BC Partners to buy 80% Keter stake

Sami Sagol (Photo: Tamar Matsafi)
Sami Sagol (Photo: Tamar Matsafi)

BC Partners will acquire Sami Sagol's Keter Plastic at a company value of $1.7 billion.

BC Partners is to buy an 80% stake of Keter Plastic at a company value of $1.7 billion, sources inform "Globes." Two bidders had reached the finish line in the sale of Keter Plastic - and ultimately BC Partners prevailed over of a group composed of the CVC Capital investment fund and the Goldman Sachs investment bank. A third bidder for the Sami Sagol plastics empire, Carlyle Group, left the race earlier after submitting a bid late last month.

BC Partners operates from London, Paris, Hamburg, and New York, and refers to itself as one of the few existing European buy-out investors. The company focuses on investments in large businesses in Europe, and more selectively also in North America. According to company figures, it has completed 91 acquisitions to date totaling almost €100 billion, and its return is superior to that of the market. Its portfolio includes companies like Cigerre, which operates a chain of restaurants in Italy; UK auto insurance company Sabre; and Migros, the largest food retailer in Turkey.

Surge in revenue and gross profit

As reported last month in "Globes," Keter Plastics changed the format for selling the company, after company owner Sagol realized that he would be unable to obtain his $2 billion asking price for full ownership of the company. As of now, the Sagol brothers are expected to sell 70-80% of the shares at a company value of $1.7-1.8 billion, with the purchasers receiving an option to buy the remaining shares, similar to the way Berkshire Hathaway acquired the Wertheimer family's shares in Iscar Ltd.

The process of selling Keter Plastics has been going on for more than a year. The sale is being handled by Dr. Jonathan Kolodny, former head of the McKinsey Israel consultant firm, together with Rothschild Bank, on behalf of Keter Plastics. Keter Plastics was founded in 1948 in Jaffa as a factory for making toys and household utensils, with Joseph Sagol being among its founders. Sagol bought out his partners in 1971, becoming sole company owner, and subsequently left it to his children, Sami and Yitzhak Sagol. Keter Plastics makes plastic products for home use, storage items, boxes, shelves, etc. The company employs thousands of workers in 30 plants in Israel, the US, and Europe, and markets its products throughout the world.

The company's financial data show that its finished 2015 with €769 million in revenue, a 20% leap, compared with 2014, and up 30%, compared with 2013. One third of the company's revenue last year came from sales in North America, where Keter Plastics' biggest customer, Home Depot, is located. The UK accounted for 14% of the company's sales, France for 12%, and Israel for 5%.

Keter Plastics' gross profit last year totaled €282 million, 45% more than in 2014, and its profit margin was an extraordinary 37% of sales, compared with 30% in 2014. Keter Plastics had its biggest gross profit margin in Israel 54% of sales, compared with less than 40% in the other markets in which it sells.

Published by Globes [online], Israel business news - www.globes-online.com - on July 20, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Sami Sagol (Photo: Tamar Matsafi)
Sami Sagol (Photo: Tamar Matsafi)
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