Christina Chalk, Esq.

Senior Special Counsel

Division of Corporation Finance

United States Securities and Exchange Commission

Washington, D.C. 20549

 

Dear Ms. Chalk:

 

Set forth below are the responses of Magal Security Systems Ltd. (the “Company”) to the comments of the staff of the Securities and Exchange Commission (the “Staff”) regarding its Schedule 14D-9 that was filed on June 1, 2020. Concurrently with this letter, the Company is submitting Amendment No. 1 to the Schedule 14D-9.

 

The paragraphs below are numbered to correspond to the Staff’s comments as set forth in the Staff’s letter dated June 10, 2020.  In each instance, we have repeated the Staff’s comment in italics and set forth our response in plain type below the relevant comment.

 

Schedule 14D-9 - Item 4. The Solicitation or Recommendation

 

We have revised the disclosure in response to the Staff’s comment.

 

 

We have revised the disclosure in response to the Staff’s comment.

 

 

The Board determined not to engage a financial advisor to evaluate the Offer based on its determination that a financial advisor would not be able to accurately assess the Offer because of the uncertainties arising from the outbreak of COVID-19. As indicated in the Company’s Annual Report on Form 20-F in the subsection captioned “Trend Information” of Item 4. “Operating and Financial Review and Prospects”:

 

The ongoing COVID-19 pandemic has had an adverse effect on the Company's industry and the markets in which it operates. The COVID-19 outbreak has impacted the verticals in which our customers operate and has resulted in a slowdown in our business with some of our customers. We have experienced postponed orders and suspended decision making in the markets that are likely to be negatively affected by COVID-19. Further, the guidance of social distancing and the requirements to work from home in key territories such as Israel, USA, Canada, Germany, Spain, Mexico and other countries, in addition to greatly reduced travel globally, has resulted in a substantial curtailment of business activities, which has affected and is likely to continue to affect our ability to conduct fieldwork as well as deliver products and services, thus, delaying some of the revenues expected in the first part of 2020  to a later date. We are unable at this time to estimate the extent of the effect of COVID-19on our business.  In order to mitigate the impact of COVID-19 on our business, we have adopted a plan to reduce expenses and have enacted cost savings measures.

 

The uncertainties have continued subsequent to the filing of the Company’s Form 20-F and have been exacerbated by the financial impact of COVID-19 on governmental authorities who have generally experienced budget deficits. Such deficits will likely force governmental authorities to reduce their purchases of the Company’s products and either cancel, postpone or reduce the scope of the Company’s turn-key security projects.

 

As a result of the foregoing, the Board concluded that an evaluation by a financial advisor would not materially improve the information available to shareholders from the sources already discussed in the Schedule 14D-9, including the market price of Magal shares over time.

 

 

We have revised the disclosure in response to the Staff’s comment to more fully reflect the Company’s response above to comment 3.

 

Please feel free to contact me at 212-238-8605 or Doron Kerbel, General Counsel of the Company at +972-3-5391444 if you have questions regarding the responses or the accompanying amendment.

 

		Very truly yours,
		/s/ Steven J. Glusband
		Steven J. Glusband

SJG:gb

Enclosure