As first revealed in Globes, the Livnat family has sold 49% of its shares in MedOne, a longtime server farm management company, to the American Berkshire Partners fund. The amount of the deal was not disclosed, but it is estimated at over NIS 730 million, a figure that reflects a value of about NIS 1.5 billion for the Israeli company. The Israeli company has 25,000 square meters built of server farms, two of which operate in Tirat Carmel and Petah Tikva and two other new farms that are in an advanced construction process in Ramla and near the existing farm in Tirat Carmel. The Israeli company has about 50 employees.
The negotiations ended last week after months of discussions, during which the family was offered several more purchase offers, some of them even in an amount higher than what was eventually received. It is estimated that what has decided the outcome is probably the mental match between Berkshire executives and members of the Israeli family, and the shared vision to give Lear Van an important place in the submarine and intercontinental fiber network that stretches between Israel and the Far East, the Arabian Peninsula and Europe.
The acquisition of shares in Med Van was joined by another small group owned by Grant van Royne, who was a partner in a similar investment by Berkshire Partners in South Africa. “The investment will enable the company as an international body to have the flexibility and financial capacity to continue its development, and we wish all of us growth and satisfaction in a common and respectful way,” said Shai Livnat, chairman of Med Van and Transport Owners.
Despite being a long-standing company and one of the pioneers of submarine cable in Israel – the company deployed the first “Lev” submarine cable that transferred Internet traffic to Israel – Med Van did not win agreements from approaching the Nimbus government cloud tender in the first wave, partly due to a conservative investment policy that tended not to invest Capital in setting up modern centers before signing with a large client.
However, Globes has learned that the company recently signed with Oracle (which eventually lost the Nimbus tender – but is still struggling with a Supreme Court decision) to host its cloud service at a new underground facility. Today, Oracle Israel’s cloud service is hosted by an underground center on Mount Hotzvim owned by Bynet.
It is estimated that after the transfer of cash against the Livnat family’s share, the Livnat family, Berkshire Partners, and the Van Royn Group will continue to inject hundreds of millions of shekels into the company to support the construction of new server farms in Israel and abroad. The current construction boom will triple the scope of service that Med Van provides to its customers in terms of megawatts.
Med One CEO Roni Sadeh: “This is an important development for the company”
Berkshire Partners (unrelated to Warren Buffett-AG’s Berkshire Hathaway) is a private equity fund from Boston, whose investments in growing companies range from food chains, jewelry stores, to fitness brands such as CrossFit and the Assyrian mobile device insurance company, which also owns an Israeli development center. . Berkshire Partners has been active in the server farm for some time: it invested with the Premiera fund in the South African server farm operator Traco, and sold control of it to the American investment fund Digital Reality, which also specializes in investing in server farms.
Med Van was represented in the transaction by the Moalis Investment House and the law firm Ardinst, and Berkshire Partners was represented by Herzog Fox Ne’eman, the American firm Weil-Gotschel, and the Jeffries Investment House.
Med Van CEO Roni Sadeh responded: “As a company that has been leading the Israeli market for the past 22 years, this is an important development that allows us to meet the growing demand for the company’s services in the data center and public cloud areas, with an emphasis on expanding supply and service to multinational companies. We will continue to provide quality service to our customers, and lead the Israeli market with a wider facility deployment, based on innovative technologies that aim to streamline the facilities and significantly reduce the ongoing costs of our customers. “
Roni Sadeh, CEO of Med Van / Photo: Pini Silok
“We are excited to work collaboratively with the Livnat family and the Med One team,” said Drew Walker, investment manager at Berkshire Partners, who was also responsible for investing in South African server farm Traco. “We intend to jointly develop the company’s operations and invest in implementing its plans and meeting the growing demand for its services. Together with global investments in research and development and economic growth engines, Israel will continue to be a leading international data center providing cloud services and submarine cable capacity.”