Psagot, formerly Israel’s largest investment firm, announced Tuesday it will transform into a waste and sanitation company under new ownership by former CEO Yaniv Bender.
Psagot informed the Tel Aviv Stock Exchange that it will acquire full ownership of R.G.A. Services & Cleaning for NIS 85 million ($22 million). The company, specializing in street sweeping, waste removal and municipal cleaning services, operates across Israel. Following the acquisition, Psagot will adopt R.G.A.’s name.
The deal also includes a financing arm for waste management vehicles owned by R.G.A., a company with a long-standing reputation in sanitation, reporting NIS 350 million ($91 million) in revenue and a NIS 9 million profit ($2.3 million) in 2023. R.G.A. employs 2,000 workers and operates a large fleet, including garbage trucks and street cleaning machines.
Psagot, sold as a nearly inactive “shelf company” with minimal non-bank lending activities, has divested most of its core assets over the past year, including its fund and portfolio management business, to Phoenix Insurance, IBI Investment House and others.
Incoming owner Bender said, “After a comprehensive evaluation, we chose to focus on the growing environmental sector. R.G.A. is a profitable, established company providing essential services to municipalities and government institutions nationwide, with consistent growth and positive cash flow.”
Completion of the acquisition is contingent on Bender finalizing his purchase of Psagot and R.G.A.’s due diligence review. The deal marks the end of businessman Rani Zim’s unsuccessful venture in finance.
Zim acquired Psagot from Apax Partners for NIS 405 million ($105 million) in 2021, primarily with bank loans, but faced financial losses as interest rates surged and Psagot’s stock fell by about 80% during his tenure.
How much is Bender paying?
To cover debts estimated at NIS 200 million ($52 million) from his purchase of Psagot, Zim is selling assets, including a 9% stake in his primary company, Zim Shopping Centers, for NIS 36 million ($9.4 million). Zim is also selling his shares in Psagot to Bender, who currently holds 7.5% of Psagot shares and was introduced by Zim as the company’s CEO.
Bender will pay NIS 40 million ($10.4 million) for Psagot, increasing his ownership to 73%. He will acquire Psagot as a “shell company” with NIS 13 million ($3.4 million) in cash reserves.
Why is Bender interested in transforming Psagot into a sanitation business? “The companies involved are part of the environmental sector, which is booming globally, though Israel lags behind Europe,” a source close to the company told Ynet. “Bender believes the sector will grow in the coming years, attracting increased government funding. This isn’t a ‘dream company’—it’s a cash-generating business with stable profits and reliable clients, including government institutions and municipalities.”
Get the Ynetnews app on your smartphone: