Market Overview

Pointer Telocation to Purchase 41.8% Stake in Shagrir Systems for Approximately $8.3M


Pointer Telocation Ltd. (Nasdaq: PNTR) announced today that it has reached an agreement with certain shareholders of Shagrir Systems Ltd. ("Shagrir"), to acquire a 41.8% interest in Shagrir. Pointer currently owns 54.5% of the issued share capital of Shagrir and the acquisition will increase Pointer's shareholding in Shagrir to 96.3%. The remaining 3.7% of the shares of Shagrir are held by present and former managers of Shagrir and the Company intends to purchase such additional shares under similar terms.

In consideration for the 41.8% interest in Shagrir the Company shall: (i) pay a cash consideration of NIS 29 million (approximately $8.3 million); and (ii) issue 914,000 Ordinary Shares of Pointer, representing 14.1% of the issued share capital of Pointer following the issuance of such shares.

Based on September 30, 2013 financial statements, on a pro-forma basis, the transaction would have improved basic EPS by more than 10% to $0.51 from $0.46.

A definitive agreement is expected to be entered into by December 31, 2013 with the closing of the transaction anticipated to take place no later than March 31, 2014, subject to receipt of all required regulatory approvals and obtaining financing from a banking institution.

Shagrir provides Mobile Resource Management (MRM) and roadside assistance services for the automotive industry including towing services and mobile automobile repair services (primarily in Israel), and also offers car sharing services via Car2Go in urban areas throughout Israel.

David Mahlab, President and CEO of Pointer said: "Shagrir is a leading and profitable provider of Mobile Resource Management services in Israel, supplying Stolen Vehicle Recovery, Roadside Assistance and Fleet Management. We are delighted with this opportunity to further consolidate our interest in Shagrir. The deal will strengthen our ability to increase the synergies between our global entities and we expect it to be accretive to our shareholders. This deal follows soon after our previous deal in which we acquired our partner's share in our Brazilian subsidiary. Our full consolidation of Shagrir is a further milestone in our long term strategy and in line with our expansion goals. It puts us further along the road of becoming a global service provider in the growing Mobile Recourse Management market”.

Posted-In: M&A News Global


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