New Hamashbir Lazarchan Ltd. (TASE:MSZB) is set to acquire 68.33% of New Pharm Drugstores Ltd. from Isal Amlat Investment Ltd. (TASE:ISAL) in a two-stage deal. Hamashbir will initially acquire 33% of New Pharm for NIS 55 million, giving a company value of NIS 167 million. In the second stage, Hamashbir will transfer its cosmetics activity to New Pharm in exchange for a stock allocation, which will give Hamashbir a 68.33% controlling interest in New Pharm.
In the second stage of the deal, Hamashbir will establish New Pharm branches in its 26 department stores. The deal expands the product range of Hamashbir and almost doubles the number of New Pharm outlets from its current 51 drugstores.
Assuming that the transaction boosts New Pharm’s revenue and profit, Isal chairman Roni Elroyi has agreed that Hamashbir will try to float New Pharm on the Tel Aviv Stock Exchange (TASE). If no IPO is held within three years from the closing of the deal, Hamashbir will acquire Isal’s remaining stake in New Pharm on the basis of a company valuation agreed to by both parties.
The Antitrust Authority and the Israel Tax Authority have to approve the deal. Hamashbir must also obtain financing.
Published by Globes [online], Israel business news - www.globes.co.il - on October 21, 2007
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