from the February 2011 issue


Venture capitalists see the Internet as the hottest sector in 2011. 50% of respondents in the VC Indicator Survey for the fourth quarter of 2010 by Deloitte Brightman Almagor Zohar predict that most merger and acquisition deals in the next six months will occur in this sector. The fourth quarter survey was the company's 35th VC Indicator survey.

Other hot sectors in 2011, after the Internet, are medical devices and software, with 47% and 38% of respondents predicting M&A deals in these sectors over the next six months, respectively. A majority of respondents believe that there will be M&A deals over the next months. Cleantech and telecommunications are seen as less attractive for M&A deals: 22% of respondents predict deals in cleantech and 19% predict deals in telecommunications.

46% of respondents said that one to three of their Israeli portfolio companies will move their R&D centers to India, China, or elsewhere in Asia, while 54% of respondents say that their portfolio companies will keep their R&D activity in Israel.

84% of respondents believe that at least ten Israeli high-tech companies will have an exit by June 2011, and 16% said that fewer than ten companies would have exits over this time period.

Deloitte Israel Technology, Media & Telecommunications manager Tal Chen said, "The global M&A wave will probably strengthen and affect the Israeli high-tech industry. In a reality in which leading telecom and technology players have large cash reserves and available external sources of financing, Israeli high-tech companies should realize that these are times to 'buy or be bought', and we must hope that Israeli companies will be on the buying side, too."

Reprinted from the Israel High-Tech & Investment Report February 2011

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