Dan Bus Company Acquires Shasha Transport for $50 Million

Dan, a major Israeli transportation company, is expanding its operations by acquiring Shasha Transport for NIS 180 million (approximately $50 million). Shasha, with 47 years of experience, is one of Israel's largest transport firms, generating an annual revenue of about NIS 200 million (approximately $55 million). The company operates around 200 vehicles and provides services to employees and large public entities, including the Ministry of Defense and the Israel Electric Corporation.

This acquisition strengthens Dan's existing transport services, which already include United Tours and Jacques Yulzary. Upon completion, Dan will significantly increase its organized transport operations and secure more long-term contracts with major clients. The deal follows a recent change in Dan's ownership, where Ofir Karni and a group of institutional investors purchased a controlling stake for approximately NIS 2.8 billion (around $770 million), with investors including Clal Insurance, Leumi Partners, and Mizrahi Tefahot Invest.

Dan's business extends beyond urban bus lines, encompassing light rail projects, fast lanes, and infrastructure tenders. The Shasha acquisition adds a substantial private transportation segment to its portfolio. The transportation sector continues to attract significant institutional investment, with companies like Egged and Metropolin also under large investment groups. This interest is driven by the stable, long-term revenue streams from government contracts, often indexed to inflation or fuel costs, offering a hedge against inflation and predictable cash flow.

However, the sector faces challenges, notably high labor costs and a shortage of drivers. The acquisition price for Shasha reflects a valuation of approximately 0.9 times its annual revenue. Key to the deal's success will be Shasha's operating profit and Dan's ability to integrate the company into its existing operations. Dan's new owners have an option to increase their stake to about 75%, with potential for a future stock exchange listing.