It was a wild ride in July for Israel Startup Nation. As many of its firms were forced to make layoffs, others continued with business as usual. This included many mergers and acquisitions made by and for big name businesses like ironSource, IBM, Walmart and Nano Dimension.
In some cases, the sales marked successful exits. But not always.
Here now are JBN’s 10 biggest merger & acquisition stories for the month of July 2022.
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Israeli Firms Acquired by Foreign Companies
IBM Buys Israeli Startup Databand.Ai
IBM acquired the Israeli startup Databand.ai, a provider of data observability software that helps organizations fix issues with their data. The purchase price was not disclosed.
Headquartered in Tel Aviv, Israel, Databand.ai employees will join IBM Data and AI, further building on IBM’s growing portfolio of Data and AI products, including its IBM Watson capabilities and IBM Cloud Pak for Data.
Founded in 2018 by CEO Josh Benamram, Victor Shafran, and CTO Evgeny Shulman, Databand.ai calls itself a product-driven technology company that provides a proactive data observability platform, which empowers data engineering teams to deliver reliable and trustworthy data.
Walmart Buys Israeli Founded AR Startup MemoMi
Memomi, an augmented reality (AR) optical tech startup founded by Israelis, is set to be acquired by Walmart. The acquisition is expected to close in the coming weeks, and Memomi employees will join the Walmart Global Tech organization. But there is no word yet as to the purchase price.
Founded in 2015 by Israelis Salvador Nissi Vilcovsky and Ofer Saban, who was the CTO at MobileAccess, MemoMi is the developer and patents holder of the core technology for the MemoryMirror solution and is one of a new generation of technology companies focused on the Internet of Things: transforming industries such as retail by making devices more intelligent and connected. Using its own patented image processing technology, MemoMi partners with leading technology companies, including Intel, Sony, Panasonic and IBM.
SundaySky Israeli Video Startup Was Acquired by America’s Clearhaven Partners
Also in July, SundaySky, an Israeli startup that offers a platform for video optimization at scale, was acquired by the American firm Clearhaven Partners for $100 million. The deal came after SundaySky was forced to back out of a planned IPO that the company expected would give it a $300 Million valuation.
Founded in 2007, SundaySky declares that it is transforming CX engagement for Fortune 500 B2C brands, enabling them to deliver video-powered experiences at critical moments along customer journeys that engage, educate and inspire consumers. CX engagement refers to customer experience, or how a business engages with its customers at every point of their buying journey. This applies from marketing to sales to customer service and at all steps in between.
Berkshire Partners Pays $215 Million For 49% of Data Center Platform MedOne
MedOne, a veteran Israel server farm operator owned by brothers Zeev, Zvi and Shay Livnat, is selling a 49% stake in the company to Berkshire Partners for $215 million. This gives the company a $430 million valuation.
Founded in 1999, MedOne provides public and hybrid cloud computing services to enterprise organizations in Israel and worldwide through a strategic partnership with Dimension Data, one of the world’s leading cloud providers. Dimension Data, an NTT subsidiary, provides cloud services to over 6,000 organizations through a top notch standard global network, comprising 114 partners in over 58 countries.
With over 25,000 square meters of Data Center situated in 4 highly secured underground Data Centers – MedOne is a Colocation organization in Israel. MedOne Provides hosting services, local public cloud services and unique solutions to Israel’s largest organizations.
PerimeterX Merges With America’s HUMAN Security at $1.5 Billion Valuation
PerimeterX, an Israeli information security company, is merging with HUMAN Security, Inc., an American firm that offers security solutions for enterprises protecting them from sophisticated bot attacks and fraud. While the terms of the deal were not disclosed, Globes cited experts who estimate that the new combined company will be worth $1.5 billion.
Founded in 2014, PerimeterX is a provider of application security solutions that it boasts keep your web business safe in the complex digital world. Delivered as a service, the company says that its Bot Defender, Code Defender, and Page Defender solutions detect risks to your web applications and proactively manage them, freeing you to focus on growth and innovation.
