Matthew Bronfman saw the potential of the planned expansion of the franchise in Israel.
Matthew Bronfman bought the remaining 15% stake in IKEA Israel from six individuals at a company value of NIS 650 million. The deal was made under the terms of the agreement reached when the partners bought the franchise license in 2005.
Bronfman's joint investment vehicle with Shalom Fisher, Bronfman Fisher Investments Ltd., owns 85% of IKEA Israel. The other partners, each with a stake of 2.5%, are Gil Unger, Shlomo Zohar, Ron Hadassi, Shlomo Gabay, Elisha Cohen, and Dan Brochman.
The main reason why Bronfman exercised the option to buy out his partners is the planned expansion of IKEA Israel. The company value for the deal is based on the IKEA Israel store in Netanya and the brand's potential in Israel. The construction of a second store in Rishon LeZion is stuck in legal battles over the building permit for the site at Me'uyan Soreq. IKEA also plans to open a third store in the Galilee within three years.
Published by Globes [online], Israel business news - www.globes-online.com - on March 3, 2009
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