Fortissimo Capital, a private equity firm, gave the winning bid for software company Eshbel, Israeli business news website Globes reported. The Israel-based software firm was placed on the auction block after it had become insolvent. Fortissimo Capital offered NIS 192 million, besting other contenders like Hilan Tech Ltd and One Software Technologies.

The report said the sale of Eshbel was one of the most interesting happenings in Israel's computing market for a long time. Established in 1986, Eshbel has been fairly successful as an enterprise management software developer. However, the company's Founder and CEO Yossi Shaham and partner Nava Enosh was alleged to have reported false income, avoided payment of millions of shekels in tax, drew money for personal use, ran two sets of books and other wrongdoings. A few years ago, they admitted the offenses in a plea bargain with the Tax Authority. The court ruled that they pay NIS 100 million in taxes.

Eshbel's software products has been successful mostly in the small and medium-sized business markets. The company developed "Priority," a software that manages enterprise in human resources, logistics and operations and accounting software "Zoom."

The report said Eshbel posted annual revenue of NIS 50 million to 60 million. Profit margins are high, cash flow is positive and has the potential to expand worldwide. However, its obligation to the Tax Authority put it to close to insolvency.

Trustees were appointed by the court a few weeks ago to oversee the sale of Eshbel. The report said proceeds from Fortissimo's bid will allow the software company to pay its tax debt as well as settle a claim brought against the company by minority stakeholders who are senior employees of the company.

The employees claimed that they are entitled to a portion of the firm's profits. Since the company did not accurately report the profits, the senior employees said Eshbel owes them 30% of the profits or NIS 47 million.