Lodan Engineering Company reports today that it has signed with Dan, a public transportation company, a memorandum of understanding for strategic investment in the subsidiary Shimkotek, according to which Dan will invest NIS 25 million in exchange for issuing 19.2% of Shimkotek shares.
Shimkotech is engaged in the integration of systems in the field of public transportation. 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 and constitutes about 20% of Lodan’s revenue.
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 be at a minimum company value of NIS 165 million and Dan will be able to increase its holding in Shimkotek at 80% of 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.
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.
CEO of Shimkotech Avi Lieber He noted that “Dan’s investment in Shimkotek and the joint expansion into overseas markets are evidence of Dan’s appreciation for Shimkotek’s professionalism and reliability. “Thank you to the managers and employees of Shimkotek for the dedication and hard work that brought the company to new heights.”