Doral Energy Invests $738 Million to Gain Majority Control of U.S. Subsidiary

Israeli renewable energy company Doral Energy is undertaking a major strategic investment by injecting $738 million (approximately 2.2 billion shekels) into its American subsidiary, Doral LLC. This investment will increase Doral's ownership stake from 26% to 53.2%, giving it majority control. CEO Yoni Hantsis described the deal as a strategic move that strengthens Doral's access to its primary growth engine in the U.S. and provides liquidity to advance its projects.

The transaction consists of three components: Doral will inject $400 million directly into Doral LLC, acquiring an additional 9.7% stake. This capital raise was preceded by a 920 million shekel equity raise from institutional investors in June. Additionally, Doral will purchase 5.8% of shares from Nick Cohen, CEO of Doral LLC, through his company CAG, in exchange for Doral shares valued at $206 million and cash payments totaling $35 million (with $20 million deferred until 2028). The third part completes a prior November deal where Doral invested $132 million for 11.8% of Doral LLC.

Following the transaction, ownership of Doral LLC will be 53.2% Doral, 11.4% Migdal Insurance, and 35.4% Dutch investment fund APG. Analyst Gilad Ben-Zvi called the move positive, noting it boosts market confidence and increases cash flow from existing U.S. projects. Doral LLC currently holds a project pipeline of 7.9 gigawatts and 2.5 gigawatt-hours of storage capacity, mostly qualifying for U.S. tax incentives. The capital injection aims to connect most projects to the grid by 2029 and complete them by 2030, adding an estimated annual 620 million shekels to Doral's EBITDA share.

The deal values Doral LLC at about $4.1 billion, more than double the November valuation, reflecting protections and dilution mechanisms from prior agreements. The investment implies an EV/EBITDA multiple of 7 to 8, attractive compared to peers. This move likely postpones a planned IPO of Doral LLC, simplifying ownership and reducing the need for public fundraising. However, some institutional observers suggest the simplified structure could facilitate a future IPO.

Former Mossad chief Yossi Cohen, a Doral LLC director, stands to lose from the IPO delay, as he is entitled to a $2 million bonus and holds options worth significant potential gains. CEO Hantsis also addressed U.S. government restrictions on importing solar panel materials, estimating a 10% project cost increase but noting protections in existing contracts and potential legal challenges to the new rules. He emphasized that Doral's insulation from these effects could provide a competitive advantage amid rising electricity prices.