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engaged in the development, production and marketing of concentrates and mixtures for the plastics industry,
Acquires the German company AG Kunststoffe Delta, which also specializes in the development, production and marketing of concentrates and mixtures for the plastics industry, including conductive products, paints and other additives.
In exchange, Kafrit will pay approximately 11.3 million euros, which reflects a multiplier of 7.2 on the adjusted EBITDA based on the financial statements of the acquired company for 2021, net of net debt and after making adjustments to working capital. From the proceeds, an amount of 1 million euros was paid into an escrow account, in order to secure the indemnification obligations of the sellers. After 12 months, the said trust amount will be reduced by 50%, and at the end of 24 months, the trust funds (as they will be left at that time) will be transferred to the sellers.
Also, an additional amount of 2.5 million euros was paid to a designated trust account, in order to secure the company’s commitment to pay the sellers additional consideration for the performance of the acquired company as measured by the average adjusted EBITDA for the years 2022 and 2023 as calculated according to the financial statements of the acquired company for the years These, so that as the average EBITDA exceeds 2 million euros (but not more than 2.1 million euros), a total of 1.3 million euros from the escrow account will be transferred to the sellers; To the extent that the average EBITDA exceeds a total of 2.1 million euros, the full amount of the trust will be transferred to the sellers.
At the same time, Kafarit purchased the office building of the German company for approximately 600,000 euros and emphasizes that it intends to continue to operate the acquired company in a similar manner to its current operations while integrating it into the company’s various activities, and it estimates that in the coming years investments will be required during the current business, mainly investment in dedicated production and development equipment.
The revenues of the acquired German company in 2021 amounted to approximately NIS 90.9 million with a net profit of approximately NIS 2.1 million. The company’s EBITDA amounted to approximately NIS 5.7 million and the total assets are estimated at approximately NIS 35.3 million.
Kfarit’s share has fallen since the beginning of the year by 15% to a price of NIS 24.5, representing a value of NIS 584 million. The company’s profit in the first half of this year amounted to NIS 35.4 million on revenues of NIS 555.4 million. In 2021 as a whole, the company earned NIS 64.9 million on revenues of NIS 1.03 billion. The value expresses a profit multiplier of 9.
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