Tuesday, June 30, 2015

Chinese Investor To Invest 2m In Israeli Company HBL

Hadasit Bio Holdings Ltd. has announced a $2 million investment from Chinese investors. The investors will receive one quarter of the company's shares in the placement, which reflected a company value of $6 million, after money.

Hadasit Bio is a holding company for companies founded on the basis of technology developed by the Hadassah Medical Center. The company currently has holdings in a number of companies, most of which are at various stages of clinical trials. Hadasit Bio's most prominent investments are in Cell Cure Neurosciences, which is in Phase I/IIa clinical trials for the use of stem cells in the treatment of age-related blindness; Enlivex, which is preparing for a Phase IIb or Phase III trial of its treatment for Graft Versus Host Disease (GVHD), a disease that attacks bone marrow implants, and which recently received an investment from a group led by Shai Novick; D-Pharm, which is developing drugs for treatment of stroke; and KAHR Medical, whose product treats autoimmune diseases and cancer, and which has obtained an investment from Sanofi. KAHR is also at the pre-clinical trials phase.

Hadasit Bio's market cap as of today was $4 million, meaning that the new investment is being made at a 50% premium on the market price.

In return for the investment, Hadasit Bio promised that it would do its best to make sure that the investor received the right to produce and market in China the products of Hadasit Bio's portfolio companies, and to establish a company development center in China, if an additional investment is made.

Since all the companies in the group are legally independent, and some have additional investors, Hadasit does not have control over the grant of licenses on the portfolio companies' products, and can only make its best efforts, as the agreement specifies.

Sunday, June 28, 2015

Fosun Buys Israeli Insurance Company Phoenix For $489mm

Delek Group Ltd. agreed to sell its controlling stake in Phoenix Holdings Ltd., Israel’s fourth-largest insurance provider by market value, to China’s Fosun International Ltd.

The Netanya, Israel-based holding company announced on Sunday it would sell its entire 52 percent stake to a unit of the Shanghai-based conglomerate, according to an e-mailed statement. The purchase price is about $461.6 million plus interest accrued before the deal’s closing date, with other adjustments possible, Fosun said in a statement to the Hong Kong stock exchange. The maximum payable may be about $489 million, it said.

“It is an important strategic deal for the group and will add 1.8 billion shekels in cash to the company’s coffers,” Asaf Bartfeld, Delek Group chief executive officer, said in an e-mailed statement. “We are in a great starting position to implement our plans and undertake strategic investments in the international energy market, which will be synergistic and complementary to our activities.”

Delek needs to sell its stake in Phoenix to comply with a law passed in December 2013 that prohibits Israeli companies from owning financial services corporations as well as industrial businesses. Sunday’s deal adds to the company’s agreements to sell other units including Delek Europe BV and Barak Capital Ltd. The Phoenix sale is subject to regulatory approval. An accord last year to sell its stake in Phoenix to U.S. company Kushner Funding LLC fell through.

“The sale is part of Delek’s strategy to focus on gas and was expected,” Noam Pincu, an analyst at Tel Aviv-based Psagot Investment House Ltd., said by phone. It “may enable Delek to revive its plan to list shares in London in the medium term.”

Acquisition Spree

Fosun, backed by Chinese billionaire Guo Guangchang, has been on an acquisition spree, buying insurers, energy companies and properties overseas in Australia, Italy and New York. The company will invest in more insurers in Europe and the U.S. in the coming two years, Guo, a self-proclaimed student of Warren Buffett, said in an interview at Bloomberg’s headquarters in New York in April.

The transaction adds to growing interest from Chinese investors in Israeli companies. Last week xio Group, a closely-held Chinese investment firm with more than $3 billion in available capital, agreed to buy Israel’s Lumenis Ltd. for about $510 million in cash. Bright Food Group Co. acquired dairy producer Tnuva Food Industries Ltd. earlier this year in a deal that valued it at more than $2 billion and Alma Lasers Ltd. was bought by Shanghai Fosun Pharmaceutical Group Co. for $222 million in 2013.

Thursday, June 18, 2015

Hong Kong Based XIO Group Acquires Israeli Company Lumenis in $510M Deal

Israeli based company Lumenis (NASDAQ: LMNS) has signed a definitive agreement to be acquired by XIO Group for $14.00 per share in cash, for an aggregate purchase price of approximately $510 million.

"This acquisition is a strong recognition and vote of confidence in Lumenis' achievements and its employees, and I am excited about the future prospects of Lumenis," said Tzipi Ozer-Armon, Chief Executive Officer.

"Over the past 3 years we have managed to transform Lumenis into a strong, growing and profitable company. We have refocused our strategy, introduced new products, and tripled our EBITDA. Furthermore, we have created a very bright and promising future for Lumenis by building a robust pipeline of innovative products, a strong sales team in each region, and by enhancing our global brand recognition. I am confident that we will continue to thrive and reach new heights together with XIO Group."

"We are excited about the announced transaction and the value created for Lumenis' shareholders," said Harel Beit-On, Chairman of the Board of Directors. "Over the last years, we had an opportunity to lead Lumenis through a strategic transformation into a valuable growing business with global appeal. We respect and appreciate the efforts of Lumenis management and employees and wish the company continued success."

The two largest shareholders of Lumenis, Viola Group and Ofer Hi-Tech, which collectively own approximately 59% of the shares of Lumenis, have entered into a customary voting agreement with XIO Group.

