BRCM--Merger by numbers in Israel
By Thom Calandra, FT MarketWatch.com
Last Update: 5:14 AM ET Dec 12, 2000
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LONDON (FTMW) - A new Israeli technology stock index at Goldman Sachs could become a well-thumbed guide for bankers seeking mergers in the tech-laden nation.
Several California-to-Israel tech combinations have raised eyebrows amid gloomy stock markets. Polycom (PLCM: news, msgs) of California just announced it would buy Israel's Accord Networks (ACCD: news, msgs) , a company that makes technology for video-teleconferencing, for $339 million in stock. (See earlier column.)
Broadcom (BRCM: news, msgs) , a California chip maker, spent more than $1 billion of its highly rated Nasdaq stock to buy VisionTech, a privately held firm in Herzliya, Israel, that makes compression chips for video-teleconferencing, television viewing and broadband Internet use.
Israel is a leading maker of video communications and other Internet and computer technology. Its engineers, who receive rigorous academic and military training, are said to be worth $1 million each on the market capitalization of their companies, maybe more.
About 145 Israeli companies trade on U.S. stock exchanges, almost two-thirds of them on Nasdaq.
When the Polycom purchase was announced earlier this month, one analyst, Doug van Dorsten at Thomas Weisel Partners, described it as a "bombshell" that shook a teleconferencing trade show going on in Anaheim, Calif. The analyst said in a report that he sensed "a fair bit of shock among video-conferencing industry vendors."
Polycom's purchase, which van Dorsten sees as "an outstanding strategic move," could place it in competition with Cisco Systems, which uses video-conferencing infrastructure products from an Accord competitor, RADVision (RVSN: news, msgs) , another company with roots in Israel.
In the case of Broadcom, the $33 billion company said it would use VisionTech to build a Broadcom Israel unit. Other American companies, led by Intel Corp. (INTC: news, msgs) , are very active in Israel on the engineering and venture capital fronts.
Jacada, others in index
The new Goldman Sachs Israel Technology Index holds 35 stocks in it, among them Breezecom (BRZE: news, msgs) , Radware (RDWR: news, msgs) and Jacada (JCDA: news, msgs) . All are listed in the U.S. Some of them, like Accord before the Polycom purchase, or Jacada, which makes electronic commerce and wireless technologies, have shares that have been battered in the tech sell-off.
Another Israeli index, run by TransNations Investments of New York, contains 35 Israeli stocks listed in Tel Aviv and the U.S. The funds-rater Morningstar said earlier this year, when Nasdaq was tanking, that TransNations' Israel-oriented mutual fund (AMDEX: news, msgs) was the top performing non-American focused fund in the world. (See chart above.) The AMIDEX35 mutual fund's net asset value has gained 20 percent thus far in December.
See here for more on the Goldman Sachs index.
See here for more on the AMIDEX35.
Thom Calandra is editor-in-chief of FTMarketWatch.com and CBS MarketWatch.com. |
