Israel Chemicals Ltd. (ICL) said it is in talks to sell its 50 percent stake in water desalination company IDE Technologies, following a local press report earlier Tuesday that said the company had reached a deal for the sale of the unit.
“Further to the publication in the Israeli media, the Company confirms that the Company is holding negotiations for the sale of ICL’s share in IDE (50%). There is no assurance that these negotiations will materialize to an engagement in a transaction and/or as to the terms and conditions of such transaction. The Company will report if such transaction materializes into an engagement,” ICL said in a filing to the Tel Aviv Stock Exchange.
Financial website Calcalist reported earlier Tuesday the ICL has agreed to sell its 50 percent holdings in water desalination company IDE Technologies to a consortium of buyers that includes IDE’s chief executive Avshalom Felber for some $175 million to $180 million,
The sale price gives IDE a valuation of just some $350 milllon-$360 million, Calcalist said, well below the valuation of some $800 million dollars the two owners of IDE, Israel Chemicals and Delek Group Ltd. were seeking for the water desalination firm just a year ago.
The group of buyers includes Clal Insurance Enterprises Holdings Ltd. which will acquire a 20% stake in the company, Calcalist said. Felber will buy a 10% stake and an additional buyer is a local fund, the website said.
IDE, set up in 1964 as a government body, specializes in the development, engineering construction and operation of water desalination and industrial water treatment plants. Using small to large cost-effective solutions and membranes the company has set up some of the largest plants in the world, including in Israel, China, the US, India and Australia, according to its website.
The company is jointly owned by ICL and Delek Group, which have been trying to sell their stakes in the company since 2014 as both companies sought to sell off assets that were not part of their core activities. Israel Chemicals is a chemical and fertilizer manufacturer, while Delek Group, a holding company owned by billionaire Yitzhak Tshuva, is refocusing its activities on the natural gas industry.
Delek is waiting to get a better price before selling its stake, Calcalist said.