Apax, JMI buy Paradigm Geophysical for $1b

The energy exploration software company, founded in Israel, was acquired by Fox Paine for $100 million in 2002.

Paradigm Geophysical Ltd.., a developer of software for the oil and gas exploration industry, has been acquired by Europe's Apax Partners and JMI Equity of the US for $1 billion in cash from US private equity firm Fox Paine & Company.

Fox Paine acquired Paradigm Geophysical, founded in Israel, in 2002 for $100 million. Paradigm Geophysical has undergone several upheavals over the years, and, in 2006, Fox Paine considered refloating the company, raising $200 million at a value of $500 million. Paradigm Geophysical vice chairman and CEO Eldad Weiss founded the company, which has offices and a development center in Herzliya Pituah.

Paradigm Geophysical, founded in 1987, was initially supported by Israeli venture capital funds, including Genesis Partners and Challenge Fund - Etgar, and held its IPO on Nasdaq in 1998. The share price crashed 70% in 2001, and the company's crisis prompted the sale to Fox Paine the following year. In 2006, Fox Paine CEO Saul Fox told "Globes" that when it acquired Paradigm Geophysical, it was very difficult to secure financing to cover the company's $20 million debt to Bank Hapoalim (TASE: POLI), and that Fox Paine ultimately covered the debt itself.

In that interview, Paine added, "We were very lucky with this company." Today, Fox Paine is making a ten-fold return on its investment after ten years.

Published by Globes [online], Israel business news - www.globes-online.com - on June 11, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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