"At age 15 I set up a grocery store at 23 Rambam Street in Petah Tikva. I completed ninth grade. I studied a bit in tenth grade, and after that I went to work. That's what I loved, to be involved in commerce. Rani joined me after the army," Adi Zim told "Globes" today.
Yesterday, the Zim brothers closed a circle, when they signed a memorandum of understanding to sell Zim Direct Marketing, through which they hold supermarket chain Kimat Hinam, to rival chain Yaynot Bitan, for NIS 350 million.
The big story is the amazing rags to riches tale of the Zim brothers. 13 years after they started to set up the Kimat Hinam network of stores, and just three years after they floated the chain on the stock exchange, they are parting from it with capital of NIS 420 million, accumulated in salaries, dividends, and sales of shares in recent years, including the current deal.
Following the sale, Zim Direct Marketing will become a private company, and will be merged into Yaynot Bitan, owned by the couple Nahum and Nurit Bitan. The value of the deal is 11% higher than the company's market cap this morning. Zim Marketing shares responded by rising 2.9% today, completing a 26% rise in two weeks.
The consideration will be paid in at most three installments, the first being of NIS 155 million. Yaynot Bitan will provide security for the remaining amount, to be indexed to the CPI. Part of the purchase price will be financed from Zim Marketing's cash: the company will distribute a NIS 85 million dividend to its shareholders before ownership is transferred.
The capital market, which is used to business people in jackets and ties and with higher education, found it hard to digest Adi Zim, the commercial spirit behind the business, with the gold chain he sports around his neck and his casual garb of t-shirt and jeans (brother Rani dresses more formally). The grocery store he set up was ultimately the basis for the Kimat Hinam chain.
The origin of the name is a bags and wallets store operated by the brothers' grandfather in Tel Aviv's Hatikva neighborhood in the 1960s, called in Iraqi "Yaani Balash", which translates literally as "Almost Free" (Kimat Hinam in Hebrew). Today, the chain numbers 35 branches, with an annual turnover of NIS 1.35 billion.
In the past two years, Adi became the chain's unmediated spokesperson. He talks directly, simply, and clearly, and his way of expressing himself helped form the chain's down-toearth image. He never hesitated to attack his competitors, and to criticize the food manufacturers fiercely. "The price reductions by Shufersal are a conjuring trick"; "Only in Israel does cheese cost twice as much as meat", he said. When other retailers spoke anonymously, Adi did not think twice, and directly attacked Tnuva, Strauss, and Osem, with statements that more than once aroused the anger of the food manufacturers. He recently called for Wissotzky to be declared a monopoly. "As a child, I dreamt of opening a supermarket chain, and I fulfilled the dream. Everything I dreamt of in life, I have achieved," Adi says.
Did you think that you would succeed to such an extent?
"Always. I never had any doubt whatsoever. I have succeeded at everything I wanted in life, and everything I believe in succeeds. I have a special sense."
How do you feel today?
"It’s a good feeling, but not easy, because the chain is a child I raised. On the other hand, I'm only 42, and my life is still in front of me."
What will happen to the merged chain?
"It will undoubtedly be the number three chain in Israel. There's no doubt that Nahum Bitan made an excellent deal. I wish him great success, and it seems to me that he will be a great success."
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2012
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