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Tech deals continue to dominate Israeli M&A – with dealmaker confidence in the sector up

Mergermarket, the leading provider of M&A data and intelligence, alongside White & Case note that TMT will be the most appealing sector in Israel this year, according to 90% of respondents in a survey of senior-level executives at Israel-based companies and private equity firms. 

·       Tech dominates Israeli M&A with 10 deals worth USD 1.2bn in 1Q19

·       General M&A in Israel slumped last quarter

·       Cybersecurity deals expected to be in demand in 2019 

 

Mergermarket, the leading provider of M&A data and intelligence, alongside White & Case note that TMT will be the most appealing sector in Israel this year, according to 90% of respondents in a survey of senior-level executives at Israel-based companies and private equity firms. 

This is additionally reflected in Mergermarket research, which reveals how technology dominated Israeli M&A, accounting for 10 deals worth a combined USD 1.2bn in 1Q19.  It also accounted for the highest share of deal value (40.8%).  The data and survey were announced at Mergermarket’s Israel M&A and Private Equity Forum 2019 held at the Carlton in Tel Aviv on 15 May. 

 

 

 

Despite TMT’s promising performance, Israel’s USD 3bn total M&A value slumped last quarter to almost half of the USD 5.1bn recorded one year ago.  

 More than half of the survey’s respondents expect cybersecurity firms to be in demand this year, according to Mergermarket and White & Case’s survey, while 27% expect mobile technology specialists to gain in popularity in 2019. The first quarter saw two Israeli cybersecurity companies - NSO Group Technologies and Luminate Security – taken over. 

Jonathan Klonowski, Research Editor, EMEA at Mergermarket commented: “Foreign investment, particularly from the US, remains a key driver behind Israeli M&A due to its tech-driven business environment and the amount of high-quality assets. Given the need for corporates to stay ahead of the latest innovative developments, Israeli M&A should continue to active through 2019”.

Colin Diamond, Partner, Head of Israel Practice at White & Case commented: “We are continuing to see high levels of activity across both M&A and capital markets landscapes.  We see intense interest from clients outside of Israel, keen to invest in hot sectors such as technology and healthcare, but also from our Israeli clients who want to expand internationally.  We expect to continue to see these levels of activity in 2019.”

Doron Gurevitz, Head of Israel, Global Advisory, Rothschild & Co commented: “Israel has established itself as a world class leader across global technology markets and investors are seeking opportunities to access innovation through M&A. The technology and cybersecurity sectors were key driving forces of Israeli M&A transactions in Q1 2019. We expect to see this trend continue for the remainder of 2019”

Sharon Amir-Senior Partner and Head of M&A and Private Equity and Tuvia Geffen- Partner and Head of International Capital Markets Practice at Naschitz Brandes Amir commented: “The increased M&A volume of 2018 has continued into early 2019, with Q1 2019 off to a strong start and the deal pipeline indicating that 2019 is set to continue at a strong pace. In addition to the hi-tech M&A deals that traditionally lead the Israeli cross-border M&A market, global consolidation trends also have triggered large public Israeli M&A deals in a broader range of sectors, such as the food and beverage and consumer industries and other traditional industrial companies.This is as significant public Israeli companies with years of independent operations choose to consolidate with leading global players to compete effectively in the market."

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