The sale of Keter Plastic lurched forward this week. Sami Sagol will accept a deal in which he sells 80% of the company based on a $1.8 billion valuation with an option to liquidate the rest of his shares at a later date, sources informed “Globes”. The framework is similar to the Berkshire Hathaway acquisition of the Wertheimer holdings in Iscar.
Until now, Sagol had insisted on selling his entire stake for $2 billion but no buyers were interested in that arrangement.
The new framework, if implemented, will allow Sagol to sell the majority of his Keter shares for a better price than he would have received for all of his shares, while still leaving him with 20% of his company’s shares.
The sale process began more than a year ago; the parties which passed the first phase will be asked to submit binding offers. Dr. Jonathan Kolodny, who previously managed McKinsey’s Israel office, is representing Keter in the negotiations alongside Rothschild Bank.
All the current candidates for the acquisition are foreign funds with the leading group a joint venture of CVC Capital partners and investment giant Goldman Sachs. The other publicly acknowledged contestants are the Carlyle Group and BC Partners. The highest offers for Keter thus far reached a figure of $1.5 billion.
Keter Plastic was established in 1948 as a small workshop for houseware and toy production. Joseph Sagol, one of the founders, bought out his partners in 1971. The management of the company eventually passed into the hands of his children, Sami and Itzhak.
Keter manufactures plastic-based household and garden products. It employs thousands of people and operates some 30 plants in Israel, the US, and Europe. Its products are sold worldwide.
Financial data provided by the company to prospective buyers shows the company ended 2015 with income of €769 million a 20% increase from 2014 and 32% from 2013. A third of its revenue last year was generated in North America home to key client Home Depot with the UK accounting for 14% of its sales, France for 12%, and Israel for 5%.
Its gross profit for 2015 was €282 million a 45% jump from 2014 and its gross margin increased from 30% in 2014 to 37% in 2015. Its highest gross margin last year was reached in Israel 54% with North America at 33%, the UK at 39% and France at 37%.
Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2016
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