Sources inform ''Globes'' that department store chain New Hamashbir Lazarchan Ltd. (TASE:MSZB) has promised Office Depot Inc. (NYSE: ODP) to achieve NIS 1 billion in annual sales by Office Depot Israel Ltd., 50% more than its current annual turnover of nearly NIS 600 million.
Hamashbir notified the TASE last night that it signed a memorandum of understanding (MOU) to acquire all of Office Depot Israel for $47 million, less its debt on the closing date. Hamashbir will pay Office Depot Inc. royalties on Office Depot Israel's sales. Hamashbir will continue to operate the chain under the Office Depot brand.
The sources added that even if Hamashbir fails to achieve the NIS 1 billion sales target by Office Depot Israel, it will pay Office Depot Inc. royalties on this turnover.
Office Depot Israel imports and sells office supplies and equipment, computers, computer screens, mobile telephones, printers, computer peripherals, and office furniture.
Hamashbir's share price rose 4% by mid-afternoon to NIS 2.65, giving a market cap of NIS 300 million.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2010
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