Koor to Sell Its Soltam Weapon Systems Subsidiary to Michael Ltd. for Approximately $32.5 Million; 1998 3rd Quarter Results to Reflect Pre-Tax Capital Gain of About $19 Million.
Terms of the transaction, which is expected to be completed within 45 days, include a cash payment of approximately $32.5 million, and the agreement includes the transfer of Soltam's technology and other know-how to Michael.
The Soltam divestiture also includes a 50% interest in the Yokneam, Israel, site where Soltam's main facilities are located. In addition, Koor granted an option to Michael to purchase the remaining 50% of the site from its Koor Properties real estate subsidiary, for an additional $6 million. The Yokneam site was developed as an industrial park during the past several years.
Koor said that the transaction will result in posting a one-time pre-tax capital gain of slightly more than $19 million in this year's third quarter. (Koor reports results in Israeli shekels -- NIS -- with dollar figures provided as convenience translations.)
Commenting on the divestiture, Jonathan Kolber, Koor's chief executive officer, said: "Today's transaction is the most recent example of how we are moving forward to focus exclusively on our core businesses. We continue to reclaim and redirect our strategic financial and managerial resources, divesting businesses which are non-strategic. By doing so, we can concentrate on the telecommunications, electronics and agrochemicals industries where Koor has the scale, strength and depth to compete in global markets."
Soltam's basic business has been the development and production of specialty munitions and other weapons systems, and the company had recently expanded into non-military metalworking, including the production of high-quality household cookware. Michael said it plans to develop additional manufacturing facilities for Soltam, as well as create new jobs.
Koor Industries Ltd. is a holding company with headquarters in Tel Aviv. Its primary holdings include telecommunications and electronics companies such as Tadiran, Tadiran Telecommunications, Telrad and ECI Telecom, and its main agrochemicals subsidiary is Makhteshim-Agan Industries. Koor employs approximately 21,000 people in Israel and around the world.
Forward looking statements in this release involve a number of risks and uncertainties including, but not limited to, international market conditions, domestic political factors, technological developments, ability to finance operations, and other factors which are detailed in the Company's SEC filings.
CONTACT: Koor Industries Ltd.
Lyon Roth, (972-3) 519-5359 (In Israel)
Phase Two Strategies, Inc.
Stuart Pearlman, 212/716-3400 (In the USA)