Last month Israeli tech and real estate billionaire Teddy Sagi completed the delisting process for Israeli cybersecurity and privacy protection company Kape Technologies from London's Alternative Investment Market (AIM) after buying the public's shares for $515 million. Now he is planning a similar move for another company in which he holds a stake although in this instance the amount he plans investing is much more modest.
The company is Best of the Best (BOTB), which is also traded on London's AIM with a current market cap of £44 million ($56 million). BOTB, which has 26 employees, started out as chain of stores at airports and shopping centers in the UK, and over the years change its activities.
The company today operates as a website in which skill-based competitions are held for cars, luxury watches, motorbikes, and electronic goods. Since 1999, prizes worth £52 million have been awarded. While participants are required to play games, BOTB is not a gambling company.
During the fiscal year that ended in April, BOTB recorded revenue of £26.2 million, down 24.5% from the previous year. The company's revenue has been extremely volatile over the past few years. In the 2020 fiscal year, before the Covid pandemic, revenue was £17.8 million, jumping to £45.7 million in 2021 due to positive online commercial activity during the pandemic. In the financial year ending in April, the company recorded profit of £4.7 million, up 9.3% and cash flow from ongoing activities was £2.9 million, down 31.8%.
"The next period of growth"
Sagi holds a 29.9% stake in BOTB's shares through Globe Invest. He acquired the stake from the Hindmarch family at £4 per share for a total investment of £10 million. He is now offering to purchase the public's shares at £5.35 per share - a premium of 33.8% on his purchase price last September, for a total of £33.5 million ($43 million).
The offer reflects a company valuation of £45.3 million for BOTB, an 8.9% premium on the share's average price over the past year and 3.6% on the last price of the share before the offer was submitted. Since the start of the year, BOTB's share price has risen 30%.
Sagi has already received the agreement of shareholders holding 20.5% of the company's share capital including the founding family headed by CEO William Hindmarch. In order to delist the share from the stock market in London, Sagi requires the approval of 75% of the shareholders at a meeting, so that he will be able to delist the share even if he does not obtain full ownership.
Sagi said that the offer allows for immediate liquidity for the shareholders in the company in which trading turnover is extremely low. "We are excited to continue to consolidate the foundations established by William Hindmarch and the BOTB team," Sagi said, "by focusing on sustainable long-term strategic competitive growth, by continuous investment in technology, customer and product analytics capabilities as well as development capabilities, both in the UK and in new territories. We plan to support BOTB in considering potential acquisitions. Through our business partners and other companies in the group, we look forward to offering BOTB operational and financial support and knowledge sharing that will be required for BOTB's next period of growth."
Sagi recently completed a similar move with Kape Technologies, which was acquired through Unikmind, which he also owns. Kape provides software solutions for cybersecurity and privacy protection. In February, when Sagi held 54.8% of Kape's shares, he offered to purchase the holdings of the public at a price reflecting a 10% premium on the market price.
Following the success of the offer to purchase, Sagi's holdings in Kape climbed to 87.6%, allowing him delist the company from trading. "After weighing the pros and cons, and in light of the macroeconomic uncertainty and thin stock trading, as well as new avenues of growth, we are determined that the next chapter in Kape life is in the privacy arena," he wrote.
Except for BOTB, there are currently no more publicly traded companies, in which Sagi holds a stake, where he plans to undertake similar moves.
Published by Globes, Israel business news - en.globes.co.il - on June 26, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.