According to a survey conducted by the Israel Venture Capital Research Center (IVC), the dollar amount involved in private equity deals in Israel in the fourth quarter of 2010 was the highest quarterly total in two years. There were eleven private equity deals closed in the quarter, for an aggregate deal value of $769 million.
Most of the sum came from Apax Partners' buyout of Psagot Investment House Ltd. for $576 million.
Fourth quarter deal value was 165% higher than the $290 million of the third quarter, when 13 deals were closed, and 590% above the $112 million of the fourth quarter of 2009, when seven deals were closed.
In all of 2010, 51 private equity deals were closed, at a total value of $1.58 billion. The figure is more than triple the $513 million (38 deals) in 2009. Apax's buyout of Psagot represented 36% of the aggregate deal value in 2010.
In the fourth quarter, private equity deals valued at over $50 million accounted for 75% of total aggregated deal value; deals valued at $20-50 million accounted for 22%; and deals valued at under $20 million represented 3%. In the fourth quarter of 2009, all deals were valued at under $50 million.
In 2010, deals valued at over $50 million accounted for 54% of total aggregated deal value; deals valued at $20-50 million accounted for 32%; and deals below $20 million accounted for 14%. In 2009 only one deal was valued at over $50 million, representing 15% of total deal value.
In 2010, the financial sector represented 39% of total deal value, and the real estate sector followed with 10%.
In 2010, average deal value was $31 million, compared to $14 million in 2009.
In 2010, the five largest Israeli private equity deals accounted for 54% of aggregate deal value. Apax closed its buyout of Psagot for $576 million; Tene followed with a buyout of thermostat manufacturer Fishman Thermo for $85 million; Israel Infrastructure Fund (IIF) had the third largest deal - a buyout of toll highway operator Derech Eretz for $75 million; there was Ergasol's $58 million deal with solar systems installer Inbar Solar, and the next largest was FIMI's $50 million mezzanine financing of civil engineering company Tahal.
IVC research manager Marianna Shapira says that local private equity funds are planning to raise new funds in 2011. "We expect capital raised for private equity investments to reach $1.5 billion, which could boost investment activity and lead to growth in both the number and size of Israeli private equity deals."
The survey was sponsored by corporate law firm Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. (GKH).
GKH managing partner Rick Mann says that while local Israeli funds continued to account for most of the transactions, he expects foreign funds to play an active role going forward, particularly in the larger transactions.
Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2011
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