Israel’s reputation as ‘start-up nation’ has been affirmed by a string of significantly sized acquisitions by multinationals in the Israeli tech sector. The trend saw a particularly strong wave of activity across the summer with three deals over $400m, including Google’s acquisition of Waze and IBM’s acquisition of Trusteer for $966m and $630m respectively.

PwC has reported that transaction sizes have increased from $32m to approximately $111m on average since 2008.

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Deals have spanned the areas of internet, social media, data/big data, cloud, software‑as‑a‑service (SaaS), security and cybersecurity.

Although the Waze deal and, more recently, the Trusteer deal are the most high-profile of this year’s transactions, they reflect the uptick in size and relative maturity of Israeli technology companies being targeted by multinationals. We expect this trend to continue as large-scale sales gain local cachet among the technology community, and Israeli business owners increasingly look to exit through sales processes as an alternative to the historic choice of NASDAQ IPOs.

The Israeli economy

  • The new Israeli shekel is the strongest currency monitored by Bloomberg for the fifth year in a row.
  • Ranked third in the world for innovation according to the World Economic Forum Competitiveness Report 2013–14.
  • Number one originator of NASDAQ listings outside the US, apart from China (ahead of India, Japan and European continent).

Some local quirks

  • Regulations on IP transfers mandated by the Israeli Office of Chief Scientist
  • Stock option transfers
  • Israeli takeover rules
  • Local securities disclosure requirements