Investment House Mor Acquires 12% Stake in Gaon Group for $27 Million

Investment house Mor is acquiring approximately 11.7% of the shares in Gaon Group, a company operating in the water, gas, and fuel infrastructure sectors, for about 100 million shekels. The transaction values Gaon Group at approximately 850 million shekels, based on a price of 18.7 shekels per share, compared to its market capitalization of around 934 million shekels at the close of trading on Friday. As part of the deal, Mor is purchasing shares worth about 74.8 million shekels from the parent company, Gaon Holdings. Following the sale, Gaon Holdings will retain approximately 55.3% of Gaon Group's shares. An additional 25.1 million shekels worth of shares are being acquired from Challenge Holdings and Guy Regev, the CEO of Gaon Group, who are among the controlling shareholders. Gaon Holdings intends to use the proceeds, in part, for the early repayment of its Series E bonds. This move is expected to reduce its debts and improve its financial flexibility while maintaining control over Gaon Group. The acquisition follows a significant surge in Gaon Group's stock price, which surpassed a market value of one billion shekels for the first time last September. In late March 2025, the company's stock traded at less than 200 million shekels, but since then, it has benefited from improved business results and growing investor interest. The recent stock increases are also linked to a change in control at Gaon Holdings. In April 2025, Ofer Gilboa, owner of the cargo airline Challenge Airlines, and Guy Regev led a move to acquire control of the holding company from its previous shareholders, including Viola Fund. Gaon Group reported first-half 2026 revenues of approximately 389.8 million shekels, an 11% increase year-over-year. Its operating cash flow (EBITDA) reached about 69.4 million shekels, and its equity stood at around 500 million shekels at the end of June. Operating profit rose 32% to approximately 50 million shekels, and net profit attributable to shareholders jumped 56% to about 28 million shekels. Gaon Group is involved in manufacturing and marketing pipes, fittings, and valves for water, sewage, gas, and fuel transport, as well as planning and executing infrastructure projects and waste disposal systems. Its operations are divided into three main divisions: Industry, Projects, and Trade.