Israel's high-tech IPO market falls flat in '08

The country didn't see a single high-tech initial public offering last year, a first since 2003.

Correction at 9:10 a.m. PDT: The size of the average M&A deal is lower than originally reported.

Israel's high-tech merger activity fell last year, but it's IPO market took a far greater hit, according to a report released Wednesday.

The country exited the year without a single high-tech initial public offering, a first since 2003, according to the Israel Venture Capital Research Center report.

With the global economy taking a beating and the markets leaving investors running for cover, it's not surprising to see companies pulling back on IPO plans, in hopes of receiving a higher valuation in better times.

The overall figure for Israel's high-tech mergers dropped 19 percent year over year to $2.64 billion in 2008, with the average deal size coming in around $31 million.

"Lower valuations present an opportunity to global technology leaders seeking innovative technologies at bargain prices," Koby Simana, IVC's CEO, said in a statement. "We forecast an active (mergers and acquisition) market in Israel in 2009 as a result."

But IVC's venture funding forecast for Israeli high-tech companies this year is not as bullish. Earlier this month, IVC said it expects venture funds to raise only $300 million this year, a decline of 62 percent from last year.

Investors, however, may find some comfort in the fact that the number of high-tech mergers has remained relatively stable. Last year, 84 Israeli tech companies were involved in mergers, down one deal from the previous year.

 

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