After several years of drought, a wave of TASE IPOs, which began in 2017, is starting to emerge. Sources inform "Globes" that private equity fund Sky Fund is considering an IPO on the TASE for iDigital, the importer of Apple devices in Israel. As far as is known, Sky is still testing the waters, and has not made a final decision on the matter.
iDigital is believed to be a profitable and growing company, and it can be assumed that the great popularity of Apple products in Israel will also help boost an IPO, should one be held. The company valuation at which Sky is considering an IPO is unknown, but will probably be substantially larger than the NIS 110 million at which the fund acquired its controlling interest in iDigital last April.
In that deal, Sky bought 65% of iDigital from the partners in Pitango Venture Capital: Isaac Hillel, Rami Kalish, Aaron Mankovski, Nechemia Peres, Zeev Binman, and Rami Beracha. The partners owned the shares privately, not through Pitango. The partners still hold a stake in iDigital after the sale. Another investor in iDigital is Viola, which made its investment in 2009.
Up until recently, iDigital was the sole authorized distributor of Apple products in Israel. Recently, however, iStore also became an official distributor. iDigital, which sells products such as iPhones, iPads, and Mackintosh computers, currently operates 13 branches.
iDigital's CEO is Ayelet Zarfati-Rosen, who replaced the company's founder Eran Tor in 2013. iDigital is active in two spheres: retail sales of Apple products through the chain's stores, and distribution of its products to other chains, such as Bug, KSP, etc.
Sky Fund, founded in 2005, today manages over $450 million in three funds. The fund's managing partners are Zvi Yochman, Nir Dagan, Amir Erben, Dr. Avraham Ortal, Zion Agiv, Liat Benyamini, Ron Hochman, and Maytal Heller. In addition to iDigital, Sky's prominent portfolio investments include Schnapp Batteries Ltd. (TASE: SHNP), Hamashbir Agriculture, Marina Galil Mushrooms, Groupon, and S.AL. Group. Sky's prominent exits include Barak-Netvision, IDB Tourism, Natali-Seculife, and Spectronix Ltd. (TASE: SPCT).
Ace to raise NIS 300 million
The Tel Aviv Stock Exchange (TASE) has recently become an additional instrument for exits by local private equity funds, mainly through offers for sale included as part of offerings. This was the case with the offerings of Inrom Construction Industries Ltd. (TASE: INRM), Novolog (Pharm-Up 1966) Ltd. (TASE:NVLG), and Overseas Commerce Ltd. (TASE:OVRS) (by FIMI Opportunity Funds), Telrad Networks Ltd. (Fortissimo Capital), and Aeronautics Ltd. (TASE:ARCS) (Viola).
Sky is not the only fund seeking to jump on the bandwagon; another one is Kedma Capital, which is considering an offering by one of its main holdings - the ACE Auto Depot chain of do-it-yourself products, the acquisition of which Kedma completed in March 2017 from Electra Consumer Products (TASE: ELEK) at a valuation of NIS 190 million.
As far as is known, this measure is also in the early stages, and the value at which the offering is to be held, if it goes through, has not yet been determined - estimates are around NIS 300 million.
Electra Consumer acquired ACE Auto Depot in early 2012, after the latter, which was controlled by B. Gaon Holdings Ltd. (TASE: GAON) and Shlomo Zavida, accumulated NIS 450 million in debt and entered a stay of proceedings. Electra Consumer paid NIS 129 million for ACE Auto Depot, after a pricing procedure with other concerns that expressed interest in acquiring the chain. The ACE Auto Depot chain operates in home design and maintenance. As part of its activity, it also holds the Auto Depot chain of auto product stores.
Kedma, which was founded in 2006, is managed by Uri Einan, Gilead Halevy, and Gilad Shavit. Kedma manages NIS 1 in capital in two funds. Its investments over the past decade include public companies such as Danel (Adir Yeoshua) Ltd. (TASE:DANE) and Brand Industries Ltd. (TASE:BRND) and private companies such as Carmel Winery, QualiTest, Marina Galil Mushrooms, and Femi Premium.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 25, 2018
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