Israeli high-tech exits totaled $7.44 billion in 2017, 110% more than the $3.5 billion in exits in 2016. An exit is defined as a merger, acquisition or initial public offering (IPO).
Year-end figures for Israel’s high-tech industry released by PriceWaterhouseCoopers (PwC) Israel (excluding exits of less than $5 million) reveal that the number of mergers and acquisitions (M&As) involving Israeli companies increased 9 percent over 2016 to 131, and 9% of those deals were worth $400 million to $1 billion.
The average price of M&A deals went down 27% in 2017 to $142 million, the first decline in five years.
Nearly half the exits cited in the report were in the computing and software sector, including cybersecurity technologies. Life-sciences companies accounted for about a quarter of the exits, Internet companies 12%, and communications companies 9%.
As for IPOs, 11 Israeli high-tech companies held IPOs on stock exchanges in Israel, the US, Sweden, the UK or Australia, raising an aggregate $414 million at an aggregate company value of $1.5 billion, a substantial increase over 2016. The biggest IPO the report cited this year was by software company ForeScout Technologies, which raised $116 million on NASDAQ in October.
The PwC report speculates that the increase in IPOs will continue in 2018 and that new markets, “such as the stock exchange in Canada and various Far Eastern markets, will also be an attractive option for an IPO.”
The report further explains that the shifts seen in 2017 reflect an “evolutionary trend” in Israeli high-tech, moving from early exits to deals at a more mature stage in a company’s life.
In addition, PwC noted more local acquisitions than in the past, by strong Israeli companies such as Gett, Innovid, Playtika and Radware. Companies based in China, India, Japan and Europe were increasingly involved in M&As with Israeli firms, while in the past most such activity involved American companies.