PwC Israel
Exit Report 2015
The PwC Israel 2015
Hi-Tech Exit Report
Another amazing year for Israeli Hi-Tech exits
M&A is up 44%
www.pwc.com/il
PwC Israel
Exit Report 2015
Opening remarks
Israeli hi-tech continues to provide
investors with an impressive string of
exits, with total deal value of more than
$5bn for the fifth straight year. The Israeli
market seems to have grown desensitized
to the news of yet another exit. But, that's
quite unjustified, because this is actually
quite amazing, on a global scale.
Rubi Suliman
Hi-Tech Leader
PwC Israel
More M&As, less IPOs
The growth of M&As this year was robust,
with an increase from $5bn in 2014 to
$7.2bn in 2015. Meanwhile, IPO activity
by Israeli companies dimmed in 2015,
from $9.8bn for 18 IPOs in 2014 to $3.5bn
for 8 companies in 2015, mainly due to
effect of the $5.3bn Mobileye IPO in 2014.
The decline in IPOs is driven by several
factors. First, the window of opportunity
has been closing in the US and the UK.
It is not completely closed just yet, but
certainly narrowed in 2015. Second,
cheap private money is a very significant
contributor to the decrease in IPOs. Only
recently we have witnessed companies
that were unable to raise in IPOs at the
same valuations as they did in private
placements. When the public markets do
not give the higher valuation, the number
of IPOs is set to go down. Only recently
we have seen the Square IPO, which went
public at a lower valuation than reflected
by its last private round. Square is not alone
in this. Quite a few Israeli companies find
it easier to raise private capital with higher
valuations, which make it less attractive to
go public, if at all. Finally, decision makers
in the high-tech industry no longer seek
small-to-medium IPOs and want to grow
companies to unicorn status before listing,
which requires a higher level of company
maturity, and takes longer to achieve.
The increase in M&A deals is virtually fully
explained by an increase in the number
of deals, from 52 to 62. This increase is
driven by continued appetite by large
multinationals to use their massive cash
holdings to acquire innovative future
technologies as the best way to preserve
value in the current environment of
super-low returns. Some of these funds
are actually "locked" in tax structures that
make the acquisition strategy seem even
more attractive.
Who's buying?
Israeli hi-tech remains a focal point for
international M&A deals. We have grown
accustomed to the presence in Israel of
global giants like Facebook, Apple, IBM,
Qualcomm, Microsoft, Intel and more,
which is actually far from being obvious.
This year we have seen some new players
in the local M&A market such as ARM,
Amazon and Zynga. Israeli companies,
such as Checkpoint, Mellanox, IronSource
and Wix are also actively or potentially in
on the action. The most active buyer by far
is Microsoft with 5 acquisitions in 2015. In
2015, 56 buyers acquired 62 companies,
versus 49 buyers that acquired 52
companies in 2014.
While ranked top in terms of the number
of delegations to Israel and interest they
show, the Chinese are still on the sidelines
and have not made significant acquisitions
of Israeli hi-tech companies. However,
the Chinese do make investments in
Israeli hi-tech, and have made quite a
few acquisitions in other industries, so it's
possible to assume that it is a matter of
time before they get into the game.
Looking ahead
The expected further hike of interest rates
in the US and the belief that the economy
is recovering out of "the seven lean years"
since 2008, may impact the availability
and alternative price of private money,
and indirectly impact exits in Israel, given
other investment opportunities. But, in
fact, there are arguments that actually
show why those changes can even
intensify M&A activity in Israel. Be it as
it may, such transitions take time to play
out, and so, it is fair to assume that 2016
will also be buzzing with M&A activity.
The amounts currently invested in Israeli
hi-tech is unprecedented, and it seems
that this will bear fruits in the form of
more innovative companies that will keep
Israeli hi-tech rolling forward. The bottom
line is that at this juncture, Israeli hi-tech
have all ingredients to continue producing
larger than ever exits.
