Tene exiting Gadot Chemical Terminals at triple valuation

Gadot Chemical Terminals / Photo: Company presentation
Gadot Chemical Terminals / Photo: Company presentation

Tene Investment Funds is making an offer for sale of its holding in a flotation at a valuation of $350 million.

Twelve years after being delisted from the Tel Aviv Stock Exchange, Gadot Chemical Terminals is set to return in what is shaping up to be one of the outstanding flotations of 2020. This time it will be by a different owner, private equity firm Tene Investment Funds, which bought Gadot almost seven years ago, and which now seeks to float the company again at a valuation three times higher than the valuation at which it bought it.

Gadot Chemical Terminals has published a draft prospectus that includes an offer for sale by Tene Investment Funds. According to market sources, the amount raised including the offer for sale will be some NIS 350 million, at a valuation of $350 million (NIS 1.2 billion). At the same time, Gadot will list for trading on the stock exchange the bonds it has issued in private placements. The bonds are rated A3 by rating agency Midroog.

Gadot's activity spans several fields, among them trade in and distribution of chemicals, marine and land chemicals logistics, and production services for the oils industry. According to the draft prospectus, the group has 500 employees, and recorded $331 million revenue in the first three quarters of 2020, 6% less than in the corresponding period of 2019.

Nevertheless, gross profit was 14% higher than in the corresponding period last year, at $44 million, while operating profit grew by almost 40% to $24.1 million. Net profit was $14.4 million, 200% higher than in the first three quarters of 2019 and in 2019 as a whole. The company has shareholders' equity of $125 million, financing a balance sheet of $381 million.

Tene Investment Funds bought Gadot in 2014 from the receiver appointed for the shares in the company on behalf of Israel Discount Bank (TASE: DSCT) in order to repay loans extended to Josef (Yossi) Maiman's Ampal, Gadot's former controlling shareholder, which collapsed. That purchase was made at the end of a pricing process and after Tene bid $73.5 million. A few years previously, in 2008, Ampal delisted Gadot from the Tel Aviv Stock Exchange through a tender offer to purchase at a company valuation of NIS 400 million.

For Tene, which has made impressive exits from companies like Caesarstone and Netafim, this is another successful investment. Apart from the offer for sale, in the framework of the flotation Tene will convert capital notes to the tune of $37.3 million.

The flotation of Gadot will be led by Leumi Partners Underwriters, Barak Capital Underwriting, and Discount Capital Underwriting.

Published by Globes, Israel business news - en.globes.co.il - on November 8, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Gadot Chemical Terminals / Photo: Company presentation
Gadot Chemical Terminals / Photo: Company presentation
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