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Israel’s Q1 deal value slumps to 7-year low as cross-border M&A takes significant hit

Following a record deal count in 2019, hope for a strong start to Israel’s dealmaking in 2020 has been dashed by uncertainty around coronavirus.

The coronavirus pandemic has started to impact Israeli dealmaking, with M&A in the first quarter of 2020 ($1.4bn, 21 deals) decreasing by 57.4% and 13 fewer deals compared to 1Q19 ($3.3bn and 34 deals). The opening quarter of 2020 represents the slowest start to the year since 2013 ($1.1bn).

Cross-border M&A in particular has taken a significant downturn, with both inbound and outbound activity dropping by almost half from 1Q19 to $1.3bn and $222m, respectively. However, the deal count has remained fairly steady, illustrating that firms have been cautious in conducting high-profile deals so far this year.

Private equity activity in the country at the start of 2020 was sluggish with exits totalling USD 358m (five deals), 81% lower than the value in the same period last year. Meanwhile, buyout deals fell to USD 263m (four deals), a 75% drop compared to 1Q19.

The telecommunication sector saw the largest deal in the opening quarter of the year, with the acquisition of Gilat Satellite Networks Ltd by Comtech Telecommunications Corp for $533m. However, technology was the most targeted sector, with nine deals worth a combined $311m.

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