The share price of Orbit Technologies Ltd. (TASE:ORBI) jumped 7% yesterday on a lively turnover after the company reported that it had signed a NIS 109 million framework agreement to provide upgrading, service, and maintenance for airborne communications management systems on US Air Force KC-135 planes. Under the agreement, Orbit will provide services for internal communications systems and upgrade the operating units on the fleet of KC-135s for five years.
Orbit develops, manufactures, and markets communications solutions combining advanced technologies for sea, land, air, and space applications. Its products are suitable for both the commercial and defense markets. Last November, the FIMI fund, led by Ishay Davidi, became the controlling shareholders in Orbit after acquiring 33.3% of its capital for NIS 36 million. The deal was at NIS 6.70 per share. Orbit's share price has since climbed to NIS, a 49% rise, pushing the company's market cap up to NIS 160 million. Following the deal, the stake of former controlling shareholder Zeev Stein declined from 45% to 26.3% and he left his position as Orbit chairperson (although he will continue to provide the company with consultation services for three years).
FIMI has a two-year option to invest NIS 18 million more in Orbit for a share allocation at NIS 7.50 per share and a further five-year option to invest NIS 54 million for a share allocation at NIS 9 per share. If FIMI exercises these options, its holding in Orbit will rise to 56% of the company's share.
Biggest deal since FIMI's entry
Orbit finished the first quarter of the year with $10 million in revenue, 39% more than in the corresponding quarter last year. The company's operating loss fell 65% to $507,000 and its $718,000 net loss was 61% smaller than its loss in the first quarter of 2017.
Orbit's orders backlog amounted to $58.6 million as of the end of March, compared with $47.6 million at the end of the first quarter of 2017 and $56 million at the end of 2017.
The current deal is Orbit's largest since FIMI acquired control of the company. Orbit reported last week that it had received a NIS 3.9 million follow-on order from the Ministry of Defense for the supply of advanced communications systems in 2019, after reporting last month a NIS 3.9 million order from a large fleet in Asia for the supply of new satellite communications systems by the end of 2018.
Orbit CEO Eitan Livne said, "The order shows the great trust by the US Air Force in Orbit's service apparatus. These are critical task systems in the Air Force's operational air fleet."
Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2018
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