Shapir Engineering Sells Gas Distribution Units for $60 Million

Shapir Engineering, a major infrastructure company, has signed a binding agreement to sell its natural gas distribution companies, Super N.G. and Super N.G. Hadera and HaEmekim, for NIS 230 million ($60 million). The buyer is Alon, managed by trustee Professor Yitzhak Suari, one of Israel's largest holding companies. Shapir anticipates a pre-tax profit of NIS 50-100 million from the transaction.

Moshe Saboski, Shapir's CFO, explained the sale aims to "free up capital" for future investments, stating the company would not have sold if the deal wasn't favorable. The sale also addresses a regulatory hurdle: under natural gas law, a distribution licensee cannot hold 10% or more of a refinery's shares or appoint a director. Shapir holds 10% of Bazan (Haifa Refineries) shares since its 2023 split from Paz, with options to increase its stake. Saboski believes regulatory approval is procedural, but a recent recommendation from the Concentration Reduction Committee against granting Shapir control of Bazan presents a challenge. However, the Ministry of Energy holds an opposing view, which Shapir sees as an opportunity to reopen discussions about its intention to exercise its options and gain control of Bazan.

Shapir is experiencing a strong financial period, reporting NIS 3.2 billion in revenue and NIS 164 million in net profit for the first half of 2026, a significant increase from the previous year. The company's stock has risen 70% over the past three years and 33% this year, valuing it at approximately NIS 15 billion, about NIS 4 billion more than its closest competitor, Shikun & Binui.

Saboski attributes Shapir's success to conservative forecasting and the market's underestimation of its value, citing the recent sale of 58% of its stake in toll roads for NIS 556 million. He also highlighted the company's integrated industrial sector, including quarries, concrete, asphalt, and cement, which provides a stable foundation. The controlling shareholders, the four Shapira brothers, Harel (CEO), Yisrael (CEO of infrastructure), Gil (CEO of industry), and Chen (CEO of concessions), own 56% of Shapir, valued at NIS 8.3 billion. Including stock sales and dividends, their wealth creation is estimated at around NIS 10 billion. Shapir also distributed options to 850 employees in 2021, with those who haven't exercised them reportedly gaining an average of over NIS 350,000.

Shapir Engineering is involved in numerous infrastructure projects, including railways, roads, interchanges, tunnels, bridges, mining, and real estate development. The current boom in the infrastructure sector, driven by upcoming projects like the NIS 65 billion Metro project and other tenders delayed by the war, is attracting investors. Shapir's integrated model and strong market position make it a formidable competitor, according to Saboski.

Other major players in the sector include Shikun & Binui (valued at NIS 11 billion), Electra (NIS 8.5 billion), and Ashtrom (NIS 6.4 billion). Infrastructure investment funds like Generation (NIS 5.4 billion) and Keystone (NIS 4 billion) have also seen significant returns. Rimon, specializing in tunneling and water treatment, has seen its stock surge 340% in three years. The upcoming IPO of private infrastructure company Y.D. Barzani, valued at NIS 2.8-3 billion, further signals investor appetite for the sector.