Founded as The SodaStream Co. back in 1903 by W & A Gilbey Ltd., the famous London Gin distiller, its first soda maker was created by George Gilbey. The company first introduced two flavors in 1920 - sasparilla and cherry. By 1955 SodaStream had expanded its distribution introducing 14 new flavors.

In 1979 SodaStream developed the classic Soda Maker, which remained its top product for decades, and with successful television advertising campaigns grew its sales by fifty percent.

In 1985, the Cadbury Schweppes conglomerate acquired SodaStream, operating it as an independent business. However in 1991 SodaStream’s main distributor in Israel, Peter Wiseburgh, established his own company - Soda-Club. The company’s business was not confined to sales only, rather it also developed a new brand of domestic soda-making devices. The Israeli inventiveness proved to be a hit as the company reached foreign markets as far as South Africa and Australia. Eventually, Soda-Club’s success resulted in its purchase of SodaStream. This is how the Israeli company set out on the path to become the world’s largest home carbonation system supplier.

In the early 2000's, SodaStream grew its production to nearly two hundred flavors and developed a global distribution network. However quick growth came at a price as the company ran into financial difficulties. Consequently, this led to its sale in 2007 to Israeli private equity investment group Fortissimo Capital Fund, which appointed Daniel Birnbaum as the CEO. In 2010 the company listed shares on the Nasdaq and six years later also on the Tel Aviv Stock Exchange.

Under the new CEO's leadership, SodaStream rebranded itself as a fizzy water company. The company continued evolving, introducing its first line of natural sodas that contained no artificial colors, sweeteners, flavors, or preservatives.

It provided a healthier alternative to the soft drinks offered by its global competitors. In recent years, the company’s expansion has been credited to focusing on innovative and healthier beverages such as Soda­Stream My Water, SodaStream Caps, SodaStream Free, and other products.

In recent years SodaStream has been running a global marketing campaign that addresses one key message - one reusable Soda­Stream bottle can help eliminate the usage of thousands of disposable plastic bottles.

Advocating for a more sustainable way of life, SodaStream spreads the word that the global plastic bottle pollution issue must be resolved. For the health conscious consumer the company accentuated the fact that SodaStream owners consume 43-percent more water than non-owners and use the sparkling water maker to cut sugary drinks out of their diets entirely.

In addition, targeting green-leaning and health-conscious consumers with messages of excessive use of plastic bottles by global beverage conglomerates is what helped Israeli SodaStream grow from a plain maker of fizzy water into a mammoth worth $3.2 billion.

It is unfortunate to see an Israeli company being taken over by a global corporation and delisted from the Israeli stock exchange, especially since Wise Money Israel has been holding its shares in its client’s investment portfolios. However, the good news is that SodaStream will remain an independent firm within PepsiCo, with its headquarters and operations remaining based in Israel for the foreseeable future. This will allow it to maintain its own brand, expand even further and keep delivering its products to households far beyond Israel. And as for PepsiCo, purchasing SodaStream may prove to be a turning point for its brand which has been struggling for sometime.

cnn.com, timesof israel.com, responsemagazine.com, forbes.com

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The Standard & Poors (S&P) credit rating agency upgraded its credit rating for Israel from A+ to AA- (stable outlook), ushering Israel into an exclusive group of 15 nations that hold the prestigious AA ratings (AA+, AA and AA-). The upgrade was announced on Friday, August 3^rd after S&P changed its outlook for Israel’s economy from “stable” to “positive” approximately one year ago.

This upgrade represents the highest-ever credit rating given to Israel by S&P or any other credit rating agency in the history of the nation and comes one month after Moody’s credit rating agency also raised its outlook for Israel from “stable” to “positive” in July 2018, indicating an upgrade in their rating from A1 to Aa- in the coming 12-18 months.

S&P explained its decision by stating that “Israel has demonstrated sound economic performance since the global financial crisis, with a current GDP of about $140 billion (or 50%) larger than in 2010, the current account in a sustainable surplus, and unemployment at historical lows,”.

