Israel Matzav

Israel on track for highest rate of M&A since 1994

If the current pace holds—40  Israeli companies have been acquired this year—this will be the highest rate of M&A activity since 1994. Since January 2011, acquirers have spent an aggregate $19.4 billion to acquire 107 Israeli companies. Fifty-five of these companies were venture backed and accounted for $12.8 billion in aggregate purchase price. Interestingly, 21 of these companies were acquired by Apple, Cisco, EMC/VMware, Facebook, GE, Google, IBM, Intel / McAfee and Salesforce.com. The future looks robust as well, as venture investment in Israeli companies in the first six months of 2013 alone totaled nearly $1.0 billion.

With a current population of less than eight million people (fewer than, for example, New Jersey, North Carolina or Virginia), you might wonder how Israel generates such a track record. The fact is that there are attractive acquisition targets all over the planet. EMC and others are increasingly setting their sights on Israel because the companies we find and the macro environment in which they operate can enable growth and success at global scale. 

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Serial acquirers have also recognized the opportunity that acquiring teams with shared values, visions and missions offers the combined business. As with many US-based companies, EMC, for example, has found in Israel companies that not only have extremely talented engineers and best-in-class technologies—we have also found teams that share our most fundamental corporate mandates (integrity, absolute attention to customer needs, ability to execute, etc.). That alignment enables significant post-acquisition investment, growth and business success.

The combination of intellectual horsepower, a fostering and innovative culture and environment and values and motivations that are common to those of many large multinationals is compelling for large acquirers operating at global scale. In a world with few technology hubs with this combination of attractive characteristics, Israel should continue to be on the radar screen for any serious technology investor.

Labels: Israeli high tech, mergers and acquisitions

posted by Carl in Jerusalem @ 9:27 PM