The number of exits by Israeli tech companies reached a low in the first half of 2020, the financial daily Globes reported on Monday, although the average exit value was the highest in the past six years.
According to an exits report by the IVC Research Center and law firm Meitar relayed by financial daily Globes, the first half of this year saw a dramatic decline in the number of mergers, acquisitions, and buyout deals and IPOs in comparison with the first half of 2019. In the first half of 2020, there were 52 exits with an aggregate value of $5.8 billion, compared to 77 exits with an aggregate value of $7.5 billion in the first half of 2019.
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As stated, however, the average value of exits in the first half of 2020 was $112 million, the highest since 2015.
The high average value, according to the report, stemmed from three deals worth over $1 billion each that took place in the first half of this year: The acquisition of cybersecurity company Checkmarx by Hellman & Friedman for $1.15 billion; the acquisition of IoT security company Armis by CapitalG, the investment arm of Google parent company Alphabet, and Insight Partners, for $1.1 billion; and the acquisition of transport app Moovit by Intel for $1 billion.
Despite the high average value, most of the deals in the period were fairly small when compared to deals in the corresponding period in previous years, Globes said.
"In the first-half figures, we can see the considerable effect of the coronavirus pandemic," Meitar partner Adv. Shira Azran told Globes.
"These figures are consistent with the general atmosphere among potential acquirers, who because of the crisis are focusing on maintaining revenue and conserving cash, and avoiding using capital for acquisitions. We expect that we shall continue to see the declining trend in exits in the second half of 2020. On the other hand, in certain sectors, we are seeing a flowering that represents a basis for accelerated growth, such as in digital medicine, [financial] tech, and in digital services generally. These, we hope, will represent the basis for the exits of the coming years," she said.
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