They also added that despite Israel’s political situation being “highly fragmented” and the public debt remaining relatively high, “we now think that fiscal slippages leading to a significant reversal of the debt path are unlikely. This is based on our belief that, absent global trade shocks, Israel’s economic growth outlook will remain solid and allow the government to accommodate pressures coming from social and infrastructure spending, as well as a potential moderate escalation of security risks”.

Prime Minister Benjamin Netanyahu praised the upgrade, stating: “These decisions reflect the strength of the Israeli economy and the correct and responsible economic policy that we are leading on behalf of Israel’s citizens”.

After being at the helm of Israel’s economy since 2015, Finance Minister Moshe Kahlon also expressed his satisfaction from the S&P upgrade. "In the past three years, the Israeli economy has soared to the best macro data in its history. The confidence expressed by the strongest economic bodies in the world allows us to continue to grow the economy and to help reduce social gaps and strengthen the middle class and weaker sectors. The increased rating of AA- will save us billions of shekels in financing expenses, which we will redirect to the health, education and welfare ministries.” He said, optimistically adding "Although now it is double-A minus, this minus will disappear in a year".

Moody’s stated two main reasons for its outlook upgrade last month, one being recent positive trends in Israel’s government debt and the second Israel’s robust economy.
"The general government debt ratio has declined by more than 10 percentage points since the last upward move in Israel's credit rating in 2008 to around 60% of GDP, reflecting in part a prudent budgetary framework and a robust growth performance. This contrasts sharply against trends in many other advanced country peers both before and after the global financial crisis. For example, Israel is one of only a handful of advanced economies (including Norway, Switzerland and Singapore, which are all rated Aaa with a stable outlook) with a lower debt to GDP ratio today than before the global financial crisis. Furthermore, central government deficits have remained below 3% of GDP over the past 4 years, despite repeated upward revisions of the government's own deficit targets."

"The second driver of the decision to assign a positive outlook is Israel's increasingly resilient economy, supported by the dynamism of the high tech sector, increased energy independence and a strengthening external position, which, if sustained, will continue to support more favourable growth rates than similarly rated peers,".

Finance Minister Kahlon reacted to Moody’s outlook upgrade, stating “The rating outlook upgrade is further evidence of the strength and stability of the Israeli economy. All the data indicate that the economic policy that we are pursuing, including a free and responsible economy alongside strengthening the middle class and poorer sections of society, is the right way”.

Credit rating agencies base their ratings on the governments ability to repay its debts, but also heavily consider geo-political, macroeconomic and other strategic factors pertinent to each country, often comparing between peer countries. The ratings given by S&P, Moody’s and Fitch are the most prominent indicator of a country’s economic situation and are used to evaluate investment opportunities of many types. A higher credit rating expresses confidence in Israel’s economic policies and its future, and will allow the government to finance at lower costs.

Because of the credit rating upgrade, Israel’s capital market reacted positively with significant gains on Sunday, August 5^th, seeing the largest indexes, Tel-Aviv 35 and Tel-Aviv 125, rising 1.69% and 1.55% respectively by the end of trading. This is the highest level the market has been at in almost three years. The Shekel also strengthened 0.5% against both the USD and the Euro due to the upgrade.

Looking ahead, S&P analysts predict an average year over year GDP growth of 3.3% between 2018 and 2021, resulting from private consumption, corporate investments and strong performance in the high-tech and fields of service exports.

Sources:

Wise Money Israel, The Times of Israel, Calcalist, Globes, Jerusalem Post, Ynet

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March 13th, 2017 will be forever recorded in Israel’s history as the day of the largest Israeli tech exit to date. The Jerusalem-based, high-tech company Mobileye is reported to be acquired by international computing giant Intel for an astounding US$15.3 billion deal – a new record for an Israeli company exit. In reaction to the announcement, Mobileye’s NYSE-traded stock price shot up by approximately 30% to match the per-share premium that Intel will be paying in the deal.

Mobileye was founded in 1999 by Amnon Shashua and Ziv Aviram with the idea of creating computer vision software and cameras that would allow automobiles to drive autonomously, assist drivers to avoid accidents of all types, and ultimately saves lives. Mobileye offers Advanced Driver Assist Systems (ADAS) that include a windshield-mounted mono-camera capable of sophistically viewing what is in front of the driver. The images are processed and, in real time, a small device on the dashboard gives the driver audio-visual warnings. It identifies other vehicles, cyclists and pedestrians, and sounds an alarm before a collision occurs.

It can also read speed limit signs and determine whether the driver is veering out of his lane, the first sign of driver fatigue or lack of attention. The software application links to the steering system, and sounds an alert when the driver does something that may lead to a collision, so even if the driver makes a mistake or takes his eye off the road, the Israeli Mobileye system is always monitoring the vehicle’s surroundings and immediately notifies the driver of dangers.

Since the race is on to get the world's first self-driving car on the road, the world's largest and leading automobile manufacturers - BMW, Tesla and Audi - have all turned to Mobileye’s cutting edge technology for integration in their vehicles. Now the firm is re-engineering the system to allow drivers to take their hands off the wheel altogether, allowing for fully autonomous vehicles that they plan to roll out in 2021. The key innovations are in the computer microchips Mobileye develops, named EyeQ, and in the algorithms to determine cars distances, shapes of objects, red and green lights, etc.

Currently 25 automobile makers and over 15 million vehicles are using the technology developed by Mobileye, a company that started as a tiny start-up in Mt. Hotzvim, Jerusalem and went on to have the biggest IPO in Israeli history (valued at US$5.3 billion). With the Intel acquisition to be finalized in the coming months, no doubt that Israeli Mobileye technology will be in the forefront of global automobile development in the years to come.

Mobileye’s exit is the most recent and largest of a long and distinguished list of Israeli tech exits that we have witnessed over the past two decades. In 2016 Israeli tech exits totalled US$10 billion according to IVC Research Center, US$8.9 billion in 2015, US$9.82 billion in 2014, US$7.29 billion in 2013 and US$11.37 billion in 2012, so this one deal alone far outweighs all combined deals for each previous year.

One of the most memorable Israeli tech exits was that of Mirabilis, the developer of the famous ICQ messenger services which was purchased by AOL in 1998 for a total US$407 million. This software initiated the mass usage of social messaging and media of the likes of WhatApp, Twitter and Facebook. Since then hundreds of Israeli tech companies were purchased and merged with other leading world companies who deliver products that are now household names in dozens of countries.

Some examples include M-Systems, inventor of the modern DiskOnKey (aka thumb drive) which was acquired by Israeli global flash memory giant Sandisk in 2006 for US$1.55 billion. Flash drives forever changed the way that we store and carry data and led SanDisk to become a global leader in the USB flash drive market.

In 2013 Internet giant Google purchased the Israeli social navigation company Waze for a reported US$1.6 billion. Waze allows real-time reports from users to update navigation routes, thus avoiding traffic, warning about hazards, roadblocks, police and speed cameras. It also allows driver to schedule drives, leave in order to arrive on time, and share ETAs with other drivers. Currently Israeli Waze technology powers both Waze and Google Maps, the world leading real-time navigation apps.

Israeli companies will continue to lead the world in a plethora of fields as they have until now, and many of these companies, along with their technologies and innovations, are now also available and accessible for investors all around the globe through securities traded on Israel’s public exchange, the Tel Aviv Stock Exchange (TASE). Mobileye and its partners will revolutionize the world of driving in the coming years, and their investors are likely to be rewarded handsomely. Where will the next world-revolutionizing Israeli tech breakthrough come from and will you have a part in it – I leave that to you.

