Delek Auto completes NIS 992m Veridis acquisition

Gil Agmon  photo: Eyal Izhar
Gil Agmon photo: Eyal Izhar

Insurance company Harel is taking a 10% stake in Veridis's holding company at the same valuation.

Delek Automotive Systems Ltd. (TASE: DLEA), headed by Gil Agmon, has completed the acquisition of sustainability group Veridis agreed in March.

The acquired group deals in the environment, desalination, power production, and energy solutions.

Delek Automotive Systems agreed to acquire 70% of OCM Luxemburg, including its owners' loans, from international fund Oaktree Capital Management. OCM Luxemburg is a holding company with no activity, which holds Veridis and the owners' loans granted to it. The acquisition price is NIS 992 million, reflecting a value of NIS 1.42 billion for OCM. Delek Motors will pay for the acquisition with bank loans and from its own resources. NIS 100 million of the price will be recorded as a one-year seller's loan.

At the same time, Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) is buying 10% of OCM Luxemburg at the same company value as in Delek Automotive Systems' investment: 5% from Oaktree and 5% from the exercising of an option granted by Oaktree to the Israel Infrastructure Fund, when it sold it 20% of the shares in the holding company last July.

Veridis was founded in Israel in 1993 by French concern Veolia International and Uri Starkman. The company operated under the name Veolia Israel for 22 years, after which it was sold in 2015 to Oaktree for $450 million. Following the acquisition, Oaktree appointed Ariel Kappon CEO of Veolia Israel, and changed the company's name to Veridis Israel in January 2017.

Veridis deals in waste disposal, seawater desalination, and power production and energy solutions. The Veridis group's revenue totaled NIS 887.4 million in 2016, with a NIS 113.2 million operating profit and NIS 227.2 million EBITDA, giving a 25.6% ratio of adjusted EBITDA to revenue.

The figures also show that the group's assets totaled NIS 2.246 billion at the end of 2016, while its liabilities totaled NIS 1.796 billion and its shareholders' equity was NIS 372 million.

Delek Automotive Systems' main current business is importing Mazda, Ford, and BMW cars to Israel. The company finished 2017 with NIS 3.41 billion revenue and a NIS 349 million net profit, compared with NIS 3.43 billion revenue and a NIS 370 million net profit in 2016.

Published by Globes [online], Israel business news - - on July 3, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Gil Agmon  photo: Eyal Izhar
Gil Agmon photo: Eyal Izhar
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