Keter Plastic Looks for Firm Bids as It Eyes $2 Billion Sale

Keter Plastic’s Sami Sagol is reportedly looking to sell his company, with an asking price of more than $2 billion. Sagol is the firm’s controlling shareholder, but appears in no hurry to sell. However, the combination of the plastics industry’s expansion in recent months and his relatively advanced age (73) make this an attractive time to put the company on the block.

The company declined comment, noting that it is privately held and will report publicly “when there is something to report.”

Keter Plastic has been in a similar situation for the past several years, and it is also clear to those who have already expressed an interest that there is no heir to the family-owned company. What’s less clear is how much the company is actually worth, since no share has ever been sold in it, which would have provided a departure point for negotiations.

Those close to the firm say it is worth more than $2 billion, although one can assume that this number is being proposed as a starting point for negotiations – on the expectation that it would actually sell for between $1.5 billion and $2 billion.

Over the past year, several investment funds and privately owned firms have shown an interest in Keter, including Apax Partners and Markstone Capital. No actual bids have been submitted, though, and no negotiations for the sale of the company – which produces a range of plastic household and garden products – have been undertaken.

Sagol is not actively looking for a buyer, and at this point is simply letting his associates confirm that in principle Keter is on the market.

“The contacts are at the courting stage and have not progressed to practicalities,” said one individual close to the firm. “The courting process is intensive and is being carried out by a large number of companies and investment funds, because Keter is blossoming and Sami is 73.”

“There is no similar company in Israel that can be purchased off-the-shelf without complications regarding its finances or workforce, or that is on such a good business footing,” the source added. “It’s a company that generates very large profits, so it is attractive. In principle, one person makes the decisions there, so the sales proceedings can be fast.”

Sources in the capital markets said that it appeared Sagol was attempting to take advantage of the surge in global stock markets to obtain a high price for Keter. On the assumption that the company’s annual sales are close to $1 billion and its profits before tax and interest between $150 million and $160 million, the company should be selling for about $1.2 billion, the sources said. Nonetheless, sometimes there are investors who have considerations beyond purely economic ones, or who are incapable of properly evaluating a company. They may pay more, the sources added.