Elspec Engineering plans NIS 40m issue
Elspec Engineering plans to float NIS 40 million worth of shares on the Tel Aviv Stock Exchange based on a company value of almost NIS 100 million. The company also plans to issue warrants that could bring it another NIS 15 million. Poalim IBI and Mizrahi Capital Markets will be leading the offering.
Elspec manufactures and markets technologies that improve electrical network quality, save energy and provide advanced network analysis. The company also provides technology to prevent energy loss over power lines, as well as power generation and transformer systems. The company, based in Caesarea industrial park, sells mostly to overseas markets.
The Yozma fund, controlled by the Ofer brothers and Yeshuron, will be selling half of Elspec's offering, while company manager Yoram Harary (40 percent holder of the company) and smaller shareholders will be selling the rest. Yozma invested $250,000 in Elspec back in September 1995. Later, it put in $900,000 more, achieving a 17.5 percent shareholding.
Elspec's sales in 2003 totaled NIS 32 million - up 50 percent from NIS 21.5 million in 2002. Europe contributed the bulk of its business, accounting for 74 percent of sales in 2003, with the U.S. adding 16 percent, Asia 6 percent and Israel only 3 percent.
Established in 1988, Elspec only began commercial production in 1993. It has sold some 2,500 energy improvement systems in over 40 countries. Prominent clients include Honda, General Motors, Proctor & Gamble, and Pirelli.
In 2003, Elspec netted $1.5 million on sales of less than $10 million.
A main booster for its sales has been the shift toward environmentally-friendly power generation in the form of wind-powered turbines. Elspec developed a real-time power factor controller for wind turbines to contend with the problem of unsteady wind affecting the power grid. Its products switch capacitors, enabling fast, smooth connection and disconnection when appropriate.
Elspec now has agreements with two of the world's biggest wind-turbine manufactures, both located in Denmark, which sell their products worldwide. The agreements generated NIS 20 million for the company in 2003.
Elspec has plants in Caesarea and Portugal and employs 60 people, of whom 75 percent work in Israel. It has applied for state assistance in building a new plant in the Beit She'an industrial zone, at an investment of NIS 4.2 million.
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