Schneidman family seeking exit in Canada

Family's income-producing real estate company, Adgar Investments, in advanced negotiations for sale of 25% of Canadian subsidiary for approximately NIS 450 million. Prospective buyer: Leading Canadian pension fund

Golan Hazani, Calcalist|Published: 08.02.11 , 12:50

Following the sale of its 20% stake in Yashir IDI to the Battery VC fund for NIS 860 million ($251 million), the Schneidman family is currently in advanced negotiations for bringing aboard a partner for its Canadian real estate business, Calcalist correspondent has learned.

The Schneidman family holds Adgar Investments which handles the company's income producing real estate business. Calcalist correspondent learned that negotiations are for the sale of a 25% stake in Adgar's subsidiary which holds assets in Canada valued at approximately NIS 450 million ($132 million).

Presently, the company is negotiating with a major Canadian pension fund which is expected to pay some NIS 110 million ($32 million, after loans) for the shares.

Main property in Toronto

The company's Canadian activity is conducted through subsidiary Adgar Trust. As of 2010, Adgar Trust owns 15 buildings in Canada, 14 of which are located in Toronto and one in Montréal. The company's most substantial property is a Toronto office building listed in the company' books at a value of NIS 231 million ($68 million).

Adgar Trust Canada's income producing property totals approximately 150,000 square meters and at the end of 2010 was evaluated at NIS 1.4 billion ($410 million).

In 2010, the net operating income (NOI) of the company's Canadian property was NIS 94.5 million ($28 million) constituting 55% of Adgar Investments' overall NOI. The reevaluation of the Canadian property yielded a net income of NIS 122 million ($36 million) in 2010, and average monthly rent for that year in the company's property was CAD 15.3 per square meter.

Adgar Investments is a publicly traded company which handles the Schneidman family's income producing real estate business and is traded on TASE at a market cap of some NIS 500 million ($146 million). The Schneidman family holds some 69% of Adgar Investments through privately owned Yashir IDI (57%), Zur (11%) and Doron and Muki Schneidman (1%).

Adgar Investments was founded in 1977 as a textile company and subsequently went into the local real estate. At the end of 1994 the Zur Shamir investment company acquired control of Adgar from Eliyahu Yosef and turned Adgar into a real estate company. The company is characterized by a good properly profile which is disbursed in strong economies at a low risk level. The company terminated its textile activity in 1996.

Property in Poland as well

Adgar Investments deals mainly in office buildings and owns 31 buildings with a total of some 305,000 square meters of income producing property in Israel, Canada, Poland and Belgium.

Additionally, the company deals in income-producing real estate entrepreneurship which includes the acquisition of land and the use of existing land reserves to construct office buildings through external contractors. In 2010 the company's earnings totaled some NIS 186 million ($54 million) and its net profit was NIS 92 million ($27 million).

Adgar spokesperson told Calcalist correspondent in response, "Indeed we are holding preliminary and non-binding talks at this stage with a Canadian institutional body for a partnership between both companies. If the need arises, we shall reports as required."