Israeli technology companies getting acquired by multinationals—seems almost inevitable. Just the other day, the CEO of Bank Hapoalim gave a speech decrying this long time trend, joining the chorus of Israelis who say the “Start Up Nation” needs to grow its own giant companies and not go for the quick sell off.
I haven’t made up my mind on this debate, recognizing that for every acquisition exit, the Israeli founders don’t stay on the sidelines for long, going on to seed and grow the next round of promising companies. However, in February when Given Imaging was acquired for at least $650 million by Ireland-based Covidien, it was a landmark event for Israel and for me, personally.
My involvement with Given Imaging began in 1997 when I was asked to go to Yokneam by the Jewish Federation of Greater Atlanta that was considering the Israeli community for a Partnership 2000 relationship. While there, I was taken to the RDC incubator, jointly owned by Rafael and IDB, and I met Gabi Iddan, the inventor. I was astounded by the potential he and the investors saw in changing the way gastrointestinal diagnosis could be made through the revolutionary Pillcam that Given Imaging was developing. It was a scene out of Fantastic Voyage.
In my time as professional leader of the American-Israel Chamber of Commerce, Southeast Region (AICC), we always used to ask ourselves, “How early is too early?” to engage with Israeli startups. The paradigm was always Given Imaging, because if we hadn’t gotten involved with them at the incubator stage, there’s no way the company would have decided to establish their North American headquarters in Atlanta. It was that early engagement that made all the difference, leading them to the abundant med tech talent, lower cost of doing business, and other advantages Atlanta offered to help make their operation here a major reason for their successful US market entry.
So Given Imaging is no longer an independent Israeli company. We understand that Covidien intends for the R&D and manufacturing to continue in Yokneam, and sees Israel as the place for developing new products. The Atlanta operation will continue, although already there has been an exodus of some of the key management here, but the parent company may relocate some of their own people to join the Given Imaging team.
Even before the acquisition, Given Imaging “alumni” had assumed leadership roles with other Israeli companies and the community. David Hartnett, the company’s first US employee, is VP Life Sciences for the Metro Atlanta Chamber, and Israel is a key target for his work. Mark Gilreath went on to found EndoChoice that is now engaged in revolutionary R&D in Israel through its merger with Caesaria-based Peer Medical, and Given Imaging’s former COO Kevin Rubey and VP Yoram Ashery are working with Mark again. Former President of Given Imaging’s North America operation, Chris Rowland, is now CEO of Omer-based Medigus. And Given Imaging’s founding CEO, Gabi Meron, continues to invest in Israeli medical device startups and always considers Atlanta for their US operations.
At the annual Eagle Star Awards Gala on June 11th, AICC will honor the last CEO of independent Given Imaging, Homi Shamir, with the “Tom Glaser Leadership Award”. With our long time association, it is touching to me that Given Imaging will again be honored by the organization I founded and ran for almost 22 years.
I have witnessed other Israeli companies in our neighborhood getting acquired by multinationals, among them Accord Networks by Polycom and Scitex Vision by HP. The reverse has also happened with Verint buying Atlanta-based Witness Systems several years ago.
So the future of the Given Imaging-Covidien combination remains to be seen. Let’s hope they will continue to reap the benefits of Israeli technology, and that new startups will be spawned by those who have been associated over the years with this outstanding Israeli company.