Private Equity Week Interview: Dr. Gavriel Meron of Given Imaging Ltd.

Dr. Gavriel Meron founded Given Imaging in 1998. Prior to that, he served as CEO of APPLItec Ltd. Dr. Meron holds a Ph.D. in international business from Columbus University, Louisiana, an M.B.A. from Tel Aviv University and a B.A. in economics and statistics from the Hebrew University, Jerusalem.

In a year of slumping technology and stymied IPOs, why did you chose to go public?

It was originally planned in the beginning of the year that immediately after we received FDA clearance we would go to the market, and we prepared ourselves accordingly. We received that clearance in August and began our road show in the beginning of September.

Why did you decide to make a go of it right away, instead of waiting to see if next year’s market would bring in more money?

When we made the decision in January/February, the markets weren’t the same as they were in August. There were a few reasons that we wanted to go public. We had to get finance in some form or another. To put in the effort of a private road show or a public road show, from our point of view, was not going to be much different. [We thought] it would be a bit more effort, but let’s get it done, let’s get the money we need to succeed. Once you get FDA clearance you have to ramp up your costs – sales, expenses, the marketing offices, production scale-up.

There’s a lot of money that you need at that stage. If you do it publicly you only get valuated once and not twice. Strategically, we thought it is important to be positioned as a public company. As a public company we have more credibility around the world and we become a known entity.

Why Lehman Brothers?

We chose them after reviewing a number of bankers. We had a good experience with them prior to that with the private placement we did a year earlier with them. It’s all a relationship business… and we had the warmest and strongest relationships with them.

Additionally, that they were able to bounce back after being thrown out of their building on Sept. 11 and still manage to go back on the road five days later, I think, was phenomenal.

Were you comfortable with being placed on the calendar so early after the summer lull that had occurred?

We were very comfortable. The meetings were very good and positive. I think it was a challenge for everyone. The big advantage was that there wasn’t a line of limos to wait behind.

How did the attacks effect the road show?

Actually we started [the road show] in Europe, and then came to New York on Sept. 10, where we had nine presentations. The following day we were in Delaware, and we sort of got stuck there.

We waited a few days to see what was going to happen. It was possible that we would have to pack up to go home. Lehman Brothers was calling the prospects, asking if they were willing to get back to business. After a few days there was demand from institutions to have the meetings and get back to business. There was this spirit, that we were not going to let this stop us. That was our spirit, Lehman’s spirit, and also that of the institutions – we have to get back to business. Even though this was terrible, we can’t just sit around, we still have to do stuff. Then we really got back on the road and managed to finish.

Having been displaced from their offices, how was your communication with Lehman?

We were in constant communication by phone and Blackberry. Some of them were working from home, and others later on moved into the Sheraton [Hotel]. It was amazing how quickly they were able to pull everything together.

Did you consider pulling the offering?

The first thing that crossed my mind when I saw the images of the planes crashing into the building was that we have to put this off. But then we had some time to think, and we saw the general resolve of people to show the world we’re not going to give up to terror. And we were fine with that.

The books really closed towards the end; people were hedging. It obviously wasn’t a time when people wanted to make decisions. At the end of the day, we said the people who got the story will want to invest. If they understand its worthwhile, then they’re not going to argue on the price too much because clearly, at that price, it’s a worthwhile investment. So what we [thought] is, we will move to the low part of the range and we should be able to pull it off. And we did.

What has been pressuring the stock, as it’s down from its offer price?

I think what will be sufficient will be our earnings reports. Listening to our earnings reports this quarter and the quarter after that … people will see the capabilities of this management team and of this company. The way we’re moving ahead, they’ll make their decisions and hopefully that will drive the correct valuation of the stock.

Company Info:

Given Imaging Ltd. (GIVN)

Yogneam, Israel

Priced on 10/4/01


Underwriters: Lehman Brothers, Credit Suisse First Boston, Robertson Stephens, Merrill Lynch, AG Edwards & Sons (and others)

Current Price: $9.34

Colleen O’Connor can be contacted