Acquisitions and IPOs of Israeli tech companies has totaled $16.9 billion in 2022, an 80% decrease from 2021, when the figure was $82.5 billion, PwC Israel reports. There were 72 deals in 2022, compared with 171 last year, a decrease of 58%.
With the exception of 2021, there was still more transactions and higher financial volumes in acquisition deals and IPOs than in any year in the entire decade prior. In 2020, there were 60 deals valued at $15.4 billion, while 2019 there were 80 deals valued at $9.9 billion.
When taking follow-on deals into account (M&As and IPOs), which were excluded from PwC’s primary analysis (as they were included in previous reports at the time an IPO or M&As were made), total transaction value in 2022 amounted to $47 billion, compared with 2021, when the total transaction value amounted to $99.2 billion.
In 2022, 15 follow-on transactions were closed with an overall value of $30 billion, compared with 2021 with four transactions and $18 billion. Most prominent of the follow-on deals in 2022 was the $16.7 billion Mobileye IPO on Nasdaq (current market cap is $27.1 billion).
PwC Israel adds that looking at deals in 2022 on a quarterly basis provides more insight into the process that unfolded over the past 12 months, and how the market is most likely going to look like in 2023. In the first, second and third quarters of the year, the number of deals was 33, 17 and 17 respectively, while in the fourth quarter, this figure sank to only five deals
The trend that PwC Israel pointed to in 2021 continues – 23 all-Israeli deals were closed in 2022 (compared to 77 last year), representing 32% of the total deal count (compared to 45% in 2021 ). When excluding IPOs, the number of such deals is 18 in 2022 (compared to 32 last year). The US remains the most significant player on the buyer side.
PwC Israel Hi-Tech cluster head Yaron Weizenbluth said, “Rampant inflation, growing uncertainty and rising interest rates brought back to the fore some economic terms that were not around for a quite a while, and left investors and sellers waiting by the sidelines. The markets were fast to react, violently hitting tech companies, and reminding everyone that the higher you go, the farther you fall.
He added, “The Israeli tech market has been reacting to adjust itself to the twists and turns and the new challenges. This process will take time, but the necessary accommodations will be made, either in valuation or in practices, and eventually, sellers and buyers will adapt to the new situation.”
Published by Globes, Israel business news – en.globes.co.il – on December 28, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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