January 3, 2021

Electra Acquires Control of Afikim for NIS 74 Million

The projects and infrastructure company controlled by Elco of the Salkind brothers acquires 51% of the shares in Amnon Mesilot, which holds 100% of Afikim which operate public transportation lines. Electra was given an option to purchase the remaining shares at a company value of NIS 154 million

By Golan Hazani

The Salkind family enters into the public transportation field. Calcalist has learned that Electra, which is controlled by Elco and controlled by brothers Danny and Mikey Salkind, has signed a deal to acquire control of the Afikim transportation company. This is actually a purchase of 51% of the shares of Amnon Mesilot from Amnon Sela, for NIS 74 million. Amnon Mesilot, which provides various solutions in the field of transportation, holds 100% of Afikim. As part of the transaction, Electra, which is managed by Itamar Deutscher, was given an option to purchase the remaining shares of Amnon Mesilot, which will Sela will continue to hold, at a company value of NIS 154 million.

Afikim was established in 2008 as part of one of the Ministry of Transportation's reforms that allowed private companies to bid in tenders to operate public transportation clusters. In 2009, the company won the operation of the Samaria cluster. In 2013, it expanded its operations through the acquisition of Veolia Transport. Today, the company, which is managed by Oded Cohen, operates 840 buses on 250 service lines, most of them in the Samaria area (160 lines), which operate in five clusters. About 60 million passengers a year use their lines.

In recent weeks, Sela has been competing for the acquisition of the Israir airline company from IDB creditors. Sela joined Arie Fridenson, the owner of Shladot Ltd., and the two bid NIS 80 million for the airline company in the early stages of the tender conducted by Adv. Ofir Naor, the liquidator of IDB. Both quit when the price of the airline company in various bids approached the threshold of NIS 100 million.

In October 2018, Sela was arrested together with his wife and his two sons on suspicion of giving bribes in the form of favors to a senior official at the Ministry of Transportation, in order to obtain priority in tenders for profitable public transportation lines. The investigation is still ongoing and no one in the family has been convicted.

Sela previously owned Globalicom Trade, a company that distributes cellular products and communications in Romania. He acquired the company from Freddie Robinson, however in the end it ran into difficulties and Sela recorded a loss of tens of millions of shekels.

As mentioned, for Electra, this is the first time it enters into the field of public transportation. Electra operates in the field of buildings and infrastructure projects in Israel and abroad, providing services and maintenance for projects, as well as real estate development and construction. In addition, the company has activities in the field of franchising. Electra and Afikim have already been cooperating.  Both companies, together with two other companies, won a tender for the construction, operation and maintenance of a 14-year-old parking lot and transportation system at the entrance to Gush Dan - one network in Rishon Lezion and the other in Shefayim. The shuttles will be carried out in the highways that will be built for purposes tethereof. Electra’s share in the group is 25%, similar to the share of Afikim, Nahor Transport Routes and Lapidot Capital.

In the first nine months of 2020, Electra's revenues increased by almost 10% and amounted to approximately NIS 5.65 billion. Net profit was cut by about 32% and amounted to NIS 138.5 million. During 2019, the company's share rose by 74% and is traded at a market value of NIS 6.6 billion.

Electra recently began performing electromechanical works as part of the first phase of establishing a plant for the production of Tesla vehicles, through a subsidiary (80%) whose share of the project is estimated at 70 million euros.

Itamar Deutscher, CEO of the Electra Group, said in response to the transaction: "The transportation industry in Israel is one of the sectors that has received the most significant investment in the Israeli economy in recent years. The Electra Group intends to become one of the largest operators in Israel in this industry, and as a result we have embarked on a significant strategic move, in which the group will acquire control of Afikim, with the understanding that this acquisition is in line with the company's 'life cycle' strategy, enabling it to expand in the field of transportation operation and maintenance in Israel. In the past year, the company, together with partners, won a tender for the construction and operation of highways on Highway 2 and Highway 20.

Electra was represented by attorneys Sharon Amir, Meital Zimberg Lederman and Noam Shualy of Naschitz Brands Amir; Amnon Mesilot was represented by attorneys Nahum Shai Asheri and David Bitton of Herzog Fox Ne'eman.