OR Technologies Ltd. (TASE:ORTC), controlled by Intergamma Investment Ltd. (TASE:INTR) (controlling shareholder: Tanhum Oren), is selling its holding in subsidiary Orpak, which produces automatic fueling systems. OR Technologies today reported to the TASE that it would sell its 68% stake in Orpak in a $160 million deal, reflected a company value of $225 million for Orpak.
The buyer is the Gilbarco group, which currently owns 20% of Orpak. Gilbarco, which provides technological solutions for fuel retailers, will have an 88% holding in Orpak after the deal, paving the way for it to obtain full ownership of the company.
OR Technologies said today that the proceeds in the deal would be set when the deal was completed. Certain amounts will be deducted from the proceeds in order to pay holders of options in Orpak, for cancelation of Orpak options previously granted to company employees (amounting to 8% of Orpak's share capital), and to reimburse $3 million in expenses related to the deal.
Completion of the deal is contingent on suspending conditions, including the absence of any substantial worsening in Orpak's situation, approval of the merger by the antitrust authorities in Israel and Turkey, consent from the financing banks of OR Technologies and Orpak, and the continued employment of key personnel in the company.
OR Technologies estimates that it will receive NIS 376 million in free cash flow upon completion of the deal and post a NIS 360 pre-tax accounting profit (calculated at a NIS 3.60/$ exchange rate). The OR Technologies share price began the day by zooming 35%, but the trend later reversed, with the share price falling 6% below its starting price. The share price of Intergamma, which owns a 51.4% stake in OR Technologies, began the day with a meteoric 21% rise. Like its subsidiary, however, the share price later returned to its starting point.
OR Technologies supplies electronic products for managing vehicle fleets, automatic fueling products, and electronic means of payment. Its market cap is NIS 340 million.
Founded in 1938, Orpak makes automatic fueling systems based on vehicle identification, computer automation systems for fueling and filling station management, control systems for a variety of equipment at filling stations, and software and hardware systems for managing convenience stores at self-service filling stations and terminals.
Orpak's revenue turnover totaled $90 million in 2016, 10% of which was in Israel, and its operating profit was $12.8 million.
The deal reflects a substantial increase in value for Orpak. In October 2015, ORT Technologies and Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva, sold Gilbarco 20% of Orpak for $20 million, reflecting company value of $100 million. The parties then signed a shareholders agreement giving Gilbarco the right to appoint a director or observer on the board of directors, the right to receive information, and veto power over decisions on special matters, such as liquidation, merger, and sale.
Orpak recently completed its acquisition of Brazilian company Microsffer for NIS 33.8 million. The Brazilian company develops, markets, installs, and supports computer systems for managing filling stations in Brazil. Through US subsidiaries, Orpak is also active in the US, India, Chile, and the Netherlands.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 17, 2017
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