Magal has signed an agreement to acquire Senstar, a Daimler-Benz Aerospace company and a leading manufacturer of high security technology solutions, for $5.2 million in cash. Several months ago, Magal reported it was negotiating the purchase of a company operating in a similar field. Today it announced the conclusion of the deal.
Senstar’s 1996 sales were $13 million, while Magal’s sales in the perimeter security system field were $16 million for the same period. The two companies together hold a 40% market share. In other words, the market has a limited potential of some $75 million.
Magal chairman Kobi Even Ezra explains that market growth is not particularly rapid, at 5-10% not including special projects such as the installation of the protective fence surrounding the Gaza Strip.
Two months ago, Magal submitted a draft prospectus for a second share issue. The company wishes to sell 2 million shares, raising $10 million. Even Ezra explains that the acquisition is not contingent on the floatation, as Magal also has more than $5.2 million in its coffers. The company has also benefited from positive cash flow for a long period of time.
Concerning the share issue itself, Even Ezra estimates it will be executed before the end of January, adding that the present share price of $7.5 is right and timing is dependent on underwriter US investment bank Josepthal, Lyon and Ross. Josephtal also hopes to issue Eltek shares in New York next week.