Sources inform "Globes" that Zvi Yemini, founder, chairman and CEO of plastics company ZAG until recently, is selling his 6% holding in the company to controlling shareholder Stanley Works (NYSE: SWK), a US company, which already owns 94% of ZAG. Stanley Works plans to sell 100% of ZAG to Deutsche Bank Israel to another party.
Deutsche Bank representative in Israel Dr. Boaz Schwartz is handling the deals for Stanley Works, which acquired control of ZAG from Yemini in 1998, shortly after Yemini floated it in the US. Stanley Works subsequently delisted the company from trading.
Since the deal is not significant for Stanley Works, the company is not obligated to report negotiations for its sale.
The value of ZAG in the preliminary talks is $130-140 million, but capital market sources and persons interested in the company said that the price was higher than its performance warranted. Stanley Works acquired control of ZAG from Yemini in 1998 at a company value of $130 million. Sources close to the company said that Stanley Works had later withdrawn $100 million in dividends from ZAG.
Sources inform "Globes" that Yemini is about to reach agreement on the sale price for his holdings in ZAG. This price will not affect the price at which Stanley Works plans to sell the entire company through Deutsche Bank Israel; Stanley Works and its buyer will use a formula based on profits.
Yeminini agreed to sell his stake some time ago. His shares are being held in trust, pending agreement on their price, which is expected shortly.
Senior sources close to the deal told "Globes" that Markstone Capital Fund has no interest in acquiring ZAG. In evaluating the worthwhileness of the deal, Markstone took into account the fact that most production in the do-it-yourself (DIY) and plastic boxes market currently takes place in China, and profit margins in the sector are consequently expected to fall. Markstone declined to respond to the report.
One of the players currently negotiating to acquire ZAG is First Israel Mezzanine Investors Fund (FIMI), headed by general manager Ishay Davidi. ZAG’s $120-130 million in annual sales could match FIMI’s strategy of investing in export-oriented industries.
Published by Globes [online] - www.globes.co.il - on February 6, 2006