Rumors are swirling in the Israeli press that Ormat Technologies (ORA), a leader in geothermal energy, is about to close a large M&A. These rumors are based on an article in Power, Finance and Risk, which is reporting, ” Geothermal developer Ormat Technologies is on the hunt for strategic acquisitions and is working with Lehman Brothers to do so. The company has reportedly looked at a few targets but nothing has yet come to fruition.” The article continues, “Targets on the geothermal side are scant, but one Ormat is said to have chased is Salton Sea, an inland saline lake in Imperial Valley, Calif., with some 500-600 MW of geothermal potential.”

The rumors are that they will offer around $1.1 billion for the Salton Sea project, which will increase Ormat’s output by about 80%.

Funding the acquisition could be another problem. The company, as of 3/31/08,  had about $30.7 million in cash, and in May they sold 3.1 million shares for about $149.6 million. This means that they are going to have to take on a sizable amount of debt to complete an acquisition of this sort.

This move will help placate some large shareholders like Haim Katsman (no relation), who have been pushing for the company to get more aggressive in expanding.

I guess the question is whether taking on such large amounts of debt, is worth the expanded output? I guess only time will tell.

Disclosure: Author’s fund has a position in ORA, he has no position in any other stock mentioned as of 8/04/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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The Israeli company Energtek (EGTK.ob) has developed a new alternative technology allowing motorcycles to be powered with natural gas.

According to a report in the Jpost: “Energtek has developed a system to power two- and three- wheeled vehicles with natural gas. The motorcycles and scooters use gas canisters that can be replaced in less than a minute, without the need for special refueling stations, CEO Lev Zaidenberg said. The technology also makes it more cost efficient to tap so-called stranded gas in reservoirs that aren’t large enough to justify building a pipeline.”

The company plans to target Asia, where there are more than 250 million two- and three-wheeled vehicles. The company plans on doing a private placement shortly in order to fund the initiative, and they claim that they will be profitable in 2010.

It’s funny because Israel never had an auto or transportation industry, but because of the country’s global technological edge in alternative energies, an alternative transportation industry is starting to pop up. From natural gas powered motorcycles to electric cars, as in Project Better Place,  to GreenRoad Technologies, - Zack” Cleantech” Miller’s favorite-who employ a in-vehicle device that improves driver safety and betters fuel consumption for car fleets, maybe just maybe Israel will be the Detroit of the 21st century.

Disclosure: Author’s fund has no position in any stock mentioned as of 7/30/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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A couple of months back, a jewel in the Israeli cleantech crown raised some additional funds (some even coming from Sir Richard Branson).  GreenRoad Technologies, with development in Or Yehuda, employs a in-vehicle device that improves driver safety and betters fuel consumption for car fleets. Read Cleantech-Israel’s review of the deal as well.

I’m reading the article and it looks great.  GreenRoad’s Safety Center, the firm’s flagship product, seems to be getting traction with fleet operators and insurance firms, looking to decrease accidents and improve efficiencies.  While GreenRoad is doing wonderful things for Israeli Cleantech and kudos to them, I’m struck with that fact that Pointer Telocation (PNTR), whose Chairman, investor Yossi Ben Shalom, we interviewed a few months ago, is not a player in this space.

Pointer has an interesting business.  While providing road-side services in Israel and abroad, Pointer provides a lot of location-based services for the auto industry.  Via RF-systems, the firm can locate autos.  Via cellular units, the company has essentially combined GPS and GPRS systems with embedded software together in on box.  They also have an impressive command and control system that allows for fleet management and stolen vehicle recovery (SVR).

With a install base and global sales, why isn’t Pointer forging ahead beyond SVR and into more value-added service like GreenRoad is providing?  Maybe a partnership is in order?

Disclaimer: Author’s fund holds a position in PNTR as of 7/27/2008.

Zack Miller
IsraelNewsletter.com

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Aaron Katsman
IsraelNewsletter.com

Shares in Medis Technologies (MDTL) reached a 5 year low Friday on news that the company was doing a $29 million offering. This raise leads to the question of whether the company is teetering on the brink of financial solvency? For those who don’t know, Medis focuses on its fuel cell technology, and sells through OEM partnerships.

The problem is that they aren’t doing much selling. The company has made announcement’s in the past about prospective deals but little has come to fruition. A year ago, after announcing a deal with Microsoft (MSFT) that was said to be in the millions, Herb Greenberg wrote in SeekingAlpha.com: “A Microsoft spokesman, noting that the order was “small,” told me there has been “inaccurate” information in the marketplace about what Microsoft plans to do with the fuel cells. “We have no plans to resell these products around the world,” she said. She added that Microsoft has no plans “for development of the product.”

Then what is Microsoft doing with it? As John says in his piece, Microsoft plans to use the Medis products as a giveaway at an upcoming event…like a chatchke. Yet another Medis announcement that isn’t quite what it appears to be.

Jonathan Weil of Glass Lewis, the proxy and research firm, added color in a report to his firm’s clients. He quoted a Microsoft spokesman as saying the Medis product is “not a Microsoft branded product. He added that the total purchase price was “less than $15,000. We have no agreements with them. No joint development. There’s no partnership around accessories. If you think of this as akin to Microsoft buying a pen or a Frisbee — that’s the way you should think of it.”

If you look at their Q1 ‘08 earnings report you will find that the company lost more than $14.7 million in the quarter. The report goes on to say: “We recently announced the signing of a $60 million equity line of credit facility with Azimuth Opportunity Ltd. We believe that the equity line offers financing which is sufficient to meet our current and near term foreseeable needs but is also very flexible. As we move forward with our sales and marketing programs we will determine how best to finance our activities.”

That was on May 12th. A short time after signing a $60 million equity line of credit, the company goes out and raises $29 million? I know that when talking about an alternative energy company this may sound heretical, but it seems like Medis is about to run out of gas.

Disclosure: Author’s fund has no position in any stock mentioned as of 6/22/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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