The CEO of three Israeli high-tech companies attended the investor relations conference held by Gelbart Kahana at the Tel Aviv Stock Exchange (TASE) today. The three companies - Perion Network Ltd. (Nasdaq:PERI: TASE:PERI), Pointer Telocation Systems Ltd. (Nasdaq:PNTR), and Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) - are each in a different business but they have a common denominator: they have all be recently been involved in mergers or acquisitions.
Gilat sold its US subsidiary; vehicle fleet management services provider Pointer acquired full ownership of Israeli roadside services company, Shagrir Systems Ltd., from the Recanati family, and bought out its partner in its Brazilian subsidiary; and Perion has completed the acquisition of Conduit's ClientConnect business. Yesterday, it was reported that Perion was in initial talks to acquire myThings Ltd. for $100-150 million.
"I know the first question you'll ask me: Are we acquiring myThings? The answer is that we don’t respond to rumors," said Perion CEO Josef Mandelbaum. "We want to help companies that are developing software to make money from the Internet. The technology we offer is the one we use for our own distribution, monetization, and optimization of our products."
Asked how Perion plans to reach its target of $1 billion in sales, up from projections of $400 million in 2013, Mandelbaum said, "We have a good growth rate. Assuming we make one acquisition a year over the next 3-5 years, we'll easily achieve $1 billion in sales. The better question is what the profit margin will be. It's important to have strong cash flows."
Asked about the change in Google Inc.'s (Nasdaq: GOOG) policy, Mandelbaum said, "When Google made a lot changes, people came to Conduit, which worked well with Bing. When we look forward, we see more opportunities to increase market share."
Pointer CEO David Mahlab talked about the change in the company's business focus and its transition from a customer orientation to enterprises, where the average revenue per customer is higher. "Our goal is to sell technologies in more countries, and to enter the services business in more territories," he said, and mentioned that India was a target. "Pointer is at an interesting crossroads. We're ready for growth and improvement. We had less than $100 million in sales in 2013, but we'll handsomely pass that in 2014."
As for the acquisition of Shagrir, Mahlab said, "We wanted to better leverage the synergies between the companies." He added that, despite the increase in bank debt, because of the loans to finance the acquisition. "The deal requires improving EBITDA, so that we can service our debt," he said.
Gilat had a weak year in 2013, during which it twice cut its guidance. However, it reported two big contracts in South America late in the year. "We haven’t yet published targets for 2014, but it will be better than 2013," promised Gilat CEO Erez Antebi.
Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2014
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