27 innovative events and conferences organizing solutions. This financing, which reportedly reflects a company value lower by 30% compared to the prior round in 2020, also includes a 3X liquidation preferences protection. This protection, which basically guarantees an investor a three-times return on its investment in case of a future exit, would have been difficult to imagine in similar investments that took place in the pro-seller investment atmosphere of the last couple of years. Another trendthatwearestartingtoseeamongour clients isan increase in the use of earn-out and similar mechanisms to determine a bigger portion of the deal consideration. This mechanism allows parties who disagree on the valuation of a company tomake a portion of the consideration subject to the occurrence of future events, thus reducing the risk associated with the deal for the buyer, while allowing the seller to enjoy the future success of the business despite current market uncertainties. Recently, we have even seen another type of M&A deal taking place, one almost unheard of in the local market: a hostile takeover attempt where Aviat Networks attempted to take over Ceragon Networks, following a 68% drop in its traded share price compared to its twoyear record high. There are a few reasons why hostile takeovers in Israel are so rare, but of particular note is the structure of the Israeli capital market, which traditionally includes mostly public companies with a strong controlling shareholder, as well as a unique limitation under Israeli law which requires buyers that wish to acquire initial control in a public company to make their bid public through a “Special Tender Offer”. According to this procedure, the buyer's offer must not only be addressed to the shareholders of the company in their entirety, but it also must be approved in a general meeting. This means that even if a buyer manages to find enough shareholders who are willing to sell their holdings, a majority of disagreeing shareholders could still frustrate the deal. However, the increase in IPO of tech companies without a strong controllingshareholderwhichwehaveseen the last fewyears,particularly during the SPAC Spring of 2020-21, together with a sharp drop in share prices may make this type of deal more attractive in the near future, as evidenced by the on-going Ceragon Networks transaction. Another deal of similar nature is the tender offer made by Panopto for its competitor, Israeli-founded video creation company Kaltura. It is the third tender offer Kaltura has received from Panopto in the last couple of months, which comes as no surprise as Kaltura's shares' have dropped by roughly 80% since its USD 1.3 billion IPO only last year.
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