Luzon Group Sells Dorad Energy Stake to Mor Gmul

Luzon Group, led by businessman Amos Luzon, has finalized an agreement to divest a 20% interest in its energy operations to Mor Gmul for approximately 223 million shekels (around $61 million USD). This strategic transaction values the Dorad power station, a key asset within Luzon's energy portfolio, at an impressive 4.4 billion shekels (approximately $1.2 billion USD). This valuation mirrors the figure at which Luzon Group recently consolidated its full ownership of the energy division earlier this year.

The deal marks a significant milestone for Luzon Group, underscoring a substantial uplift in the valuation of its energy assets. This move comes on the heels of Luzon Group's complete acquisition of the Dorad power station's operational entity from Alumay. This prior consolidation followed a competitive process, including a dispute with Nofer Energy, controlled by Ofer Yanai, after Nofer Energy acquired the public energy firm Alumay, which held a stake in the joint venture.

The recent transaction with Mor Gmul, a prominent institutional investor, reflects a robust market appetite for well-established energy infrastructure. The 4.4 billion shekel valuation for Dorad is a testament to the asset's strategic importance and operational efficiency. This valuation is consistent with recent market assessments, including the acquisition of a 10% stake by The Phoenix insurance company last year, which also pegged the power station at a similar enterprise value.

Luzon Group's journey with its energy division began nearly a decade ago when it acquired control of the real estate company A. Dori. Initially facing significant financial challenges, the entity, later rebranded as Luzon Group, underwent a substantial transformation. Under Luzon's stewardship, the group diversified beyond its initial real estate and construction activities, integrating the Dorad power station and expanding its financial services arm through Luzon Credit (formerly Tria).

The energy sector in Israel is experiencing heightened investor interest, driven by the nation's commitment to renewable energy targets and energy independence. The Dorad power station, a significant contributor to the national grid, benefits from this favorable market dynamic. The consistent valuation across multiple transactions indicates a stable and attractive investment profile for such infrastructure assets.

This divestiture by Luzon Group allows for capital realization and strategic realignment, potentially freeing up resources for future growth initiatives or debt reduction. For Mor Gmul, the acquisition represents a strategic entry into a valuable energy asset, aligning with institutional mandates to invest in stable, long-term infrastructure projects. The broader implications suggest continued investor confidence in Israel's energy infrastructure, particularly in established, operational power generation facilities.