Businessman Eyal Segal and his partner are about to make an impressive exit, after signing an agreement to sell 60% of Megason Ltd. to construction and infrastructure firm Electra Ltd. (TASE: ELTR) for NIS 86 million in cash, subject to adjustment, in a deal reflecting a NIS 145 million company valuation.
The agreement between the parties includes a buy option and sale option for the remaining Megason stake (40%) from December 2021, with both parties having the opportunity to realize the options earlier. As part of the deal, Segal and Shaham will provide Megason with consultation services until the option is realized or, alternatively, for five years from the completion of the deal, which is contingent on the approval of the Antitrust Authority and third parties.
Megason provides customized safety and security solutions for the private and public sector and has an installation and service network. It provides integrative solutions which include access control, surveillance cameras, alarm, monitoring and fire detection and prevention systems, control and management solutions, perimeter control, intercom systems and software development.
In this deal, Segal enhanced his relationship with the local capital market, after he completed acquiring control of Aviation Links in September, a company operating charter flights and marketing tourist packages and services, for NIS 34 million.
Segal said today, "We have been approached by many funds from Israel, and some overseas funds, willing to give us a higher multiplier than offered by Electra, but the future of the company and its employees was important for us, because they have stayed with us for many years, and so we had decided to close the deal with Electra, because we are completely certain this deal guarantees their future, a deal in which we will also stay in the company for a few years and enjoy the fruits of our operations."
Electra, controlled by Gershon Salkind's Elco Holdings Ltd. (TASE: ELCO), operates in five sectors: infrastructure and building projects in Israel and abroad, service, maintenance and commerce, real estate development and construction and franchising. Since the beginning of the year its share price has risen 20%, reflecting a NIS 2 billion market cap.
Electra said today that the acquisition of Megason is part of the establishment of a new technological division, and explained that the acquisition "is a breakthrough in Electra's business strategy, with the company entering a new technological field, in which activity will generate synergy between all company operations, and provide a significant value to existing and potential clients."
Published by Globes [online], Israel business news - www.globes-online.com - on December 12, 2016
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