FIMI Opportunity Funds, controlled by Ishay Davidi, is buying a 55% stake in communications systems provider Orbit Technologies Ltd. (TASE:ORBI) for NIS 108 million.
FIMI will initially invest NIS 36 million in the company for an allocation of shares at a price of NIS 6.7 per share (which compares with a market price of NIS 4.94), and will become the controlling shareholder in the company, with a 33.4% stake. In the second and third stages, FIMI will have options to invest up to a further NIS 72 million in Orbit, which could take its stake to 55%.
Orbit chairman Ze'ev Stein will hold 29.3% of the company and will switch to being a consultant to it for three years. FIMI will appoint three directors on its behalf. Among them is chairman designate Itzhak (Itzik) Gat.
In the second stage of the deal, FIMI will receive a two-year option to invest a further NIS 18 million in Orbit in return for an allocation of shares at NIS 7.50 per share. At this stage, FIMI's stake in Orbit will rise to as much as 42%. In the third stage, FIMI will receive a 5-year option to invest a further NIS 54 million in Orbit in return for an allocation of shares at NIS 9 per share, representing a premium of 82% on this morning's opening price. At this stage, as mentioned, FIMI's stake in Orbit could reach 55%.
FIMI senior partner Gillon Beck said, "Orbit operates in areas with substantial growth potential. The company has unique know-how in technology-rich communications systems and it provides solutions to both the civilian and military markets. The deal suits the fund's policy of acquiring companies and enhancing them and we believe that FIMI has capabilities and experience that will contribute to the growth of the company and to the realization of its great potential."
Stein said, "We are delighted that FIMI is investing in Orbit. Its investment testifies to Orbit's technological and competitive advantages and to the business potential in the company. After many years of work in the company and leadership of it as chairman of the board for the past decade, I am happy to hand over the leadership of the company's management to the FIMI fund, which has a proven record of performance and success, and I am confident that its leadership and involvement will be of great value to the company, its employees, customers, and investors. I intend to continue to serve as a consultant to the company and to assist the new chairman in any way required to make Orbit succeed."
Orbit's share price has soared by more than 44% on the Tel Aviv Stock Exchange this morning, and is currently at NIS 7.16.
Published by Globes [online], Israel business news - www.globes-online.com - on August 22, 2017
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