The Israeli technology industry posted 587 exits over the past decade – companies that were sold or held stock exchange offerings – with a total of $71 billion. If follow-on deals, companies acquired more than once or acquired after holding an offering, are taken into account, the amount rises to $108 billion.
The value of exits in 2019, according to a new report by financial consultancy company PwC, comes to $9.9 billion, double the value in 2018 and 33% more than in 2017. PwC excluded 10 follow-on deals, among them the acquisitions of Mellanox, ClickSoftware Technologies, and Lumenis. If these deals are included, the value of deals in 2019 rises to $22 billion. While the value of deals has fluctuated over the years, the number of deals in the past year, 80, was the highest in the past decade. 67 of these deals were mergers, and 13 were offerings.
There was one deal amounting to over $1 billion in 2019 – Intel’s acquisition of Habana Labs for $2 billion. Three deals were in the $500 million-$1 billion range, and 20 more were in the $100-500 million range. There were 24 deals of over $100 million each in 2019, compared with 17 last year and 23 in 2018.
Half of the total value of deals, $4.5 billion, was in the computing services and software for corporations sector. Deals in the Internet sector totaled $1 billion, deals in the life sciences totaled $1.7 billion, and deals in the chips sector totaled $2.3 billion (featuring the Habana Labs deal). Other prominent deals this year were two acquisitions by Palo Alto Networks: Demisto and Twistlock, for $560 million and $410 million, respectively, and McDonald’s acquisition of Dynamic Yield for $300 million. The large-scale merger of Israeli companies Taboola and Outbrain was not included in the report. There were three prominent IPOs in 2019: Fiverr, which developed a trading platform for freelancers; cybersecurity company Tufin; and medical devices company InMode.
The US was again the leading acquirer of Israeli companies with 48 deals, 60% of the total, amounting to $8.9 billion. Israeli companies made 11 acquisitions, but their aggregate value was only $230 million.
Commenting on the figures, PwC Israel high-tech partner Yaron Weizenbluth said, “The local technology market has become an efficient machine for entrepreneurs supported by, and supporting, a professional and focused ecosystem. Early in the decade, it was said that one of the weaknesses of Israeli entrepreneurs was their haste to sell. Now, at the end of the decade, Israeli entrepreneurs have gained more confidence than ever before, and are willing to go a long way before making a decision.
“On the other hand, it is impossible to ignore the fact that the value achieved by many of the technology companies arouses quite a few questions. To this should be added a trend, the consequences of which cannot be assessed at this stage: the decline in the amount of funding raised by startups in the early stages, as well as uncertainty about future trends in the global economy.”