Wishing you a great year,
Rubi Suliman
Hi-Tech Leader
PwC Israel
www.pwc.com/il
PwC Israel
Exit Report 2015
Exits by years
Total annual exits IPO & M&A 2007-2015 ($ in millions):
Opening remarks
16,000
300
14,850
212
14,000
250
Exists by years
12,000
Exits by sector
170
200
10,000
111
8,000
•General
32
6,000
35
5,078
84
88
3,522
4,000
51
73
2,572
2,681
2,000
Exits by deal size
7,643
150
81
40
•Detailed
5,567
100
70
63
50
1,176
70
50
45
23
0
0
2007
2008
2009
2010
Total amount
Annual IPO vs. M&A
Buyers by geography
2011
Number of deals
2015
Average deal size
2010
2011
2012
2013
2014
2015
3,522
2,681
2,572
1,176
5,078
5,567
7,643
14,850
10,695
Number of deals
88
84
73
23
63
50
45
70
70
Average deal size
40
32
35
51
81
111
170
212
153
Total annual exits - M&A only
2011 - 2015 ($ in millions):
600
546
9,826
500
435
8,000
6,000
3,476
4,000
8
2014
Total amount
2015
Number of deals
Average deal size
6,000
5,000
4,000
0
7,219
7,000
300
100
18
8,000
400
200
2,000
0
2014
2009
Total annual exits - IPO only
2014 - 2015 ($ in millions):
10,000
2013
2008
$ in millions
12,000
2012
2007
Total amount
Contact
www.pwc.com/il
153
10,695
6,420
5,078
81
5,567
165
111
200
5,024
116
150
97
100
3,000
2,000
250
63
50
1,000
39
52
62
50
0
0
2011
2012
Total amount
2013
Number of deals
2014
Average deal size
2015
PwC Israel
Exit Report 2015
Exits by sector (General)
Opening remarks
Exists by years
Exits by sector
•General
•Detailed
Exits by deal size
Annual IPO vs. M&A
Buyers by geography
Contact
Total annual exits by sector (IPO & M&A) 2013 - 2015
($ in millions):
6,000
5,000
4,000
3,000
2,000
1,000
0
2013
2014
2015
Life Sciens
Internet
IT & Enterprise
Software
Communications
Semiconductors
Cleantech
Miscellaneous
Technologies
1,276
2,251
3,574
554
1,841
672
1,798
3,084
4,511
1,116
1,444
267
812
5,690
493
10
430
763
1
110
416
Communications
3%
Semiconductors
Cleantech
5%
7%
Miscellaneous
Communications
10%
Cleantech
3%
2014
2014
www.pwc.com/il
Internet
6%
Internet
12%
Semiconductors
38%
Miscellaneous
Technologies
1%
Technologies
4%
Life Sciences
33%
IT & Enterprise
Software
21%
Life Sciences
15%
2015
2013
2015
IT & Enterprise
Software
42%
PwC Israel
Exit Report 2015
Opening remarks
Exists by years
Exits by sector
•General
•Detailed
Exits by deal size
Annual IPO vs. M&A
Buyers by geography
Contact
Exits by sector (Detailed)
Total annual exits by sector (IPO & M&A) 2006 - 2015
($ in millions):
Communications
Cleantech
Cleantech
Communications
1,600
180
1,400
160
1,200
1,000
800
600
400
200
0
900
300
800
140
700
120
600
100
500
80
400
60
300
40
200
20
100
250
200
150
100
50
0
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015*
Total amount
9
95
87
593
0
25
10
35
430
763
5
Number of deals
5
3
6
3
0
1
1
1
5
3
53
Average deal size
2
32
15
198
0
25
10
35
86
254
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015*
Total amount
574
537
234
338
302
768
1,116
1,206
1,444
267
Number of deals
20
25
18
14
4
11
10
8
9
Average deal size
29
21
13
24
75
70
112
151
160
*No large deals were closed in the communications
sector, compared to 2014 with the $900mn Viber deal.
0
*Growth in the Cleantech sector in 2015 driven by
the SolarEdge IPO.
Internet
Internet
2,500
250
2,000
200
1,500
150
1,000
100
50
500
0
Total amount
www.pwc.com/il
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015*
122
444
235
27
162
1,480
554
2,142
1,841
672
Number of deals
3
11
11
12
5
15
10
9
16
18
Average deal size
41
40
21
2
32
99
55
238
115
37
0
*No large, exceptional deals were closed in the internet sector,
compared to 5 IPOs with total value of $1.4bn.
PwC Israel
Exit Report 2015
Opening remarks
Exists by years
Exits by sector
Exits by sector (Detailed)
Total annual exits by sector (IPO & M&A) 2006- 2015
($ in millions):
IT & Enterprise Software
Life Sciences
IT & Enterprise Software
Life Sciences
8,000
200
•General
7,000
180
•Detailed
5,000
120
2,500
300
4,000
100
2,000
250
Exits by deal size
3,000
80
1,500
200
Annual IPO vs. M&A
Buyers by geography
Contact
160
6,000
140
40
1,000
450
400
3,000
350
2007
2008
2009
2010
2011
2012
2013
2014
2015*
6,669
1,395
1,088
416
347
945
1,798
1,332
3,084
4,511
Number of deals
38
23
26
17
6
22
10
11
23
Average deal size
175
61
42
24
58
43
180
121
134
150
1,000
100
500
20
2006
Total amount
500
3,500
60
2,000
0
4,000
0
50
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015*
Total amount
724
220
920
778
18
488
1,276
2,471
2,251
3,574
29
Number of deals
16
11
11
15
3
6
9
13
14
8
156
Average deal size
45
20
84
52
6
81
142
190
161
447
*Growth in the corporate IT and software in 2015
was mainly driven by a significant growth in the
number of deals
0
*Growth in the life sciences sector in 2015 was
mainly driven by the $1.8bn Novocure IPO.
