The Salkind brothers' M&A machine

Daniel and Michael Salkind / Photo: Israel Hadari

From food to transport, energy to retail, Michael and Daniel Salkind's Elco group always seems to be where the action is.

Elco Holdings Ltd. (TASE: ELCO) continues its acquisitions campaign, reporting two substantial investments this week. Electra Afikim, a unit of Elco subsidiary, Electra Ltd. (TASE: ELTR), bought bus company Egged Ta'avura for NIS 200 million, while another subsidiary, Electra Consumer Products (TASE: ECP), bought control of supermarket chain Yeinot Bitan.

The name of one or another company in the Elco group has arisen time after time recently as a potential contender in just about every deal that comes up in the Israeli economy. Whether it's in food, energy, aviation, real estate, retailing, or transport, Elco, controlled by brothers Daniel and Michael Salkind, is there on the side of the potential buyers, and in most cases comes away with the prize.

The two Salkind brothers, who serve as joint CEOs of Elco, have turned the veteran investment company into an acquisitions machine, with the aim of developing its traditional businesses alongside the addition of more areas of activity. The group's policy, in most cases, is to make substantial acquisitions of companies with leading brands and with potential synergy with existing group companies.

Elco carries out its acquisitions either itself or through one of its four Tel Aviv Stock Exchange-listed subsidiaries: Electra (one of Israel's leading construction and infrastructure companies), Electra Consumer Products (whose main business is the production and sale of electrical goods), Electra Real Estate (income producing real estate, mainly in the US), and Supergas (purchase, storage and sale of natural gas and electricity).

On the other hand, the group also does not hesitate to take advantage of opportunities to realize businesses, even within a short time of acquiring them, if it can do so at a good profit. Last year's sale of Golan Telecom is an excellent example, as is the flotation of Supergas on the Tel Aviv Stock Exchange.

For nearly four years now, the brothers have dictated Elco's strategy, since the death of their father the late Gershon Salkind, the founder of the business. They do however respect the independence of the CEOs of the subsidiary companies in making decisions. Under the brothers' leadership, Elco's share price has risen by three digit percentages and, bringing it to a current market cap of NIS 4.8 billion. The brothers hold 65% of the company.

The most recent major deal that Elco itself has carried out is an investment of NIS 400 million in one of the largest holding companies in Israel, Discount Investment. The deal is close being complete after the Competition Commissioner gave approval.

In the past year, Elco's share price has risen 45%, Electra Consumer Products is up 180% to peak market cap of NIS 3.5 billion, and Electra is up 20% to a market cap of NIS 6.8 billion.

Published by Globes, Israel business news - en.globes.co.il - on May 6, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Daniel and Michael Salkind / Photo: Israel Hadari
Daniel and Michael Salkind / Photo: Israel Hadari
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