46 / 114
46 The US-Israel Legal Review 2019
ISRAEL: MERGERS & ACQUISITIONS
2018
was a good and prosperous year for
M&A in Israel. M&A deals involving
Israeli companies reached 132, seven more than
2017, with 2018’s total deal value surpassing that
of 2017, with a total of $25.7 billion. We saw eight
deals valued at $1 billion or more, with the average
deal size leaping to $267 million. The acquisitions
of Frutarom by IFF ($7.1 billion), of SodaStream by
PepsiCo ($3.2 billion), of Orbotech by KLA Tencor
($3.1 billion), as well as the acquisition of SynaMedia
(Cisco) by Permira at an estimated value of US$ 1
billion (in which EBN represented the buyer-side)
and the acquisition of an 80% stake in Netafim by
Mexichem at a valuation of $1.9 billion (in which
EBN represented sell-side) are but top examples of
the sizeable deals which are becoming increasingly
common in the Israeli M&A realm.
The increase in funds being expended by foreign
investors in domestic Israeli targets continued.
Ever-growing transactions and higher valuations
prove again that where opportunities abound,
the money is plentiful. Investment from East Asia
soared, with Chinese companies leading the way,
though North American investors and acquirers
remain the strongest players.
It is clear that the Israeli market reflects the
trends unfolding on the global stage, however,
a close understanding of the unique legal and
business environment in Israel is a must in order to
really reap thebenefits onoffer. Accordingly, factors
such as economic turbulence, emerging industries,
and especially constant regulatory developments
all have a strong impact and the potential to disrupt
the smooth sailing that many investors in Israel
have enjoyed, and must be accounted for in order
to reach a swift closing of M&A transactions and
maximize returns. More importantly, it is essential
for investors and acquirers to pay close attention
to potential trends in the upcoming year that we
aspire to analyze hereunder, as well as conduct a
carefully considered legal and financial strategy,
which canminimize risk and promote successwhile
doing business and M&A transactions in Israel.
This articlewill detail some of the industries that
we tip for success in2019, andprovidesomeanalysis
of the factors that are likely to affect investors and
acquirers in the Israeli market in the upcoming
year. It will also review some representative
developments in the Israeli regulatory sphere, and
describe how these changes are likely to affect
the world of M&A in Israel in 2019. First however,
this article will begin by outlining some of the
noteworthy developments in 2018 and consider
how and why things have changed since 2017.
HIGH-TECH IN ISRAEL: SOME THINGS
NEVER CHANGE
Where else to start? Israel is increasingly
synonymous with high-tech, and 2018 was no
exception. We consistently encountered larger
early-stage financing rounds, and an ever-
increasing number of secondary transactions
taking place as part of financing rounds. Despite
the overall number of deals decreasing in 2018
M&A In Israel: LookingBack
At 2018, AndTowards 2019
Ever-growing transactions and higher valuations marked
a prosperous 2018 for M&A in Israel, with North American
investors and acquirers remaining the strongest players.