US investment bank Revolution Partners, which specializes in mergers & acquisitions and private capital fundraising for IT start-ups, has signed a cooperation agreement with Israeli financial services group Magnolia Capital Partners, which will represent it in Israel.
Revolution Partners co-founder and managing director Peter Falvey visited Israel last week. He founded the bank six years ago and before that he managed East Coast software and business-to-business e-commerce investment banking for Robertson Stephens.
Revolution Partners is the fourth investment entity to collaborate with Magnolia Capital. It has been involved in 55 deals to date in all areas of technology, including software, Internet, and services to telecommunications, semiconductors, wireless communications digital media and storage. Among the deals it led in 2006 were the acquisition of Israeli software company Demantra by Oracle Corp. (Nasdaq: ORCL), and the strategic investment by Fortissimo Capital in RadView Software Ltd. (OTCBB:RDVWF). It also advised on the acquisition of Top Tier, which was sold to SAP AG (NYSE: LSE; XETRA: SAP) in 2001 for $400 million, and it raised $30 million in a private placement for Vista Print (the largest private placement in the last five years). "We see ourselves focusing chiefly on private capital raising for technology companies. We manage medium-size deals ranging from $30 million to $300 million," Falvey told "Globes."
Globes: Is there a potential business for brokers leading financing rounds for Israeli companies?
Falvey: "There are companies that need access to capital which they look for in the US. These sums are larger than the standard deal in Israel. The companies I will be aiming for are ones with $10 million in revenue, and we can help companies like these. We have access to venture capital investors and others. We often see Israeli companies at these stages opting for a listing on London’s Alternative Investment Market (AIM), and I feel that they would do better by raising a further $20-50 million privately instead.
"On the other hand, there are a good many private equity investors that are looking for investments outside the US, and Israel is definitely an interesting target. Deal prices in the US are higher and companies can find some interesting companies here."
Which fields do you usually operate in?
"Technology in general. We've done deals in software, IT, telecommunications and storage. We're a bank that specializes in working exclusively with technology companies."
Published by Globes [online], Israel business news - www.globes.co.il - on June 11, 2007
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