Amiad update on proposed acquisition of Arkal
January 20 2010 - 2:00AM
UK Regulatory
TIDMAFS
RNS Number : 8160F
Amiad Filtration Systems Ltd
20 January 2010
20 January 2010
Amiad Filtration Systems Ltd.
("Amiad" or "the Company")
Update on Proposed Acquisition of Arkal Filtration Systems
Further to the Company's announcement of 5 November 2009, the Board of Directors
of Amiad (the "Board") is pleased to announce that the Company has entered into
a conditional agreement for the acquisition of the entire issued share capital
of, and ownership rights in, Arkal Filtration Systems Cooperative Agricultural
Society Ltd. ("Arkal"), from its existing shareholders - Kibbutz Beit Zera,
including its affiliated corporations ("Beit Zera"), and Bermad Industries
Cooperative Agricultural Society Ltd. ("Bermad").
Under the terms of the agreement, the consideration for Arkal will be satisfied
by a combination of a cash payment of $10 million, to be paid to Beit Zera, and
the issue of new ordinary shares of 0.5 NIS of Amiad, in an amount that will
constitute 14.5% of the Company's issued share capital (on a fully diluted
basis) immediately following the completion of the transaction
("Consideration Shares"), of which 9% shall be due to Bermad and the remaining
5.5% to Beit Zera. The Consideration Shares will be subject to a lock-in and
orderly market arrangement, and will rank pari passu with Amiad's existing
ordinary shares in issue.
The completion of the acquisition is subject, inter alia, to the approval of the
relevant regulatory authorities in Israel, the approval of Beit Zera's creditor
banks and the approval of an extraordinary meeting of the shareholders of Amiad
(the "EGM").
Kibbutz Amiad, the controlling shareholder of the Company through its wholly
owned subsidiary, A.M.SI. Investments (1997) Ltd ("A.M.S."), has informed the
Company that following the issuance of the Consideration Shares, a shareholders
agreement will come into effect among Kibbutz Amiad, Beit Zera and Bermad.
Pursuant to the shareholders agreement, the parties thereto have agreed to vote
their shares together at all meetings of the shareholders of Amiad, as shall be
agreed among them or in the absence of agreement as shall be decided by Kibbutz
Amiad. In addition, the agreement shall impose on Beit Zera and Bermad certain
limitations on the transferability of the Consideration Shares.
Rationale for Acquisition
Arkal is one of the leading suppliers of water filtration solutions, with a
particular presence in the irrigation market. Its primary product is the
automatic Spin Klin system, based on disc filtration technology - which was
introduced to the filtration industry by Arkal. It is expected that the addition
of Arkal's product range, and sales and marketing infrastructure, will
considerably enhance Amiad's offering in the irrigation market as well as in the
industrial and municipal markets.
Based on its consolidated audited financial statements for the full year ended
31December 2008, prepared according to Israeli accounting principles, Arkal's
revenues for 2008 amounted to approximately US$42 million and its net profits
for the same period totalled approximately US$2.5 million. In 2009, due to the
macroeconomic climate, Arkal's sales in the irrigation market declined
drastically and, as a result, Arkal's revenues for the 9 months ended 30
September 2009, based on its unaudited interim financial statements for that
period prepared according to Israeli accounting principles, amounted to US$20.5
million and its net profit was approximately US$140,000.
The enlarged group will have a greatly expanded product portfolio, geographical
spread and sales team. In addition, a number of synergies have been identified
from which Amiad expects to benefit.
Extraordinary General Meeting
The Board has resolved to convene an EGM, to be held at 9.00am GMT on 9 March
2010 at the offices of Speechly Bircham LLP, 6 New Street Square, London EC4A
3LX, England, to approve the entering by the Company into the Arkal purchase
agreement and to increase the authorized share capital of Amiad. Amiad's Board
intends to send a Circular to shareholders convening the EGM by 28 January 2010,
which will include the full details of the transaction.
Commenting on the proposed acquisition, Tal Yeshua, Chairman of Amiad, said:
"We are excited about the opportunities that this acquisition represents for
Amiad and are delighted that it will secure Arkal's future. Amiad's technology
base will be greatly enhanced by the addition of Arkal's intellectual property,
which will enable us to target customers and territories that were previously
inaccessible to the Company. We also expect to benefit from a number of cost,
and strategic, synergies. As a result, with a greatly expanded product
portfolio, geographical spread and sales team, the Directors believe this
transaction will be a crucial milestone in the development of Amiad and we look
forward to the future with confidence."
Amiad will provide a further update in due course.
Enquiries:
+-----------------------------------------+------------------------------+
| Amiad Filtration Systems Ltd. | |
+-----------------------------------------+------------------------------+
| Arik Dayan, Chief Executive Officer | +972 4 690 9500 |
| Rivka Kalmanzon, Chief Financial | |
| Officer | |
+-----------------------------------------+------------------------------+
| | |
+-----------------------------------------+------------------------------+
| Panmure Gordon | |
+-----------------------------------------+------------------------------+
| Andrew Godber | +44 20 7459 3600 |
+-----------------------------------------+------------------------------+
| | |
+-----------------------------------------+------------------------------+
| Corfin Communications | |
+-----------------------------------------+------------------------------+
| Harry Chathli, Claire Norbury | +44 20 7977 0020 |
+-----------------------------------------+------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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