Israel Desks - February 2020 Edition

23 from private equity," adds Kiernan. “We represented private equity firm, Searchlight Capital Partners on its acquisition of a controlling stake in Bezeq, Israel’s largest telecoms group, and we also represented private equity firm, CVC, which made a USD 400 million investment in IronSource, a leading adtech company.” In the mid-cap market you would usually see only the local PEs, such as AMI, FIMI, Fortissimo, Green Lantern, and so on, and they will compete on mid- cap deals against the other local PEs and also against local and international strategic acquirers. They will be active in all sectors, whether in high-tech, industrial, financial, retail or other. The big international PE funds come for the "one-off" big opportunities,” adds Hai. “One of the main challenges for the Private Equity firms is the intense competition on each deal, both in the mid-size market and especially the more substantial deals. Strategic buyers are much more aggressive and can offer higher prices, but the advantage of the PE is its easier access to funds, ability to execute a deal faster, and usually more deal certainty, as the antitrust approvals for PEs are less challenging. Furthermore, there is less fear by targets to share information with PEs as part of the due diligence (which is always the concern with a strategic buyer),” points out Hai. Other opportunities for Israel Orgad of Latham adds: "There has recently been more activity from Australian and Canadian companies and investors. The legalization of cannabis in Canada at the end of 2018 combined with Israel's cutting- edge cannabis technology has led to significant cross-border activity. We recently acted for a company on the Canadian Securities Exchange in a reverse takeover, allowing an Israeli medical cannabis operator, IMC, to list its shares in Canada." “The U.S., though, has always been and still is the leading jurisdiction for Israeli targets, notwithstanding the recent U.S. tax reforms which encourage U.S. investors to invest locally in the U.S.,” points out Hai. ” Chinese investors, however, find it more difficult to execute deals out of China given political and regulatory constraints. We are yet to see how the Coronavirus crisis will impact Chinese investors,” he adds, while “the Brexit which came into force on 31 January 2020 can create very interesting opportunities for the Israeli market in the medium-term,” adds Hai.