Dan Bus Co secures investment at NIS 1.1b valuation

A deal for bringing new investors into the Dan transport group has been completed. Sources inform "Globes" that a group of investors led by the Value Base investment house and the LBH Infrastructure fund has acquired 40% of the Dan group's shares for NIS 450 million, and also received an option on an additional 10%.

The deal is at a NIS 1.125 billion valuation for the Dan group. The parties agreed that Dan would hold an offering on the Tel Aviv Stock Exchange within two to three years. The deal includes the appointment of a new CEO for the Dan group - Ofir Karni, the company's CFO. Karni will replace Ofer Zilbiger, who is being appointed co-chairman of the group, together with current chairman Shmuel Refaeli.

Sources also inform "Globes" that the group of investors recruited by Value Base and LBH Infrastructure includes Hachshara Insurance, Shlomo Insurance, Discount Capital, Norstar, and private investors Chen Lamdan, David Fattal, and Dan Propper.

Value Base is a private investment house founded and managed by Victor Shamrich and Ido Nueberger. LBH Infrastructure is managed by Shimon Ben-Hamo and Ofer Linchevsky. The investment group is managed by Yair Ephrati on behalf of Value Base Mergers and Acquisitions and Ben-Hamo.

Other investors competed for the deal in the past, among them the Fortissimo fund, Israel Phoenix, the Weil family, and Blue Square Real Estate, controlled by Moti Ben-Moshe.

Holdings in real estate and a listed company

The main business of the Dan group, founded in 1945, is operating bus routes in the greater Tel Aviv area. The group transports over 14 million passengers a month - 640,000 a day. The group provides service in 22 local authorities with an aggregate population of 2.5 million. As of the end of 2015, Dan had 1,300 buses.

Dan was a cooperative owned by its employees for decades, and incorporated as a limited company in 2002 in order to adapt to the changing trends in public transport. In addition to its transport activity, Dan owns a considerable number of properties, several of which were formerly used as garages, services centers, parking lots, and for purposes in connection with its buses. These properties have substantial potential if rezoned.

As part of its real estate activity, Dan has initiated several residential, commercial and income-producing real estate projects in recent years. Dan has also become a prominent player in the infrastructure sector, after making large investments in desalination and sewage purification. Dan holds 16% of Tel Aviv Stock Exchange-listed company Electreon, which is developing smart road technology for travel powered by wireless energy transmission. Electreon's current market cap is NIS 750 million. Dan became a partner in Electreon in early 2017 by investing several million shekels. The current market value of its investment is NIS 120 million.