Buying a business in Israel? Consider 3 guiding principles

buy a business in Israel Cabinet Expert Comptable Dray & Dray

The guiding principles for acquiring an existing business are synergies, value and balance.

Synergies must be created between the two merging companies, or between the buyer and the acquired company.

Ideally, the merging companies should have similar or complementary product or service ranges, and their marketing and sales methods should be in harmony.

Synergies are to be created in three areas:

  • Marketing and sales (new products and services, new customers or new markets should lead to revenue growth)
  • Operations (obtaining discounts, improving means and methods of production and delivery of products and services)
  • Finance and administration (the merger or acquisition should improve cash flow and lead to an increase in the number of projects)

Without synergy, no acquisition should be envisaged

Value, on the other hand, refers to the ability to generate profits and cash flow. Profits and cash flow create value and stimulate growth: profits generate equity, which in turn increases value, and cash flow increases working capital and consolidates day-to-day operations.

A company that does not create value should not be acquired.

Read also: How do you calculate a company's real value?

Striking the right balance

To strike the right balance, you need to find the right middle ground. As far as synergies are concerned, the acquisition must be feasible both operationally and financially. In other words, a very small company shouldn't acquire a very large one, and a company that makes widgets probably shouldn't acquire one that makes clothes.

Another type of balance lies in the ability to create value: the investor must be able to offer added value to the acquired company, and vice versa.

An acquisition that does not create a balance, positive synergy or value should be avoided..



Kanfei Nesharim 68. Merkaz Oranim.

Tel Aviv

31 boulevard Rothschild


Phone : 02 631 9000
Fax: 02 631 9005
Email : office@cpa-dray.com

Boruch Levenson - CPA

A native English speaker qualified in both Israel and the UK, Boruch cares for the English speaking clients.

If you've got questions, don't hesitate to reach out.

Do you have any further questions? Our team is ready to help


Read our latest articles & tips.

In partnership with :


Our offices in Israel

Our firm specializes in Israeli accounting and taxation, with in-depth expertise in Olim Hadashim benefits and tax optimization.

Our consultants in Tel Aviv

English speaking accountants in Israel
Address: 31 boulevard Rothschild, Tel-Aviv (Israel)
Phone number: 03-9446635
Fax: 03-9494682
Email: office@cpa-dray.com

Our consultants in Jerusalem

English speaking accountants in Israel
Address: Kanfei Nesharim 68. Merkaz Oranim
Phone number: 02 631 9000
Fax: 02 631 9005
Email: office@cpa-dray.com