Insurance and finance group Menorah Mivtachim Holdings Ltd. (TASE: MORA) continues to develop its small and medium-size business credit arm. Just a few months after buying 30% of finance company Ampa Capital for NIS 63 million, it has now signed an agreement to buy 40% of clearing and check payment guarantee company ERN Israel, controlled by Rony Natanzon, for NIS 100 million.
The deal values ERN at NIS 250 million. The consideration is subject to adjustment in accordance with ERN's results in 2016-2018.
Menorah Mivtachim received an option to buy a further 10% of ERN, which was founded in 2001 and has been profitable for several years, exercisable for a year from the end of February 2022. Menorah Mivtachim also has an option to sell the shares it buys, at a price to be set in accordance with a company valuation less a certain amount. The put option will be exercisable from the date of completion until the end of February 2023.
Until a few years ago, Cal-Israel Credit Cards Ltd. held 20% of ERN. In 2013, Natanzon bought Cal's stake for NIS 18 million, a deal that valued the company at NIS 100 million, so that within a little over three years ERN's value has risen 150%.
Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2016
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