Arnon Milchan closed the acquisition of 50% of Automotive Equipment group's vehicle import and marketing business last week, following the completion of contingent conditions, including approval of the Antitrust Authority. Milchan will pay a maximum of $40 million; the final amount will be determined on the basis of the company's performance. The entire investment is in Automotive Equipment's capital.
For the purpose of the deal, Automotive Equipment split off its real estate business and its vehicle manufacturing business at Automotive Industries in Nazareth, which are not part of the deal with Milchan. Automotive Equipment's vehicle import and marketing businesses, including their real estate properties, will be included in a new company, called Automotive Equipment and Cars Ltd., in partnership with Milchan.
Figures obtained by "Globes" indicate that Automotive Equipment's sales turnover was $164 million in 2004, 29% higher than in 2003. The company sold 5,200 vehicles including Sufa (Storm) Jeeps and Abir (Knight) army command cars.
Automotive Equipment's revenue for the first quarter of 2005 was 21% higher than for the corresponding quarter of 2004. Suzuki cars, which the company imports, are among the top ten brands sold in Israel.
Vehicle industry sources believe that following the sale and capital injection, Automotive Equipment will expand its vehicle business, including reentering the car leasing and rentals businesses. At the same time, Automotive Equipment's real estate division, which owns properties in Tel Aviv and elsewhere, is looking for new investment opportunities.
Published by Globes [online], Israel business news - www.globes.co.il - on April 28, 2005