Based in Hong Kong, XIO Group is a global multi-billion dollar alternative investments and research firm with offices in London, Hong Kong and Shanghai. The company has a significant amount of committed capital in place for global transactions. The Group seeks to leverage its unique global network to provide growth for portfolio companies.

Sunday, June 14, 2015

Chinese VC to invest $500m in Israel in 2015

Chinese investors continue to show growing interest in Israeli high tech. According to IVC Research Center, Chinese investors will invest an estimated half a billion dollars in Israeli venture capital in 2015. IVC held a conference yesterday where it revealed the data and publicized another estimate, according to which Israeli funds will raise between $1.2 billion and $1.5 billion by the end of this year. In addition, the company believes that half of the funds that raise money by the end of the year will have at least one Chinese investor.

IVC examined the data on venture capital in Israel and the US, which grew 30% - 50% between 2013 and 2014. In China, by contrast, venture capital increased by 300% in a single year. Since 2012, more than 30 entities from China and Hong Kong invested in Israel that had not previously done so. The number of Chinese investors is growing, according to the data, at the impressive annual rate of 50%. China’s venture capital industry totaled $15.5 billion in 2014, compared with $48 billion in the US, and $3.4 billion in Israel.

Israel-China investment fund Synergy China Fund managing partner David Fuchs, who participated in the conference, said: “The money flowing in is just the tip of the iceberg; there are many more good investors and strategic partners who are looking for interesting investments within China, and don’t reach Israel.”

Wednesday, June 3, 2015

Shanghai Pharma Buys Israeli Company Syneron Dental

Shanghai Pharmaceuticals Group is said to be in advance negotiations to buy Israeli company Syneron Dental Lasers for $15 million. 

*** Details to follow ***

Chinese Companies Seek Tech Innovations in Israel

Numerous Chinese technology corporations have embarked on ‘Go Global’ marketing and sales campaigns to introduce their products and services worldwide. Sounds attractive for domestic companies to expand beyond borders, but such endeavors do not always guarantee success. China has a negative reputation for having a business environment that appears permissive for shortcuts on Intellectual Property Rights (IPR), playing copy-cat with new tech trends and lacking an innovative spirit.

Nevertheless, Chinese companies are taking tremendous strides to overcome such deficiencies by making large-scale R&D (Research & Development) investments and encouraging greater cooperation on joint ventures with foreign-owned firms. Israeli technology companies are playing a pivotal role to help ‘China Tech’ to design ground-breaking devices that transform society.

Shining a light on Israel’s R&D centers 

The Chinese and Israeli governments, as well as leading universities from both nations are collaborating to build the most-advanced R&D centers in Israel as the country is gaining prominence for establishing the ‘Silicon Valley’ of the Middle East. Israeli tech research labs have received hundreds of millions of US dollars in capital to develop new inventions that can grab the hearts of consumers, investors and manufacturers. Chinese tech giants – Alibaba, Baidu, Fosun, Lenovo and Xiaomi – have agreed to open subsidiary R&D centers in the country.

Chinese companies realize that the old ways of doing business, which includes manufacturing low quality gadgets on the cheap, is no longer a winning formula. Israeli companies are recognized as key innovators in the fields of IoT (Internet of Things), Web security, edTech (education technology), finTech (financing Tech startups), mobile and digital health devices. Meanwhile, Chinese companies hold a deeper understanding on how to bring new products to the mass market.

CEO Omer Kreisel of Paolim Capital Markets told Globes News that Chinese consumers are getting more sophisticated and desiring more advanced technology devices for purchasing. Israeli tech startups can offer them more-enhanced innovations. This explains why more than 1,000 Israeli companies have set up operations in China, which have led to mergers, such as in 2014 when China-based Ctrip acquired Israeli-owned Travelfusion Ltd.

Bridging cultural investment gaps

For Israeli hi-tech firms hoping to set up shops in Asia, China offers benefits, but there are a few disadvantages as well. China has the heads up on factories, logistics and infrastructure. The set-up process for registering a new company takes a shorter time than in Israel. Yet, Israeli investors or startup companies should prepare for headwinds, such as cultural investment gaps that can lead to misunderstandings and potentially broken contracts in China.

The best solutions for Israeli firms to enter the Asian powerhouse would be to sign up with a Chinese company from a related industry on joint ventures. Utilizing localized managerial skills in China remain essential for success and harmony. Most importantly, they should develop a network of relationships with potential Chinese partners. Accordingly, adapting to such customs can be rewarding.

China-Israel trade accelerates to full-speed ahead

Trade between China and Israel stood at over $11 billion last year. Chinese companies have already invested more than $2 billion in the country so far in 2015 as compared to just $300 million for all of 2014. Economists are forecasting China to surpass the US as Israel’s largest trading partner in the near future. Last Wednesday, the Israeli Trade Authority signed an Authorized Economic Operator (AEO) agreement that simplifies customs and approval procedures for Chinese exporters to Israel. 

“The mutual recognition program streamlines and simplifies trade between Israel and China.” Israel’s Trade Authority director Moshe Asher told the Jerusalem Post. “Participation in the program is expressed through saving time and money” for Israeli companies, exporters and importers to “make them more attractive to the global trade market.” 

Linking China and Israel with shared technologies

As Israel ‘Looks East’ for trade and investment opportunities in Asia, China’s technology companies can benefit from the innovative drive of Israeli hi-tech startup firms. R&D tech centers are blooming in Israel, paving a pathway to new devices that can change the world. Both countries can cooperate to instill a more tech-savvy global populous.