After receipt of all the regulatory and banking approvals, the Excellence-Prisma deal was completed today. Excellence bought Prisma's mutual funds and ETFs, and will be the second largest player in the funds sector.
"I'm happy about the deal, it’s very good for Excellence," said Excellence CEO David Baruch today. The investment house will manage almost NIS 14 billion in funds, NIS 9.2 billion of which is from Prisma. "I'm not only happy about the deal but also that Prisma's funds remained stable during the negotiations period," Baruch added. "I admit that in the purchase contract there was an adjustment formula, because of the fear that there would be substantial redemptions. But it turned out that we managed to preserve the value of the assets."
Under the deal, Prisma will receive 45% of the shares in the new funds company, and between 2014 and 2017 Excellence will be able to buy its stake in accordance with a formula whereby the company's value will be set at five times its EBITDA. In addition, the new funds company will bear Prisma's bank debt, amounting to NIS 130 million, and Prisma will be allocated a NIS 78 million bond on which it will receive payments until 2017.
Prisma's investment portfolios, which were to have been transferred to Excellence without consideration, were in the end sold the insurance company Ayalon for NIS 7 million. The investment portfolios have some NIS 2 billion worth of assets under management, so that the multiple for the deal is low, at 0.35%.
Published by Globes [online], Israel business news - www.globes.co.il - on June 10, 2009
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