Chicago-based US agricultural concern Archer Daniels Midland (ADM) is acquiring control of Israeli company Industries Centers EOD at a value estimated in the tens of millions of shekels, sources inform "Globes." The acquired company imports and markets animal feed, processes seeds, and stores emergency inventory for the state. ADM is traded on the New York Stock Exchange at a $24.1 billion market cap, dwarfing the size of this deal. ADM purchases, distributes, stores, and markets agricultural raw material products and raw materials. Even before the acquisition, ADM had connections with EOD. ADM, which began doing business in 1902, currently has over 32,000 employees throughout the world, and is active in 160 countries.
The acquisition, which is subject to regulatory approval in Israel, is slated for closure in the coming months. EOD, located in Beit Dagan, is owned by Omer Eran, who acquired a 50% stake in the company from Baran Group (TASE: BRAN; Nasdaq: BRANF) in 2013. Eran, who already owned half of EOD, paid Baran NIS 40 million for its shares, reflecting an NIS 80 million company value. Baran posted an NIS 18 million capital gain on the sale.
ADM: EOD is our entry into the Israeli market
Eight months ago, as reported by "Globes," negotiations took place for the sale of EOD to private equity fund Kedma Capital at a company value of NIS 66 million, substantially less than in the deal with Baran. The negotiations, however, eventually failed to produce a deal. ADM did not report the price for the deal. As far as is known, EOD also owes money to the banks.
According to the EOD website, the company "is currently one of the largest companies in Israel in its main fields of activity, and displays a high rate of growth in all parameters." These fields of activities include the importing and supply of seeds, flour, corn, and more to the Israeli market; the importing of gluten feed and DDG for the meat market; the provision of processing services (crushing and pressing) for seeds, and consultancy and professional advice in preparing feed adapted to the grower's needs. Two years ago, Logus Bar, EOD's fellow subsidiary, launched a new logistics center located in the rear of Ashdod Port, with enough space to store 52,000 tons of seeds and seed products.
"With this investment, we are continuing to expand and enhance our core value chain, including our ability to deliver direct to the customer," said Joe Taets, president of ADM’s agricultural services business unit. "Industries Centers offers an entry point into a strong, established Israeli market. We have worked with them in the past to help us import our own products into Israel, and we know them as an experienced, capable partner." He added that it was a great opportunity for ADM to reach new customers with a wide array of products. Among other things, the company imports and markets animal feed.
Published by Globes [online], Israel Business News - www.globes-online.com - on May 10, 2017
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