Israel's Qualitest Changing Hands at $420m Value

Bridgepoint fund buying majority stake software-testing firm from U.S. investor

Qualitest logo
Wikimedia Commons

The U.K. private equity group Bridgepoint has agreed to buy a majority stake in the Israeli software testing firm Qualitest from Marlin Equity Partners, the companies said on Wednesday.

Financial terms were not disclosed but a source close to the deal said the purchase price is about $420 million.

Marlin, they said, will retain a minority stake in Qualitest, which sells a range of artificial intelligence-powered engineering and testing products. Marlin, which is based in California, acquired Qualitest in 2016 at a company valuation of just 300 million shekels ($84.4 million at current exchange rates)

Based in Petah Tikva, Qualitest serves mid- to large-size tech firms in the technology, financial service, retail, telecom, health care, insurance, aerospace, media and utility sectors.

“They [Bridgepoint] are thoughtful investors who seek to work with strong management teams and have a history of investing in high growth potential markets. Their long-term capital commitment provides us with the platform to accelerate the next stage of our development and execute our global acquisition strategy,” said Qualitest CEO Norm Merritt.

Bridgepoint said Qualitest’s market is growing at an average rate of 13% a year, driven by the increasing needs of a $32 billion global outsourced market where software performance has become more critical for businesses.