According to estimates, the sale price for the company will be $675-$810 million.
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The government has approached the world’s leading investment banks including UBS, HSBC, Merryl Lynch, JP Morgan, Citi Bank, and Deutsche Bank as it attempts to find a buyer for Israel Military Industries (IMI). Defense industry sources have estimated in the past that the state would be able to sell IMI for $675-$810 million. This price includes the company’s physical infrastructure, its intellectual property, and its estimated NIS 8 billion orders backlog with various customers in Israel and overseas
Simultaneously with inquiries to the investment banks, the Government Companies Authority is preparing to publicly announce in two months that it will brief private investors about the beginning of proceedings to sell the company, and asking for preliminary bids to acquire it. The bids will be assessed by the Companies Authority and the Ministry of Defense, which will later allow access to information rooms, including the company’s confidential financial particulars.
“The number of candidates within Israel for acquiring such a company is known and limited. It is possible that out of a wish to obtain the best price for optimal realization of the sales potential, approaches may also be made to foreign investors, ” a source involved in the plan to privatize IMI told “Globes” today. Some Israeli defense companies are already readying themselves for a possible sale of IMI: bidders for the company’s acquisition are likely to include Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), businessman and Israel Weapons Industries (IWI) Group owner Samy Katsav, a group of investors being formed by businessman Eldad Avraham, and businessman Meir Shamir. Some of the possible candidates expressed interest to “Globes” today in acquiring the company, but made it clear that at this stage, they are waiting for publication of the tender and to examine its terms before making a decision on the matter.
IMI chairman Udi Adam said, “Privatization of the company is progressing as planned, and is at the point of no return. Our main goal is to carry out privatization at a high monetary value for Israel, while reflecting the company’s technological capabilities, knowledge foci, and the quality of its human resources.” In the middle of 2014, as part of the privatization plan, early retirement of hundreds of IMI workers began according to agreements reached on the matter with the Histadrut (General Federation of Labor in Israel). By the end of the year, 600 employees are expected to retire.
Published by Globes [online], Israel business news – www.globes-online.com