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Economic News from Israel

  • Atlanta-based NCR Corporation has completed its $650 million cash acquisition of Ra’anana-based Retalix.  With the closing of the acquisition, Retalix has become a wholly-owned subsidiary of NCR, and will be delisted from the TASE and NASDAQ.
  • Tel Aviv-based Verint Systems has completed its separation from former parent company Comverse Technology by issuing 27.5 million shares to Comverse shareholders.  Verint has a major operation in Alpharetta, Georgia.
  • Yokneam-based Given Imaging has confirmed that it has broken off talks on the sale or merger of the company as part of its strategy of boosting growth and maximizing shareholder value.  The developer of the PillCam maintains its North American headquarters in Atlanta.
  • Jerusalem-based Brainsway has announced that a trial of its Deep TMS (transcranial magnetic stimulation) device enables smokers to give up cigarettes with 84% of the study participants and 36% still not smoking after the six-month post-treatment monitoring.  Last month, the FDA approved Brainsway’s treatment of depression in patients who did not respond to drugs.
  • Ramat Hasharon-based Israel CleanTech Ventures has announced the final closing of its $74 second fund.  The firm raised its first fund in 2007, and now has $150 million under management.  The proceeds will be used to continue its strategy of investing in Israel-based or Israeli related high growth, clean technology, early and growth stage companies with 15 Israeli company investments to date.
  • Jerusalem-based ATID E.D.I. and Tel Aviv-based Orange Blossom Ventures have joined forces to provide an expanded range of investment banking services in order to match overseas investors with Israeli start-ups and attractive M&A opportunities.
  • Ramat Gan-based EarlySense has signed a strategic cooperation agreement with US-based Welch Allyn to distribute their proactive patient care solutions to hospitals in the United States.  The EarlySense contactless system , placed under the mattress, measures a patient’s heart rate, respiration rate, movement in bed, and bed entries and exits.
  • Monsanto is acquiring Rehovot-based crop engineering company Rosetta Green for $35 million plus $2 million in milestone payments.  Previously, Monsanto had acquired another Israeli crop engineering company, Evogene, also for $35 million.
  • Tel Aviv-based Better Place is pulling the plug on its operations in Australia and the US, and will focus on Israel and Denmark.  As part of this change, the Palo Alto office will be closed.
  • Jerusalem-based crowd-funding platform OurCrowd has raised $5.5 million after previously raising $6.5 million for 12 companies from accredited investors.  Founded by noted technology investor / entrepreneur Jonathan Medved, the platform invests in Israeli start-ups seeking early-stage investment, bringing these opportunities to its members.
  • Korea-based Samsung Electronics has unveiled a $100 million seed fund to support innovation in components and subsystems, with the funds focused on Silicon Valley, Cambridge, and Israel.
  • Apple is opening a development center in Ra’anana, Atlanta’s Sister City in Israel.  The new center will be staffed by 100-150 employees who were fired several weeks ago by Texas Instruments which was said to layoff 250 employees, most of the staff at its Israel development center.  The Ra’anana center will be Apple’s third location in Israel after it opened a development center in Haifa last year and acquired Herzliya-based Anobit.
  • 2012 was a particularly good year for exits by Israeli companies with $5.5 billion in 50 transactions according to PwC Israel.  Only in 2006 was there a higher value for exits — $10 billion.  An average deal in 2012 was valued at $11 million.
  • Israel’s annual inflation rate for 2012 was 1.6% compared to 2.2% in 2012 and 2.7% in 2010 according to the Central Bureau of Statistics.  The inflation rate forecast for 2013 is 1.8%.
  • Israel’s unemployment rate rose to 7% at the end of 2012 from 5.4% a year earlier.  Earlier in the year, the Central Bureau of Statistics changed its methodology for measuring unemployment to conform to OECD rules which resulted in a jump in the unemployment rate from 5.4% to 6.5% of the civilian labor force.
  • Israeli venture capital funds raised $607 million in 2012, down 30% from the previous year according to the IVC Research Center and KPMG Somekh Chaikin Israel.  Among the leading funds, Sequoiah V, Pitango VI, and Magma III raised a combined sum of $450 million, 74% of the total.
  • For the first time in ten years, high-tech exports stagnated on the basis of an analysis of 2012 export data.  According to the Israel Export and International Cooperation Institute, high-tech exports in 2012 totaled $21 billion, 1% lower in dollar terms than in 2011. The Export Institute warned that even during the global crisis in 2009, Israeli high-tech exports grew by 5%.
  • Start-up fundraising was down 10% in 2012 with 575 high tech companies raising $1.92 billion.
  • The Ministry of Finance, Ministry of Defense, and Ministry of Industry, Trade & Labor will jointly budget a new program to finance R&D for dual-use (military and civilian applications) technologies.  The program will have a NIS 30 million budget, with each ministry providing one-third.
  • Commitments for reciprocal procurements by foreign companies doing business with the Israeli government tripled from $320 million in 2009 to nearly $1 billion in 2011 according to Defense News.  These reciprocal procurements are the purchase of goods and/or services or investment in the particular country in exchange for large contracts.

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