Exit: German giant Bosh acquires Israeli company Elmo for about $ 700 million

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by Ifi Reporter Category:Financial Sep 5, 2022

Less than half a year after he started a tender process for the sale of the company he founded, Haim Monheit, an almost unknown entrepreneur, his Elmo from the city of Petah-Tikva for more than 700 million dollars to the giant German concern Bosch. Bosh agreed to pay more than the American company Rockwell Automation and beat it in the tender.
One of the biggest exits of a private shareholder in recent years. Elmo is owned by Haim Monheit who founded it in 1988 together with two friends who have since retired. Elmo develops advanced traffic controllers and employs 330 people in Petah Tikva, in development, production, sales and marketing. Bush intends to expand Elmo's operations. Malmo refused to comment on the amount of the purchase.
Elmo did not need capital raising and was profitable from its first stages. The company has no debt, and it brings in about 90 million dollars a year and an EBITDA (flow operating profit) of about 40 million dollars a year.
Exits where one shareholder owns all the shares are unusual by any standard, and certainly in a transaction of such dimensions.
Bosch, which employs 31,000 people through its headquarters in Germany, operates in the field of automation in industrial plants through the subsidiary Bosch Rexroth, which makes the purchase. The revenues of Bush, which is active in 80 countries in the world and is considered one of the largest companies in Europe, stood at 78.7 billion euros in 2021. As mentioned, Elmo's purchase accounted for 6.2 billion euros of that. Deutsche Bank accompanied Bush in the process alongside the S. Horowitz law firm.
Two years ago, Bosch purchased 40% of the magazine factory of Electra Kevema in Ashkelon, a plant that is the main activity of Electra Kevema. Bosch Global has entered into a partnership in the new factory that Electra is establishing in Ashkelon, in order to expand the cooperation that already existed between the two companies, in the field of underground heating systems.
Bosch Rexroth, established by Bosch as part of its effort to lead another industrial revolution, is one of the most prominent in the world in the fields of hydraulics, drive technology and electrical control, fields that touch Elmo's activity.
The German company has been working in recent years to expand its activities in the field. Elmo will remain an Israeli company and its employees will continue to operate in the company under Bush. The administrative avenue will continue to serve.
This is one of the big companies that operated under the radar. The fact that it did not need capital raising and operated in a niche field, allowed Elmo to grow without interruptions and while the owner guards the privacy quite jealously and is rarely exposed.
Elmo's products are considered technically brilliant. Elmo recognized the transition of the industry to automation and concentrated on the development of the "brain", of the automatic robots that have been running the industry in the advanced companies for two decades. Instead of a human factor connecting two parts of a product, a robotic arm does it.
This arm needs a brain, which will direct its movement precisely, sometimes at the level of millimeters and with a minimum of errors. An incorrect estimate of the movement, and its planning, will cause the destruction of the entire product assembled by the same robot. Elmo knows how to design the robot's brain, in the most advanced and precise way. In a factory that builds, for example, parts for luxury cars like Mercedes, which needs a maximum level of precision, Elmo products will be used.
Its customers are international robot manufacturers such as Coca, and also companies like Bosch. Elmo's products are also resistant to extreme weather conditions, of heat and cold. The company's factory in Petah Tikva is considered one of the most beautiful and advanced in Israel.
As revealed in "Calcalist", Rothschild Bank managed the Elmo sale process, together with Deutsche Bank, and received several offers around 700 million dollars, of which Monheit chose Bush's offer. Mitar Adv. Office represented Elmo in the transaction. The purchase is expected to close in the fourth quarter of 2022, after receiving all the required approvals.
The beginning of Elmo, in its previous incarnation, was as a company for winding and refurbishing electric motors that was established by two Holocaust survivors in 1970 in Tel Aviv, Avraham Tanenbaum and his partner Yehuda Zuckerman. In 1970 the company moved to Petah Tikva.
Yehuda Zuckerman's son, Nachman Korem, took over his father's share of the company upon his release from military service as a fighter pilot in the early 1980s. Together with Haim Monheit, he founded Elmo Hine Maboker in 1988 and retired from the company about twenty years ago.
Monheit continued the activity himself and in recent years was joined by his son, Ben Monheit, who is one of the company's senior vice presidents. About a third of the company's employees are engineers employed in Israel and the rest in subsidiaries around the world, in the USA, Germany, England, Italy, Poland, China, South Korea and Singapore.
As mentioned, the company's products are found in the most advanced factories in the world. They are actually the brains for the drive control machines of electric motors, and are developed in the company's development center in Petah Tikva. The company's multi-axis motion controllers and servo motor motion controllers have been implemented by major machine manufacturers in Israel and around the world in a wide variety of sophisticated industries that require optimal performance. Industries that Elmo's products are aimed at are robotics, autonomous vehicles (AGVs), electronic manufacturing, robotic surgery, advanced manufacturing processes, automated warehouses, theme parks and more.
On several occasions, Monheit spoke in praise of the approximately 80 development engineers employed at Alamo, and according to him, they constitute the cutting edge of drive control technology. Monheit said following the transaction that "I am proud of Elmo joining the Bosch family. The combination of forces will ensure the continued success and growth of Elmo. I welcome the fact that Bosch will continue to nurture Elmo as an Israeli center of excellence and as an Israeli company. I am sure that Elmo's dedicated and talented people will continue to excel that you will develop and produce innovative, fascinating, and leading technologies and products in our world, and will bring Elmo and themselves to new heights."

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