The private equity group Francisco Partners is close to an agreement to buy approximately 50% of R2Net, an Israeli e-commerce platform that runs the JamesAllen.com jewelry trading site, at a company value of $300 million.
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Francisco will buy the shares from Israel Growth Partners, a fund run by Lichtman and Shani, that acquired about 25% of R2Net in 2014 at a company value of $100 million and the rest from the Edelman family, which controls the company.
R2Net provides an electronic trading site for jewel merchants and is considered one of the biggest in its niche in the United States. Operating from offices in the Herzliya industrial zone, the company has about 200 employees and generates revenues of about $90 million a year. Oded Edelman had been among the owners of Daro-Net, an internet service provider that collapsed in 2013.
R2Net’s business is based on technology developed by Segoma Imaging Technologies, which it bought in 2015, for three-dimensional photographic images of jewels. Diamond industry insiders estimate the acquisition was done for about $18 million.
Francisco Partners specializes in high-tech investments, mainly in the U.S. and Britain, though in 2006 it bought another Israeli company, Ex Libris, which developed library cataloging software, for $62 million. It sold Ex Libris two years later to the Leeds Fund for about $200 million.
In late 2008, Francisco Partners and the Sequoia Fund acquired the Israeli monitoring technology company Dmatek (which changed its name to Attenti) for $77 million. Within a year and a half, Dmatek was sold to the American company 3M for an estimated $230 million.
In 2014, Francisco Partners bought the Israeli cyber company NSO at a company value of $130 million, and in 2015, it acquired Clicksoftware for $440 million.
Its modus operandi is generally to buy the controlling interest in companies and improve their operations and profitability over a number of years before exiting. Its Israeli office is headed by Eran Gorev, formerly CEO of Wi-fi-technology developer Alvarion.