Walden International and another firm will invest $30 million in Priortech Ltd. (TASE:PRTC) Chinese joint venture Access, at a company value of $210 million, after money.
Access produces components for integrated circuits. Priortech subsidiary Amitech Ltd. and its Chinese partner own Access in equal shares.
The investment depends on due diligence by the two investors and Access's Chinese shareholder converting a $15 million loan into equity.
Priortech reportedly received other investment offers for Access before deciding on Walden International, a San Francisco-based firm that invests in semiconductor, electronic and digital consumer products, software, IT services, communications, and cleantech companies.
Amitech, which develops and assembles high-performance electronic substrates, is Priortech's rising star, with growing revenue and profits. Priortech hooked up with a Chinese manufacturer to give Amitech access to the Chinese market - a move that is apparently successful. Access opened its Chinese plant, located near Macau, three years ago.
Priortech says that its 50% share of Amitech' revenue was NIS 46.7 million in 2010, which means that the company is close to triple-digit sales. Priortech's share of the net profit was NIS 6 million in 2010 and NIS 2.1 million in the first quarter of 2011.
At the same time, Access's workforce rose 76% over the past year to 695. The plant's current production capacity is 30,000 substrates a month, and the company is boosting this 60% to 48,000 a month by the end of the year, to meet rising demand. At this production level, annual revenue could reach $80-100 million.
First Israel Mezzanine Investors Fund (FIMI), which invested $30 million in Priortech six months ago, mainly to success Access's growth, will likely benefit from the investment.
Published by Globes [online], Israel business news - www.globes-online.com - on June 21, 2011
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