US private equity fund buying Israel's Windward for NIS 1b

The price represents a 39% premium over the valuation at which the shipping information tech company was floated on AIM three years ago.

Three years ago, in December 2021, Israeli technology company Windward.ai became listed on London’s AIM market, at a pre-money valuation of €127 million. It now reports that it has been sold to US private equity firm FTV VIII, L.P. (through a company named Octopus UK Bidco Limited, formed for the purposes of the deal) at almost double that valuation, £216 million cash (about NIS 1 billion).

The share price in the sale, 215 pence, represents a premium of 47% on the market price before the report, and of 92% on the average share price over the past six months. In comparison with the flotation price three years ago, the premium is 39%. In that period, the FTSE AIM All Share Index has fallen 65%. In response to the report of the sale, Windward’s share price jumped 40%, bringing it close to the deal price.

Windward was founded in 2010 by its CEO Ami Daniel and Matan Peled, who manages the company’s activity in the US. The company’s chairperson is former BP CEO Lord John Browne. The company develops and sells a solution for providing real-time information on ships at sea, enabling users such as importers, exporters, and logistics service providers to make decisions and manage risk. Among its customers are energy companies, banks, and government agencies. At the beginning of 2024, it employed 170 people, 120 of them in Israel.

Earlier this year, Windward reported that it had been chosen by Interpol to provide intelligence and insights on illegal trade, people smuggling, and illegal fishing. The report of the acquisition states that FTV "sees an opportunity to accelerate Windward's continued expansion from its current market position within the maritime sector, into a broader supply chain analytics provider and plans to support the development of Windward's future product roadmap under private ownership. For this, Windward may require investment, which could reduce profitability in the short to medium term, but should build the strong operational foundations required to support Windward's next phase of growth, scale its platform globally and drive sustainable long-term value.

Windward says that, since its flotation, it has more than tripled its customer base. The company’s independent directors have recommended acceptance of the acquisition offer, the US company. In giving their reasons for doing so, they state: "While the Windward Independent Directors believe Windward is well positioned for future continued success and that the long-term prospects are strong as an independent listed entity, they also recognize that economic, regulatory and competitive uncertainties exist, many of which are beyond Windward's control."

"This marks an exciting next step in the evolution of Windward, providing the opportunity to build upon our first mover advantage in maritime generative AI through accelerated innovation and greater market reach," Ami Daniel said. "We are incredibly proud of the growth we have achieved while on the AIM market, and our ability to adapt and incorporate evolving technology, specifically generative AI."

"Now is the time to replicate that success across additional geographic markets. In addition, being US-owned is expected to facilitate expedited penetration and growth in the US market," he added.

In the first half of 2024, Windward had revenue of $17.6 million, 37% more than in the first half of 2023. EBITDA was a negative $1.3 million, which compares with negative EBITDA of $3.8 million in the corresponding period, and at the end of the half it had cash of $13.8 million.

Windward is represented by CMS Cameron McKenna Nabarro Olswang LLP and Epstein Rosenblum Maoz (ERM). Willkie Farr & Gallagher (UK) LLP and Gornitzky & Co. are acting as legal advisers to FTV.

Published by Globes, Israel business news - en.globes.co.il - on December 24, 2024.

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