YSB set for TASE IPO this week

Tel Aviv Stock Exchange Photo: Eli Yizhar

The construction company's offering will be at a company value of NIS 260 million after money.

The IPO of construction company YS Yaacobi Brothers Group (YSB) is scheduled for this week. As reported by "Globes," according to the most recent draft prospectus published by the company, the company value for the offering will be NIS 260 million, before money. The company originally sought to raise money at a NIS 400 million value.

Simultaneously with raising tens of millions of shekels in its offering, YSB is also planning a bond issue of up to NIS 70 million, and has obtained a Baa1 credit rating with a stable outlook. The maximum interest rate for the bond issue will be 4.2%.

As far as is known, due to demand from investors at presentations by the company ahead of the offering, YSB controlling shareholders and brothers Pini (chairperson) and Amir (CEO) Yaacobi have waived an offer for sale in which they wanted to sell part of their holdings for tens of millions of shekels. They have also substantially reduced the remuneration they had sought from the company after the IPO.

Variable remuneration halved

The most recent draft prospectus shows that the aggregate cost of the two brothers' employment at the company will be up to NIS 6 million, compared with nearly NIS 8 million originally sought, following a reduction in their annual variable remuneration. Their fixed monthly remuneration will still be substantially larger than at present: NIS 168,000 a month for Pini Yaacobi and NIS 152,000 a month for Amir Yaacobi.

The variable remuneration based on YSB's results was halved, and has been limited to NIS 1.25 million for Pini Yaacobi and NIS 840,000 for Amir Yaacobi, compared with the NIS 2.4 million and NIS 1.6 million originally sought, respectively. The total annual salary cost can therefore reach NIS 3.3 million for Pini Yaacobi and NIS 2.7 million for Amir Yaacobi. Pini Yaacobi currently owns 60% of YSB's capital, and Amir Yaacobi 40%.

As far as is known, the Green Lantern company, controlled by Richard Hunter, which controls the Holmes Place chain of fitness clubs and is also slated for an IPO, has decided to forego an offer for sale amounting to tens of millions of shekels planned as part of the IPO.

The decision to waive an immediate exit through an offer for sale on the stock exchange was due to the demand made by investors during the roadshow conducted in preparation for the IPO. One of the reasons for this demand was the heavy losses recently suffered by investors in Aeronautics Ltd. (TASE:ARCS).

YSB is one of Israel's most prominent infrastructure companies. It currently operates in three main sectors: construction and performance projects, its main field of business, which accounts for 60-70% of its revenue; maintenance and operational services for buildings and systems; and development and operation of waste treatment facilities (the environmental sector).

YSB has been growing in recent years; its revenue rose 25% to NIS 312 million in the first half of 2017.

Published by Globes [online], Israel Business News - www.globes-online.com - on November 28, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Tel Aviv Stock Exchange Photo: Eli Yizhar
Tel Aviv Stock Exchange Photo: Eli Yizhar
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