Several months after reports of an attempted takeover of Mikal Ltd., defense electronics firm Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) said today that it will acquire three subsidiaries of Mikal Technologies Ltd., and not buy Mikal itself.
Elbit said that it signed an agreement to acquire all the shares of Soltam Systems Ltd., Saymar Ltd., and ITL Optronics Ltd. (TASE: ITL) that are currently held by Mikal and its subsidiaries.
Mikal owned 100% of Saymar and Soltam. It also owns 20% of ITL directly, and Soltam owns about 65% of ITL. When the deal is completed, Elbit will own 100% of Soltam and Saymar, and about 87.85% in ITL. The rest of ITL's shares are held by the public. Elbit Systems willl also sell its existing approximately 19% stake in Mikal.
Elbit will pay about $87 million for the units. The consideration to be paid to Elbit Systems for its 19% holding in Mikal will be $18 million. There may also be possible future payments to Mikal depending on the acquired units reaching business milestones.
Elbit said that it is buying the subsidiaries "rather than the acquisition of Mikal itself, as was contemplated in Elbit Systems' prior announcements."
Elbit CEO Joseph Ackerman said that the companies are synergetic to Elbit Systems, and "their acquisition will be an important step in executing our long-term growth strategy."
Elbit shares rose to $50.58 yesterday, giving a market cap of $2.16 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 2, 2010
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