Leading Israeli investment fund FIMI Opportunity Funds, led by Ishay Davidi, is in exclusive negotiations to acquire the Migada plant in Kiryat Shmona from Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), sources inform "Globes." The fund will probably decide on the matter in the coming weeks. Migada, which was formerly valued in the tens of millions of dollars, was one of the sites put up for sale by Teva as part of the aggressive streamlining program launched by the company in December 2017. Although more than a year has passed since then and a number of concerns expressed interest in the acquisition, Teva still owns the plant.
A labor dispute was declared at Migada in recent months, sparked by uncertainty among the workers and the suspension of their pay hikes and the extra month's bonus salary that they formerly received. Migada has 200 employees producing a system enabling medical staff to use drugs and medical equipment safely. It is believed that the employees would like FIMI, which controls dozens of industrial companies employing tens of thousands of workers, to acquire the plant.
In late 2017, Kare Schultz, Teva's then-new CEO, presented the company's streamlining program, including 14,000 layoffs worldwide, 1,750 of whom were in Israel. The program was designed to save $3 billion a year in order to service Teva's enormous debt, which peaked at $35 billion, most of it incurred in the 2016 acquisition of Actavis.
The cost-cutting program also entailed finding buyers for the plant in Kiryat Shmona, the SLE distribution company, and the site in Ashdod, which have been classed as not part of the company's core business. After considering the possibilities, Teva decided not to sell SLE and announced its intention to close down the Ashdod plant, which had not been sold. At the same time, in contrast to the plant in Ashdod, the plant in Kiryat Shmona makes a profit and its activity is continuing while Teva searches for a buyer.
Among the names mentioned as interested in the acquisition of Migada over the past year were Maabarot, controlled by Kibbutz Maabarot, German companies Fresenius and B Brown, and brothers Dan and Shmuel Topaz, founders and former controlling shareholders in industrial company Ham-Let (Israel-Canada) Ltd. (TASE: HAML), together with a group of additional investors. FIMI began negotiations to acquire the plant after obtaining exclusivity in negotiations, its usual practice in such cases.
Published by Globes, Israel business news - en.globes.co.il - on January 7, 2019
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