Bowed by debt, Kobi Tribish has accepted a low offer for shares in his beloved chain of supermarkets, Tiv Taam. Amit Berger's company Enter Holdings will be paying just NIS 26 million for 50% of Tiv Taam, the company advised the Tel Aviv Stock Exchange on Thursday.
The transaction will be closed in 14 days, Enter said, subject to the approval of the two companies' boards of directors.
Upon finalization of the deal, Tribish will be diluted and Yaki Vadamny (until recently the CEO of Ace Buy & Build) will take over as CEO.
Other Tiv Taam shareholders can decide whether to be diluted or to sell outright.
TheMarker has learned that Tiv Taam netted NIS 8 million in 2005, on turnover of NIS 1.2 billion. That would indicate the chain is being sold at a profit multiple of 14. market sources say that in the past, Tribish had wanted a much higher price for shares in Tiv Taam, which unlike the big chains Super-Sol and Blue Square, also sells unkosher foods.
But an investigative report by the consumer-affairs TV program Kolbotek caught three branches doctoring rotting chicken and selling it as "spicy nuggets" and schwarma, which hurt the chain's image and brought down its price by some 30%.
Tribish found himself in need of a partner as the chain expanded, say the sources. Tiv Taam has signed agreements in place to open more branches in the year to come, beyond the 27 outlets it already runs.
Berger says Tiv Taam made more than a billion shekels in sales, compared with NIS 780 million in 2004. The company's pretax profit was NIS 55 million.
The Tiv Taam group actually consists of three parts: a retail arm, an imports arm and a production unit. It makes or imports many of the products it sells.
Its industrial arm maintains a plant in Emek Hefer, and also owns Maadaney Mizra, which among other things makes pork products. Tiv Taam bought the controlling interest in Mizra during 2005, and also owns a chicken slaughtering facility at Ramat Ishay. The company is negotiating to buy a company that imports seafood and fish, too.
The imports department brings in wines and other alcoholic beverages, and has the franchise to distribute Pilsner beer in Israel. It also imports cheeses and meat products.
The future partners say that 2006 sales of the imports unit are expected to reach NIS 40 million.
Kobi Tribish says the entry of Enter Holdings as a financial-strategic partner will help leverage the group's development in the years to come, bolstering its status as one of Israel leading and most unique chains. "The chain means to continue expanding significantly in the years to come," Tribish commented.
Within four years the company aims to have 35 branches, he said.
Founded in 1976 by Yehuda Tribish, Tiv Taam remains a privately held company run by his son Kobi. Amit Berger owns 52.5% of Enter Holdings, which among other things owns 10% of Solomon Capital Markets.
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