Ilan Zachi, CEO of Internet price comparison company Zap, is apparently paying the price of the failure of the company's IPO plans. Zachi announced his resignation today after three years in the job; he will leave the company at the end of the year. Zachi, 52, began managing Zap in early 2016, after having previously managed HOT Telecommunication Systems Ltd. (TASE: HOT), which he unexpectedly left in 2015.
Zap made headlines last summer when Apax Partners, its controlling shareholder, tried to hold an IPO for it on the Tel Aviv Stock Exchange. The offering was unsuccessful because of the valuation set by Apax Partners, which was substantially higher than the valuations of local investment institutions.
Completion of the IPO would have been very lucrative for Zachi, who held options on 1.5% of Zap's shares and was eligible for an annual bonus amounting to nine months' salary "subject to threshold conditions determined in the remuneration policy and according to the measures and targets to be set for the CEO."
Employing Zachi cost Zap NIS 1.7 million in 2017: NIS 1.2 million in salary cost, plus a NIS 450,000 bonus. In the first three months of 2018, the cost of employing Zachi neared NIS 800,000: NIS 300,000 in salary, plus a NIS 500,000 bonus for the company's 2017 results.
Apax, managed by Zehavit Cohen, tried to hold Zap's IPO at a company value of NIS 650-700 million, almost quadruple the price that it paid for the company. In the framework of the IPO, the fund planned to sell shares to the public for NIS 200 million. Financial institutions, however, demanded a 40% cut in the company valuation to NIS 400 million, a demand refused by Apax.
Apax acquired Zap for NIS 145 million in 2015 from a number of investment institutions. A few months before the unsuccessful attempt at an IPO, the fund held an auction for selling Zap to a large international concern (the name of German publisher Axel Springer was mentioned as among those expressing interest), but failed to obtained the price it demanded.
Published by Globes, Israel business news - en.globes.co.il - on October 28, 2018
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