Electra Ltd. (TASE: ELTR) has sold its transformer manufacturing subsidiary Enerco Enterprises Ltd. to Switzerland's Von Roll Holdings AG (SWX: ROL) for NIS 290 million, and expects to report a pretax capital gain of NIS 120 million on the sale.
Von Roll is 250 years old, making it one of Switzerland's oldest companies. It has a market cap of CHF 2.2 billion. The company manufactures insulation products and laminates for manufacturers of electrical systems, while its Industrial Business Unit offers mechanical, thermal and chemical products and services for transport, electronics, plant engineering, household appliances, medicine and safety companies.
The Enerco deal is in two stages. Von Roll will initially acquire 80% of the company for $65.5 million. It will acquire the rest in December 2009 for $14.5 million. Electra could receive up to an additional $10 million if Enerco meets earnings before interest, taxes, depreciation and amortization (EBITDA) targets for 2009.
Elco Holdings Ltd. (TASE: ELCO) owned Enerco for 60 years before selling it to Electra in May 2006.
Electra CEO Itamar Deutscher said, "In recent months, we've been thoroughly examining how to maximize Enerco's potential. We concluded that the company was a manufacturer that was not part of Electra core business and that the best solution for Electra and its employees, whose benefit and future is our responsibility, was to sell Enerco to an international manufacturing concern with a thorough background in the electricity and energy field, which could drive Enerco to growth and profits in the coming years."
Published by Globes [online], Israel business news - www.globes-online.com - on September 16, 2008
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