Israeli agtech co Roots set for Australian IPO

Roots Photo: PR

For Ale Yarok leader Boaz Wachtel's company is seeking to raise $14 million at a $35 million company value.

Roots Sustainable Agricultural Technologies is joining the growing group of Israeli agro-tech companies that have raised money in Australia. The Kfar-Netter-based company has submitted a prospectus for raising A$5 million (five million Australian dollars - NIS 14 million) at a company value of A$12 million (NIS 33 million). The offering is scheduled for November.

Roots, which was founded by entrepreneur and non-executive director Boaz Wachtel and CEO Dr. Sharon Devir, operates in the Avital Pharma technology incubator. Wachtel is known in Israel for his political activity in the past; he founded and led the Ale Yarok Party, which advocated the legalization of cannabis in Israel, but failed to win any Knesset seats. Wachtel is responsible for offering by two medical cannabis companies in Australia: MMJ Phytotech Ltd. (ASX: MMJ), which has a current market cap of A$73 million, and Creso Pharma (ASX: CPH), whose market cap is A$49 million.

Roots has developed a unique environmentally friendly system that makes it possible to heat and cool the roots of crops using very little energy. Wachtel says that the technology is very useful; for example, it provides an option of out-of-season planting, while saving on energy. At the same time, as he told "Globes" today, the company is in the process of completing development of an irrigation-by-condensation technology, and has succeeded in growing plants solely with condensation on pipes.

According to Wachtel, this is the first time that plants have been grown exclusively with irrigation by condensation unrelated to cold seawater. According to the submitted prospectus, the company has raised NIS 8.6 million to date: A$2.2 million (NIS 6.1 million at the current exchange rate), from its shareholders and A$892,000 (NIS 2.4 million) from the Israel Innovation Authority. The company's largest shareholder is Wachtel with 29%, set to fall to 7.9% after the offering. Other company shareholders include Devir and company directors Tal Youdim and Eran Fridman.

Roots will use the money raised in the offering for continued R&D, production, marketing, sales, and self-development. The company had a loss of A$197,000 and no revenue in the first half of 2017 and A$753,000 at the end of the period.

More than 10 Israeli companies on the Australian Securities Exchange

"There is a lot of interest in Israeli agro-technologies in Australia," Wachtel says. "The brokers we're in contact with thought they should check what interest Australian investors had. The response was positive, and we started the process several months ago - a collective effort by teams in Israel and Australia."

Before the offering, Roots recruited Ehud Raivitz, former CEO of kibbutz company Elcam Medical, as deputy CEO.

Roots wants to join the growing number of Israeli companies listed in Australia, which includes software company Dragontail Systems Ltd. (ASX: DTS); Elsight Ltd. (ASX: ELS), which markets real-time information streaming systems; water treatment company Fluence Corp. (ASX: FLC), medical cannabis company eSense Lab. Ltd. (ASX: ESE), and others. More than 10 Israeli companies have joined the ASX since 2015, some of them through the back door - a reverse merger into an existing stock exchange shell. Located in Sydney, the ASX is regarded as important in global terms; it is rated in the top 10 worldwide, with many shares and heavy trading.

Published by Globes [online], Israel Business News - www.globes-online.com - on October 24, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Roots Photo: PR
Roots Photo: PR
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