Tadir-Gan (Precision Products) Ltd. (TASE: TDGN), controlled by First Israel Mezzanine Investors Fund (FIMI), has won a $45 million contract from Volkswagen AG (DAX: VOW) to supply engine parts over eight years from 2015. The contract is the result of two acquisitions by Tadir Gan earlier this year.
Tadir Gan will supply aluminum components produced at its plants in Afula and Germany and magnesium products from its plant at Kibbutz Neve Or. The components are designed for large engines for Volkswagen's high-end models.
"The company believes that the project will have a material effect on its sales turnover," said Tadir Gan in its notice to the Tel Aviv Stock Exchange (TASE). "The agreement includes a one-time payment of $4.3 million by Volkswagen to cover the company's investments in the project."
Tadir Gan chairman and FIMI senior partner Sam Vlodinger said, "The new order is the direct result of the acquisition of Germany's Alu Druckguss, which has an excellent working relationship with Volkswagen divisions, including Audi, Skoda, and Porsche.
"This is Tadir Gan's first material framework agreement with Volkswagen, demonstrating that Tadir Gan is in the front line of aluminum and magnesium parts manufacturers for the car industry, after passing the customer's engineering and operational tests."
Tadir Gan posted a net profit of $2.9 million on $23.1 million revenue in the first quarter of 2013, which included the results of Alu Druckguss. The company raised $12 million in a rights issue in June to finance acquisitions.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2013
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