INDIA ISRAEL CROSS BORDER MA ISRAEL INTRODUCTION India

INDIA – ISRAEL CROSS BORDER M&A ISRAEL

INTRODUCTION India, the seventh largest economy in the world and the largest in terms of growth, has become a relevant and attractive target market for many international companies, looking to benefit from the significant growth in the market and its tremendous potential. There has been a significant increase in the recent acquisitions of Indian companies by international companies, seeking to establish presence in the Indian market - close to 400 transactions between 2016 and 2018. Similarly, there has been a steady increase in acquisitions, made by Indian companies, of assets based outside of India, looking to penetrate into new markets and establish their global presence - close to 350 transaction between 2016 and 2018. The bilateral trade between India and Israel, while having remained steady in the past few years, is expected to increase, backed by the two governments push for open trade, together with the private sectors in both countries, which were responsible for dozens of joint ventures through recent years. Steady increase noticeable in cross border M&A activity, is also expected to take place between India and Israel inter-se. Focus in sectors which are likely to witness heightened M&A activity between India and Israel - Defence & Aerospace, Auto Tech, Medical Devices and Health Tech, Agri Tech and Cyber Security and Technology The rationale will remain as such that Indian companies will seek for advanced technologies in Israel.

TABLE OF CONTENT INDIA’S M&A OVERVIEW 1 BIG TICKET TRANSACTIONS IN INDIA 2018 2 INDIA M&A SECTOR WISE DEAL ANALYSIS 3 CROSS BORDER M&A ACTIVITY IN INDIA - 2018 4 RELATIONS BETWEEN INDIA & ISRAEL 5 INDO-ISRAEL CROSS BORDER M&A TRANSACTIONS 6 FOCUS SECTORS BETWEEN INDIA & ISRAEL 7 RATIONALE FOR INDO-ISRAEL TRANSACTIONS ACTIVITY 8 OUR EXPERIENCE - CASE STUDY 9 BDO AND ITS INDIAN BUSINESS PARTNER 10

1 INDIA’S M&A OVERVIEW Value (USD Bn) 90 Volume 1, 120 1, 067 80 1, 070 70 60 1, 020 50 941 40 970 926 30 920 20 870 10 0 45 35 80 2016 2017 2018 820 Deal Breakup By volume Deals By Value (USD Billion) 2017 2018 2016 2017 2018 Domestic 682 589 596 16 25 42 Cross Border 272 262 255 24 6 27 Others 113 90 75 5 4 11 1, 067 941 926 45 35 80 2018 (USD Million) 1, 000 & Above Volume Value % of Total Volume % of Total Value 18 60, 000 2% 75% 500 - 999 9 6, 000 1% 7%% 100 - 499 34 7, 700 5% 10% Below 100 865 6, 300 92% 8% Total 926 80, 000 100% Source: VCC Edge 1 } The average ticket size of each deal also recorded a 130% increase from USD 37 Million in 2017 to USD 86 Million in 2018 2016 Total } India’s M&A deal value peaked at USD 80 Billion in 2018, recording an all time high, largely driven by top 18 deals amounting to 75% of the total M&A deal value in India } Recording a 5 year high, India’s cross border deals witnessed a 350% increase from USD 6 Billion in 2017 to USD 27 Billion in 2018. The cross border deal value accounted for 33% of the total M&A deal value in India

2 BIG TICKET TRANSACTIONS IN INDIA 2018 In 2018, Out of the Top 8 deals, 5 deals were cross border M&A transactions 02 03 07 06 05 04 01 02 03 04 USD 16, 000 Mn USD 6, 307 Mn USD 5, 778 Mn USD 5, 596 Mn Sector - Consumer Tech Target - Flipkart Buyer - Walmart Sector - Telecom Target - Indus tower Ltd. Buyer - Bharti Infratel Ltd. Sector - Energy Target - HPCL Buyer - ONGC Ltd. Sector - Materials Target - Tata Steel Buyer - Bamnipal Steel Ltd. 05 06 07 08 USD 4, 542 Mn USD 4, 200 Mn USD 2, 580 Mn USD 2, 098 Mn Sector – Consumer Target - Glaxo. Smith. Kline Consumer Healthcare Ltd. Buyer - Hindustan Unilever Ltd. Sector - Agrichemicals Target - Arysta Life. Sciences Buyer - UPL Corp. Sector - Materials Target - Aleris Corp Buyer - Novelis Inc. Sector - Industrials Target - L&T (Electrical & Automation Business) Buyer - Schneider Source: VCC Edge 2 08 01

