The Paz group acquired 26% of Burger Ranch shares from founder and president Ron Lapid for $10 million, thereby completing 100% ownership of the company. Lapid founded the hamburger chain 29 years ago. He will continue to serve as strategic consultant to the management.
Paz acquired 74% of Burger Ranch shares three years ago for $8.2 million, as part of its plans to enter the retail sector through its gas stations. In this framework, Paz also established the Yellow chain of convenience stores.
In response to a question about Paz’s decision to increase its Burger Ranch holding to full ownership, the company said that Burger Ranch is in the midst of an investment and expansion surge requiring large financial resources. Burger Ranch is in the midst of an aggressive expansion campaign, opening 10 new branches a year, four at Paz gas stations, and the upgrading of half of its older branches. It also signed a contract with Super Sol (NYSE: SAE) to open Burger Ranch outlets in its supermarkets, at a rate of one a year.
Burger Ranch operates 84 restaurants across Israel, 10 of which are at Paz gas stations. It had a turnover of NIS 200 million in 2000, with a 32% share of the NIS 640 million annual hamburger market.
In the framework of its plan to develop its business with Super-Sol, Paz is negotiating to open gas stations at the chain’s branches, through commissions on petrol sales. Blue Square Israel (NYSE: BSI) is expected to undertake a similar deal, probably with Sonol.
Paz shareholders are Zadik Bino (51%), the Lieberman family (20%), Bank Leumi (19%), Modi Ben-Shach (7%) and others (3%).
Published by Israel's Business Arena on 25 January 2001