Published On: Thu, Mar 12th, 2015

Israeli Employees Who Received their Company as a Gift Sold It for Millions

This is an unusual exit even for the Israeli high-tech environment.

Digital signature

Digital signature maker Algorithms Research ARX in Petach Tikva, Israel, was sold for tens of millions of dollars to American corporation DocuSign, Calcalist reported.

This is an unusual exit even for the Israeli high-tech environment, since the company has already been acquired 18 years ago by Cylink, but a few years after the purchase, in 2001, the company returned to independent operation, and its shares were transferred to employees and management.

The employees and managers received the shares free of charge, while a number of clients invested about $ 2 million in the company. Cylink invested $1 million in return for a few points, which today have made that investment pay through the roof. With $3 million in their pocket, the self owned company fired 80 employees, and set out on a new path of constant revenue growth to this day.

The biggest winners from the transaction are the 116 employees in Israel and the U.S., who hold the vast majority of the Company’s shares. The employees, as well as veteran company executives Gadi Aharoni and Yair Yitzhaki, also hold generous stock options worth millions of dollars.

Digital signatures are an answer to the needs of organizations investing funds and resources in computing and streamlining organizational processes, accumulating in the process electronic documents. But when transactions require ratification, paper documents are still printed, perpetuating the need for routing paper documents. Digital signatures enable turning this process fast and efficient, and entirely electronic. A digital signature is a signature enforceable legally and obviates the need to print documents for the purposes of signature and approval.

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