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Kibbutz water tech firms merge

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Sunday, January 24th, 2010

Amiad Filtration Systems: The addition of Arkal’s product range will considerably enhance Amiad’s offering.

“The physical distance between Amiad Systems and Arkal is just 30 kilometers. Kibbutz Amiad is north of the Kinneret, whereas Kibbutz Beit Zera, which owns Arkal is south of it,” Amiad Filtration Systems Ltd. (AIM:AFS) CEO Arik Dayan told “Globes” today following its announcement on its acquisition of competitor Arkal Industries Ltd. Unit Arkal Filtration Systems Ltd.

There may be no better description to explain the logic of the merger between the kibbutz industries. Amiad Filtration Systems today announced the signing of a conditional agreement for the acquisition of Arkal Filtration Systems from Kibbutz Beit Zera (which owns two thirds of the company) and Bermad Control Valves Ltd., owned by Kibbutz Saar and Kibbutz Evron.

Amiad Filtration said in its announcement, “The addition of Arkal’s product range, and sales and marketing infrastructure, will considerably enhance Amiad’s offering in the irrigation market as well as in the industrial and municipal markets.”

Besides being two kibbutz companies an hour’s drive from each other, Amiad Filtration and Arkal Filtration have much in common. As Dayan put it, “Arkal and Amiad have competed against each other for over 40 years, and an attempt to merge them was always in the air, but never took place for a thousand different reasons.”

“Globes”: What tipped the balance now?

Amiad Filtration Systems chairman Tal Yeshua: “First, we paid a better price. Second the business model suited both of Arkal‘s shareholders. Kibbutz Beit Zera needed cash, and Bermad wants to cooperate with us, so received Amiad shares in exchange for its holding, which achieves the objective.”

Amiad Filtration Systems’ share was unchanged at ?1.92 on London’s Alternative Investment Market (AIM) today, giving a market cap of ?37 million.