YEHUD, Israel, Feb. 8, 2021
/PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ:
MAGS), a leading international provider of comprehensive
physical, video, and access control security products and
solutions, as well as critical site management, announced today its
entry into an asset purchase agreement to sell its Integration
Solutions Division, or projects division, to Aeronautics Ltd.,
a subsidiary of RAFAEL Advanced Defense Systems Ltd., for
approximately $35 million. The
transaction is expected to be completed by the second quarter of
2021, and is subject to customary closing conditions, including
regulatory approvals. The Company will conduct a conference call to
review the transaction on Wednesday February
10, 2021 at 11:00 a.m. Eastern
Time.
Magal's strategic decision to divest its projects division, will
enable the Company to focus on providing technology-rich products,
solutions and related services in its four key verticals: energy,
logistics, critical infrastructure and correctional facilities.
These verticals provide Magal the greatest opportunity to increase
its security and related markets offerings while expanding its
customer base.
Following the sale of the projects division, Magal, through its
Israeli based headquarters, will continue to operate its Senstar
product division, with development and manufacturing facilities
located in Canada and sales
offices in the US, EMEA, APAC, and LATAM regions. For the last 12
months, Senstar's revenue represented 46% of the consolidated Magal
revenue while delivering a 64% gross profit margin, compared to the
consolidated 45% gross margin. Senstar's R&D during the last 12
months represented 12% of its revenues, as compared to 8% for the
consolidated company.
Post-divestiture, Magal anticipates higher growth rates with
improved gross margins and a stronger balance sheet. The Company
will leverage Senstar's industry-leading position, continue
expanding its tech-rich product and software lines organically and
intends to optimize future strategic acquisitions to achieve
incremental growth in its global markets.
Dror Sharon, Chief Executive
Officer of Magal, said, "Magal's future direction lies in
developing industry-leading technology for the security industry.
Senstar's track record of growth and profitability is highly
scalable to deliver ongoing operating leverage and deliver
long-term shareholder value. The Senstar team is continuously
innovating, improving product lines, and developing new products
that set a standard for quality, innovation, and reliability. The
divesture gives our business model greater visibility and a
stronger balance sheet to stay on track with our acquisitions
strategy and to execute our long-term growth strategy."
Moshe Elazar, President and CEO
of Aeronautics Group: "Magal's project division will become an
independent company under Aeronautics Group. Aeronautics Group is
fully committed to Magal's partners and customers worldwide.
Magal's projects international footprint, experience and technology
combined with Aeronautics' proven solutions, is a significant part
of the Group growth strategy in the HLS and advanced para-military
markets"
Pursuant to the share and asset purchase agreement, Aeronautics
agreed to acquire the project division from Magal for a
purchase price of $35 million in
cash, on a cash-free debt-free basis subject to post-closing
working capital and other customary adjustments. As part of the
acquisition, Aeronautics is also acquiring Magal's facility in
Yehud, Israel. The share and asset purchase agreement contains
customary representations, warranties, covenants and
indemnification provisions. Subject to regulatory approvals and the
satisfaction of customary closing conditions set forth in the share
and asset purchase agreement, Magal expects the acquisition to
close during the second quarter of 2021.
The foregoing description of the share and asset purchase
agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the share and asset
purchase agreement, a copy of which is an exhibit to Magal's Form
6-K that has been filed with the Securities and Exchange Commission
on this date.
Conference Call Information:
To participate in Wednesday call, please use one of the
following teleconferencing numbers. The Company requests that
participants dial in 10 minutes before the conference call
commences and use the conference ID number 13716415.
Participant Dial-in Numbers:
Toll Free: 1-877-407-9716
Toll/International: 1-201-493-6779
Israel Toll Free: 1 809 406 247
UK Toll Free: 0 800 756 3429
The call will begin Wednesday, February
10, 2021, promptly at: 11:00 am
Eastern Time; 6:00 pm Israel
Time; 4:00 pm UK Time.
The conference call will also be webcast live at
http://public.viavid.com/index.php?id=143507.
A replay link of the call will be available at
www.magalsecurity.com on February 10,
2021 after 1:00 pm Eastern
time through February 24, 2021
at 11:59 pm Eastern time.
Replay Dial-in Numbers:
Toll Free: 1-844-512-2921
Toll/International: 1-412-317-6671
Replay Pin Number: 13712737
Advisors
Naschitz Brandes Amir & Co. serves as legal advisor to
Magal and Fischer Behar Chen Well
Orion & Co. serves as legal advisor to Aeronautics.
About Magal Security Systems Ltd.
Magal is a leading international provider of comprehensive
physical, video and access control security products and solutions,
as well as site management. Over the past 45 years, Magal has
delivered its products as well as tailor-made security solutions
and turnkey projects to hundreds of satisfied customers in over 100
countries under some of the most challenging conditions. Magal
offers comprehensive integrated solutions for critical sites,
managed by Fortis – our cutting-edge physical security information
management system (PSIM). The solutions leverage our broad
portfolio of home-grown PIDS (Perimeter Intrusion Detection
Systems), Symphony – our advanced VMS (Video Management Software)
with native IVA (Intelligent Video Analytics) security
solutions.
About Aeronautics Ltd.
Aeronautics Group offers proven integrated turnkey solutions,
for multiple applications in the defense and HLS markets,
including: unmanned systems, multiple sensors, big data
exploitation and mission critical communications. As a leader in
the field of unmanned aerial systems, Aeronautics identifies its
customers' operational needs and responds with innovative
technological solutions. The Group's broad product portfolio offers
comprehensive solutions for ISTAR and HLS missions, with
demonstrated excellence in performance and operability. Backed by
continuous research and development, these systems are built on
decades of technological and operational experience. As part of
Rafael Advanced Defense Systems, Aeronautics utilizes the
technological synergy between the two companies – Rafael's advanced
air, land and naval defense capabilities and Aeronautics' proven
technologies - to strengthen its own status as a leading unmanned
and autonomous solutions integrator provider. For more information
on Aeronautics Group, please visit the company's website:
www.aeronautics-sys.com
Forward Looking Statements
This press release contains forward-looking statements, which
are subject to risks and uncertainties. Such statements are based
on assumptions and expectations which may not be realized and are
inherently subject to risks and uncertainties, many of which cannot
be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and
otherwise, may differ from the results discussed in the
forward-looking statements. A number of these risks and other
factors that might cause differences, some of which could be
material, along with additional discussion of forward-looking
statements, are set forth in the Company's Annual Report on Form
20-F filed with the Securities and Exchange Commission. In
addition, there is uncertainty about the impact of the spread of
the COVID19 virus and its effect on the Company's operations, the
demand for Company's products, global supply chains and economic
activity in general.
For more information:
Magal Security Systems Ltd.
Diane Hill
+972-3-539-1421
dianeh@magal-s3.com
www.magalsecurity.com
IR Contact:
Brett
Maas
Managing Partner
Hayden IR
+1 -646 -536 -7331
Brett@HaydenIR.com
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SOURCE Magal Security Systems Ltd