Koor To Acquire 10.7% of ECI Telecom In $275 Million Transaction; Claridge Increases its Investment in Koor by Exchanging its Holdings in ECI for Koor Shares
TEL AVIV, Israel--(BUSINESS WIRE)--Nov. 26, 1997--Koor Industries Ltd. (NYSE: KOR) announced today that its board of directors approved an agreement for Koor to acquire a securities package equal to 8.35 million shares of ECI Telecom Ltd. (Nasdaq: ECILF) from the Claridge Israel Group. The transaction -- which is subject to approvals by Israeli and U.S. government and regulatory authorities as well as Koor shareholders -- is valued at approximately $275 million and will result in Koor controlling 10.66% of ECI's shares.
Terms of the acquisition of shares of ECI include an exchange of securities through which Koor will acquire 6.6 million ordinary shares and a $45 million principle amount convertible subordinated note. The 4.50% note matures no later than December 31, 2003 and is convertible at any time into an additional 1.8 million ordinary shares of ECI at a conversion price of $25 per share.
Claridge presently owns 25.8% of Koor. Through the exchange of securities, Claridge will receive the equivalent of an additional 12.9% of Israel's largest industrial holding company, bringing the Claridge stake in Koor to 35.4%, all on a fully diluted basis. The new shares, which will result in 15% dilution of Koor stock, will be equivalent to approximately 11.37 million Koor American Depositary Shares (ADS's). (Five ADS's are equal to one Koor ordinary share.) The ADS's are listed on the New York Stock Exchange and also quoted on SEAQ International, and Koor's ordinary shares trade on the Tel Aviv Stock Exchange.
Commenting on the transaction, Benjamin D. Gaon, president and chief executive of Koor, said: "Our decision to invest in ECI Telecom, a leader in integrated network solutions, is on target with our continuing strategy to focus on telecommunications, which is one of our three core businesses. This initial investment in ECI reflects our commitment to pursue Koor's vital interests in developing a strong, export-oriented position in telecommunications technologies and markets that are complementary to our growth objectives for the company as a whole." About ECI Telecom
ECI Telecom designs, develops, manufacturers and markets digital telecommunications and data transmission systems, enabling network operators to deliver cost-effective services. The Petah Tikva, Israel-based company's systems provide capacity expansion, flexibility and management functions to better utilize existing and new telecommunications, data and integrated networks. Earlier this month, ECI reported revenues for the nine months ended September 30, 1997 of $491.6 million and net income of $93.1 million or $1.22 per share. The company has approximately 76.6 million shares outstanding. |
