StePac, which has developed and manufactures special packaging, has been sold to Johnson Matthey Investments for £18 million (NIS 105 million) in cash by DS Smith, which owned all of StePac.
Both the seller and the buyers are British companies listed on the London Stock Exchange. Johnson Matthey is traded at a £7 billion market cap, while DS Smith is traded at a £3.4 billion market cap. StePac was founded in 1992 by entrepreneur Israel Ben-Tzur, and developed its products - packages that the extend shelf life and preserve the quality of fresh agricultural produce - on the basis of know-how from the Volcani Institute, and later on the basis of know-how developed by the company itself. In Israel, the company is located in the Tefen industrial zone in northern Israel.
DS Smith has been a shareholder in StePac since the 1990s. It gradually increased its holdings in the company, until attaining full ownership three years ago by purchasing Ben-Tzur's 10% stake. DS Smith, which deals in packaging and paper, recently decided to focus on its core business, and began looking for a buyer for StePac. Johnson Matthey, a company dealing in sustainable technologies, provides solutions for controlling pollutant emissions and recycling metal, among other things.
The Barnea & Co. law firm is representing DS Smith in the deal, while Herzog, Fox & Neeman is representing Johnson Matthey in Israel. According to figures published by Johnson Matthey, StePac's revenue in the 12 months ending on April 30, 2015 totaled £15 million (nearly NIS 90 million). The purchaser also reported that StePac employs a staff of 90, and has two production sites: one in Israel and one in the US, while doing business in over 60 countries. Johnson Matthey believes that StePac's packaging technology will generate £20 million in revenue in the coming year, and that after the integration costs are included in its reports, StePac will make a small contribution to Johnson Matthey's annual operating profit. StePac will be absorbed into Johnson Matthey's new business division, considered the British company's growth engine.
Johnson Matthey CEO Robert MacLeod said, "The acquisition of StePac is an important step in the development of our Atmosphere Control Technologies business. The combination of Johnson Matthey’s expertise in advanced materials and StePac’s complementary technical and applications knowledge will enable us to develop new, sustainable technologies for customers in the fresh produce supply chain that prolong shelf life and reduce waste.”
As far as is known, the acquiring company received permission to take StePac's knowhow out of Israel as part of the deal. There were formerly restrictions on this, due to the financing received by StePac from the Ministry the Economy Chief Scientist. This means that the site in Israel will continue operating, but not exclusively. Following the deal, SteFac's workers have organized in the Histradrut framework, and the acquisition took place simultaneously with a dialogue with the workers. According to Histadrut chairman for the western Galilee Asher Shmueli, a work dispute has been declared at SteFac that has not yet been carried out, and negotiations are taking place between the Histadrut and management. He added that most of the issues had been settled by the parties (including payment of an acquisition bonus to the workers), but a number of issues of principle were still in dispute.
Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2015
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