Tuesday, August 21, 2012

(BN) Intel Boosts Tech Investment After Anobit Sale: Israel Overnight

Aug. 21 (Bloomberg) -- Intel Capital, the investment unit of Intel Corp., is expanding its presence in Israel at a time local venture capital funds are cutting back, Marcos Battisti, a managing director at the chipmaker's subsidiary, said.

The unit added two investment managers in Tel Aviv last month to boost its portfolio in the country as first-time Israeli investments in technology companies were at the lowest level in a decade, he said. Israel has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China, and the three largest gainers on the Bloomberg Israel-US Equity Index of the most-traded Israeli stocks in New York this year are technology developers.

"We are betting big on Israel because of the type of innovation coming out of there, and very few small countries can match that," Battisti, who oversees the unit in Western Europe and Israel, said by phone from London yesterday. "Venture capital money has dried up a little bit in the region, so fundamentally we have less competition and we are not seeing overbidding in the market."

Intel Capital previously invested in Herzliya, Israel-based Anobit Technologies Ltd., which was acquired by Apple Inc. in January and Yokneam Elit, Israel-based Mellanox Technologies Ltd., the best performer on the Nasdaq Computer Index this year. The Bloomberg Israel-US Index was little changed at 84.25 yesterday. Given Imaging Ltd., the Israeli maker of pill-sized cameras for diagnosing digestive ailments, dropped to a three- year low.

'Heating Up'

Israel's TA-25 Index rose 1.3 percent to 1,118.73 at the close in Tel Aviv today. The benchmark gauge has climbed 3.1 percent this year, compared with 13 percent for the Standard & Poor's 500 Index. The Bloomberg US-Israel index has gained 3.7 percent this year, led by Mellanox's 248 percent rally and Allot Communications Ltd.'s 79 percent jump.

Israel's spending on research and development accounted for 4.4 percent of its gross domestic product in 2010, the most among countries in the Organization for Economic Co-operation and Development, according to statistics by the group. The data is a key indicator of government and private sector efforts to obtain competitive advantage in science and technology, the OECD said on its website.

"The evidence we have is that Israel is heating up in a positive way with good companies coming out," said Battisti, who focuses on investments in technology, media and telecommunications companies. It is becoming "more and more attractive for us because we are able to find companies that are going to yield good returns," he said.

The unit of Intel, the world's largest semiconductor maker, has invested in more than 60 companies in Israel since 1996.

Shrinking Investment

Israeli technology companies raised $453 million in the previous quarter, according to a survey conducted by IVC Research Center and KPMG Somekh Chaikin Israel. That's the least amount raised since the fourth quarter of 2010.

First investments by Israeli venture capital funds accounted for 18 percent of total investments in the second- quarter, the lowest share in a decade, IVC said.

"The percentage of high-tech investment from Israeli venture capital firms is continuing to decline as capital available for new investments is shrinking," Koby Simana, chief executive officer of IVC, said in a July 16 statement. "We expect a further decline in VC high-tech investments throughout this year."

In the last quarter, first investments by Israeli venture capital funds accounted for 18 percent of their total investments, the lowest quarterly share in a decade, IVC said.

Scailex Deal

Partner Communications Co., Israel's second-largest mobile phone provider, slumped the most in a month, dropping 5 percent to $3.81. Its shares in Tel Aviv dropped 2.1 percent to 15.52 shekels, or the equivalent of $3.86, today.

Scailex Corp., which owns 44.5 percent of Partner, said a group led by Hutchison Whampoa Ltd. canceled an agreement to buy 75 percent of the company due to "adverse findings" and a "decline in operations" discovered in the due diligence process, according to a statement filed with the Tel-Aviv Stock Exchange. Partner's shares has declined 18 percent since the deal was announced on June 5.

Given Imaging declined 1.9 percent to $12.69 in New York to the lowest since September 2009. Its Tel Aviv shares fell 3.3 percent to 50.52 shekels, or $12.55, today.

The Yokneam, Israel-based company has hired a foreign bank to help find strategic partnerships that could also include the sale of control of the company, the Bizportal website reported yesterday, without saying where it got the information. An e- mailed message sent to the media department of the company seeking comment wasn't immediately returned.

No comments: