Cisco buys Israel's Intucell for $475M
US multinational networking giant announces acquisition of Raanana-based developer of mobile network management technologies
This is an impressive price tag considering that only two years ago a meager $6 million were invested in the company.
One of the biggest winners in the deal is US VC fund Bessemer, represented in Israel by Adam Fisher, which stands to gain one of the highest profits ever made in Israel by a venture capital fund, with a price-to-earnings ratio of 37.
Bessemer holds a 47% interest in the company so it will earn a whooping $220 million.
Fisher was one of the only VC investors who was willing to invest in Intucell, transferring $6 million to Intucell in its initial financing round. Bessemer is regarded as a "deep pocket" VC fund and is invested in two other Israeli startups aside from Intucell: Traffix and Vasona.
Other winners are founders Rani Wellingstein and Ido Susa, who hold a sizable portion of the company (35%) and will pocket a cool $83 million each.
The company's 85 employees hold an estimated $70 million in stock options; however, they will be able to exercise them only after a four-year term at Cisco.
Intucell is one of the most prominent telecommunications companies in Israel, quietly growing within only two years at a breakneck speed usually exhibited by internet companies rather than mobile network communications developers.
In January 2011, the six-employee company raised its first and only investment – $6 million.
Two years later, aside from its workforce multiplying, the company's cash reserves rapidly ballooned to some $20-$30 million and today it counts AT&T as its main client.
After the acquisition, Intucell will be assimilated into Cisco's mobile internet technology group and made a Cisco development center in Israel, specializing in SON (Self Optimized Networks).
This report was originally published in Hebrew by Calcalist
