Bank Leumi (TASE: LUMI) is bringing strategic partners into its US business. The bank announced today that it will sell 15% of its shares in Bank Leumi USA for $141 million. The shares will be sold to two US investment funds: Endicott Capital Management, and MSD Capital LP, which manages the assets of Dell Technologies founder Michael Dell and his family. The deal values Leumi USA at $940 million. Leumi USA is managed by Avner Mendelson. The deal is not expected to produce a material gain for Bank Leumi.
The deal is a strategic one for the funds concerned. One of the partners in Endicott Capital Management will be appointed to the Bank Leumi USA board, and the two funds are expected to assist the bank in expanding its activity.
Endicott Capital Management was founded 22 years ago, and it specializes in investment in the financial sector, particularly banks; it is expected to be the more active partner in the current investment. MSD was founded 19 years ago, as mentioned to manage the assets of Michael Dell, whose fortune is estimated at some $20 billion.
"After examining various possibilities, we have chosen to link up with MDS and Endicott. Their knowledge and experience will help Leumi USA in broadening its range of customers, in expanding the activity of <a href=https://www.leumitech.com/#home target=new>Leumi Tech</a> in the US, and in giving access to the US capital market," said Bank Leumi CEO Rakefet Russak-Aminoach.
In the past few years, Bank Leumi has considerably cut back its international activity, following the investigation by the US authorities into assistance the bank gave to US citizens in evading tax. The bank closed its private banking business in several locations, chiefly in Switzerland, and it was recently reported that it had sold its business in Romania, which had caused it losses in the hundreds of millions of shekels over the years. At the same time, the bank decided to focus on its activities in the US and in London, and to develop and expand in both places.
Bank Leumi USA was formed 50 years ago. Its main business is credit to medium-size businesses, and private banking for US customers. Its commercial customers are mainly in real estate, high-tech, and trade. The bank has branches in New York, California, Florida and Illinois. Its credit portfolio totals over $4.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 22, 2018
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