DBSI Investments to buy Shagrir for NIS 200m
DBSI Investments signed a note of understanding with the owners of Shagrir - Israel Phoenix Assurance, Clal Insurance and Delek Motors - to acquire the company for NIS 200 million.
DBSI Investments signed a note of understanding with the owners of Shagrir - Israel Phoenix Assurance, Clal Insurance and Delek Motors - to acquire the company for NIS 200 million. Shagrir is one of Israel's largest towing services, employing 285 workers while boasting 750,000 customers throughout the country.
DBSI will pay NIS 190 million for Shagrir's entire operations and goodwill, and add NIS 10 million to cover specific debts.
Shagrir reported 2003 profits of NIS 31.3 million after taxes, and paid out a dividend of NIS 30 million.
Shagrir supplied 365,000 roadside and towing services in 2003 and 86,000 such services in the first quarter of 2004. Shagrir also sells subscriptions for replacement car services. The company conducts most of its business via insurance companies with whom it maintains service arrangements. Insurance firms offer their clients Shagrir's services without having to contact the insurance agent separately, according to the arrangements. Shagrir is also contractually tied to other institutions to provide services.
Shagrir's deals with the insurance companies also explains why two major companies hold shares in the company and why these companies will purchase services from DBSI for several years beyond the date of the deal's completion.
"Shagrir is a leading company in the field of automobile services in Israel", a partner in DBSI, Yossi Ben Shalom, said after the signing of the agreement.
"The company, headed by CEO Opher Lior, is well managed and has a dedicated and professional staff. We have no intention of changing the company's style of operation, rather we plan to develop it for further deals and operations abroad."
DBSI, owned by Ben Shalom and Barak Dotan, has profited from investing in other automobile service companies in recent years. In 2002, it bought control of Nexus Telocation Systems, which develops location systems for retrieving stolen vehicles. Nexus in turn has invested in Pointer, which competes with TASE-listed Ituran.
The final deal is subject to a due diligence check and approval by the anti-trust commissioner.