Business in Brief

Comverse partnering with Indian firm in Israeli R&D center; Motomy Group to buy controlling stake in Canadian email marketer.

Nir Keidar

Indian information technology group Tech Mahindra is partnering with the U.S.-Israeli firm Comverse, the telecom business software company, to set up a research and development center in Israel. The two companies did not disclose financial details. Manish Vyas, president of Tech Mahindra’s communications group, said the deal — which would bring the Indian company hundreds of engineers — will help the firm more than double its engineering business revenue within a few years. The company does about $400 million annually in engineering, about half of which is in telecoms. 

Under the “strategic relationship,” Tech Mahindra will be responsible for R&D and customer services while Comverse will be in charge of product management and sales. The venture into Israel by Tech Mahindra, which is part of the $16.5 billion Mahindra conglomerate, is the latest sign of booming ties between the countries since Indian Prime Minister Narendra Modi came to power last year. Tech Mahindra, which employees over 98,000 people in 51 countries, will take on about 400 Comverse workers, up to 300 from Israel and the rest mainly from the United States, France, Japan, Bulgaria and India. Tech Mahindra owns Israel’s Leadcom, a provider of network services for telecom companies, after it bought Leadcom’s parent Lightbridge Communications in February. (Reuters)

Motomy Group to buy controlling stake in Canadian email marketer

Israeli digital advertising firm Matomy Group said Wednesday it was buying a 70% stake in Canada-based Avenlo, which has developed a platform for email marketing campaigns. Matomy said the move will enhance its existing email acquisition marketing capabilities and provide its advertising clients with cross-device ad targeting and data management solutions. Matomy said it was not required by authorities in Britain, where its stock is traded, to disclose the valuation of the deal due to its size and structure, but the Wall Street Journal reported it would likely value Avenlo at around $17.6 million. Under the agreement, Matomy has the option to buy the remaining 30% of Avenlo over the next three years. French advertising group Publicis bought a 20% stake in Matomy in October, followed by a further 4.9 percent stake in November. (Reuters)

Viola raises $250m for tech investment fund
Viola Private Equity, part of Israel’s Viola Group, said Wednesday it had raised $250 million for its latest investment fund, Viola Private Equity II. Viola Private Equity invests in growth-stage technology companies in sectors such as enterprise software, e-commerce, cyber security, financial technology and health care. The new fund will invest in 10 to 12 companies with investments ranging from $20 million to $40 million per company. Viola’s previous fund invested in 12 companies including MobileAccess, which was acquired by Corning Inc, and Matomy Media Group, which went public on the London Stock Exchange last year. (See additional news about Matomy above). Viola Private Equity recently completed the new fund’s first investment, backing GlassesUSA.com, an e-commerce company that sells prescription eyewear to U.S. consumers. Viola Group has over $2 billion under management. (Reuters)

TASE higher, led by communications stocks

Stocks and bonds were higher overall Wednesday on the Tel Aviv Stock Exchange, led in part by communication stocks. The benchmark Tel Aviv-25 index rose by 0.46%, to 1,686.60 points, while the Tel Aviv-100 was up 0.44%, to 1,480.46. Trading volume was 1.62 billion shekels ($408 million). The communications index rose by 1.7%, led by an increase of 1.6% in Bezeq’s stock value. Among the standouts in share trading were Elbit Systems, which gained 3.1% on the day and Nano Dimension, which dropped 10% in heavy trading after the launch on Tuesday of its first 3-D printer. The Real Estate-15 index declined by 0.1% Wednesday. Following a steep rise overall in the index since the beginning of the year, Excellence Brokerage Services is attempting to put a damper on the excitement, advising that investors reduce their exposure to local income-producing real estate firms, which it generally sees as overvalued, and increasing investment in firms with overseas operations. (Omri Zerachovitz)