Refusal to sell Maytronics earned kibbutz billions

Maytronics swimming pool robot cleaner  / Photo: PR

In 2012 after a stormy meeting, Kibbutz Yizre'el members turned down Haywards offer of NIS 180 million for its 67% stake in the swimming pool robot cleaning company - now worth over NIS 3 billion.

The 3% stake in swimming pool robot cleaner company Maytronics Ltd. (TASE:MTRN) that Kibbutz Yizre'el sold last Thursday puts into perspective how right the decision by members not to sell the company in 2012 was. The kibbutz received almost NIS 150 million for its 3% stake last week. Back in February 2012, US swimming pool equipment giant Hayward offered Yizre'el NIS 180 million for its entire 67% stake - a handsome premium on the company's then market cap.

The offer, which valued Maytronics at NIS 345 million, was rejected after a stormy kibbutz meeting. Since that decision, Maytronics share price has risen by a staggering 2,600%. In 2017, the kibbutz sold a 10% stake in Maytronics for NIS 235 million, so that together with last week's 3% sale Yizre'el has raked in NIS 385 million, while still holding a controlling a 54% stake in the company, which is today worth more than NIS 3 billion, and earlier this month took its place on the revised Tel Aviv 35 Index - the 35 most valuable companies traded on the Tel Aviv Stock Exchange (TASE).

In addition to realizing the 13% stake and still holding control of Maytronics, the company provides employment for 40 members of the kibbutz out of the company's total workforce of 530. In 2019 alone from employees' salaries, Yizre'el earned NIS 10.5 million as well as NIS 2.5 million in management fees and NIS 3.5 million in other fees, and millions more in dividends.

Ironically Maytronics CEO Eyal Tryber and chairman Jonathan Basi both supported the sale to Hayward in 2012, something which would have seen the kibbutz miss out on billions of shekels. Since the start of 2020, Maytronics' share price is up 65% as revenue continues to climb.

98% of the Israeli company's swimming pool cleaning robots are exported. The Covid-19 crisis has only boosted sales. Revenue in the second quarter was NIS 378 million, up 22.6% from the corresponding quarter of 2019 and revenue in the first half of 2020 was NIS 692 million, up 17.5% from the first half of 2019. Net profit in the second quarter was NIS 72.6 million, up 27.6% from the corresponding quarter of 2019.

Maytronics said, "As a result of the coronavirus crisis, many pool owners in all markets are staying at home and devoting more of their resources and time to the domestic space. The amount that the pools are used and the need to maintain them have risen in the second quarter."

Published by Globes, Israel business news - en.globes.co.il - on August 24, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Maytronics swimming pool robot cleaner  / Photo: PR
Maytronics swimming pool robot cleaner / Photo: PR
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