Lapidot Capital is in talks to purchase a steel packer, whose issuance in Tel Aviv has been canceled

Lapidot Capital is in talks to purchase a steel packer, whose issuance in Tel Aviv has been canceled

Company Steel packer Looking for a buyer after her attempt to issue the shares of the subsidiary to the public investing in the stock market, has not matured. Holding Company Lapidot Capital Under control Jacob Luxemburg (Luxi) reported on Monday on contacts between its representatives and representatives of Packer Steel, which have not yet been realized into a binding agreement due to price differences, but were recently renewed.

In a statement to the stock exchange, Lapidot states that “Several months ago, representatives of Packer Steel asked our company to examine a possible deal to acquire control of Packer. In the contacts between the parties, significant gaps were discovered and therefore the contacts were terminated more than a month ago.

“During the last two days, following a renewed request on behalf of Packer Steel, the parties are examining the possibility of renegotiating, but for now these are only preliminary stages, and on the face of it, it seems that there are still significant gaps between the parties.

“To the extent that developments in this regard require reporting by law, the company will report accordingly,” reports Lapidot, who about two years ago completed a very successful acquisition of the test of Africa Israel (the former controlling owner of Packer) from its bond creditors.

Repayment of Africa Industries’ debts

Packer Steel is a pioneer in the steel industry and metal products in Israel. The company, founded in 1934, specializes in the supply of raw materials and metal products and employs about 280 workers in factories scattered in four locations around the country.

The company is owned by a company Africa Israel Industries As stated in the past, part of the Africa Israel Group, which collapsed a few years ago and has been transferred to the management of trustees on behalf of the court. Since then, the trustees have sought to sell Packer Steel’s activities to repay Africa Industries’ debts.

Last November, Packer Steel signed a deal to sell its subsidiary, Packer Metals Quality, to a company Mendelssohn Infrastructure . This transaction has now been completed in exchange for a payment of NIS 68 million in cash.

At the same time, Packer Steel sought to issue the rest of its activity on the stock exchange, against the background of the surge in world metal prices, through another subsidiary, Packer Steel and Galvanizing. Last November, the company submitted a first draft prospectus for the initial public offering of shares, with the aim of raising NIS 100 million at a company value of NIS 300 million “before the money”, but the move did not materialize.

Packer Steels, established in 1992, is engaged in galvanizing metals, processing and marketing tin and steel products, profiles and pipes, marketing construction products, and manufacturing light poles. ” And Discount, in which the bank debt of the Packer Steel Group was spread out.

Has enjoyed rising world steel prices

Last September, the banks gave their consent to the issue, subject to a repayment of a debt of NIS 40 million in exchange for the issue, provided that the company bears a debt of NIS 143 million after the said repayment shortly after the issue. A steel deposit will also be required to sign an amendment to the arrangement with the banks, including a lien on the company’s shares (which will not be held by the public) in a lien and the determination of new financial terms.

Steel Packer Steel Products / Photo: Company website

In the first half of 2021, Packer Steel’s revenues grew by 36% to NIS 256 million and its net profit jumped 11 times to NIS 47 million. The company explained that “the reporting period is characterized by an increase in revenue and profitability compared to previous years, mainly due to an increase in world steel prices, which positively and significantly affected the company’s profitability due to sales of inventory purchased at lower costs than current purchase prices.”

The company further emphasized that “both gross profit and operating profit improved, among other things, thanks to the continued initiated actions of streamlining and cost savings taken mainly in 2020.”

As stated, Lapidot Capital already holds the controlling shares (80%) in Africa Israel, which previously controlled Packer Steel (through Africa Industries).

Through Africa Israel, Lapidot controls the construction and infrastructure company Danya Cebus and the Africa Israel Residential Construction Initiation Company. Lapidot ended 2021 with a net profit for shareholders of NIS 190 million, following a net profit for shareholders of NIS 193 million, which the company recorded in 2020.

As of the end of 2021, Lapidot Capital presented shareholders with NIS 1.25 billion, compared with only NIS 734 million at the end of 2020. The significant increase in capital was mainly due to the net profit for the past year, the issuance of Danya and the distribution of shares during the year.

Arik Shapir, Deputy Chairman of the Lapidot Capital Group, emphasized that in 2021 the company was able to substantially improve its investment portfolio, including Danya’s issuance. “In the current year, Lapidot is working to improve the land divisions in Ramat Aviv, Savyon and Yehud and to develop the water infrastructure company, which recently won a significant tender, as well as to find additional companies that are characterized by significant growth potential and cash flow,” said Shafir.

“Lapidot has liquid balances of NIS 1.35 billion”

The group noted that liquid balances of NIS 1.35 billion allow it to deepen and develop its existing business activities and expand its investment portfolio to other areas, such as improving the company’s land divisions, developing the water infrastructure company and locating additional companies to acquire. In 2022, Lapidot will focus on improving three real estate properties in areas of demand in Tel Aviv, Mevoot Savyon and Yehud, where it is working to promote a master plan that will enable the development of these properties, as well as promoting activities in the field of water infrastructure.

Lapidot is traded on the stock exchange at a value of NIS 3 billion, after yielding investors a return of 308% in the last three years. The controlling shareholder Luxenburg holds 76.7% of the company’s shares.

Lapidot holds (in a chain) 60% of the shares of Danya Cebus, which in 2021 showed a 14% increase in revenues to NIS 4 billion and a 33% growth in operating profit to NIS 132 million; In Africa Residential, which is 41% owned, which sold 908 housing units in 2021 with a cash volume of about NIS 3.1 billion and showed a net profit of NIS 220 million, more than double compared to 2020.

In addition, Lapidot holds 49% of the shares in Sunny Communications, which imports and distributes Samsung-made cell phones. Sonny ended 2021 with revenues of NIS 915 million and adjusted net profit of NIS 45 million.


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