Infrastructure and construction company Electra Ltd. (TASE: ELTR) will build a new campus in Ra'anana for Amdocs Ltd. (NYSE: DOX). Electra today reported to the Tel Aviv Stock Exchange (TASE) that it had signed, through its Electra Construction subsidiary, an agreement to build the office campus, which will be Amdocs Israel's new headquarters. The campus will have four office buildings, green areas, and three underground floors. Electra said that its proceeds from the construction work would total NIS 330 million.
Electra, controlled by Elco Holdings Ltd. (TASE: ELCO), in which brothers Daniel and Michael Salkind have a controlling interest, has several spheres of activity: construction and infrastructure projects in Israel and overseas, service and maintenance, real estate development and construction, and franchises. The company's market cap is NIS 3 billion.
Amdocs, managed by CEO Shuky Sheffer, which provides IT systems and solutions for communications companies, has an $8.4 billion market cap. The company currently operates from offices at Ra'anana Junction rented from REIT 1 Ltd. (TASE:RIT1) and its partners. Amdocs bought land in the northern Ra'anana industrial zone in late 2017, however, for the purpose of having its new campus built there. Amdocs estimated its total net investment in buying the land and having the campus built at up to $350 million over 4-5 years, which the company will pay for from its own resources.
Amdocs bought the land from businessperson George Horesh, owner of Union Motors, which imports Toyota cars to Israel. Horesh also has significant holdings in real estate and technology. He sold the same land two years ago to Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), which planned to build its new headquarters there. When Teva had difficulty servicing its enormous debt, however, Horesh exercised a right granted him in the land sale agreement to buy back the land from Teva in the framework of a partnership agreement with Amdocs.
Electra was also to have built Teva's headquarters in Ra'anana, together with Tidhar Group. The cost of construction was estimated at NIS 1 billion at the time. Electra will now build offices for a different company at a different price on the same land.
Electra CEO Itamar Deutscher said, "Electra is proud of being selected to lead the construction project on the site, and is grateful for the vote of confidence. Winning this important project enables us to work in cooperation with a large concern like Amdocs, and to contribute from the group's experience and professional capabilities in all the necessary areas at the highest standards of quality and performance."
Amdocs Israel CEO Shai Levy said, "We are glad to confirm that the vision of Amdocs's new campus in Israel is approaching the construction stage. In recent months, we designed an architectural plan, and we are now glad to complete another important stage with the selection of Electra Construction as performance contractor. The new campus, scheduled for completion in three years, will provide an optimal advanced work environment for our employees, and will support the company's future growth."
Published by Globes, Israel business news - en.globes.co.il - on January 14, 2019
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