The sale of control of the quartz and stone company Caesar Stone for at least $600 million is the subject of talks between foreign investment firms and the kibbutz and investment fund that jointly control the company.
The sale of the company would turn the 711 residents of Kibbutz Sdot Yam, just south of Caesarea, into overnight millionaires.
The firm, controlled jointly by the kibbutz and the Tene investment fund, is publicly traded and, at a $600 million valuation, a sale would fetch at least $18.50 per share, which is 25 percent more than the price at which it is currently trading.
It appears that the prospect of such a sale, as well as the prime real estate location of the kibbutz, on the Mediterranean coast just south of the expensive residential neighborhoods of Caesarea, could explain why the kibbutz is not currently taking in new members, including those aged 30 and over who grew up there and want to move back.
Kibbutz Sdot Yam holds a nearly 58 percent stake in Caesar Stone, which makes stone counter tops for kitchens and bathrooms. It is the largest company in its field in the world. The kibbutz is expected to retain a minority share in the company even after the sale, as is the Tene fund, which has almost a quarter share in the firm. The kibbutz is also expected to maintain the employment contracts that members of the kibbutz currently have with the company, as well as the firm's lease agreement at Sdot Yam.
Caesar Stone paid the kibbutz $12.6 million last year - a sum that included $4.8 million in wages for kibbutz members who are employed by the firm. The company provides work for 72 permanent workers from the kibbutz and up to 40 temporary staff. Caesar Stone also paid Sdot Yam another $3 million in rent last year for its facilities on the kibbutz grounds.
If the sale of control of the company goes through, it is expected to hand an additional sum of $200 million to the kibbutz even if Sdot Yam holds onto a quarter interest in the company.
When it comes to the future of Caesar Stone, an analyst at JP Morgan, Michael Rehoe, said the firm's efforts to increase its market share in the United States have been working out well. It appears that the company's potential growth in the American market is one of the main explanations for investment funds' interest in acquiring the company. In May last year, Caesar Stone acquired 75 percent of the shares of its American affiliate, Caesar Stone USA, for $27 million and in the process solidified its presence in the United States.
It appears that, in its effort to conquer America, or at least expand its foothold there, Caesar Stone could take two routes. Either its could hawk its wares appealing to the lower end of the market or it could go high-end. It could also hitch its future there on a recovery of the U.S. real estate market, which last month saw a 15 percent growth in building starts.