After signing a deal a few months ago to sell control of the telecommunications company cellcom reports Discount investments (DSKSH) on another potential realization of its holdings: an agreement for the sale of its holdings in the Technology Investment Company Alron . At the same time, Elron reported that it received the court’s approval to distribute a dividend in the amount of 35 million dollars, of which approximately 20.7 million dollars will go to the controlling owner DSKSH.
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Deskash signed a non-binding agreement to sell its holdings in Elron (59.1% of the shares) to a foreign venture capital company whose name was not disclosed, based on a value of between 82 and 90 million dollars for Elron, which reflects a value of $48.5-53.2 million for Deskash’s holdings. Q in the company. Such a value reflects a premium of 12%-23% on Elron’s current value on the stock exchange. Elron is traded in Tel Aviv at a value of NIS 274 million and is also listed for trading on Nasdaq (however there is almost no trading of the stock there).
The value range in which Elron is sold is based on the fact that there will not be a substantial decrease in its current cash levels and that of the RDC Rafael subsidiary, and that the levels of debt and working capital will remain unchanged compared to their current situation. As Elron distributes cash, the said value will be adjusted accordingly For this, the deal is subject to the formation of a binding agreement between the parties, at which point the buyer was given an exclusivity period of 30 days, which can be extended in another 15 days.
Elron specializes in investments in early stages of technology companies, mainly in the fields of life sciences. Recently, Elron had a successful exit in the Israeli biomed company Carthill, which developed a replacement tissue for damaged cartilage, for the medical device company S&N. Elron’s share in the sale was an immediate consideration of $43 million plus an additional $5 million deposited in trust; Elron is entitled to an additional conditional consideration of up to 40 million dollars if certain conditions stipulated in the sale agreement are met.
DSKSH is reducing liabilities to focus on the real estate sector
Among Elron’s portfolio companies today are RDC Rafael, which is responsible for developing companies based on Rafael technology, Signrio, which developed a security platform to protect healthcare systems from cyber threats, Ironscales, which develops anti-phishing solutions, Nutel Vision, which develops home diagnostic services, and Kormize, which developed a system to repair the tricuspid heart valve in a minimally invasive catheterization procedure. Since 2010, Elron has recorded 15 exits totaling $2.2 billion, of which Elron had a share of $750 million.
The controlling owner of Elron, DSKSH, has been working for some time to reduce the scope of its liabilities in order to focus on its main asset – controlling the office company Gev Yam. DSKSH, which trades at a value of NIS 560 million, is managed by Nathalie Meshan-Zakai, and the owners Its main shares are the Mega Or real estate company of Tzachi Nahmias (who serves as the company’s chairman) and the Elko holding company of the brothers Daniel and Michael Zalkind. Mega Or and Elko hold about 30% of the shares of DSKSH 21 – the holding of which they are losing 50% in relation to the purchase price of the shares in 2021.
As part of its plans to reduce leverage, last year DSKSH sold its holdings in the Mehdrin agriculture company (to the Delek Group) and later the controlling shares in the telecommunications company Cellcom to the Fortissimo investment fund for NIS 925 million (according to a value of NIS 2.6 billion to Cellcom) – a deal that has not yet been completed.
DSK has a bond debt of approximately NIS 1.6 billion that trades at a yield of up to 7.4%, which indicates a significant decrease in the level of risk in the eyes of investors, since last October the yield crossed the 20% mark.
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