The deal for the sale of the controlling stake in E&M (Emet) Computing Ltd. (TASE: EMCO) to private equity firm FIMI Opportunity Funds for NIS 443 million, valuing the company at NIS 720 million, has been completed. This is the largest acquisition deal of recent years in Israel's IT services market.
Two months ago, FIMI Opportunity Funds, headed by Ishay Davidi, announced the acquisition of shares from the founders of E&M Computing and a portion of the shares belonging to the company's CEO. The deal price was NIS 16.25 per share, which at the time of the announcement represented a 10% discount on the market price of the shares. Since then, the company's share price has shot up, and it is now 41% higher than the deal price, at NIS 22.85, giving the company a market cap of about NIS 1 billion.
The sellers in the deal are former company chairman Yigal Shefer, current chairman Shraga Shahak, and board members Reuben Schrift, Jacob Walter, and Sarah Shahak. CEO Yoav Weinberg retains 440,000 shares. Weinberg signed an agreement with FIMI under which he will join the partnership in buying the controlling interest in the company, and will allow it to do as it sees fit with his shares. Subject to certain conditions to do with the share price, Weinberg will be entitled to receive up to NIS 10 million.
Following completion of the deal, the sellers resigned from E&M Computing's board of directors, and new directors on behalf of FIMI were appointed, among them FIMI senior partner Gillon Beck, and Ofer Shelah, who was until recently a member of Knesset. Shelah split from Yair Lapid's Yesh Atid party to form a party of his own, but later withdrew from the Knesset election that took place yesterday.
Several M&A deals have been taking place in Israel's IT services industry. The NIS 250 million deal for the acquisition of Taldor by One Software Technologies was recently completed.
Published by Globes, Israel business news - en.globes.co.il - on March 24, 2021
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