The Netz group continues to benefit from its investment in Mendelson Infrastructures, which announced today the sale of Dodson Global, its US subsidiary for $110 million (NIS 380 million) to an unnamed US company.
Dodson supplies steel piping accessories, faucets and taps used primarily in the oil and gas industries. The company has throughout the US. Mendolson, managed by Shraga Bar and Tzvi Itzik, estimates its pre-tax proceeds from the sale at $82 million and its net profit on the deal at $20 million. The Mendelson share was up 6% today, reflecting a NIS 280 million market cap.
Part of the proceeds will probably be set aside for investment in other activity in the Mendelson's core business in Israel, while part will be distributed to its shareholders as a dividend. The company distributed NIS 20 million in dividends to its shareholders last year.
Another leading beneficiary of the sale is Dodson CEO Robert Elliot, who owns 11% of the company's share capital, and is therefore expected to make $12 million on the sale. The balance of the proceeds on the deal is designated for Dodson's liabilities ($13 million), transaction costs ($4 million), and an additional obligation of $750,000 to Robert Elliot.
As part of the deal, Mendelson undertook to refrain from competing with Dodson in the US and Canada for five years. Completion of the deal is subject to several conditions, including approval from US authorities. Completion of the deal is expected by mid-August.
Dodson is one of Mendelson's two main activities, in recent years contributing close to 40% of the latter's revenue, which totaled NIS 1 billion in 2013. Dodson accounted for nearly 60% of Mendelson's NIS 91 million operating profit last year, which was 6% lower than in 2012.
Mendelson's other main activity is marketing and distribution of liquid transportation products (water, sewage, chemical, and other pipes) in Israel. The company also assembles and maintains water pumps, and produces and markets polyethylene and PVC piping.
Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2014
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