Written by

Stefan Silver

The post Another Huge Deal for Israeli Tech – Mobileye’s Historical Exit appeared first on Wise Money Israel.

Since David Ben Gurion declared the establishment of the State of Israel on May 14^th, 1948, Israel has been at an almost constant state of war with its Arab neighbors, whether it was large-scale regional Israeli-Arab wars that characterized the first 30 – 40 years of the nation’s existence, or the more recent conflicts with local Palestinian terror groups such as Hezbollah and Hamas.

Due to the change in nature of Israel’s recent conflicts over the past few decades, new security threats have appeared and Israel has once again been forced to invent innovative ways to combat them. Two of these threats are the continual missile threats from Israel’s immediate neighbors in Lebanon and Gaza - as well as more distant nations such as Iran and Iraq - and also the very imminent, although less felt threat of cyber warfare.
Surface-to-Air Missile Defense

Israel may not be the first nation to deal with the constant threat of missiles and mortar shelling, but it certainly is the first to develop a solution for it. Since Israel withdrew from the Gaza Strip in mid-2005, over 11,000 projectiles have been launched into Israel, bringing approximately 5 million Israelis under threat[i].

The Iron Dome mobile missile defense system is part of a larger multilayer missile defense system that Israel is developing to cover all layers of aerial defense. This system includes the Iron Dome (short range), Magic Wand (mid-range) and Arrow (long range). Iron Dome is the only system of its kind in the world, and was developed in a mere four years by leading Israeli defense corporations Rafael (privately owned) and Israel Aerospace Industries (IAI). It has a 90% success rate and has intercepted over 1,200 projectiles aimed at civilian populations since going operational in 2011.

The system is highly advanced and sophisticated; the system’s radar detects a projectile launch and then determines its flight path and impact location. Only if the impact location is in or near civilian populations (or sensitive installations) is an interceptor missile launched. The system is entirely mobile and can easily be relocated and deployed to any location necessary.

Air-to-air Missile Defense

Commercial aircraft also fall under the threat of missile attacks as seen in various incidents around the world such as Malaysia Airlines flight 17 (Boeing 777) that was shot down over Ukraine in 2014 by a Russian surface-to-air missile while on route from Amsterdam to Kuala Lumpur. Although Israel has never suffered a missile attack on a commercial airliner inside Israel, the threat does exist, especially due the proximity of Israel’s borders to Ben Gurion International airport.

In light of the gravity of missile threats to Israeli passenger aircraft both inside Israel and abroad, Israeli security company Elta Systems Ltd. designed “Flight Guard” - the first airborne flight system to protect passenger and freighter aircraft against missile attacks. This system is now installed on all three of Israel’s airlines as well as on hundreds of military aircraft and even VIP commercial aircraft[ii]. Elta systems is part of the larger Israeli government-owned Israel Aerospace Industries (IAI) which offers unique solutions for a broad spectrum of requirements in the fields of space, air, land, sea and cyber[iii].
IAI is investable through corporate bonds on the Tel Aviv Stock Exchange[iv].

Cyber Security

Check Point Software Technologies is a leading global provider of software and hardware & software products for IT security. Best known for introducing the Stateful Firewall that reduces CPU usage dramatically, the Israeli based company was founded in 1993 by Gil Shwed who served in the renowned Unit 8200 during his Israel Defense Forces (IDF) army service. Unit 8200 is part of the Israeli Intelligence Corps and has produced several other former servicemen that have gone on to found additional leading high-tech companies such as Palo Alto, ICQ, EZchip, Onavo, Singular, AudioCodecs, NICE Systems, CyberResaons and more^[v].

Check Point’s hardware and software protect companies of all sizes, as well as consumers, from cyberattacks as well as preventing malware and spyware from penetrating and attacking enterprise networks, computer and even mobile devices. Their innovative FireWall-1 was a groundbreaking development in the area of cyberwarfare and protection and has remained the basis for securing digital communications and data since its inception.

