FIMI Opportunity Funds, led by Ishay Davidi, is going full speed ahead on its investments, even in the midst of the fighting in the Gaza Strip. The fund is acquiring a controlling interest in security systems manufacturer Magal Security Systems Ltd. (Nasdaq: MAGS), managed by Eitan Livneh. Magal's market cap is $60 million.
FIMI will acquire the shares from current controlling shareholder Nathan (Natey) Kirsh, who owns 40% of Magal's share capital. The share price in the deal is $3.50, close to the market price on Wall Street.
FIMI, Israel's largest private investment fund, tends to acquire industrial companies in which it can influence the companies' activity and enhance their value, among other things by changes in management and business policy. Magal has not yet published its second-quarter results, but the company's first quarter revenue totaled $12.5 million, down 7%, compared with the corresponding quarter in 2013. The company posted a $2 million net loss ($0.12 a share), compared with a $1.1 million loss in the corresponding quarter last year. The company had $34 million in cash at the end of the first quarter.
Magal began as an Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) subsidiary. In 1984, control of the company, which develops computerized defense systems for tracking and identifying unauthorized intrusions, passed to Kirsh and Yaakov Ibn Ezra. Magal held its Nasdaq IPO in 1993. Several years ago, a struggle for control of the company developed, and an effort was made to get rid of then-chairman Yaakov Perry, currently Minister of Science and Technology. Kirsh acquired the Ibn Ezra family's stake in the company in 2012 at $5 a share.
Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2014
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