Stock Lodan Jumps about 17% in high turnover on the stock exchange, after the company reported today that it has signed with the public transport company Dan On the Memorandum of Understanding for Strategic Investment in the Shimkotek Subsidiary. According to the memorandum, Dan will invest NIS 25 million in exchange for issuing 19.2% of Shimkotek’s shares.
In addition, Dan was given a two-year option to allot additional shares of Shimkotek in an amount not to exceed NIS 10 million in two possible scenarios: in the event that Lodan issues Shimkotek on the stock exchange, it will have a minimum company value of NIS 165 million and Dan will increase its holding in Shimkotek by 80% From the effective issue price. In the second scenario, if Dan chooses to exercise the option before the date of issue of Shimkotek, it will be entitled to exercise the option at a company value of NIS 150 million before the exercise.
Shimkotech is engaged in systems integration in the field of ePublic transportation. Lodan notes that the company has over 25 years of experience and provides systems and maintenance services to a variety of customers in the various fields of public transportation in Israel, such as buses, trains, light rail and cable cars.
Simultaneously with the completion of the investment, a joint company will be established (49% Shimkotek, 51% Dan), which will exclusively carry out all Shimkotek’s existing and future activities outside Israel. Dan and Shimkotek will inject, according to their holdings in the joint company, up to NIS 30 million for the development of the activity and the acquisition of companies in the target markets outside Israel.
Shimkotech CEO Avi Lieber stated that “Dan’s investment in Shimkotek and the joint expansion into foreign markets constitute evidence of Dan’s appreciation for Shimkotek’s professionalism and reliability. I appreciate that we are at the beginning of a period of development and accelerated investment in the field in the coming years, and we are very happy that we will be joined by the experienced Dan. “
Dan CEO Ofir Karni noted that “Dan believes in Shimkotek’s ability to continue to grow in Israel while expanding its operations to additional target markets outside Israel. We believe that in cooperation with Shimkotek, we will create a high synergy that will bring value to both Dan and Shimkotek. “