Doral invests $738 million in US operations — gains control of American subsidiary

Doral is increasing its holdings in its US operations: it is acquiring 27% of its subsidiary Doral LLC for $738 million, which is 2.2 billion shekels at the current exchange rate, and will increase its stake to 53.2% compared to 26% before the deal. The move consists of three sub-steps.

The main part includes a capital injection by Doral into the subsidiary, which concentrates its operations in the US, in the amount of $400 million. The injection will entitle Doral to 9.7% of the company's shares. At the same time, the agreement signed by Doral last November with its partner in the company, CAG, owned by Nick Cohen, who serves as the company's CEO, was updated. Thus, in addition to the 10% that Doral acquired from it in November, it will acquire another 5.8%, which is the remainder of the shares held by CAG, in exchange for $206 million. Of this, $15 million will be paid in cash and the balance through the allocation of Doral shares. Another component of 11.8% stems from the exercise of transactions and convertible instruments determined in previous deals between the shareholders of Doral LLC, including the previous deal between Doral and CAG that has not yet been completed, in exchange for $132 million.

"This is a strategic deal for Doral that allows it stronger access to its main growth engine, which is the activity in the US, and at the same time creates sufficient liquidity for Doral LLC to promote its projects," said Doral CEO Yoni Hantzis.

The ownership structure in Doral LLC is changing: Doral will hold 53.2%, alongside the insurance company Migdal with 11.4% and the Dutch investment fund APG with 35.4%. The move, which simplifies the company's ownership structure, may promote its future IPO. Doral intends to finance the capital investment and the cash component of the deal with CAG from its own sources. It estimates that the move will result in a net profit of 80-120 million shekels in its quarterly reports as a result of the revaluation of derivatives.

Furthermore, Doral updated its forecasts: its revenues from projects, excluding tax partner revenues, will reach a range of 1.9-2.05 billion shekels, compared to 1.83-1.98 billion shekels in the previous forecast. Revenues from the mature backlog and projects with tax benefits in their first year of operation are expected to yield an addition of 340 million shekels, to a total amount of 3.86 billion shekels. At the same time, EBITDA in 2027 will grow from a range of 748-867 million shekels to a range of 813-932 million shekels.