Telecom Giant Ericsson Buys Its First Israeli Startup

Amir Teig
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The logo of Ericsson AB hangs above the entrance to the company's headquarters in Stockholm, Sweden, on January 25, 2011. Credit: Bloomberg
Amir Teig

Ericsson is making its first foray into Israel, the Swedish telecommunications technology maker saying over the weekend that it was spending $95 million to acquire Fabrix Systems of Ra’anana.

The purchase, which is expected to be competed in the fourth quarter, will give Ericsson control of a leading provider of cloud storage, computing and network delivery used for delivering digital video recorder, video on demand and other services.

Ericsson said Fabrix’s technology would help service providers deliver what is called TV Anywhere – enabling users to view high-quality video on multiple devices.

“Fabrix Systems further positions Ericsson to help customers deliver on the Networked Society’s global demand for personalized video content on any screen, at any time,” said Per Borgklint, a senior vice president at Ericsson.

In fact, the acquisition will mean that control of Fabrix is moving from one foreign company to another. Formed in 2006, a 78% stake in the company was sold a year later to IDT Corporation, a New Jersey-based provider of telecommunications and payment services.

Ericsson is buying IDT’s holding as well as the 22% still in the hands of the original investors, who are led by Fabrix CEO and cofounder Ram Ben-Yakir. The company employs 103 people, 93 of them in Israel and the rest in the United States.

IDT CEO Shmuel Jonas said the sale “further sharpens our strategic focus on our growing communications and payments businesses, and represents another in a string of successful efforts to maximize shareholder value by selling or spinning off noncore businesses we have created or nurtured.”

Borgklint said the Swedish company is investing significantly in its TV platform and video-network areas. Fabrix Systems will be incorporated into Ericsson’s Business Unit Support Solutions.

While Fabrix is Ericsson’s first acquisition in Israel, it opened an Israel office in 1997, which today employs about 100 people under CEO Alon Berman.

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