Plastofil will acquire Mor Plastic Industries for NIS 105 million

A deal for the purchase of Plastoshack, or under its new name Mor Plastic Industries, by Plastofil Zora from Midi Kargel has been completed. Plastofil Zorea is under the control of Kibbutz Zorea and businessman Ronen Elad. The original deal was signed in May.
The sale price will be NIS 105 million. NIS 73.2 million will be paid in cash, NIS 20 million in a three-year Cargel seller's loan at prime plus 2.5% interest, while a payment of NIS 6 million will be postponed until the settlement between the parties is complete. Cargel will record a capital loss of NIS 18 million for the deal.
Plastophil is traded on the Tel Aviv Stock Exchange at a value of NIS 89 million. The company is engaged in the production of multi-layer plastic sheeting for the food industry, and its customers include Tnuva, Strauss and dozens of European food companies. The scope of its sales in 2022 is expected to reach approximately NIS 200 million, after it finished the first half of the year with revenues of NIS 98.5 million and a net profit of NIS 3.7 million.
The packaging activity that Plastofil is now acquiring is mainly concentrated in Cargel's subsidiary company, Mor Plastic Industries, which operates in the field of printing on polyethylene sheets and gluing printed polyethylene films on nets, safety envelopes and safety tapes.
Most of the purchased activity is concentrated in the Israeli market, where its customers are divided into two main groups: industrial sector and other customers. The industrial sector includes manufacturers of food and beverages, toiletries, pharmaceuticals, rubber, phosphates and chemicals. Its sales volume is expected to be NIS 240-200 million in 2022. The joint company will employ approximately 370 workers at two production sites in Sderot and Kibbutz Zorea.
Ronan Elad, the chairman of Plastophil and the controlling owner of the company, said today that this is a significant merger in the field of the plastics industry in Israel, and that the activities of the two companies complement each other, since both companies have a large number of overlapping customers. The consolidation of the companies' headquarters will lead to an increase in effectiveness in the field of sales and marketing Along with reducing sales costs and management expenses.
Elad also said that the joint company is expected to continue growing so that its sales volume will reach one billion shekels, and the profit before tax will reach 150 million shekels in about four years. Elad further stated that Plastophil intends to continue growing both through organic growth and through acquisitions with proven synergy for Plastophil's activities in Israel and abroad.