Shapir Engineering Sells Gas Distribution to Elad for $63 Million
Translated & summarized from Calcalist by baba
Shapir Engineering has agreed to sell its gas distribution companies, Super NG and Super NG Hadera and HaEmek, to Elad Group for NIS 230 million in cash. The deal, expected to generate a profit of NIS 50-100 million for Shapir, includes provisions for future revenue streams and an option for Elad to acquire Shapir's share of those payments. This sale aligns with Shapir's strategy to focus on core activities and new projects, while the transaction awaits regulatory approvals.
The story in 6 lines · by baba
- Shapir Engineering will sell its gas distribution networks to Elad Group for NIS 230 million.
- The deal is expected to yield Shapir a profit of NIS 50-100 million before taxes.
- Shapir will retain rights to future revenue streams, including tariff increases and asset value.
- Elad has a five-year option to buy Shapir's share of future payments for NIS 130 million plus interest.
- The sale is part of Shapir's strategy to divest mature assets and focus on core business.
- The transaction requires approvals from the Minister of Energy and the Competition Authority.
Shapir Engineering is selling its gas distribution networks to Elad Group for NIS 230 million (approximately $63 million) in cash, while retaining rights to potential future revenue streams. The infrastructure group announced Tuesday that it signed an agreement Monday to sell its two subsidiary companies, Super NG and Super NG Hadera and HaEmek, which operate gas distribution networks connecting industrial and commercial consumers to the national gas transmission system.
The sale is expected to yield Shapir a profit of NIS 50-100 million before taxes and transaction costs. Elad will acquire full ownership of the two companies, which operate in central Israel from Netanya to Gedera. Their distribution licenses are set to expire in 2034 and 2038, respectively. The final price will be adjusted based on the companies' debt and cash at the time of closing.
Shapir will also be entitled to conditional payments related to future tariff increases, license extensions, and the network's asset value at the end of the license period. Elad has an option to purchase Shapir's share of these future payments for NIS 130 million, plus 9% annual interest from the signing date, valid for five years post-closing.
This divestment is part of Shapir's strategy to monetize mature assets and reinvest in core activities and new infrastructure and industrial projects. Recently, Shapir brought institutional investors Migdal, Amitim, Clal, and Meitav into a partnership holding its rights in Highway 6 North, Highway 16, and the Fast Lane, granting them a combined 70% stake valued at approximately NIS 950 million.
The current deal, based on a memorandum of understanding signed in April, still requires approvals from the Minister of Energy and Infrastructure, in agreement with the Natural Gas Sector Authority, and the Director General of the Competition Authority.
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