The surge in issues by Israeli companies in the British capital market over the past year has motivated quite a few Israeli investment houses to create strategic partnerships with British investment banks. The first was Poalim Capital Markets, which teamed with Bridgewell Securities, followed by Leader Holdings and Investments’ (TASE: LDER) alliance with Seymour Pierce. The third Israeli investment house to follow this road is MG Equity Partners, which is cooperating with KBC Peel Hunt, considered one of the leading investment banks in the London financial district.
Last week, MG Equity and KBC Peel Hunt signed a strategic cooperation agreement, under which MG Equity will be the Israeli representative of the British bank, and will provide an array of investment banking services. MG Equity, led by founder and CEO Amir Raveh, is an Israeli-British investment house. KBC Peel Hunt is a subsidiary of international company KBC, one of the 20 largest financial institutions in the European Union. KBC focuses on small and medium-sized companies with market caps of $50-350 million.
KBC carried out over 20 issues in 2005, in which $1.5 billion was raised. KBC’s first Israeli issue was Engel Eastern Europe, for which it was the underwriter, but not the financial adviser. Engel Eastern Europe raised $53 million at a company value of $167 million. The company’s current market cap is $198 million, reflecting a 17% return on the issue price.
As part of cooperation between the parties, senior KBC executives will visit Israel in early February, and take part in a conference on dual listing of Israeli companies in London.
Published by Globes [online] - www.globes.co.il - on January 25, 2006