Israeli retail fashion chain Castro Model Ltd. (TASE: CAST) has notified the Tel Aviv Stock Exchange (TASE) that it has signed an agreement to acquire a 50% stake in low-cost fashion retail chain Urbanica for NIS 90 million, at a company value of NIS 180 million, after money. Castro plans integrating Urbanica into its own chain. "Globes" was the first to reveal the imminent acquisition last month, shortly followed by confirmation of the negotiations by Castro.
The ownership structure of the Urbanica chain, held by Palo Retail, is similar to that of the Hoodies Group in which Castro bought a 25% stake four months ago - with the exception of a Canadian partner, which has a stake in Hoodies but is not registered as a shareholder in the Companies Registrar.
Like Hoodies, Urbanica has many partners including Yossi Gabison, who heads the Hoodies Group with a 31% stake, and Eli Gabi (21%). Other partners include Oren Bar-Gil, Nitzan Israeli, and Mariano Karp. Model Bar Refaeli and her mother, Tzipi, hold 2% and 1%, respectively, of both Urbanica and Hoodies. After the acquisition, the holdings of all the Urbanica shareholders will be diluted in equal parts..
Marketing of the Urbanica chain is built around the Bar Refaeli brand and she also fronts the chain's brand in ads, as she also does with Hoodies and the Caroline Lemke spectacles brand.
Castro co-CEO Gabi Rotter said, "The agreement will boost the company's growth. I'm sure that the result of the acquisition will mean benefits in synergy between the companies and it is our intention to strive to realize the potential that will allow additional growth in the future."
Urbanica launched its first branch in May 2015 in Cinema City, Rishon Lezion and has since opened four more branches in Ashdod, Beersheva, Tel Aviv's Azrieli mall, and Eilat. Four more outlets are planned for 2017 including Azrieli mall in Haifa and Bilu Junction near Rehovot. Urbanica is based on the UK's Primark group.
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2016
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