The rise of Ilan Ben-Dov

He started out at 17, as the franchisee to operate games at a swimming pool.

Ilan Ben-Dov started out in business at the age of 17, as the franchisee to operate games at a swimming pool. Later, he began importing electronic games, and in 1991 he founded Suny Electronics Ltd. (TASE: SUNY). Two years later, during a Tel Aviv Stock Exchange (TASE) bubble, Suny raised NIS 20 million in an IPO. Whereas most of the companies that went public during the bubble have since disappeared, Suny has not only survived, but thrived to become one of the outstanding cash cows on the TASE.

Ben-Dov's breakthrough came in 1996, when he obtained the Israel franchise to import Samsung Electronics Co. Ltd. (KSX: 5930) cellular telephones, and Suny became Israel's largest handset importer. Thanks to this success, Suny has hundreds of millions of shekel in cash. The company is traded at a market cap of NIS 550 million.

A year ago, Ben-Dov restructured Suny's holdings, and sold the Samsung cellular telephone import business to Suny subsidiary Scailex Corp. ltd. (TASE: SCIX; Pink Sheets:SCIXF) (formerly Scitex). Scailex has more than NIS 500 million in cash of its own, and it is the company through which Ben-Dov is acquiring the controlling interest in Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR). In addition to importing Samsung handsets, Suny is active in the Internet, through its controlling interest in Internet portal Tapuz People Ltd. (TASE:TPUZ), which has a market cap of NIS 40 million.

In addition to telecommunications interests, Ben-Dov is also enamored of financing. Over the years, he has made a number of financial investments, and Suny has become a party at interest in several companies, including IDB Holding Corp. Ltd. (TASE:IDBH).

A few years ago, Ben-Dov decided to expand his financing activity, and founded Tao Tsuot Ltd. (TASE: TAO-M), which made a number of leveraged investments in public companies. These investments were made at the height of the bull market, and with the outbreak of the market crisis 18 months ago, Tao took a severe battering. The company posted heavy losses as share prices crashed, and it fell into a shareholders' equity deficit.

Ben-Dov was forced to come to Tao's aid, partly through an insider deal in which Tao sold its Scailex stake to Suny. The aid and the stabilization of the markets improved Tao's condition, although it still isn't great. One of Tao's bonds is traded at a yield of 37%, reflecting investors' concerns about the company's ability to meet its debt payments to them.

Published by Globes [online], Israel business news - www.globes-online.com - on August 12, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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