Koor Industries and Electric Fuel Announce Agreement Regarding Tadiran Batteries Subsidiary
Koor Industries Ltd. (Israel) and Electric Fuel Corp. (Iselin, NJ) jointly announced an agreement that will allow Electric Fuel to acquire the Tadiran Batteries Ltd. (Israel) subsidiary of Koor Industries Inc., and for Koor Industries to invest $10.5 million in Electric Fuel. Tadiran Batteries is claimed to be a world leader in the manufacture and development of high-energy lithium-thionyl-chloride batteries for critical applications in remote locations and severe climates.
The companies said that a key purpose of the investment is to speed the delivery of advanced power sources for the wireless market, including new Internet and hand-held devices.
According to the terms of the agreement, Electric Fuel will acquire Tadiran Batteries from Koor for $40.0 million in Electric Fuel's common stock, based on Electric Fuel's closing price of $17.125 per share on March 8, 2000; the date on which the two companies reached an agreement in principle. Koor will receive 2,335,767 shares, reflecting a total transaction value of $41.6 million based on the closing price of $17.8125 on March 14, 2000. The transaction is subject to the approval of the Israeli restrictive trade practice controller. Koor Industries will acquire an additional 613,139 shares of Electric Fuel's stock at $17.125 per share, for a total cash investment of $10.5 million. After the transaction is complete, which is expected to be in April, Koor's total holdings in Electric Fuel will amount to about 14 percent of its common stock. Koor will obtain one seat on Electric Fuel's board.
Electric Fuel President and CEO Yehuda Harats said, "The acquisition of Tadiran Batteries is significant to us for a number of reasons. First, based on Tadiran's 1999 trailing EBITDA figures, the acquisition will generate cash flow of approximately $6.0 million for Electric Fuel. Second, the acquisition will give Electric Fuel access to skilled human resources in all aspects of battery development, production, quality assurance and marketing. Furthermore, Tadiran has existing production infrastructure, including systems and expertise, that will be extremely valuable as our ZincAir production line goes into high gear. And third, Tadiran has developed extensive marketing channels for its batteries in the US, Europe and Asia, especially in the area of sales to OEM's. Lastly, the Tadiran brand name on primary lithium batteries also is an important asset that is recognized worldwide."