In a Twist, Israeli Giant Acquires American Startup
It came a bit late to prevent the latest breach of internet security in Israel – the swiping of 15,000 names and passwords of Israeli credit car users – but with the new technologies and tools that Israeli tech integrator Matrix is acquiring from New Jersey-based Exzac, the company will now have the technology to build a better mousetrap – or a better way to catch internet fraudsters. It's a twist from the usual pattern of evnets, where U.S. companies acquire Israeli startups - but Matrix is a world-class tech company, and this isn't the first foreign entity the company has acquired.
Matrix announced this week that it was acquiring 60% of Exzac, which specializes in services and software for enterprise fraud management, fraud prevention, anti-money laundering efforts, compliance with government security and finance laws, and more. Although its tools are not specifically designed to fight hackers, the technology is the same – and if the sites where the credit card information was stolen from had better anti-fraud alert systems or better systems to ensure compliance with security norms, chances are that Saudi hacker would not have gotten away with hacking into Israeli databases.
Most Exzac's customers are banks and brokerage houses, which are legally liable for the actions of their employees, as well as for damage to account holders due to hackers. The company supplies tools and tests clients' systems to ensure that they are safe. Matrix is paying $6.75 million for Exzac, and will also pay up to an additional $2.5 million, subject to milestones. Exzac was acquired through the acquisition of 60% of Germany's AG 2000 Holdings; Exzac is that company's only asset. Although based in the U.S., Exzac, with the Matrix deal, is actually “coming home” - the company was founded and run by Israeli Guy Avtalion.
Motti Gutman, CEO of Matrix, said that the acquisition of Exzac “is a milestone for Matrix. We set for ourselves a goal of achieving greater exposure in the U.S. market, via the acquisition of a successful company. Exzac helps us achieve these goals.”