Friday, 18 September 2015

Ambassador ret. Yoram Ettinger: Israel – a R&D and manufacturing powerhouse



While global economic slowdown and insecurity have reduced consumption, export and growth throughout the world:

1. Microsoft acquired Israel's cyber security startup, Adallom, for $320mn. Adallom exposed the break into the security server of Microsoft Office365. In recent months, Microsoft also acquired Israel's cyber security company, Aorato, for $200mn, Equivio for $200mn and N-trig for a few scores of millions of dollars.  In 2009, Microsoft acquired Israel's 3DV Systems for $35mn (Globes, July 20, 2015).

2. The Framingham, MA-based Heartware acquired Israel's Valtech Cardio for $360mn, which could surge to $860mn, provided that milestones are met (Globes, September 3).

3. Medtronic, the Dublin and Minneapolis-based world's largest stand-alone medical technology development company, is launching – along with IBM and Israel's Office of the Chief Scientist – a digital medicine incubator in Israel. In April, Medtronics invested $2mn in Israel's DreaMed Diabetes (http://www.fiercemedicaldevices.com/, September 15). 

4.  According to Frans van Houten, the Chairman and CEO of the global Dutch giant, Phillips: "Israel has a major record of achievement in innovation, which Phillips is a partner to through our extensive R&D investments in Israel." Van Houten inaugurated a joint incubator, in Israel, with Israel's TEVA Pharmaceutical Industries – a $25mn investment by each company.  The joint incubator, Sanara Ventures, will be the home of digital health, monitoring and imaging early-stage startups.  In addition, Phillips operates a research & development center, in Israel, which employs 850 people. Phillips is also manufacturing special elements for its imaging systems in Israel. During the last three years, Phillips experienced a 60% expansion of its Israeli operation (Globes, September 11).

5. In 2014, Israel sold $6bn cyber-wares10% of global sales – compared with than $5.7bn in arms sales. The number of Israeli cyber-security companies has doubled over the past five years to 300.  Eight of them were sold to foreign investors for a total of $700mn. Israel's CyberArk is traded on NASDAQ at a $2bn valuation (The London Economist, August 1).

6. Switzerland is acquiring, from Israel's Elbit Systems, six "Hermes 900" medium-size unmanned aerial vehicles for $250mn (Israel Hayom, September 8). India is purchasing 10 missile-armed Israeli drones, the Heron TP, for $400mn. It will significantly advance India's cross-border military strikes capability against Islamic terrorist bases.  Previously, India purchased Israel's Harpy unmanned aerial vehicles, which are self-destructing systems, aimed at enemy radar and missile positions (India Economic Times, September 11). Russia acquired 10 Israeli intelligence-gathering drones, the Forpost.  In 2011, Israel delivered to Russia 12 drones at a cost of $400mn (Jerusalem Post, September 8, 2015). Oshkosh Corporation won a $6.75bn contract to build 17,000 new light trucks to replace aging Humvees for the US Army and Marine Corps. Israel's Plasan, one of Oshkosh's subcontractors, is expected to get $1bn of the transaction. Plasan develops, manufactures and assembles custom-built vehicle armor systems for lightweight military vehicles, protecting most US military vehicles, including in Iraq and Afghanistan (Yedioth Achronot, August 27).

7. China's Hebang acquired Israel's Stockton, a world leader in the development and manufacturing of bio-pesticides, for $90mn (Start Up Israel, July 10).

8. The CEO of Turkey's natural gas company, Turkiye Petrolleri: Importing natural gas from Israel – which is cheaper than the natural gas in Iran, Russia and Azerbaijan – would be a win-win transaction.  Irrespective of the deterioration of Turkey-Israel diplomatic ties, their trade balance has grown (Globes, August 12).

9.  Japan's Samsung Ventures co-led an $18mn round of private placement by Israel's StoreDot (Globes, August 20).  Minneapolis-based Norwest Venture Partners and London-based 83North (formerly Greylock Partners) co-led a $14mn round by Israel's Elostrata (Globes, August 27). Israel's Intec Pharma raised $27mn on NASDAQ (Globes, August 5). Johnson & Johnson, Adams Street Partners and China's Sino Biopharmaceutical participated in a $27mn round by Israel's LifeBond (Globes, August 6).