3 INDIA M&A SECTOR WISE DEAL ANALYSIS Deal Value (USD Million) 4, 591 2, 997 1, 762 3, 649 3, 805 4, 290 1, 346 4, 654 1, 026 5, 463 542 5, 879 5, 057 6, 292 BFSI Healthcare Utilities Industrials Consumer Staples Energy Information Technology Telecom 14, 558 7, 345 1, 485 Materials 19, 648 1, 351 Consumer Discretionary 0 5000 2017 19, 967 10000 15000 20000 25000 2018 Deal Volume 3% 1% 1% 6% 27% 10% 7% 15% 16% 3 1% 1% 5% 7% 8% 2017 13% Source: VCC Edge 4% 27% 2018 11% 16% 18% Information Technology Consumer Discretionary Industrials BFSI Materials Healthcare Consumer Staples Utilities Energy Telecom

4 CROSS BORDER M&A ACTIVITY IN INDIA - 2018 Inbound Deals Deal Volume Deal Value (USD Bn) 115 143 135 19 4 23 2016 2017 2018 53% Outbound Deals } Over the last 3 years, India has witnessed on average 260 cross border transactions with inbound & Outbound deal ratio of 55: 45 approx. } Continuing global interest in India as one of the best growing economies globally, will result in substantive and large inbound transactions into India in the future Source: VCC Edge 4 Deal Volume By Deal Value (USD Bn) 47% By volume Deals 5 2 4 2016 2017 2018 By Value (USD Billion) 2016 2017 2018 Inbound 115 143 135 19 4 23 Outbound 117 119 120 5 2 4 Total 272 262 255 24 6 27

5 RELATIONS BETWEEN INDIA & ISRAEL In July 2017, Prime Minister Narendra Modi was the first Indian Prime Minister to visit Israel, marking the 25 th anniversary of the establishment of the diplomatic relations between India and Israel. This was followed by the Israeli Prime Minister Benjamin Netanyahu’s visit to New Delhi in January 2018, first visit to India by an Israeli leader in 15 years. INVESTMENT CYBER SECURITY Memorandum of Intent between Invest India and Invest in Israel Mo. U on Cyber Security Cooperation between India and Israel MEDICINE ENERGY COOPERATION Mo. U between the Ministry of Petroleum and Natural Gas and the Ministry of Energy on Cooperation in Oil and Gas Sector Source: Public Sources 5 Mo. U between the Central Council for Research in Homeopathy, Ministry of AYUSH and the Centre for Integrative Complementary Medicine

