Sources inform "Globes" that Zap Group (formerly Yellow Pages), managed by CEO Nir Lempert, is planning an IPO on the Tel Aviv Stock Exchange (TASE). Representatives of Axel Springer, a major German publisher, which last year acquired the Yad2 Israeli bulletin board website, recently visited Israel in order to push forward with a deal for investment in Zap before the deadline for bids, due in the coming days.
Axel Springer's bid is NIS 220 million, including Zap's NIS 90 million debt to Bank Hapoalim (TASE: POLI). At the same time, there may be a problem obtaining approval from the Israel Antitrust Authority for Axel Springer's acquisition of Zap, due to the fact that it already owns Yad2. Zap said in response that it had not yet made a final decision about the sale option, but the company was checking into all the possibilities, including a TASE IPO.
The Zap Group has 20 websites, headed by the Zap price comparison website, as well as Zap-Yellow Pages, the Rest restaurant portal, the Doctors health and medicine portal, and the "Getting Married" weddings website. There were originally three offers to acquire Zap: Axel Springer, Apax Partners, and a joint offer by Sky Fund and FIMI Opportunity Funds. The Zap shareholders, however, preferred an open auction in order to maximize the sales proceeds.
The Zap Group's revenue totaled NIS 149 million in the first three quarters of 2014, up 6%, compared with the corresponding period in 2013. EBITDA (earnings before interest, taxes, depreciation, and amortization) totaled NIS 35 million in January-September 2014, 30% more than in January-September 2013. Zap posted a NIS 10.5 million net profit, almost quadruple its profit in the corresponding period in 2013. At the end of the third quarter, the group reduced its debt to NIS 92 million, compared with NIS 100 million at the end of the second quarter. The largest shareholders in Zap Group, which is completely owned by investment institutions, are Menorah Mivtachim Holdings Ltd. (TASE: MORA) (20%), Psagot Investment House Ltd. (11%), Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) (10%), and Meitav DS Holdings Ltd. (TASE:MTDS) and Excellence Investments Ltd. (TASE: EXCE) (7% each). The investment institutions gained control of the company in 2009, after it announced that it would be unable to repay its NIS 500 million debt (NIS 350 million to bondholders and the rest to Bank Hapoalim). The arrangement enabled Zap to continue its business activity, including a change in business focus to the digital world and rebranding under the Zap label and association with the group's other websites. At that time, the company got rid of its printed telephone and business directories, which constituted its core business for 45 years.
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2015
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