Bank Leumi’s investment arm Leumi Partners will invest NIS 171 million in the waste unit of Generation Capital (TASE: GNRS), which is being set up by BlueGen (the recycling company in which Generation is Capital invested). The investment is at a company valuation of NIS 1.1 billion. This is an environmental and water company that will become one of the most prominent in the economy.
According to the memorandum of understanding (MoU) signed between the parties, Leumi Partners will hold 15% of the arm’s shares after the investment. Generation Capital’s shares are up 6% on the TASE to a market cap of about NIS 2 billion, after an increase of 85% in the past year.
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The investment is structured so that Leumi Partners will acquire 10% of the shares of the arm being established by BlueGen for about NIS 108 million. This is money that will be transferred to its owner – the Generation Fund. Additional shares will be allocated to Leumi Partners for NIS 63 million, which will be injected into the new arm, so that after the deal, Leumi Partners will hold a 15% stake.
The transaction is based on a pre-money valuation of NIS 1.1 billion for the waste unit, an amount that is slightly higher than its value on Generation’s books as of the end of the first half of 2025. The agreement also has an upside mechanism for two years from completion of the transaction, as part of which a value adjustment will be made in the event of an additional capital being injected into the waste unit, at a value higher than the agreed value plus a pre-agreed return.
The sector is expected to benefit from high investments
The value derived from BluGen’s share in the waste unit is about NIS 848 million and gives Generation Capital an internal rate of return (IRR) of 38% on its investment in the sector. In total, BlueGen has invested about NIS 350 million in its various assets, which include waste recycling activities, an organic waste treatment facility, a mixed waste facility in Hiriya, and the Shadan facility in Gush Dan that is under construction.
The unit’s assets have benefited from cumulative flows of about NIS 61 million. The value derived from the transaction, which stands at about NIS 850 million, reflects a threefold increase in relation to Generation’s original net investment (the amount of the investment minus receipts from the assets). The waste assets currently generate a stable annual flow of tens of millions of shekels per year, which will continue to grow with the start of operations of the assets under construction.
Published by Globes, Israel business news – en.globes.co.il – on October 29, 2025.
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