FIMI buys control of Oxygen and Argon Works for NIS 180m

FIMI's Ishay Davidi

The deal reflects a company value of NIS 353 million.

An agreement has been signed for acquisition of a controlling interest in Oxygen and Argon Works by private equity fund FIMI Opportunity Funds, a deal reported two days ago in "Globes." FIMI, led by Ishay Davidi, is acquiring 51% of the company for NIS 180 million, reflecting a NIS 353 million company value. Oxygen and Argon Works is Israel's largest manufacturer of industrial gases: oxygen, nitrogen, argon, helium, carbon dioxide, acetylene, hydrogen, medical oxygen, nitrous oxide, various gas compounds, and special gases.

Oxygen and Argon Works' main competitor is Maxima Air Separation Center Ltd. (TASE: MAXM-M), controlled by George Horesh. Maxima's market cap is NIS 241 million, substantially lower than the value at which FIMI is acquiring Oxygen and Argon works.

A way to prevent arguments

Ownership of Oxygen and Argon Works is currently divided among over 10 shareholders, the second and third generation of the company founders, and the all of them are being diluted in the deal in the same proportion. It appears that the shareholders believe that FIMI will continue the process of improving the company, and they will be able to benefit from its experience in similar cases in the past.

Another benefits the shareholders are likely to get from the deal is the prevention of potential disputes in the future between the large number of shareholders, because FIMI in now clearly the leading shareholder. Oxygen and Argon Works' managing director is Gabriel Bitton, and its chairman is Alon Cohen. The company has a total of 120 employees in seven production and distribution plants in Caesarea, Migdal HaEmek, Kiryat Gat, and Jerusalem, and serves hundreds of customers.

Oxygen and Argon Works is an industrial company that fits FIMI's profile very well. Eldad Avraham, a banker active in the industrial sector who specializes in mergers and acquisitions in private companies, provided consultation in the deal. Avraham is also a director in a number of companies , including Israel Canada ITR) Ltd. (TASE:ISCN), Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF), and Jojoba Desert, a cooperative association owned by Kibbutz Hatzerim and Kibbutz Be'eri that markets jojoba oil to international cosmetics companies.

Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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FIMI's Ishay Davidi
FIMI's Ishay Davidi
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