Sources inform ''Globes'' that Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY) is in preliminary negotiations with international investors for the sale of all or part of its 50% stake in swimwear company Gottex Models Ltd.
The sources added that Gottex had a turnover of $40 million in 2005, and an earnings before interest, taxes, depreciation and amortization (EBITDA) of 15-20% of turnover, amounting to $6-8 million. The sources said the investors interested in Gottex were not financial investors, but fashion and swimwear companies.
80% of Gottex’s output is exported, which undoubtedly whets the appetite of international investors in the company. The last valuation for Gottex commissioned by Africa-Israel, including the company’s Israel franchises for Christina of Canada, Zara, and Pull and Bear, was NIS 490 million. Analysts told “Globes” today that Gottex’s swimwear business alone was worth NIS 180-200 million.
Lea and Armon Gottlieb founded Gottex in 1949. Africa-Israel acquired the company in 1997, as part of its entry into the swimwear market. Africa-Israel and the Gottliebs signed an agreement in 2002 under which the Gottliebs sold their 20% stake in Gottex for $1.5 million, reflecting a company value of $7.6 million. In 2001, Africa-Israel and a Canadian partner acquired swimwear maker Christina of Canada for C$43 million. Most of Christina of Canada’s sales are in North America. A year later, Africa-Israel sold its Gottex stake to the joint company at a company value of $7.5 million, leaving Africa-Israel with a 50% holding in Gottex.
Published by Globes [online], Israel business news - www.globes.co.il - on February 8, 2006