Kibbutz Yizre'el Rejects High Offer for Maytronics

Feels swimming-pool robot maker is worth more than the NIS 345 million offered by Hayward.

Kibbutz Yizre'el has turned down an offer to sell its 67% stake in Maytronics, a maker of swimming-pool cleaning equipment, at a premium of 27% over its trading value, Maytronics said Sunday.

The would-be buyer offered to buy the controlling interest in Maytronics according to a company value of NIS 345 million.

Guy Raivitz

The offer reflected a 27% premium over the company's market capitalization. It included assurances that production would be maintained in Israel for at least 15 years.

Even though the deal was backed by the kibbutz's economic team, it was rejected by the kibbutz members 62% to 38%.

TheMarker has learned that the suitor was U.S.-based Hayward Industries, a maker of pool and spa equipment. Hayward, a big M&A player in the automated pool maintenance industry, bought Florida-based Aquavac Systems in 2007 and part of the operations of Pontoon, the distributor of Aquavac products in France, in 2010.

The Astral group, which had been the key distributor of Maytronics products, considered buying the company a year ago. Instead, however, Astral, decided to acquire Aqua Products, Maytronics' chief rival.

This deal turned Maytronics into an acquisition target for Hayward, which, like Astral, has a wide range of swimming pool products and a well-developed distribution system.

Maytronics stock has lost 55% of its value in recent years due to the economic crisis and depressed real estate in its main markets: the United States and warm-weather Western European countries such as Spain.

Maytronics shares fell 2.9% Sunday but rebounded by nearly that percentage on Monday.

Maytronics, which had been founded in 1983, is one of the kibbutz's main sources of income, but it comes with risks too.

The kibbutz members must have been concerned about the potential risk to their company's leading position in robotic cleaners for private swimming pools. There it holds a 32% market share against 27% for Aqua Products, 17% for Zodiac and 13% for Aquavac.

In the public pool market Maytronics leads with an 18% share, with Aqua Products and Aquavac at 15% each.

Maytronics President Ofer Shachar commented the company's risk level had significantly dropped, as did the risks to its marketing channels. This was because the company had set up marketing subsidiaries in the United States, France and Australia that grew 50% in 2011 and will grow at least another 20% in 2012, he predicted.