Sources inform "Globes" that Gad Dairy is in negotiations with a group of investors to bring partners into the company at a company value of NIS 300 million. The new partners will hold 49% of the shares, and Gad Dairy owner and CEO Ezra Cohen will remain the controlling shareholder.
The investment group includes former Shufersal Ltd. (TASE:SAE) CEO, former 013 NetVision Ltd. CEO, and former McCann Erickson Israel CEO Richard Hunter, Josef Elias, Daniel Ben-Rei, and another US investor. Elias previously headed a chain of private schools in Sweden that was sold five years ago to a European venture capital fund, and is currently a consultant for two European funds. Ben-Rei, a former pilot, worked at the McKinsey Israel consultant firm. Together with other investors, this investment group acquired 45% of the Holmes Place chain 18 months ago, and received a golden share for managing its acquisition.
In recent months, Gad Dairy has been negotiating with a number of potential partners, including two investment funds and Wissotzky, but these negotiations did not result in a deal. Gad Dairy is seeking a partner for the purpose of expanding its business to Europe and the US. The idea is that Cohen will continue to manage the company's business in Israel, while the new partners will search for overseas expansion opportunities.
Fine growth and profits
Gad Dairy, the fourth largest player in Israel's dairy market, is a family company that has been producing cheese for decades. Cohen opened its first dairy in 1980. Gad Dairy specializes in cheese from cows' milk: salted cheese, mainly white cheese; hard cheese, such as Caciocavallo, and cream cheese spread. Over the years, the company has also developed goat cheese products. It recently also began marketing hardcheese produced overseas for the company, while taking advantage of the customs duties exemption for hard cheese.
Despite being only the fourth largest dairy in Israel, Gad Dairy is an important player in its niches. Its innovation has enabled the company to maintain a 5-6% growth rate in recent years. The company's annual sales turnover is believed to be NIS 350 million. Financial data are not published, but the company'soperating profit margin is estimated at 10%.
Gad Dairy said in response, "Gad Dairy is being sought after by many players, and has received many business offers in recent years, but no final agreements have been reached. When the conditions are ripe for a deal, the company will make a formal announcement." The group of investors declined to respond to the report.
Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2015
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