In  Q2/2015, Israeli private equity performance reached a quarterly record, with 29 deals amounting to $1.67 billion in capital, according to a report by IVC Research Center and Shibolet & Co. The quarter ended with the largest number of Israeli PE deals in comparison to the 5-year quarterly average of 17 deals. The quarterly amount invested in PE deals was the highest in three years, far above the $145 million and the $385 million invested in Q2/2014 and Q1/2015, respectively.

In  H1/2015, 44 PE deals totaled $2.1  billion – the strongest first half-year  since  2011,  quadrupling H1/2014’s $592 million invested in 44 deals. The average private equity deal reached $46.8 million in H1/2015, compared to $13.5 in H1/2014.

In  H1/2015,  Israeli private equity fund investments accounted for $447  million, or 22 percent, of total investments.  This  compares with  $355  million  (60  percent)  invested  in  H1/2014  and $208 million  (23 percent)  in  H1/2013.  The  largest  deal  by  an Israel PE  fund  was  the  $97  million  buyout  of  paper manufacturer Hadera Paper by FIMI in Q2/2015.

The  bulk  of  PE  investments  were  made  by foreign  PE  funds, which  have  dramatically  increased  their activity in Israel in Q2/2015 with $1.3 billion, capturing 78 percent of all investments. The amount was only  marginally  lower  than  the  $1.4  billion (83 percent  of  total)  invested  in  Q3/2014  –  the  strongest quarter for foreign PE fund activity to date. Moreover, in H1/2015 foreign PE fund investments accounted for 77 percent of all investments, compared to H1/2014, when they captured just 37 percent.

Foreign PE funds were responsible for the top four deals in 2015, exceeding $100 million each, together amounting  to  nearly  $1.3 billion, or 62 percent, of total PE transactions in H1/2015.  The buyout of Lumenis, a medical device company by XIO Group, a Chinese PE fund, amounted to $510 million, 30 percent of total PE deals in Q2/2015. The buyout of ClickSoftware, an enterprise software company by Francisco  Partners,  a  global  private  equity firm, followed  closely,  with  $438  million.  Two  additional straight equity deals were under $200 million each: $175 million investment in Ormat by Northleaf, and $150 million invested in Infinidat by TPG Growth.

In  Q2/2015,  11  buyout  transactions  led  all  Israeli  private equity deal-making  with  $1.3  billion,  or  80 percent,  of total investments.  In  comparison,  straight  equity  deals  dominated both  in  Q1/2015  and Q2/2014, with 89 percent and 59 percent of total dollar investments, respectively.

Software led all private equity transactions both in H1/2015 and H1/2014, with 33 percent and 23 percent of total dollar investments; life sciences stood out in H1/2015 with 28 percent, compared to just 9 percent in  the  same  period  of  2014.  In terms of  the  number of  PE  deals,  the  services  industry had an unusual number of deals: 11, mostly due to the new Israeli private equity fund active in the television field.

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