October 30, 2013

Two Israeli software companies plan merger

Two Israeli Internet companies are currently planning a merger that will result in the creation of a strong player in the software download industry.

According to an article in Haaretz, Babylon, a developer of translation software and browser toolbars, may merge with IronSource, which produces a download manager used on certain websites. With IronSource's service, users can pay a fee to download products offered by companies like Babylon, making this partnership a sensible fit.

"We are continuously examining interesting opportunities for cooperation and acquisitions as we believe that by maximizing potential collaborations, we can further strengthen Babylon's position in the industry," Babylon CEO Alon Carmeli said in a press release.

If it goes through, this deal is poised to be highly lucrative for the parties involved. Haaretz reported that the four founders of IronSource own 68 percent of the company's shares, which will leave them each with NIS 475 million ($135 million) under the proposed deal.

This is because the two companies are believed to be planning a merger at a 1:2 ratio, with IronSource shareholders acquiring 67 percent of the new company's shares. They are also expected to play a large role in the new company.

Still, Babylon's own share price reacted favorably to the news, rising by 4.4 percent after the talks.

This technology acquisition should prove to be a fruitful merger for both companies. As they occupy similar areas in the industry, their combined strength should allow them to enjoy successful growth in the years ahead.