Israeli agritech company Irri-Altal, based in Kibbutz Ramat David, is holding a financing round on the TSX Venture Exchange (TSVX). The company is slated to raise C$5 million (NIS 14 million). Irri-Altal manufactures irrigation systems and designs and builds irrigation projects, mainly in Africa, from the planning stage through installation. Irri-Alta's planned IPO was first reported in "Globes."
Veteran agriculture and water entrepreneur Ohad Haber founded Irri-Altal in 2004, and has been the company's controlling shareholder and CEO ever since. He will undoubtedly remain a major shareholder after the IPO. Irri-Altal was merged into Sagittarius, a TSVX shell, and is now completing a financing round. The company submitted a prospectus for a minimal C$2 million round, but is likely to raise more, after having already raised C$2 million previously. Documents submitted by Irri-Altal to the TSVX show that the company plans to issue at least eight million shares at C$0.25 per share.
Irri-Altal's revenue made a $584,000 net profit on $9.7 million in revenue in the first three quarters of 2018, after finishing 2017 with a $671,000 net profit on $10.6 million in revenue. The company's prospectus indicates that it plans to use the proceeds from the offering to open offices in Mexico, the Balkan countries, and China; to fund projects in South America; and to complete development and commercialization of new technology.
Merger into a stock exchange shell and founding a local company
"In contrast to the Australian Securities Exchange, there are a number of stock exchanges in Canada," explains BDO Israel head of startup sector, technology & global cluster Lior Shahar, who is advising a number of companies for offerings in Canada. "The Toronto Stock Exchange is for large companies, and no Israeli company has yet made an offering on it. The TSVX is for medium-sized companies with tens of millions of dollars in revenue, while the Canadian Securities Exchange (CSE) is for startups, and is more cannabis-oriented." Shahar adds, "Six Israeli companies are currently listed in Canada. There were no offerings at all in Canada by Israeli companies in recent years. Today, we're seeing quite a few companies expressing interest, and not just cannabis companies. There is no doubt that cannabis companies are attracted to Canada because of regulation and the fact that CSE is regarded as a cannabis stock exchange, but there are also aggrotech, software, and medical equipment companies."
Irri-Altal is also linked to cannabis, because it provides irrigation solutions for cannabis growing projects throughout the world.
Shahar says that in contrast to the pattern in Australia in recent years, most Israeli companies making offerings in Canada do so through a merger into a local stock exchange shell. Another method, also used in Australia, is to found a local special purpose vehicle (SPV) and put its existing activity into it, then hold an IPO for that company.
Published by Globes, Israel business news - en.globes.co.il - on January 29, 2019
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