Published in Globes on October 2, 2018
Six years after buying Starhome from Comverse, Fortissimo Capital has sold the Ra’anana-based SaaS wholesale and retail roaming, clearing, settlement and fraud prevention technology company to U.S. private equity fund Vista for an estimated $100 million. The deal reflects almost 3x returns for Fortissimo, which paid $54 million for Starhome in 2012: $32 million in equity and the rest in debt. Fortissimo paid several million dollars a few years later when Starhome merged with Mach.
Starhome’s profitability rose last year after its debt was fully repaid and Fortissimo received millions of dollars as a dividend. The profits from the sale will be divided between Fortissimo’s second and third funds.
Vista will merge Starhome with its U.S. portfolio company Telarix, which provides business-to-business and OSS/BSS management solutions to improve efficiency and productivity.
Starhome has 300 employees, including 130 in Israel, and the expectation is that they will retain their jobs after the merger with Telarix.
Fortissimo’s Managing Partner, Yuval Cohen, said, “Fortissimo acquired Starhome in 2012 and subsequently carried out substantial changes that included a revised strategy adapted to changes in the industry, changes to the business model (to SaaS), new products and strategic partnerships. As part of this, Mach was acquired and merged into the company.”
He added, “These changes, which were implemented by a new management team led by Itai Margalit, led to a major improvement in the company’s performance, including growth in recurring revenue and substantial growth in profitability.”
Starhome CEO Itai Margalit said, “Our customers, many of whom already use Telarix’s solutions, want a single suite of integrated solutions to help manage the complexities and solve the challenges carriers face in ensuring seamless, ubiquitous connectivity for their customers. Under Fortissimo’s ownership, we successfully implemented a long-term strategy which included the acquisition and integration of Mach, launched SaaS versions of our leading roaming and clearing platforms and introduced a variety of innovative solutions beyond our customers’ roaming needs including analytics, real-time anti-fraud and IoT.”