Tadiran Group continues to build its renewable energy operations and makes a third acquisition in the field within a year, this time a acquisition of a foreign company: Tadiran acquires 60% of the Italian company VP Solar for about 32 million euros at the time of completion of the acquisition. Subsequently, Tadiran will pay the seller an additional 13 million euros on the basis of meeting the targets set for the years 2022-2023. As part of the acquisition agreement, the subsidiary was granted a CALL option and the seller a PUT option to purchase the remaining shares (40%), and this option will be exercisable for a month and a half after VP Solar’s financial results for 2024 are announced.
Moshe Mamrod, controlling shareholder and CEO of Tadiran, said: “Tadiran is expanding its operations to Europe, a step that is another step in the realization of our growth strategy. “Acquisition of VP Solar, a leading company in Italy in the field of marketing and distribution of renewable energy solutions, with a broad customer base and an experienced team, is a ticket to the large and growing European market through stable and profitable activity and is an optimal and synergistic platform for growth in both renewable energy and air conditioning.”
VP Solar was established in 1999 and specializes in the import, design, distribution and trade of products and solutions for photovoltaic systems in Italy and Europe. The company markets solar panels from an authorized distributor of global manufacturers such as Jinko, energy conversion systems, including Israeli Solrodge, storage systems, ready-made construction systems, heat pumps and products for charging electric vehicles. During its 22 years of operation, VP Solar has become a one-stop shop in the field of solar equipment and it provides a complete and comprehensive solution to the customer.
VP Solar was founded by Stefano Loro and Alessandra Galina. The couple has been leading the company for the past 22 years and today it is considered a leader in the renewable energy market in Italy. VP Solar provides a wide range of quality products and services as well as encourages a culture of learning and raising awareness among many audiences for the use of renewable energy. In addition, the company works hard to create platforms for the production of more sustainable energy and to reduce emissions in order to preserve the environment. As part of the acquisition, Loro and Galina will continue in their role for at least the next three years.
VP Solar’s success is well reflected in its financial results: the company ended the first ten months of 2021 with revenues of approximately 94.9 million euros, an impressive 116% growth compared to the 12 months of 2020. The increase in revenue translated into an increase in EBITDA (profit before financing expenses , Tax, depreciation and amortization) which stood at about 10 million euros compared to about 3.2 million euros in the 12 months of 2020 (an increase of 213%). The EBITDA margin also improved and stood at 10.5% in the first ten months of 2021 compared to 7.3% in the 12 months of 2020.
Tadiran has set itself the goal of developing its renewable energy activity, and it sees this activity as a significant growth engine. The acquisition of VP Solar is the third acquisition that the company makes in just one year: the first was by the Israeli Eliran Solar, who later changed its name to Tadiran Solar. Tadiran acquired 75% for about NIS 45 million, and an additional consideration to be paid subject to meeting the targets, and it holds the option to acquire full ownership of the company. The second acquisition was the full ownership of Aviam Systems Ltd., also in Israel, for approximately NIS 30 million, and additional consideration of up to NIS 22.5 million based on meeting targets.
VP Solar is the first foreign company that Tadiran acquires in the field and the acquisition indicates its willingness to expand its global activity in the renewable energy market. The use of renewable energy in the world in general is expected to increase significantly in the coming years, and in Italy in particular in light of the massive government support. The Italian government has set a target of 55% consumption by renewable energies by 2030. To this end, the government encourages the economy to install efficient energy systems that include renewable energy through various incentive programs, including “superbonus” (110% tax on the cost of installing energy systems for the home sector ) And “acobonus” (50% discount on the cost of installing photovoltaic systems and storage systems, and 65% discount on the installation of heat pumps for the business sector).
The volume of photovoltaic systems installed in the Italian market, as of the end of 2020, stands at 21.3 gigawatts, and is expected to grow by an average of 5 gigawatts per year and reach 71.2 gigawatts by 2030 – a program that is a fertile breeding ground For companies such as VP Solar.
Completion of the transaction is conditional on the fulfillment of conditions precedent, including, inter alia, the correctness of the statements and obligations of the parties, also at the time of completion; Third party approvals and the absence of a material adverse change in VP Solar’s position, as defined in the purchase agreement.