Israeli private equity firm FIMI Opportunity Funds, led by founder and CEO Ishay Davidi, has taken advantage in the upward momentum in the share price of TAT Technologies (TASE: TATT; Nasdaq: TATT) to sell a 25% stake for Nis 129 million. TAT's share price has doubled over the past year. With the sale, FIMI reduces its stake in TAT from 51.8% to 26.8%. Sources tell "Globes" that the share were purchased by Israeli institutional investors More, Meitav and Yelin Lapidot, which already had a 5.6% stake in TAT.
TAT Technologies provides environmental control products and services for the commercial and military aviation industries. FIMI first invested in TAT in 2004 buying shares for $8 million and selling them to KMN Holdings for $40 million in 2007.
Following the collapse of KMN in 2013, the receiver held an auction for the 53.7% controlling stake in TAT, which FIMI won for NIS 125 million - one third of the price at which it had sold shares to KMN in 2007. In 2016, FIMI invested a further $39 million (NIS 140 million) to increase its stake in TAT. After selling shares now, FIMI will still hold shares in TAT worth NIS 170 million, which together with dividends means it has seen returns of 120% on its investment, part of which has yet to be realized.
Several weeks ago FIMI sold shares in Bet Shemesh Engines (TASE: BSEN) for a huge profit. FIMI sold 10% of Bet Shemesh engines, which manufactures and refurbishes aero engine parts, to Clal Insurance, Meitav, Yelin Lapidot, and More, for NIS 178 million, representing a discount of 11% on the market price. The sale represents over a quarter of FIMI’s holding in Bet Shemesh Engines, and leaves it with a 25% stake, which means that it retains control. FIMI previously realized part of its holding in the company in 2019 for NIS 100 million.
TAT is also holding a private placement for institutional investors at a similar price of NIS 54.95 per share at which FIMI sold its shares, reflecting an 11% discount on the market price. TAT will raise NIS 37 million ($10.1 million) in the private placement. Several months ago TAT raised a similar amount in a private placement, when the share price was considerably lower at NIS 31.7 million.
In the first half of 2024, TAT's revenue was $70.6 million, up 36% from the first half of 2024. GAAP net profit more than doubled to $4.7 million, and exceeded GAAP net profit in all of 2023.
Published by Globes, Israel business news - en.globes.co.il - on September 2, 2024.
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