After a delay of two years, the founders of bath and body products chain Laline Candles and Soap Ltd., in which Fox-Weizel Ltd. (TASE: FOX) is a 50% partner. Bank Hapoalim (TASE: POLI) has stepped into the shoes of the buyers, thorugh its investment banking arm.
Two years after the deal whereby Laline was to have been sold to French cosmetics company Nuxe broke down, Poalim Capital Markets will buy 20% of Laline from founders Merav Cohen and Revital Levi for NIS 71 million. At the same time, Cohen and Levi will sell another 5% to Fox for NIS 18 million, so that Fox will become the controlling shareholder with a 55% stake.
The deal values Laline at NIS 355 million, 1.5% more than the valuation in the deal that failed to go ahead two years ago, thanks to improved results in 2019, and despite the decline in sales in the first half of 2020 because of the lockdown imposed to deal with the coronavirus pandemic. Once the current deal is completed, the ownership structure in Laline will be Fox 55%, Cohen and Levi 25%, and Poalim Capital Markets 20%.
The founders will receive NIS 90 million in the current deal, which is similar to the amount they were due to have received in the previous one.
Cohen and Levi said, "We remain with a substantial stake in the company, out of the belief that Laline will become a leading, successful global company."
It was recently reported that Poalim Capital Markets would invest up to NIS 180 million for 20% of sheltered housing company Bayit Bakfar ("Home in the Countryside"), which is controlled by the Blustein family.
Laline's sales in the first half of 2020 totaled NIS 91 million, 15% less than in the corresponding period of 2019. Gross profit also fell by 15%, to NIS 61.4 million. Gross profit as a percentage of sales improved to 67.6%, but operating prfit fell 2.3% to NIS 17 million.
Published by Globes, Israel business news - en.globes.co.il - on October 5, 2020
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