Aura Group Acquires Majority Stake in Beit Bakfar for Nearly $250 Million

Aura Group, controlled by Yaakov Attarachi, is acquiring a 55% controlling stake in the senior living chain Beit Bakfar, founded by Shalom Blustein. The deal values Beit Bakfar at 1.7 billion shekels ($450 million). Aura Group also intends to launch a tender offer for the remaining 45% of Beit Bakfar shares, representing a significant premium of approximately 80% over the stock price before trading opened on Tuesday. In response, Beit Bakfar's stock surged about 50% during daily trading.

As part of the transaction, Aura Group will purchase the shares of the Blustein family, including Shalom and his four children Yaniv, Ben, Tomer, and Maya, for 935 million shekels ($250 million). The tender offer for minority shareholders, which include Poalim Equity, Mor Investment House, and Clal Insurance, will be based on this valuation. These shareholders have indicated their willingness to participate. While the Blustein family will receive cash, the tender offer will involve a substantial stock component, with 70% of the payment in Aura Group shares, which will constitute about 8.8% of Aura's capital post-acquisition, based on a 5.5 billion shekel valuation for Aura. Aura's stock reacted to the deal with a decline.

Beit Bakfar operates five senior living facilities with 975 units and is developing three new sites. In the first half of 2024, the company reported revenues of approximately 59.8 million shekels and a net profit of about 78.3 million shekels, boosted by real estate revaluations. Founded in 1988, Beit Bakfar went public on the Tel Aviv Stock Exchange in 2022 at a valuation of 1.15 billion shekels.

Attarachi stated that the acquisition is a strategic step towards becoming Israel's leading residential group, leveraging Aura's development capabilities and Beit Bakfar's experience. Aura, a major real estate company focused on urban renewal, has 179 projects underway with approximately 66,254 housing units. The company's stock has seen a 24% decrease in the past year, trading at a valuation of about 5 billion shekels.

Beit Bakfar's existing construction pipeline of 884 units is seen by Aura as a key growth engine. Aura also plans to explore developing dedicated senior living solutions within its urban renewal projects. The senior living sector in Israel has attracted significant investment from major real estate players like Israel Canada, Azrieli Group, and Shapir Engineering, driven by rising life expectancy and quality of life among the elderly population.