Israel 2012 private equity deals down 10 pct at $2.6 bln

TEL AVIV, March 19 Tue Mar 19, 2013 4:07am EDT

TEL AVIV, March 19 (Reuters) - Private equity deals in Israel declined by 10 percent to $2.6 billion in 2012, with more than half of the investment in software companies, the IVC Research Center said on Tuesday.

The buyout of software firm Paradigm Geophysical by Apax Partners and JMI Equity for $1 billion accounted for 39 percent of the total annual deal value.

Israeli private equity funds invested $530 million in 2012, accounting for 21 percent of total investments, down from $963 million in 2011, said IVC and corporate law firm GKH.

Private equity funds invested in a wide range of Israeli industries in 2012, said Rick Mann, a partner and head of mergers and acquisitions at GKH.

"While technology remains a major attraction for private equity funds in Israel, established companies in more traditional businesses have also drawn interest," Mann said.

"The first quarter of 2013 has already seen the beginning of significant activity by foreign hedge funds in distressed debt situations and it will be interesting to see whether this becomes part of a broader pattern in Israel."

The software sector attracted the largest share - 52 percent - of total deal value, followed by cleantech with 11 percent.

Marianna Shapira, research manager at IVC, said the Israeli private equity market is smaller in terms of deal volume and local capital under management than U.S. and European markets, but tends to follow international trends.

"Forecasts for the global market are pointing to increased, though unevenly spread, activity in 2013. We believe the same can be projected for the Israeli market," she said. (Reporting by Tova Cohen)

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