Israeli unmanned aerial systems developer Aeronautics Group, a unit of Rafael Advanced Defense Systems Ltd., has announced that it is acquiring the integrated solutions (projects) division of Israeli company Magal Security Systems Ltd. (Nasdaq: MAGS; TASE: MAGS), including all the division's global operations and subsidiaries. No financial details were disclosed.
The acquisition will extend Aeronautics Group's operations in the defense, and homeland security markets. The acquisition is expected to be completed in the second quarter of 2021, and is subject to customary closing conditions, including regulatory approvals.
Aeronautics Group CEO Moshe Elazar said, "Together with our synergy with Rafael and the defense companies in Stolero Group, the acquisition of Magal's Integrated Solutions Division is a power multiplier for the entire Group, both technologically and customers' range wise. Magal's Integrated Solutions Division acquisition is another step in providing a complete and flexible solution to customers of all around the world. "Over the years, Aeronautics Group has established itself as a leading group in the area of comprehensive integrated solutions for intelligence, surveillance and sensors. We welcome Magal as it joins the Group in a strategic move that combines the leading capabilities of Aeronautics and its subsidiaries with Magal's comprehensive solutions in the HLS field, continuing to establish and deepen the Group's specialization in this field." Magal's Integrated Solutions Division CEO Arnon Bram said, "Over the past 45 years, we have delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 100 countries, in different markets such as oil & gas, sea ports, air ports, critical infrastructure, safe cities, energy and more. I'm convinced that the collaboration between Magal's Integrated Solutions Division and Aeronautics Group will broaden the range of our advanced solutions and local support and increase our international footprint."
Magal's strategic decision to sell its projects division will enable the company to focus on providing technology-rich products, solutions and related services in its four key areas: energy, logistics, critical infrastructure and correctional facilities. These operations provide Magal the greatest opportunity to increase its security and related markets offerings while expanding its customer base.
Following the sale of the projects division, Magal, through its Israeli based headquarters, will continue to operate its Senstar product division, with development and manufacturing facilities located in Canada and sales offices in the US, EMEA, APAC, and LATAM regions. For the last 12 months, Senstar's revenue represented 46% of the consolidated Magal revenue while delivering a 64% gross profit margin, compared to the consolidated 45% gross margin.
Magal's share price is down 2.47% on Nasdaq at $5.10, giving a market cap of $118.1 million. Magal is controlled by FIMI Opportunity Funds, which has a 46% stake in the company.
Published by Globes, Israel business news - en.globes.co.il - on February 9, 2021
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