Automotive Industries, a maker of four-wheel drive vehicles used by Israel’s army and police, is acquiring H. Klein & Sons, a manufacturer of trailers and chassis, for NIS 10 million as it moves to expand into new markets.
The acquisition comes on the heels of its purchase of Zaitman Industries, which makes waste removal equipment. The two acquisitions are part of an effort by AIL's parent company, the Automotive Equipment Group, to retool the company’s factory to compete in more profitable markets.
Until now, the Upper Nazareth-based AIL has produced reconnaissance vehicles for the Israel Defense Forces, foremost among them the Storm (“Sufa”) and Abir jeep lines. However, the Automotive Equipment Group decided that the company needs to branch out into other markets.
"Contracts in the area [of reconnaissance vehicles] are small, and the orders are too few and far between to make operating a factory viable,” said Tamar Givaton, a vice president of Automotive Equipment Group.
Founded in 1971, H.Klein is one the largest truck trailer and components manufacturers in Israel, with a 25% share of a local market worth NIS 150 million per year, according to figures supplied by a source close to the company.
AIL will purchase the company's name and all its operations, except for production facilities in Ashdod. Only a small number of H.Klein's employees will stay on after the acquisition. The others will continue to be employed by the company's remaining manufacturing plant, which will become a subcontractor for AIL.
Eran Klein, grandson of H.Klein founder Haim Klein, will become manager of AIL's new trailer manufacturing division.