startupmania

Following many reports of negotiations between Coppergate and Mellanox, it seems that California-based Sigma Designs, a NASDAQ-traded communication equipment developer, will soon be announcing the purchase of Israeli start-up Coppergate. Sigma Designs is said to be paying about $200 million in cash and stocks.

If Coppergate will indeed get sold, this marks the end of another attempt at brewing an Israeli mega-firm in the vein of Amdocs, Teva or Checkpoint – all three of which made it to the “big league” and became leading global companies in their respective fields.

According to general estimations, Coppergate has raised over $25 million in venture capital. Amongst its chief investors are Carmel Ventures and Tamir Fishman, on paper, these are set to reap a hansom profit once the deal is closed, in accordance with Sigma Designs current stock price on NASDAQ and the cash-stock ratio the deal will reflect. (Click here to follow Sigma Design’s stock)

Coppergate, founded in 2000 by David Baum and Israel Lifshitz, develops modems and IP communication application utilizing pre-existing communication lines (mostly for traditional copper lines). The company’s technology is meant to assist communication companies to provide an IPTV and video-phone application to customers connected on a regular, phone-company operated network. Coppergate’s current reigning CEO is Gabi Hilevitz, and its VP of research and development is Tsach Shwartz. It’s CTO is Rami Verbin and it’s VP of operations is Eran Schwartz.

According to the communication market speculations, in the past two years, Coppergate has already reached a profit, ranging in the tens of millions of dollars per year. These numbers would have helped Coppergate reach public status for a much higher sum, if it wasn’t for the economic crisis and the dwindling number of stock issues.

Translated by Itai Rosenbaum