Leumi Partners to invest in Generation Capital’s waste unit

Bank Leumi’s investment arm Leumi Partners will invest NIS 171 million in the waste unit of Generation Capital (TASE: GNRS), set up by BlueGen (the recycling company in which Generation is Capital invests). The company’s valuation for this investment is 1.1 billion shekels. This is an environmental and water company that will become one of the most prominent companies in the economy.

According to the memorandum of understanding signed between the two parties, Leumi Partners will own 15% of the shares of the arm after the investment. Generation Capital shares rose 6% on the Tokyo Stock Exchange, bringing its market value to about NIS 2 billion, after an 85% increase last year.

The investment is structured so that Leumi Partners will acquire 10% of the shares of the arm created by BlueGen for approximately NIS 108 million. This is the money that will be transferred to its owner – the Generations Fund. Leumi Partners will be allocated additional shares worth NIS 63 million, which will be pumped into the new arm, so that after the deal Leumi Partners will own a 15% stake.

The deal is based on a pre-cash valuation of NIS 1.1 billion for the waste unit, an amount slightly higher than its value on Generation’s books as of the end of the first half of 2025. The agreement also includes an upside mechanism for two years from completion of the deal, as part of which a value adjustment will be made in the event that additional capital is 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 stake in the waste unit is approximately NIS 848 million and gives Generation Capital an internal rate of return of 38% on its investments in this sector. In total, BlueGen has invested about NIS 350 million in its various assets, which include waste recycling activities, an organic waste processing facility, a mixed waste facility in Hurreya, and the Shadan facility in Gush Dan under construction.

The unit’s assets benefited from cumulative inflows amounting to approximately 61 million shekels. The resulting value of the transaction, approximately NIS 850 million, reflects a three-fold increase compared to Generation’s original net investment (investment amount minus asset returns). The waste assets currently generate a steady annual flow of tens of millions of shekels annually, which will continue to grow as the assets under construction come into operation.

Published by Globes, Israel Business News – en.globes.co.il – on October 29, 2025.

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