Afcon Industries Ltd. (TASE: AFIN), controlled by Shlomo Shmeltzer, and the parent company of Tadiran Telecom Communication Services in Israel LP, has acquired Tadiran Telecom Ltd., which manufactures Coral switchboards, for NIS 6.2 million. The acquisition removes the threat that Tadiran Telecom will be closed, and its employees will continue to continue producing and developing the company's products and services.
Afcon's acquisition of Tadiran Telecom was almost inevitable, since the sale of the company to anyone else would have probably resulted in its closure and a severe blow to the manufacture and development of its switchboards, for which Shmeltzer has exclusive marketing rights in Israel.
Synel Industries Ltd. (TASE: SNEL) also bid for Tadiran Telecom, but it was unclear whether it would operate the factory in its current format, which is why Shmeltzer essentially had to acquire it.
Tadiran Telecom Communications Services CEO Danny Rosen is CEO of Tadiran Telecom. He restored CEO Eldad Barak to his post, after he was fired by the company's previous owner, Moshe Cohen.
Afcon will pay NIS 2 million in cash for Tadiran Telecom, and the balance will be paid as royalties on sales.
Tadiran Telecom's employees, via the Histadrut (General Federation of Labor in Israel), agreed to the deal. They will become employees of Afcon and their rights will be guaranteed.
Afcon Industries' share price rose 2.3% by mid-afternoon to NIS 29, giving a market cap of NIS 128 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 16, 2011
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