2024-02-01 08:12:45
The Shlomo Group announced this morning (Thursday) that it completed the investment deal for approximately 15% of the share capital of the Shlomo Group’s automobile and credit company by the American investment fund Affinity Partners.
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The foundation was established by Jared Kushner. Affinity Partners has raised $2 billion from the wealth funds of Saudi Arabia, the United Arab Emirates and Qatar. Kushner, who heads the fund he founded, said this morning: “We are excited to join the Schmelzer family through our investment in the Shlomo Group, which has continued to demonstrate resilience like the entire country. Affinity looks forward to more promising business opportunities in Israel and the region.”
The purpose of the investment is to expand the business of the group’s automobile and credit company in Israel to countries in the Middle East and North Africa.
The deal was carried out against the backdrop of a war of iron swords and the complex macroeconomic and geopolitical conditions prevailing these days in Israel and the Middle East. The consideration in the transaction reflects a value of approximately NIS 2.7 billion for the automotive and credit activities.
According to the agreement of the parties, the new company will only own the companies that belong to the automotive division of the Shlomo Group, which includes the leasing, renting and selling activities of vehicles, while the fund will have an additional period of 12 months from the date of completion of the transaction to apply to the Capital Markets, Insurance and Savings Authority for permission to own the company through credit , a private company engaged in non-bank credit at a rate exceeding 10%. In the interim period, the shares of Derech Kredit were held by Shlomo Holdings.
In addition, the agreement stipulates that the owners of the Shlomo Group will provide a loan to the Affinity Fund for the purpose of financing the investment transaction in the amount of approximately 46.75 million dollars. The parties agreed on a value adjustment mechanism based on future results, according to which to the extent that the average net profit of the new company in the years 2023-2024 will be lower than NIS 412 million, then the fund will be entitled to an allocation of up to 3% of the new company’s issued capital in a way that reflects the difference in the value of the new company according to the average profit to the value of the new company according to a total of NIS 412 million (“catch up mechanism”).
The Shlomo Group is a player in the automotive services market in Israel and has a vehicle fleet of over 78,000 vehicles, and a market share of approximately 30% of the industry.
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