Industrial company Afcon Holdings Ltd. (TASE: AFHL), controlled by the Schmeltzer family, will build a large office and laboratory building for semiconductor giant Intel. The value of the deal approaches NIS 500 million, sources inform "Globes"
Afcon's project for Intel will help the company achieve a breakthrough in its business. The deal is the biggest in its history, with a value of NIS 440 million, plus VAT. Afcon's report on the deal to the Tel Aviv Stock Exchange (TASE) last night (which did not mention Intel) indicates that it includes the sale of two 17-dunam (4.25-acre) lots and planning and construction of a large building on them. Responding to a query from "Globes", Afcon today said, "No information can be added to what was reported to the stock exchange."
Intel has been searching for a new property in the central region for many months, and met with agents and contractors for the purpose of finding an existing property or one slated for construction. "Globes" last year reported that Intel was looking for a place to house its research and development center. Afcon will construct the building in the Kiryat Arie industrial zone in Petah Tikva, between the new Moshava stadium and the Azorim park. The building is planned to have 35,000 square meters of built-up space, including 20,000 square meters of offices, 3,000 square meters of laboratory rooms, and the rest public space. The building will also have 30,000 square meters of underground parking.
Afcon's business is in four main sectors: buildings and infrastructure; control and automation solutions; marketing and distribution of electricity and control equipment and components; and development and marketing of communications systems for businesses. Afcon is also active in the environmentally friendy energy sector. Afcon's CEO is Jerry Schenirer, and the company chairman is Israel Raif. Afcon's share price climbed 40% last year, completing a rise of 190% in three years, giving a market cap of nearly NIS 500 million.
Intel is one of Israel's leading employers with over 10,000 employees in Kiryat Gat (the company's main business center in Israel), Haifa, Jerusalem, Yakum, and Petah Tikva. Intel Israel is led by general manager Maxine Fassberg.
According to company figures, Intel Israel's exports totaled $4.1 billion in 2015 - 11% of Israeli high-tech exports, but 3.6% less than in 2014. When the figures were published, the company explained that the decrease was due to a deliberate slowdown in production, following the $6 billion expansion of the company's fab in Kiryat Gat. The expansion was part of understandings by the company with the state in 2014, under which in return for its investment, the company would receive a $1.1 billion grant and its corporate tax would be reduced.
Published by Globes [online], Israel business news - www.globes-online.com - on April 6, 2016
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