Israel Canada Completes Acro Merger as Combined Valuation Slips to 5.5B Shekels
Israel Canada has completed its merger with Acro Group, delisting Acro from the Tel Aviv Stock Exchange. Despite an initial target valuation of 10 billion shekels, market downturns have left the combined entity valued at approximately 5.5 billion shekels.
The merger between Israel Canada, controlled by Barak Rosen and Asi Toubmajer, and Acro Group, led by Tzahi Arbib, has been officially completed, with Acro delisted from the Tel Aviv Stock Exchange. Initially announced in February, the consolidation aimed to forge one of Israel's premier real estate giants with an estimated valuation of 10 billion shekels. However, amid sharp declines in both companies' share prices, the combined entity opened trading at a market capitalization of approximately 5.5 billion shekels.
Under the original agreement, Acro was acquired at a valuation of 3.1 billion shekels, reflecting a 10 percent premium over its market price at the time of the deal. The consideration was structured so that 60 percent would be paid in Israel Canada shares and 40 percent in cash, amounting to roughly 1.24 billion shekels. Following the merger, Acro's shareholders are set to hold about 21 percent of Israel Canada.
Market conditions have shifted significantly since the agreement was signed. When the deal was struck, Israel Canada's market cap stood at 7 billion shekels and climbed to 8.5 billion shekels in May. Since then, broader weakness in the real estate sector and the Tel Aviv Stock Exchange has dragged valuations down. Both firms hold substantial exposure to the luxury residential market in Tel Aviv and its surrounding areas, which has recently experienced a slowdown.
Acro specializes in initiating and developing residential projects in central Tel Aviv, while Israel Canada operates across entrepreneurial real estate, purchasing groups, income-producing properties, and hotels. The merger was designed to expand Israel Canada's footprint in Tel Aviv by integrating Acro's project pipeline, which includes income-generating assets valued at 1.6 billion shekels yielding 95 million shekels annually in net operating income.
With the completion of the transaction, Acro concluded four and a half years as a publicly traded company on the Tel Aviv Stock Exchange. Concurrently, Acro's bonds have been converted into Series 10 and Series 11 bonds of Israel Canada, with no alterations to their original terms.
