from the January 2015 issue

Record $15b Israeli high-tech exits in 2014

In 2014, deals involving Israeli and Israel-related companies that were acquired or merged were valued at $4.84 billion, 22% down from $6.23 billion in 2013. Analysis of M&As by deal size reveals a 45% rise in the number of deals ranging from $100 million to $500 million in 2014. 16 M&As accounted for $2.91 billion, down from 11 deals in 2013 worth $2.57 billion. Five deals ranging between $50 million and $100 million brought in $425 million, 73% down from four deals in 2013 worth $246 million. The number of M&As ranging from $10 million to $50 million rose 13% from 2013.

Further analysis of exits found that proceeds from deals ranging from $50 million to $100 million soared 156% from 2013. The increase reflected a large number of IPOs - 8 out of 13 exits - accounting for 58% of total proceeds within the range. Exits worth less than $5 million fell 36%, continuing the trend from 2013.

Changes in the deal size appear to be responsible for two contrasting trends, the research found. On the one hand, the average M&A deal in 2014 fell to $59 million from $62 million in 2013, in deals below $1 billion. On the other hand, in 2014 there was a notable jump in the M&A return on equity ratio, reaching an average of 6.22 from 4.29 in 2013. The calculation is made as a ratio between capital from M&A exits and the total capital raised by companies prior to their exit. The measure reflects the relative value received by company investors following a company

Reprinted from the Israel High-Tech & Investment Report January 2015

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