Hamashbir 365 Holdings Ltd. (TASE:MSAH) is strengthening its financial position. The department store group today announced that it had signed a letter of intent with US private equity firm Nashone Inc., controlled by brothers Scott Korman and Ari Korman, for an investment of NIS 134 million in the company.
Under the letter of intent, subject to several conditions, including due diligence by Nashone, it will invest NIS 77 million in Hamashbir Department Stores Ltd. and NIS 57 million directly in Hamashbir 365 for a 29% stake in Hamashbir Department Stores. By the investment date, Hamashbir 365 promises to complete the transfer of its 68.3% stake in New Pharm Drugstores Ltd. to Hamashbir Department Stores in exchange for an additional allotment of shares by Hamashbir Department Stores to Hamashbir 365.
Hamashbir also promises to increase its stake in New Pharm to 100% through negotiations with Adv. Ronen Matry, the receiver for the remaining 31.7% shares of New Pharm held by Isal Amlat Investment Ltd. (TASE:ISAL). The Rothschild Bank is Hamashbir's adviser on the deal.
Hamasbir Department Stores has 40 branches. It posted NIS 754.5 million revenue and an operating profit of NIS 24 million in 2012.
Hamashbir expects to complete the deal by the end of 2013.
Hamashbir says that it sees Nashone's direct investment in Hamasbir Department Stores as a strategic investment, and that Nashone's experience and international connections will help Hamashbir expand the operations of Hamasbir Department Stores and New Pharm.
Published by Globes [online], Israel business news - www.globes-online.com - on August 25, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013