Sources inform "Globes" that Gamma Management and Clearing, a unit of The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), is acting to raise NIS 300 million in an IPO, at a company valuation of NIS 700 million before money.
The offering may include an offer for sale by the company's shareholders, principally The Phoenix Holdings, which holds 49%. The Phoenix Holdings acquired its shares in Gamma in 2008 for just NIS 64 million (at a valuation of NIS 130 million). An offering at a valuation five times higher will give a handsome return on the investment.
The lead underwriter for the offering, planned for the first half of 2021, has not been appointed. The assessment on the market is that Excellence Underwriting, which belongs to the Phoenix group, will play a leading role.
Gamma, headed by Ariel Ganot, deals in the finance, discounting, clearance and management of credit card transactions, in the provision of various types of credit, check discounting, and factoring. In recent years it has also begun to provide credit to businesses, a field of activity with substantial growth potential, and one that has undergone severe upsets this year because of the coronavirus pandemic and the lockdowns imposed to curb its spread. According to market estimates, Gamma holds a portfolio of non-bank credit to businesses amounting to some NIS 5 billion.
According to The Phoenix Holdings' financial statements, Gamma posted a profit of NIS 42 million last year. However, since Gamma is not a public company and does not publish its financial statements, its full results for 2020 will become known only with the publication of its prospectus, if the offering goes ahead.
At the beginning of this year, before the coronavirus outbreak, Gamma completed a private placement of non-marketable commercial paper. The issue was awarded a rating of P-1 by Midroog, the highest rating available for debt of up to a year. This rating derived from, among other things, Gamma's Aa3 credit rating with a stable outlook.
After this issue, which aroused great interest among investors, the company decided to issue commercial paper to the tune of NIS 250 million. Gamma stated at the time that it held a NIS 5 billion credit portfolio, and that it provided credit and financial services to some 8,000 customers.
Published by Globes, Israel business news - en.globes.co.il - on December 16, 2020
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