6 Deal Value (USD Mn) Stake Technology N/A 100% Amiad Filtration Systems India Alpha-Elsec Defence & Aerospace Systems Pvt Ltd Industrial N/A Aerospace & Defence 57 100% Sonarome Pvt Ltd Others N/A 100% Technology N/A 100% Date Acquirer Name Target Name Sector Jan 2019 Radware Inc Kaalbi Technologies Pvt Ltd Jul 2018 Amiad Water Systems Ltd Jul 2017 Elbit Security Systems Ltd May 2015 Frutarom Industries Ltd Mar 2015 Sapiens International Corp IBEXI Solutions Pvt Ltd NV Deal Value (USD Mn) Stake Aerospace & Defence N/A Healthcare & Pharma 3 19% Technology N/A Shtula Metal-G Aerospace & Defence N/A Lenskart Solutions 6 Over 6 Vision Ltd. Technology 1 N/A Jul 2017 Reliance Industries Ltd Technology 25 20% Nov 2016 Arrow Generiques SAS Healthcare & Pharma N/A 100% Sep 2016 Wipro Ltd. Jerusalem Innovation Incubator JII Teva Pharmaceuticals Industries Ltd. (Select Commercial Products) Int. Sights Cyber Intelligence Ltd Technology 2 N/A Aug 2016 Wipro Infrastructure Engineering Ltd. H R Givon Ltd. Aerospace & Defence 79 100% Aug 2016 Genpact Ltd. PNMsoft Ltd. Technology N/A 100% Jun 2016 Dr. Reddy’s Laboratories Teva Pharmaceuticals Industries Healthcare & Ltd. (Drug Application business) Pharma 350 100% Jun 2016 Zydus Healthcare Ltd. Teva Pharmaceuticals Industries Healthcare & Ltd. (Drug Application business) Pharma N/A 100% Date Acquirer Name Target Name Sector Feb 2019 Lohia Group Light & Strong Ltd. Sep 2018 Sun Pharmaceuticals Tarsius Pharma Ltd Jul 2018 Payu Payments Pvt. Ltd. Zoo. Z Jun 2017 Saisanket Enterprises Private Limited Dec 2017 N/A - Not Available Source: VCC Edge 6 ^ Targets in Israel OUTBOUND^ INBOUND* INDO-ISRAEL CROSS BORDER M&A TRANSACTIONS * Targets in India

FOCUS SECTORS BETWEEN INDIA & ISRAEL Agritech Cyber Security Mobility Aerospace & Defence 7 Medical Devices As per our analysis the above mentioned sectors are likely to witness enhanced cross border activity between India & Israel 7

RATIONALE FOR INDO-ISRAEL TRANSACTIONS ACTIVITY 8 Rationale for Transactions into ISRAEL Israeli companies are a source of constant technology innovation in diverse fields such as solar energy, software, cyber security, medical devices, Agriculture and e-commerce Israel is home to major players in the high-tech industry and has one of the world's most technologically literate population. High-tech ecosystem (Technology Start-Ups) in Israel is the best in the world Israeli companies are present across global value chain of different sectors eg- Israeli companies can be found among all of the links in the aerospace global value chain, from aircraft OEMs to advanced electronic systems and precision metal components Israel maintains its classic advantages in fields such as relatively lowcost but high-quality manufacturing for Western countries, innovation and entrepreneurship that produce advanced technologies 01 02 03 04 Rationale for Transactions into INDIA India as a market is expected to turn South Asia into the fastest growing region world wide. India is forecasted to grow more than 7% in FY 19 -20 making it the fastest growing economy globally 01 02 03 04 8 Low end production in Israel can be shifted to India due to lower wages and fabrication costs in India Partnership with Indian Offset Partners, helps Israeli companies meet their or their customer's offset obligations for the Aerospace & Defence industry Sectors with unique advantages in Israel i. e. Agriculture, Cyber Security, Food Processing, Aerospace & Defence, Medical Devices & Auto Tech have a strong need in India in terms of technology & market potential

