Decline in Private Equity Deals in Israel for Q1 2011

IVC Research Center has released the Quarterly Survey of Israeli Private Equity Deals for Q1 2011. Eleven private equity deals in Q1 2011, amounted at $216 million, a 68% decrease from the $668 million in Q1 last year, and a 74% decline from the previous quarter ($826 million). Three of the deals accounted for 65% of the deal volume, according to the report.  Clean tech is no longer the king of private equity in Israel, making room for industrials and infrastructure deals.

Israeli private equity deals

Figure 1: Private Equity Deal Value by Quarter ($M)

Israeli private equity deal types:

  • Straight equity deals accounted for $95 million (six deals) or 44 percent of total deal value in Q1 2011, compared to $35 million (five deals) in the previous quarter, and $670 million (six deals) in Q1 2010.
  • Buyout deals (three) were valued at $82 million or 38 percent of aggregate deal value in Q1 2011, which compares with $621 million or 75 percent in Q4 2010 and $122 million or 13 percent in Q1 2010.
  • One mezzanine financing accounted for $36 million or 17 percent of aggregate deal value, compared to $68 million (three deals) or 8 percent in the previous quarter, and $63 million (one deal) or 6 percent in Q1 2010.
  • One distressed debt deal was reported in Q1 2011 in an amount of $3 million (1 percent), compared to six deals valued at $102 million (12 percent) in the previous quarter, and six deals valued at $124 million (13 percent) in Q1 2010.

The industrial sector was the most attractive area for private equity funds in Q1 2011, accounting for 29 percent of total deal value. The infrastructure sector followed with 26 percent. In Q4 2010, the financial sector attracted 72 percent of capital invested, followed by real estate with 8 percent.  In Q1 2010, the most attractive sector was cleantech with 56 percent of total deal value, followed by the industrial sector with 12 percent.

According to Rick Mann, Managing Partner of GKH:

“What we see from Q1 2011 results is that PE funds with a strong local presence still represent the bulk of all private equity deals in Israel. Foreign PE funds are typically involved only in the larger PE deals, and those deals do not occur every quarter. I expect, however, that along with the continued investment activity of the local PE funds, we will see foreign PE funds entering into several large transactions during the course of  2011.”

 

Eze Vidra
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Eze Vidra

Chief Innovation Officer at Antidote
Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Ezewas a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.
Eze Vidra
Follow me

Eze Vidra

Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Eze was a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.