Semiconductors
Semiconductors
Semiconductors
6,000
3,000
6,000
3,000
5,000
5,000
2,500
4,000
4,000
2,000
3,000
2,000
1,500
3,000
1,500
2,000
2,000
1,000
1,000
1,000
1,000
500
500
0
0
0 0
Total
amount
Total
amount
www.pwc.com/il
2,500
20062006 20072007 2008 2008 2009 20092010 2010
2011 2011
2012
80 80 419 419 341 3411,046 1,046
812
1,883
1,883 672 672
Number
of deals
7 7
Number
of deals 5 5
5
5
6
Average
dealdeal
sizesize 377 377
Average
16
16
70
96 96
6 3
70 114
2013
2012
2014
2013
2015*
2014
458
812
5,690
458
493
5,690
2015*
493
3 4
4 8
8 3
32
24
4
114261
261101
153
101
2,845
153
123
2,845
123
*In 2014, $5.3bn are attributed to the Mobileye IPO.
PwC Israel
Exit Report 2015
:‫מספר אקזיטים לפי גודל עסקה‬
Opening remarks
Exits by deal size ($ in millions):
Exists by years
40
Exits by sector
35
•General
•Detailed
34
30
25
22
23
25
20
Exits by deal size
15
Annual IPO vs. M&A
10
Buyers by geography
‫מיזוגים ורכישות מול הנפקות לראשונה‬
5
18
17
11
3
5
5
5
5
4
2
3
0
Contact
<$10M
$10M to $50M $50M to $100M $100M to $500M $500M to $1B
2013
3%
2014
2014
2014
1
2
>$1B
2015
3%
1% 7%
4%
33%
0
26%
7%
2015
2015
49%
<$10M
36%
$10M to $50M
$50M to $100M
$100M to $500M
7%
<
www.pwc.com/il
$500M to $1B
24%
>$1B
PwC Israel
Exit Report 2015
Annual IPO vs. M&A
Opening remarks
Exists by years
Exits by sector
Total amount
($ in millions)
(‫סה"כ עסקאות )במיליוני דולר‬
Number
of deals
‫מספר עסקאות‬
IPO, 8, 11%
•General
•Detailed
Exits by deal size
Annual IPO vs. M&A
IPO, 3,476,
32%
70
10,695
M&A, 7,219,
68%
M&A, 62,
89%
Buyers by geography
Contact
Average deal
($ in
millions)
: ‫גודל‬
(‫ דולר‬size
‫במיליוני‬
) ‫ממוצעת‬
‫עסקה‬
500
450
400
350
300
250
200
150
100
50
www.pwc.com/il
0
M&A, 116
IPO, 435
PwC Israel
Exit Report 2015
Buyers by geography
Opening remarks
Exists by years
(‫דולר‬Total
‫במיליוני‬amount
) od
‫עסקאות‬
‫סה"כ‬
Number
deals of
M&A deals ($ in millions)
317, 4%
Exits by sector
738,
10%
•General
•Detailed
Exits by deal size
Annual IPO vs. M&A
www.pwc.com/il
465, 7%
7, 11%
7, 11%
3, 5%
3, 5%
16, 26%
16, 26%
7,219
62
5,700, 79%
36, 58%
36, 58%
Buyers by geography
Contact
‫עסקאות‬
‫מספר‬deals
Number
of M&A
Europe ‫אסיה‬
Asia
‫אירופה‬
‫ב‬USA
"‫ארה‬
Israel
‫ישראל‬
‫אירופה‬
‫אסיה‬
‫ארה"ב‬
‫ישראל‬
Company Name
Sector
Adap.tv, Inc
CyOptics, Inc
dbMotion Ltd
Given Imaging Ltd
Intucell Ltd
PrimeSense Ltd
PROLOR Biotech, Inc
ScaleIO, Inc
Internet
Commun
Life Scien
Life Scien
Commun
Semicond
Life Scien
IT & Enter
Trusteer Ltd
IT & Enter
Software
Software
For further information
Rotem Geslevich
Head of Hi-Tech Business Development
Office: +972-3-7955029
Email: [email protected]
Tamar Yaron-Moldovan
Hi-Tech Business Development Manager
Office: +972-3-7954572
Email: [email protected]
*The report refers to both asset purchase and share purchase M&A deals of Israeli companies or companies that
have a significant Israeli affiliation.
** The report refers only to exits with a value greater than $5 million and exits where the exit amount was made
public.
***2007-2015 data based on IVC database.
An exit is defined as either closing of a share acquisition deal asset acquisition deal or activity by a target
company for cash or shares of the buyer. An exit is also an initial public offering (IPO) on any stock exchange.
IPO values are based on IPO pricing.
IPO values in this report are based on market caps of companies on the date of IPO pricing.
© 2015 Kesselman & Kesselman. All rights reserved.
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