Sources inform ''Globes'' that Shapir Engineering Ltd., one of Israel's largest contractors, is planning an IPO on the Tel Aviv Stock Exchange (TASE) to raise hundreds of millions of shekels at a company value of almost NIS 1 billion. The company is owned by four brothers: Israel, Harel, Gil, and Chen Shapiro.
The brothers withdrew plans for an IPO of Shapir Engineering three years ago when a sister company, Shapir Europe Projects Ltd. (TASE: SPRP.B1), founded in 2007 and which raised NIS 150 million, collapsed due to failed ventures in Eastern Europe. In 2010, Shapir Projects reached a debt settlement with its bondholders, which included a 70% discount on the adjusted debt of NIS 105 million.
Shapir Engineering is a different story. Dun & Bradstreet Israel ranks it as Israel's fifth largest construction company, with NIS 2.4 billion revenue in 2012, up from NIS 2.12 billion in 2011. Construction industry sources say that the company's profitability is above the industry average. One of the company's advantages is its presence throughout the industry's production chain, enabling it to exploit synergies between its units. The company is growing and participates in some of Israel's largest and most complex civil engineering projects.
Shapir Engineering is a family business founded in 1968. It is one of Israel's largest private construction and civil engineering companies. It builds bridges and overpasses, roads, and marine engineering projects, as well as public, commercial and residential buildings, sometimes through BOT (build, operate, transfer) projects. It also manufactures and supplies quarrying products, cement and building finishing products, prefabricated elements, and road building materials. It owns several quarries in Israel and Eastern Europe.
Shapir Engineering's main competitors are Shari Arison's Shikun & Binui Holdings Ltd. (TASE: SKBN) and its subsidiary Shikun u'Binui Solel Boneh Building and Infrastructure Ltd., and Lev Leviev's Africa-Israel Investments Ltd. (TASE:AFIL) subsidiary Danya Cebus Ltd. (TASE: DNYA). Danya Cebus, which had NIS 2.7 billion revenue in 2012, has a market cap of NIS 500 million.
Shapir Engineering has 1,800 employees. Recent and current major projects include Ben Gurion Airport 2000 (Terminal 3), the Rothenberg Power Station in Ashkelon, the North Ashdod Port, the Kfar Shmaryahu Interchange on Road 2 (the Coastal Highway), the Knesset's new wing, the Fast Lane to Tel Aviv along Road 1, Road 531 between Ra'anana and Road 6 (the Cross-Israel Highway), the high-speed Tel Aviv-Jerusalem railway line, and the Jezreel Valley railway line.
Like other family businesses, Shapir Engineering has no clear division between its ownership and management. The Shapira brothers do not wear suits, and work in the field on the company's numerous projects. Sources close to the company believe that the family nature of business may result is no IPO at all. On the other hand, the credit crunch at the banks may push the company to the capital market.
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2013
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