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Private equity deals up 18% in 2011

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Tuesday, February 28th, 2012

Private equity deals rose 18% to $2.88 billion in 65 transactions in 2011 from $2.44 billion in 2010, according to IVC and Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. law firm.

Ten deals, each more than $100 million, accounted for 75% of the total in 2011. In 2010, there were only five deals totaling more than $100 million, 54% of the total that year.

Israeli private equity funds accounted for $904 million, or 31%, of the total investment in 2011. They participated in two big buyouts, which accounted for 37% of the total investment by Israeli firms: the acquisition a stake in Road 6 franchisee Derech Eretz Highways Ltd. for $208 million by Israel Infrastructure Fund (IIF); and First Israel Mezzanine Investors Fund’s (FIMI) acquisition of a stake in Ormat Industries Ltd. (TASE: ORMT) for $130 million.

“In 2011, we saw local firms stand out in small and mid-sized deals, compared with the dominance of foreign private equity firms in the big deals,” said Adv. Rick Mann. “The second trend was foreign investors’ interest in Israeli technology companies. This was most noteworthy in cleantech, software, and the internet. I expect that these trends will continue in 2012.”

Cleantech companies attracted 33% of the total value of private equity investment in 2011, down from 36% in 2010. The top three deals were the acquisition of Netafim Ltd. by Permira Funds LLC for $366 million, and two $200 million investments by Morgan Stanley (NYSE: MS) in Better Place LLC and Brightsource Energy Inc.

Software developers attracted 29% of total investment, including the acquisition of Fundtech Ltd. by GTCR for $390 million, the acquisition Ness Technologies Inc. by Citi Venture Capital Investments for $308 million, and the $110 million investment by Riverbed Capital in Sintec Media Ltd.

Published by Globes [online], Israel business news – – on February 8, 2012