IronSource Merges America’s Gaming Company Unity
It was announced in July that Israel-based ironSource is merging with the American video game engine Unity Software. The combined company expects to reach $1 billion in adjusted EBITDA by the end of 2024. The deal is expected to be completed before the end of the year.
IronSource went public on the NYSE through a SPAC merger in 2021 during the COVID-19 pandemic. It was valued at $11.1 billion, a 94% premium on its current value on the NYSE.
Currently, IronSource has a market cap of $2.28 billion. This value has decreased over two-thirds of its value over the past six months. However, for this merger, ironSource, which has a platform to help app developers with their monetization, engagement, and analytics, was valued at $4.4 billion. The company employs 1,500 people.
IronSource shareholders will hold 26.5% of the shares of the merged company in the all-stock deal.
Israeli Companies Buying Foreign Ones
Israeli Startup Optimove Buys Britain’s Graphyte
Optimove is an Israeli startup that offers a Customer Service Management (CRM) marketing service. In July it acquired the British real-time, cloud-based personalization platform services provider Graphyte for an undisclosed sum, but Calcalist reports that it was for $40 Million.
Graphyte provides a real-time, cloud-based personalization platform for customer relationship programs and campaigns. The company boasts that its platform delivers improved conversion rates, click-through rates, and revenue uplift by leveraging personalized recommendations across channels.
Founded in Tel Aviv in 2012, Optimove explains that its Software as a Service (SaaS) technology combines a Customer Data Platform (CDP) with a Multichannel Marketing Hub (MMH) to “uniquely empower brands to personalize campaigns and communicate to existing customers.”
Lemonade Completes Metromile Acquisition at Greatly Reduced Valuation
Lemonade, an Israeli insurance company powered by AI and social impact, closed its acquisition of car insurance provider Metromile in July. Metromile shareholders received 7.3 million Lemonade shares, while Lemonade received a business with over $155 million in cash and over $110 million in premiums. But this amounts to roughly 75% less in total valuation than when the deal was first announced.
The merger of Lemonade and Metromile was first announced in November of 2021. The original deal was for an all-stock transaction that at the time was valued at a fully diluted equity value of approximately $500 million, or just over $200 million net of cash. The drop in value for both companies obviously came as a result of the downward trend in the markets these days.
Singtel Sells Amobee to Israel’s Tremor at Big Loss
Also in July, Tremor International, an Israeli advertising technology firm, acquired US digital media and advertising company Amobee from its parent company Singtel for $239 million. Singtel bought Amobee for $321 million in 2012. So, this amounts to an $82 million loss for Singtel, but in actuality much more than that considering the net present value of the 2012 purchase price for Amobee.
Founded in 2005 founded by Zohar Levkovitz, Gil Shulman, and Saul Rurka, Amobee says that it helps brands, agencies, and media companies unify audiences to optimize results across all TV, connected TV, and digital media, including social, to drive customers’ growth.
Tremor International is a collection of brands built to unite creativity, data and technology across the open internet.
Failed Attempted Takeover
Stratasys Takes Poison Pill to Block Nano Dimension Takeover Bid
Israeli 3D printer manufacturer Stratasys, a publicly traded company, has taken what is commonly referred to as a “poison pill” – also known as a Shareholder Rights Plan – in order to prevent a takeover attempt by Nano Dimension. To do so, Stratasys filed a shareholder Rights Plan with the US Securities and Exchange Commission (SEC).
The move came after Nano Dimension, an Israeli company in the 3D printed electronics field, bought up a 12% share of Stratasys stock.
So, what does this mean? Well, if any shareholder reaches a 15% stake in Stratasys, then the company will grants rights to all other shareholders, not including the entity with the 15% stake, to purchase additional shares for each share that they already hold. This is called a poison pill because it dilutes the value of the shares already held but helps to stop a takeover. For that reason, it is usually done as a last resort.