Lapidoth mulls Australian, Singapore IPO for Gaval

Jacob Luxenburg  photo: Tamar Matsafi
Jacob Luxenburg photo: Tamar Matsafi

Lapidoth is abandoning its plan for a TASE IPO for its international trading business.

Investment company Lapidoth Capital Ltd. (TASE: LAPD), controlled by chairperson Jacob Luxenburg, is moving towards an IPO for Gaval, its international commercial arm. The options being considered are in Australia and Singapore, while plans for an IPO on the Tel Aviv Stock Exchange (TASE) are being abandoned, sources inform "Globes." The IPO for Gaval, whose business is booming, is planned at a company value of over $150 million, higher than the $120 million price tag it is believed that company can get on the TASE.

Lapidoth Capital reported to the TASE that Gaval "had contracted an agreement with a foreign consultant firm to advise and manage a possible offering of Gaval shares on a foreign stock exchange in March 2018."

Lapidoth Capital's two main groups of products in international trade are clothing and sports goods and footwear. The company also operates in the accessories sector, including the marketing of supplementary fashion and sports accessories, such as watches, perfume, jewelry, bags, etc. Lapidoth Capital's partner in this business is Zeev Palkovic.

Lapidoth Capital reported in May that it was moving towards a TASE IPO for its commercial activity in the expectation that its 2017 sales would top €100 million. The company later revised its guidance for the year to €90 million, following the strengthening of the euro against the dollar and the pound sterling, which reduced the company's revenue from its business in the US and the UK. Lapidoth Capital's revenue from its commercial business totaled €59 million in the first three quarters of 2017.

Lapidoth Capital's share price doubled

Lapidoth operates in three sectors: marketing and selling mobile telephones through Suny Cellular Communication, international commerce, and the company's traditional drilling business. The company today reported a NIS 16.8 million net profit for the third quarter, 16% less than in the third quarter of 2016. Lapidoth Capital's net profit in the first nine months of the year remained steady at NIS 40 million.

Lapidoth Capital's financial results were positively affected by the continued improvement in Suny Cellular's business, whose revenue grew 19.7% to NIS 828 million in January-September, while its net profit leaped 185% to NIS 38 million during the same period.

Luxenburg led a huge NIS 1 billion debt settlement at Suny Cellular in 2015 that included writing off at least half of the debt, following which Lapidoth Capital became the controlling shareholder in the company, replacing Ilan Ben Dov.

Suny Cellular benefited this year from a successful launch of the Samsung S8 devices in May, in addition to other devices and accessories. Minister of Finance Moshe Kahlon's decision to cancel the purchase tax on mobile phones in April also contributed to a rise in sales.

Lapidoth Capital's share price today responded positively to the news by completely a gain of nearly 100% over the past year, pushing the company's market cap up to NIS 690 million. As of the end of September, the company's shareholders' equity was NIS 331 million, and it had NIS 310 million in cash.

Lapidoth Capital CEO Amir Tirosh said today, "Suny Cellular's peak results followed a major improvement in its distribution system and its connection with retailers, an upgrade of its B2B system, and closer connections with Samsung. The company's capital structure also improved dramatically.

"We confirm our guidance for €90 million in annual revenue in international trading activity in 2017, and expect this activity to continue its growth by a substantial rate in 2018. Significant progress has been made towards an overseas IPO for this business and enhancing value for investors. The water infrastructure activity is benefiting from growing demand for drilling. The company plans to buy another drilling machine in order to meet the series of projects expected in the coming years."

Published by Globes [online], Israel Business News - www.globes-online.com - on November 27, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Jacob Luxenburg  photo: Tamar Matsafi
Jacob Luxenburg photo: Tamar Matsafi
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