Israeli Firms Exit For Record $14.48B In First Half Of 2019

Israeli startups and high-tech firms were sold for a record $14.48 billion in the first half of 2019, according to a new report released this week by Israel-based IVC Research Center and law firm Meitar Liquornik Geva Leshem Tal.

The first six months of the year had 66 exits, including one major deal where Mellanox Technologies, a US-Israeli multinational supplier of computer networking products, was acquired by graphics-processor technologies manufacturer Nvidia for $6.9 billion. Excluding this mega-deal, the total exit value would have reached $7.58 billion in the first half of the year.

The figures reflect a significant increase in total exit value in the first half of 2019 in comparison to the first half of 2018 as the number shot up from $6.49 billion to $14.48 billion.

The total exit value in 2019 sets a five-year record, reaching $116.6 million, which is almost double compared to $63 million in 2015 annually, according to the report.

There were also a total of 23 deals in amounts ranging between $100 million and $1 billion, with a total value of $18.9 billion — another five-year record. Sixteen of those companies were ones that were not public companies or had had a previous exit. The number also increased from 2018, which saw 18 deals.

“In the first half of 2019, we witnessed a significant increase in the total volume of exits, particularly those with a value exceeding $100 million. We identify a similar trend in transactions that are currently under negotiation. There is a large variety of buyers, and, in some cases, the purchase price is not only a function of an assessment of the value of the acquired technology, but also a determination of value based on revenue and profitability levels of the acquired company as a reflection of the maturity of the acquired companies,” said Adv. Shira Azran, partner at Meitar Liquornik Geva Leshem Tal Law Firm.

The report also notes that four initial public offerings (IPOs) were completed in the first half of 2019, with two sizable companies having raised significant amounts and listed in the United States. Those companies are Israeli freelance services startup Fiverr and Tel Aviv-headquartered
security policy management company Tufin.

“The two successful IPOs in the US are likely to generate interest among more Israeli companies that will want to examine initial public offerings as a path to exit and liquidity,” said Adv. Itay Frishman, partner at Meitar Liquornik Geva Leshem Tal Law Firm. “Naturally, an examination of these trends in a semi-annual period is limited, but we feel that a significant number of the exits in H1/2019 accomplished the investment model of investors and founders. We will need to wait for the full year’s results to evaluate this period compared with previous years.”

An analysis of private companies with first-time exits show that in the first six months of 2019, the value of exits in the range of $100 to $250 million soared to $1.89 billion. Exit values ranging from $250 million to $500 million increased to $1.06 billion in the first half of the year, compared to $1.04 billion in 2018, according to the report.