ALD is considering a merger with Cyber ​​- the capital market

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) Examines the possibility of merging with a cyber company. ALD does not disclose which company it is, but mentions that it is a company established by veterans of leading technology units in the IDF with an innovative solution for encrypted computing.

According to insiders, the merger (to the extent that it does take place) may cause the company to be traded at a value of half a billion shekels. However, it should be noted that it is not yet clear how much value the new company will be able to bring into the merger, since its ALD value does not exceed NIS 100 million, even after the daily jump. Apparently the pricing in the company’s environment is more related to the optimism associated with the industry in which the company from Herzliya is engaged, which is considered one of the hottest in recent years. In addition, there are those who estimate that the merger is advancing the company towards one of its plans for future growth, which is an IPO on the NASDAQ.

After the merger, the directors of the cyber company will receive control shares. The companies began initial contacts and due diligence to examine the merger of their activities. According to the company, the merger was made in order to “enjoy, among other things, the synergistic connection between the technological innovation of the cyber company and the customers and the local and international sales infrastructure of the company”.

One of the conditions for the possibility of merging the activity is an investment of approximately $ 50 million in the merged company. Of this, an amount of approximately 20% of the financing round was promised as part of a non-refundable letter of commitment from investors. Additional contacts with other interested parties are limited until the Company’s financing round ends.

ALD is engaged in providing solutions and services in Israel and abroad (mainly North America). The company offers engineering consulting services in the areas of management and establishment of quality and reliability systems, reliability and safety analyzes, process and product improvement works, risk analysis and analysis, writing procedures and analytical reports and organization certification. And companies according to accepted standards. The group offers its customers a number of software products that are used, among other things, to collect and report incidents and faults, as well as databases and knowledge. In addition, the company provides training, training and various certifications for the civilian market in the areas of quality, safety and reliability, as well as training for the IDF in the areas of command, management, organizational behavior, preparation for military service and enrichment lectures in other areas.

At the beginning of 2020, the company raised capital in the amount of NIS 1.6 million through a private placement of shares in the Moore Investment House. The company allotted about 9.8% of the shares to the investment house. Moore bought the shares at a value of NIS 1.93 (along with an option to exercise at a price of 205 for 4 years), while they are now trading at almost NIS 6. That means a return of more than 300% on the investment house in less than a year.

In June last year, the company won another large tender from an Israeli government company, which is engaged in the development and production of weapons, for the provision of software testing services. The scope of the deal was NIS 5-10 million per year, for 3 years. Following the option to expand the service for another two years – the maximum scope of the tender is NIS 50 million. This is a win that has a significant impact on the company’s financial results in the coming years.

ALD shares are traded at a market value of NIS 42 million, after rising more than 50% since the beginning of the year alone (including the current increase). During the past three years, the company’s revenues grew from a level of NIS 97 million in 2017 to a level of NIS 125 million in 2019, with the bottom line being a cumulative net profit of NIS 1.4 million over the three years. The forthcoming annual report, which will include the results of the fourth quarter, is expected to present better results than the losses of 2019. At least that is what investors believe.

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  • 1.

    Does anyone know what the “company from Herzliya” is called? (LT)

    Mani Man

    25/01/2021 14:10

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