel.

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