The week opened with a storm in the company Electra Consumer Products Which reported on Sunday morning on a memorandum of understanding with the French retail chain Carrefour (Carrefour), which is expected to open supermarket branches in Israel based on Beitan and Mega wine branches controlled by Electra Consumer Products (AMF). An international chain, Saban Elban, which is expected to open a chain of convenience stores in the country.
In the evening, the online food retailer Quick reported on contacts with AMZ and Beitan Wines to establish a joint online arm, controlled by AMZ, for the purpose of carrying out retail activities
Of products and services.
AMZ is engaged in the import, production and marketing of electrical consumer products, and operates the Shekem Electric and Electric Warehouses chains, along with control of the Bitan Wines chain. The main beneficiaries of the increase in the share price are the brothers Daniel and Michael Zalkind, who own the company through the company Elco Holdings Under their control.
The Zalkind brothers, who own about 65% of Elco’s shares, have enjoyed a significant increase in the value of other major companies belonging to the group in the past year. Thus for example, the value of Electra Ltd. Which deals with projects for buildings and infrastructure in Israel and abroad, currently reaches NIS 9.1 billion, after a 35% increase in the share price in the past year. Electra Real Estate Which operates mainly in the American real estate market, has climbed 158% in the past year and the company is traded at a value of NIS 3.7 billion.
Elco itself is currently traded at a value of about NIS 7.9 billion, after an 80% increase in its share price in the past year (and more than 200% since the slump of the Corona crisis about two years ago). The value of the Zalkind brothers’ holding in the company already reaches more than NIS 5.1 billion, which makes them two of the richest businessmen in Israel “on paper”.
Acquisition of leading brands with synergy potential
The Zelkind brothers, who serve as co-CEOs of Elco, have in recent years turned the veteran investment company into a serial buyer, with the aim of developing its traditional business, along with adding active arms. The group’s policy is, in most cases, For synergy with the group companies.However, the independence of the CEOs of the subsidiaries is maintained.
Last year, Elco was named “The Pacman of the Capital Market” by Globes, against the background of the group’s intensive acquisition campaign in a variety of areas, which included Egged Transport (Transportation), Supergas (Energy), Pavilion Wines (Food Retail) and shares in DKSH. (Discount Investments ), Which dominates huge companies such as Cellcom and Properties and Building alongside Mega Or, a company controlled by Tzachi Nachmias.
In parallel with the many acquisitions, Elco and its daughters have in recent years also made a number of profitable realizations, including the sale of the cellular company Golan Telecom to Cellcom and the issuance Supergas At the Tel Aviv Stock Exchange.
Electra revenue growth products jumped 80%
The financial statements they publish will be demonstrated by the improvement of the activities of the companies belonging to the Elco Group. This week it was Amatz, under the management of Zvika Schwimmer, who last year led the acquisition of control of the Bitanot Wines supermarket chain, together with the Phoenix Insurance Company, from the couple Nahum and Nurit Bitan (Electra’s share in the chain currently stands at 35%).
Along with the report on Carrefour’s expected entry into Israel, AMZ published its reports for the 2021 summary, which showed that the company’s revenues grew by 80% to NIS 4.6 billion, thanks to the consolidation of the results of Bitan Wines (as well as Office Duty and Saar Entrepreneurship and Trade). .
Although the net profit attributed to the company’s shareholders fell by 43% to NIS 164 million, this is because in 2020 a large one-time profit was recorded from the sale of Golan Telecom. Net income from continuing operations increased in 2021 compared to 2020 and EBITDA (profit excluding interest, tax, depreciation and amortization) amounted to NIS 418 million – more than double compared to 2020.
Leverage the locations of mega branches in favor of Saban Elban
As mentioned, in addition to the agreement with Carrefour that was reported this week, the AMC also has a previous agreement signed with the Saban Elban convenience store chain. It was recently reported in Globes that the chain’s first store will be launched in Tel Aviv this November.
The agreement between Electra Consumer andSaban Elban Is a full franchise agreement, which included, among other things, Electra’s commitments on non-competition issues in the field of convenience stores and the opening of a minimum of stores in the years 2022-2024. The parties further agreed that the concession period would be 20 years, with an option to extend the period up to a maximum of another 50 years, subject to compliance with the conditions.
Globes also reported that Electra intends to leverage the strategic locations of the Mega chain’s branches (which belong to Bitan Wines) in Tel Aviv, in favor of Saban Elban. Saban Elban is an international chain that operates through franchises over 77,000 stores in dozens of countries. Its revenue in 2021 is estimated at $ 66 billion.
Another company in the group that has published reports in the past week is Electra Real Estate, eFocuses on managing partnerships that invest primarily in housing clusters in the southeastern United States. In 2021, the company’s revenues totaled NIS 635 million, four times more than in 2020, when most of the revenues stem from success fees. The net profit attributable to shareholders also quadrupled, to NIS 413 million in 2021. The company, under the management of CEO Amir Yaniv and chairman Gil Roshink, began last year with the establishment of a $ 700 million REIT hotel fund in the United States.
Elco itself has not yet published its reports for 2021. The company ended the first three quarters of 2021 with a 42% increase in net profit to NIS 332 million, compared to a net profit of NIS 234 million in the corresponding period in 2020 (and NIS 284 million for the entire year).
Following the losses and the failed IPO: Online retailer Quick switches to Electra Consumer
The activities of the online food retailer Quick , From the failed issues of the past year, on the way to switching to Electra Consumer Products-Pavilion Wines. The parties are negotiating to establish a partnership, “for the purpose of conducting online retail activity of products and services, first in the field of super products, food and not food, and later in other areas.”
Electra Consumer (AMZ) is expected to hold 51% of the ownership in the new partnership, to which Quick’s operations will be transferred, while Quick will hold 49% of the shares. The new partnership, which will be established subject to regulatory approvals, is expected to manage all online -Mega in the field of joint activity, and will be able to purchase its products from the Beitan Wines Group, which will later be replaced by Carrefour branches entering the country. It was also stated that any future online activity that one of the parties Set out in the Summary of Principles.
Prior to the report, Quick was traded at a value of NIS 66 million after a 80% drop in the share since the IPO in March last year (then raised NIS 85 million). Following the report on the negotiations with Amatz, the stock jumped by about 50% on Monday afternoon to a company value of close to NIS 100 million. The main shareholders in Quick, which is still recording heavy losses from its operations (approximately NIS 30 million in January-September 2021), are Super-Pharm, the main soft drink company and the Union Group of George Horesh (Toyota importer and franchisee of the H&M chain in Israel). The company’s CEO is Aviram Ganot, and the chairman is Eldad Fresher, former CEO of Mizrahi Tefahot Bank.
Shira Sapir