Electra in talks to buy G4S Israel operations

Itamar Deutscher Photo: PR

The price under discussion for the Israel operations of the UK company is believed to be NIS 200-300 million.

Electra Ltd. (TASE: ELTR) is considering the acquisition of international security company G4S's business in Israel, and is conducting preliminary contacts on the subject. G4S is a UK company that recently announced its wish to cease its operations in Israel, while also cutting back its activity in other markets.

It is believed that the price for the activity in question is NIS 200-300 million. Managed by CEO Itamar Deutscher, G4S has five main fields of business: infrastructure projects in Israel and overseas, service, maintenance and commerce, real estate development and construction, and franchises, as well as (more recently) security.

G4S, which was previously believed to be the world's leading security services company in terms of revenue, has several thousand employees in Israel. The company, which has been criticized for its business beyond the Green Line, where it provided supplies and maintenance, announced in 2013 that it would not continue its contracts in those areas.

G4S conducts its activity in Israel in advanced security technology and diverse guarding and security services through four business divisions in advanced security, according to the demand. The company has hundreds of thousands of employees worldwide, and according to the "Financial Times," its revenue in Israel totaled £100 million in 2012, amounting to only 1% of its revenue worldwide in that year. The interest expressed by Electra in acquiring the security company is expected to substantially boost this area of its activity, following its 2015 acquisition of Tavas, a provider of guarding, security, and cleaning services, for NIS 25 million.

Electra, considered the strongest and most stable activity of Elco Holdings Ltd. (TASE: ELCO) , controlled by Gershon Salkind, ended 2015 with a 16% rise to NIS 144 million in profit and 19% growth in revenue, which reached NIS 4.7 billion. Breaking down its operating profit by sector shows 16% growth to NIS 117 million in services, maintenance, and commerce, thanks to the consolidation of newly acquired activity, combined with improvement in regular activity. On the other hand, profits in the infrastructure sector in Israel declined 12% to NIS 107 million, after being affected by a downward revaluation of its business and the beginning of new projects for which substantial profit has not yet been recognized. The Electra share price is up 9% this year, reflecting a NIS 1.8 billion market cap.

Published by Globes [online], Israel business news - www.globes-online.com - on May 18, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Itamar Deutscher Photo: PR
Itamar Deutscher Photo: PR
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