Buoyed by HP's $4.5 billion purchase of Mercury Interactive, Israeli high-tech companies were sold for a total of $10.5 billion in 2006, the highest figure in six years.

45 venture-backed startup sales accounted for an impressive $3 billion of the annual M&A total. The biggest deal was PMC Sierra's $300 million acquisition of Passave. Passave had raised over $14 million in venture capital from Eurofund LP, Walden Israel Venture Capital and BRM Capital.

Of the $693 million raised via IPOs by 20 Israeli companies in 2006, six venture-backed startups accounted for $148 million of the total. One was the Nasdaq offering of Allot Communications, which had raised $38 million in venture funding from Tamir Fishman Group, Gemini Israel Funds, Genesis Partners, Partech International and Jerusalem Venture Partners.

With venture capital continuing to pour into Israel, there's no reason to believe the dealmaking upswing won't continue in 2007.

Tags: israel, m&a, vc, venture capital