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Economic News from Israel

  • Tel Aviv-based Elco Holdings will transfer 15 housing blocks with 4,635 apartments to REIT Apartment Trust of America at a value of $105 million, yielding a capital gain of $30 million.  When the deal is completed, Apartment Trust of America will own 35 housing blocks with 9,692 apartments in North Carolina, and Georgia along with Texas and Virginia.
  • Tel Aviv-based Time To Know has signed an exclusive licensing agreement with McGraw-Hill Education to develop an all digital, data-driven differentiated teaching and learning platform for one-to-one computing classrooms.  Former AICC Executive Committee member Joshua Behar has served as Time To Know’s Senior Vice President and US General Manager since the company launched in the United States.
  • Kraft Foods and Airport City-based SodaStream have announced the expansion of their strategic partnership for the manufacturing, marketing, distribution, and sales of Kraft Foods’ beverage brands for the use with the SodaStream soda making system.  The initial Kool-Aid flavors will complement the existing co-branded portfolio which includes several varieties of Crystal Light.
  • Or Akiva-based Expanding Orthopedics presented 6 months follow-up results of its XPED Expanding Pedicle Screw System at the International Meeting on Advanced Spine Techniques in Istanbul last month, reporting that this successful implantation and deployment of the expandable section was achieved and no implant-related complications were observed.  The company’s US office is in Memphis, Tennessee.
  • The Pentagon has reached an agreement with Lockheed Martin on a $450 million program to enhance electronic warfare equipment on the F-35 fighter jet, and integrate Israeli-unique systems beginning in 2016.  The deal marks a big step forward for Israel’s $2.75 billion agreement to buy 19 F-35 jets which was signed in October 2010 and includes options for up to 75 of the radar-evading fighters.
  • PGT Healthcare, the joint venture of Teva and Procter & Gamble, will set up a plant in India to produce consumer health and over-the-counter products at an investment of $89 million for both the Indian domestic market and for export.  PGT Healthcare was the winner of AICC’s 2012 Eagle Star “Deal of the Year” award that included expanded operations in Greensboro, North Carolina.
  • Intel Capital is planning to expand its operations with an emphasis on Israel.  The investment arm of Intel Corporation has been operating for the past 15 years, and has been involved in some of Israel’s top high tech companies.
  • The Ministry of Industry, Trade & Labor announced the winners in the tender to select the new franchisees for technology incubators in Israel.  Among the decisions was the move to close down the Meytag Technology Incubator in Katzrin, and replace it with a new incubator that will focus on Cleantech projects in Atlanta’s Partnership community, Yokneam.  The new incubator, TerraLab Ventures, is owned by Terra Venture Partners.
  • Caesarea-based Brainsgate has obtained FDA approval for the clinical trial on ischemic stroke treatment that will include 176  patients at 57 medical centers around the world.  Erlanger Hospital in Chattanooga, Tennessee is one of the clinical sites, and several other medical centers in the Southeast are expected to participate.
  • Israel’s GDP growth estimate for the first quarter of 2012 has been revised downward by the Central Bureau of Statistics to an annualized 2.7% compared with 2.9% in its second reading and 3.1% in its original estimate published in June.  The growth rate has been falling steadily since the unprecedented annualized growth rate of 7.2% was achieved in 4th quarter of 2010.
  • The proportion of first investments for the second quarter of 2012 by Israeli venture capital funds accounted for 18% of their total investments, the lowest proportion in a decade, according to the IVC Research Center and KPMG Somekh Chaikin.  128 Israeli high tech companies raised $453 million in venture capital in the first quarter, 20% less than the $569 million raised by 145 companies in the corresponding quarter of 2011 and 6% less than the $483 million raised by 142 companies in the preceding quarter.
  • Israel ranked fourth in overall confidence in investing and third worldwide in confidence in the home country’s economy according to the 2012 Global Venture Capital Confidence Survey by Deloitte and the US National Venture Capital Association.  The survey covered 440 venture capital, private equity, and growth equity investors in the Americas, Europe, Asia Pacific, and Israel.
  • Israeli business expenditure on R&D was higher proportionately to gross domestic product than any other country in the OECD in 2010 according to the Central Bureau of Statistics.  The development centers operated by multinational corporations contributed 40% of the overall business sector R&D spending, down from 44% the previous year.
  • Israel’s unemployment rate rose to 7% in the second quarter of 2012 from 6.9% in the preceding quarter.  Over 12,000 workers were laid-off in June 2012, 2.8% more than in June 2011, but 1.5% fewer than in May according to the Israel National Employment Service.
  • The Israeli government will invest $11 million to develop nanometer-size drug delivery systems for the treatment of a wide range of diseases.  Eleven laboratories and several universities will participate in the project that will be managed by the Israel National Nanotechnology Initiative, and the objective is to jointly create 5-6 applied technologies, each of which can serve as the basis for founding a start-up.
  • Almost 2.9 million passengers are expected to pass through Ben Gurion Airport in July and August, up 2.3% from the corresponding months of last year according to the Israel Airports Authority that predicts passenger traffic of about 50,000-60,000 per day throughout August as the summer vacation season hits its peak, with the highest numbers on Sundays and Thursdays.

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