SodaStream Rallies as Rival’s Product Launch Stumbles

The Ticker: Frutarom buys second company in a week; Elco to float U.S. real-estate business.

Scarlett Johansson representing SodaStream
Scarlett Johansson in ad for SodaStream. Credit: Courtesy of SodaStream

Frutarom buys second company in a week

In its second acquisition in less than a week, the Israeli flavorings and specialty ingredients company Frutarom said yesterday it signed a deal to buy 95% of Investissements BSA for 42.75 million Canadian dollars ($35.6 million) as it seeks to expand further into North America and India. BSA, which has a large production site in Montreal, develops and produces flavorings for processed meats and convenience foods. It had sales of 37 million Canadian dollars in the 12 months ending August 2014, Frutarom said. “BSA’s activity in India will contribute toward strengthening and securing Frutarom’s position in the growing Indian market,” said Frutarom which last week bought 60% of the Indian flavors and fragrances company Sonarome Private. The agreement is expected to be completed in the next few weeks, Frutarom said, noting that the transaction will be financed using bank debt. Frutarom shares ended unchanged at 148.20 shekels ($38.90). (Reuters)

SodaStream rallies as rival’s product launch stumbles

Shares of SodaStream rallied over the week after rival Keurig Green Mountain said its new cold-drink dispenser Keurig Kold would not reach more store shelves before Christmas 2016, giving the Israeli company breathing room to reposition itself as a source for healthy drinks. Keurig said its single-serve brewer for iced coffee, sodas, sports drinks and iced tea will be available to buy online this fall and in some stores, but not generally available. Moreover, the Keurig Kold will be priced starting at $300, more than three times SodaStream’s Metal Source Soda Machine if bought at Costco. “A stumble at Keurig does not assure a victory for SodaStream, but it certainly could end up being an accidental win,” market commentator Jon C. Ogg said on the financial website 24/7 Wall Street. SodaStream shares ended up 1.9% at $22.13 in New York Friday. (TheMarker)

Elco to float U.S. real-estate business

Elco Holdings, the holding group controlled by Gershon Salkind and his two sons, is planning a $400 million initial public offering on Wall Street in its U.S. real-estate investment trust LAT. The REIT filed a prospectus with the U.S. Securities and Exchange Commission over the weekend. The filing did not offer valuation for LAT, but analyst said given the very positive environment for real estate in the U.S. right now, with record low interest rates, they estimated the REIT would be worth $1 billion. LAT had net operating income last year of $131.5 million, derived from a portfolio of about 24,000 units of multifamily housing it holds in Texas, northern California, South Carolina and Florida. The IPO would mark one of Elco Holdings’ biggest successes. The holding company had last week traded on the Tel Aviv Stock Exchange at a market cap of 810 million shekels ($212.6 million), but its 37% stake in LAT could be worth $370 million if the valuations are correct. Elco shares jumped 11.8% to end at 32.80 shekels 
yesterday. (Michael Rochvarger)

Tel Aviv stocks rise in very light trading

The Tel Aviv Stock Exchange ended higher yesterday in very thin trading, despite somewhat disappointing first-quarter growth figures and an unexpectedly high Apirl inflation index released on Friday. The benchmark TA-25 index finished 0.3% higher at 1,669.21 points, while the TA-100 added 0.2% to 1,439.25, on turnover of just 492.2 million shekels ($129.2 million). Among blue-chip gainers, Israel Chemicals climbed 2.5% to end at 27.70 shekels after its CEO said last week he expected the Israeli government to pull back from some of the tax hikes on natural resources it is imposing. Opko Health rose 5.8% to close at 64.83, but Teva Pharmaceuticals slipped 2.1% to 278.80 and TowerJazz lost 2.1% to 59.60. Energy shares were higher amid growing signs that the government is getting ready to ease terms for breaking up the gas cartel: Avner finished 2.3% up at 3.10 shekels and Delek Drilling was ahead 2.1% at 17.14. In the fixed-income market, the government’s Shahar bond due in 2024 rose 0.75% to cut its yield to 1.8%. (Eran Azran)