Abisror Real Estate Adjusts IPO Valuation Downward

Abisror, a prominent Israeli real estate developer, has finalized its initial public offering (IPO) on the local stock exchange, securing approximately 530 million shekels (roughly $145 million USD) in capital. The company's valuation at the close of the offering stands at approximately 2 billion shekels (around $545 million USD), a notable adjustment from its initial target.

Initially, Abisror had aimed for a valuation of around 2.6 billion shekels (approximately $700 million USD) and sought to raise roughly 660 million shekels (about $175 million USD) just two months prior. However, a cooling trend in the capital markets, marked by broader equity market declines, prompted the company to revise its valuation expectations downwards by nearly 23%. This recalibration was necessary to successfully navigate the current investment climate and complete its public debut.

The offering, underwritten by lead underwriters Lider and Apex, saw Abisror allocate approximately 21% of its shares to the public. In addition to common stock, the company also issued warrants to investors, exercisable at a premium of about 12% above the IPO share price. This structure effectively lowers the company's post-offering valuation when considering the potential dilution from these warrants.

Despite the valuation concession, the founding Abisror family, comprising the four sons of the late Moshe Abisror, stands to benefit significantly. Following the IPO, they will collectively hold shares valued at approximately 2 billion shekels. Key family members include Eli Abisror, serving as Chairman and CEO, who is expected to retain around 31% of the company. Directors Yitzhak and Yoram Abisror will hold approximately 20% and 17% respectively, while Mordechai Abisror is set to hold about 10%.

Further enhancing shareholder value, Abisror plans to distribute 30% of the IPO proceeds as a dividend to its shareholders. This move is anticipated to inject nearly 160 million shekels into the pockets of the family members who did not sell any shares during the offering. This follows a pattern of substantial distributions, with the company having already paid out approximately 15 million shekels in dividends to its family shareholders over the past two years.

Established in 1978, Abisror has a diversified real estate portfolio, primarily focused on residential development, with a historical concentration in southern Israel that has since expanded to the central region. The company also engages in the development and operation of income-generating properties, including office and retail spaces. Currently, Abisror manages a pipeline of nearly 1,800 residential units under construction, projecting a future gross profit of approximately 1.3 billion shekels. The company reported first-quarter revenues of about 265 million shekels, an 86% increase year-over-year, driven by sales from projects in Bnei Brak and the "Ashira" project in Tel Aviv's Shdema area.