Dan Transportation Deal Concludes With Members Selling Shares

The acquisition of control in Dan Transportation has been finalized, with 177 Dan members selling a portion of their shares in the second and final stage of the deal. These members collectively sold approximately 5% of the company's stock for about 132 million shekels, distributed proportionally among the sellers. Following this transaction, the investor group, led by Dan CEO Ofir Karani and institutional bodies, now holds about 57% of Dan Transportation, while the members retain approximately 43% of the shares.

Initially, Dan members held about 48% of the company's stock. The plan was to acquire about 23% from them, representing half of their combined holdings. However, the actual sales volume was lower than the investor group anticipated. The decision to allow members to retain a larger stake may reflect confidence in the management's ability to grow Dan and enhance its value for a potential future IPO, alongside a desire to maintain their partnership in the company where they worked for decades.

This continued shareholding occurs amidst Dan's expansion, including the recent acquisition of the bus company Mesiei Shasha and an agreement to purchase public transport company Tnuva. Dan is also participating in infrastructure tenders for light rail projects in Tel Aviv and Jerusalem and operating a rapid lanes project, all of which are expected to support the group's continued growth.

1,078 long-serving Dan members, many of whom are retired, faced a choice between realizing their investment or continuing to hold shares in a non-tradable company. The proposed terms suggested a gross return of around 600,000 shekels for selling half of a member's holdings, up to 1.2 million shekels for selling all of them. The potential sale amount for each member also depended on the total number of participants and the volume of shares they wished to sell within the planned overall purchase.

The first stage of the deal saw the investor group acquire holdings from Keren Value and LBH, reaching a 52% stake in Dan Transportation. This stage was completed in late June after approval from the Competition Authority. The acquisition of an additional 5% from the members in the second stage has now concluded the entire transaction. The deal, across both stages, was originally valued at approximately 2.1 billion shekels, based on an effective company valuation of about 2.8 billion shekels.

Despite the members selling fewer shares than planned, the investor group maintains control of the company and its ability to direct its management and business decisions. The remaining Dan members, with their 43% stake, will continue to share in the company's growth potential and the risks associated with their continued investment.