Check Point employs 3,400 people in their offices around the world, is traded on the NASDAQ and has shown an impressive performance of over 300% over the past 7 years[vi].

Once again Israel is innovating, even through hardships, and introducing the world to technologies and solutions that can benefit many other than itself. You can be a part of propelling Israel’s economy and innovations forward by investing in Israel and becoming part of the success.

Stefan Silver serves as the Director of Business Development & Operations at Wise Money Israel (WMI), the first licensed Investment Portfolio Management firm in Israel that works completely in English to serve local and international clients. WMI works with hundreds of individuals and organizations from around the globe to invest in Israel’s leading companies and technologies through Israel’s capital market – the Tel Aviv Stock Exchange (TASE).

Stefan holds a B.A.in Economics and Management, and an MBA from Haifa University. Born in Auckland, New Zealand, Stefan immigrated to Israel in 1992 and served for four years in the IDF’s Combat Engineering Corp, including combat experience on the front lines of the Second Lebanon war. He is currently a Captain in the IDF Reserves.

LinkedIn: Stefan Silver

[i] Israel Defence Force, [ii] Wikipedia, [iii] IAI, [iv] Tel Aviv Stock Exchange, [v] Forbes, [vi] Nasdaq

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Planning Israeli Development Center?

Apple is also believed to be planning a semiconductor development center in Israel, a move that could synergize well with its recent acquisition. The facility would be the first of its kind for the company, which has preferred to contain research efforts within its headquarters. According to Calcalist reporter Assaf Gilad, Apple relies on the company’s solutions for the iPhone, iPad and MacBook Air product lines, among other devices, and the firm's proprietary "Memory Signal Processing" (MSP) technology reportedly attracted the Cupertino, Calif., company's interest. Anobit claims MSP can improve the reliability, performance, efficiency and endurance of flash memory while driving down the cost.

“The acquisition is further proof that Israel’s innovation overcomes boundaries and that the semiconductors industry is an innovative and leading field in Israel,” Koby Simana, head of the Israel Venture Capital Research Center in Tel Aviv said.

Rare Purchase for Apple

The 200-employee Israeli fabless semiconductor company that specializes in flash storage is Apple's first acquisition since Tim Cook took over Apple in August 2011 from the legendary CEO Steve Jobs, who later passed away. Apple uses its massive cash hoard to strategically invest in components and acquire companies that will give it a leg up on the competition. This is a rare hardware-based acquisition for Apple, as it typically buys software companies. The company's last major buyout of a hardware company came only in 2008, along with three others in the past two decades.

The technology could also offer some cost benefits for Apple, as it allows less expensive types of flash memory to be used. One report claimed Apple could see savings of between 10 to 20 percent on its flash purchases as a result of the Anobit acquisition.

As sales of its iPhone, iPad and MacBook Air products have taken off, the company has become the world's biggest consumer of NAND flash memory in recent years. Sanford C. Bernstein reported earlier this month that the iPhone maker accounted for 23 percent of the world's flash memory purchases last quarter.

Tim Cook, who now serves as Apple's CEO, says that the company is constantly looking for

strategic opportunities to use its cash. Israel’s Prime Minister Binyamin Netanyahu welcomed the company to the country in a post on Twitter saying, "Welcome to Israel, Apple Inc. on your 1st acquisition here. I'm certain that you'll benefit from the fruit of the Israeli knowledge."

Interested in investing in Israeli high-tech stocks available only on the Tel Aviv Stock Exchange? Learn more about opening an Israeli investment account here.

Other Recent Israeli Tech Acquisition

CSR Plc, the U.K. maker of chips used in Nokia Oyj mobile phones, completed the acquisition of the Israeli developer Zoran Corp. on Sept. 1, 2011 according to Bloomberg data. Citi Venture Capital International, a private equity investor and investment adviser focused on developing markets, paid $307 million in cash last year for Tel Aviv-based Ness Technologies Inc., an information technology company.

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