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Trends and Developments
in the Vibrant Israeli
M&A Market
The past year has demonstrated an enhanced interest by global players in
traditional Israeli corporations as well as high-tech startups, with a particular
growing interest from China-based investors. Deal volumes and values fluctuated
between the second half of 2015 and the first half of 2016, but, overall, the Israeli
M&A market was particularly vibrant and fruitful during this period. At the same
time, IPO activity by Israeli companies fell.
Strategic and financial Chinese investors have shown a special interest in Israel,
over and beyond their general interest in global acquisitions. Examples include the
announced acquisition of Israeli games company Playtika by a Chinese consortium
for US$4.4 billion, the acquisition of Israel’s largest dairy, Tnuva, by China’s Bright
Food for US$2.1 billion and the completion of ChemChina’s takeover of Adama, a
leading manufacturer of crop protection products, for US$1.4 billion. In the world
of start-ups and technology, Chinese investors have been active in companies in
the field of big data, augmented and virtual reality, fintech, medical and medical
devices.
In addition to direct investments in Israeli high-tech companies, there has also
been an increasing Chinese participation in Israeli venture capital funds, such as
Alibaba's investment in Jerusalem Venture Partners. Major Chinese companies
have also made strategic decisions to invest in Israel, which are expected to
translate into increased deal flow in the future. One example includes Kuang-Chi,
a Chinese tech conglomerate that recently launched a fund and incubator for
investment in Israeli mid-stage companies.
Additional noteworthy transactions were the acquisition by BC Partners, a
London-based private equity firm, of an 80% stake in Keter Plastic, at a company
valuation of US$1.7 billion and one of 2015's largest tech exits - the US$514
million acquisition of leading medical device company by our own client XIO Group,
a global alternative investments firm with strong ties in various Asian markets.
Strategic and financial Chinese investors have shown a special interest in Israel,
over and beyond their general interest in global acquisitions. Examples include
the announced acquisition of Israeli games company Playtika by a Chinese
consortium for US$4.4 billion.