9 BDO EXPERIENCE CASE STUDY Indian company, Skipper Ltd, and Israeli company, Metzerplas, have formed a 50 -50 joint venture, with an initial cost of $8 million, to foray into the micro irrigation market in India. The venture, Skipper-Metzer India LLP, will focus on drip irrigation manufacturing and offerings to the Indian market } Established in 1970, owned by Kibbutz Metzer, Metzerplas is One of the leading companies in Israel and globally, in the development and production of drippers, irrigation pipes and advanced irrigation solutions. } The company has several production collaborations in key markets around the world, such as: Spain, Ukraine, Mexico and China. } Metzerplas products are being marketed and sold in dozens of markets around the world. } Kolkata based, publicly traded company, one of the largest manufacturing groups in India. } A world leader in the manufacturing and assembly of transmission towers and power poles, as well as a leading manufacturer in India of PVC pipes for the water industry } Skipper, annual turnover is estimated at $260 million in 2017. The company employs roughly 2200 employees and operates in more then 20 countries around the world from South America, Europe, Africa, the Middle East, South East Asia and Australia. “ The two companies have a clear synergy, Metzerplas produces irrigation products, and Skipper manufactures the pipes. Therefore, the two companies invested in the establishment of the company equally. Metzerplas brought its accumulated know-how and experience in irrigation and Skipper brought the local infrastructure, familiarity with the Indian market and its marketing and distribution channels, In addition, Skipper will sell to the joint company its pipes. The joint company is designed to become one of the three largest companies in the Indian irrigation market and to position itself as the company with the most advanced technology and quality of products. 9 “

9 BDO EXPERIENCE CASE STUDY BDO provided Skipper with an overview on the Israeli market and directed it towards interesting opportunities BDO advised to Skipper Limited through the transaction process and was responsible to lead and facilitate the entire JV discussions and negotiations process BDO consulted Skipper in the process of defining a required criteria and profile for the potential Israeli partner, and scanned the market, identified and shortlisted companies across various channels accordingly BDO preliminary contacted the shortlisted companies and presented them with Skipper’s profile and the business opportunity. Through the calls and meetings we assessed their interest in the opportunity, and in moving forward to initiate discussions with Skipper. Accordingly, we prepared a profile of each interested company for Skipper’s consideration and approval BDO accompanied and consulted Skipper through a visit to Israel’ where it met with the shortlisted companies. We consulted Skipper in preparations, namely defining the strategy & content for the meetings BDO assisted Skipper to process the data gathered during its visit, provided our recommendations on the companies we identified as having the highest synergy with Skipper, and gave our recommendations for the next steps BDO acted as Skipper’s voice and arms in Israel and consulted it throughout the initial round of discussions with Metzerplas BDO facilitated the entire negotiation process and consulted Skipper in defining its principal terms for MOU BDO consulted Skipper in the process of constructing the Joint business plan with Metzerplas, bridged over final commercial gaps between the two parties and led the final negotiation discussions rounds until closure 10

10 BDO AND ITS INDIAN BUSINESS PARTNER 1 4 2 India-Israel M&A boutique desk provides One Stop Shop solutions for Indian and Israeli companies, with comprehensive end to end, financial and corporate advisory services 5 3 A combination of two market leading firms, backed by strong international franchises, brands and Cross sectors experience, as well as a strong network in both the Israeli and Indian markets 6 11 4 3 6 Highly experienced investment banking advisors, with a combined experience of dozens of years in Investment banking, specialize in managing the entire process of M&A/JV between Israeli and Indian companies from inception, through outreaching and negotiations to post deal support 2 1 5 Senior Israeli-Indian management teams with deep understanding and experience in both markets, and with familiarity with both the Israeli and the Indian business cultures I. e. "the way of doing business" Physical presence in both markets with offices in Tel-Aviv and tier-one cities in India Familiarity and exposure to business opportunities in various sectors in the Indian and Israeli markets

ABOUT BDO ISRAEL The leading business advisory company in Israel Offering a wide range of professional services to the private, public and government sectors, serving mainly large–medium size local & international corporations, . Through its Israel-India Desk, BDO is the leading Indo-Israeli Business Development & Consulting firm, focused on providing M&A and Business Development advisory services. Amot Bituach Building 46 - 48 Menachem Begin Av. Tel-Aviv 66184 ISRAEL 12

The Firm: BDO is one of Israel's largest accounting and business consultancy firms, which employs over 1, 500 emloyees through 10 branches in Israel and operates Israeli desks in China, India, USA and Eurasia. As part of BDO International, we enjoy the patronage of the world's 5 th largest accounting and advisory firm, located in more than 160 countries. Contact Us: www. bdo. co. il ISRAEL