More than six years after it purchased for NIS 300 million the Glaam company, the manufacturer of ingredients for food and beverages, the Fimi Magamim fund manages the sale of 40%-20% of its holdings in the company at a value of NIS 1 billion.
“Calcalist” has learned that the contacts are being conducted with several institutional bodies, with the goal being to bring two or three of them into partnership in the company. This, in the format in which Fimi operated in Simplivia for medical products (formerly Teva’s Migada), where the fund included Leumi Partners and Phoenix as partners in an investment of $47 million for a third of Simplivia’s shares. Simplivia itself was purchased by Fimi, managed by Yishai Davidi, for exactly the amount for which it sold a third of the shares.
Fimi’s move is accompanied by Underwriting Leader headed by Amit Verdi, with at least two of the five major insurance companies positively examining the deal. Apparently, Fimi chose the option of bringing in investors also due to the non-ideal conditions of the capital market at this time, and also to restore the combination model of two or three partners during the pre-IPO. Glaam’s activity is divided into the traditional one and a relatively new activity in the field of foodtech. Glaam, founded in the 40s of the last century, deals in the field of raw materials mainly for the food industry. The company produces fructose-based sweeteners, starches used in the food industry and other industries such as paper, and also imports and markets additional components to its customers from the food industry. About 55% of the company’s sales are in Israel and the rest are for export. Glaam employs 250 people, of which 210 are in Kibbutz Manit (but only eight of them are Kibbutz members) and the rest at its production sites in Spain and Germany.
Glaam is managed by Liad Cohen, former CEO of Tnuva, who joined the company in 2015 as part of the streamlining and expansion moves led by Kibbutz Manit and the Berashit Leverage Fund. Berashit owned 30% of Glaam’s shares at the time of the sale to Fimi, and the fund decided to keep Cohen in the position.
The annual sales volume of Glaam, which is managed by Liad Cohen, amounts to half a billion shekels and the EBITDA is estimated at 85 million shekels
Uri Yehudai, former CEO of Frutarom, which was sold for $7 billion in the summer of 2018, who is also Davidi’s cousin, entered as a partner in the purchase at a rate of 5%, and was appointed as the company’s chairman in addition to his position as chairman of Simplivia. Yehudai and Cohen were the ones behind the procedures The efficiency of the company and a significant increase in its profitability. Glaam sells in about 40 countries to 400 customers to the extent of about NIS 500 million a year, and its EBITDA is estimated at NIS 85 million a year. The increase in sales is at a rate of about 10% over six years, but profitability more than doubled in this period.
Glaam is considered a stable company, which had little foothold in the area in the years before the purchase of Fimi. The fund worked to improve the company and bring it to growth, and did so with the help of entering a new field. At the beginning of 2019, Fimi invested close to NIS 100 million in the construction of a new pulp plant alongside the existing plant that, as mentioned above, produces starches and fructose for the global food industry. The new plant is engaged in the production of prebiotic fibers, known as Gos-Fos, which are intended to feed the good bacteria in the intestines, which are responsible for the normal activity of the digestive system. The production in the factory is carried out with a unique technology that was developed in Golam over five years.
Glaam, most of whose employees are employed in Kibbutz Ma’anit, produces fructose-based sweeteners, starches for the food industry and other industries, and also markets other food ingredients
Gosfus is defined as a food additive and is intended for export. The demand for the product in the global food industry, which emphasizes more and more the issue of nutrition, is greater than the supply in the world. In addition, the fiber is also intended for the nutrition of animals intended for meat or pets – when a healthier digestive system in animals reduces the use of antibiotics. For example, in premium dog food, you can find Goose supplement. By the way, this additive is also found in baby milk substitutes. Glaam managed to reach sales of 60-50 million shekels per year from the new factory which is in consistent growth. The factory actually uses the finished products produced by the old factory as raw material for the production of the advanced products of the foodtech industry. Glaam takes advantage of its connections with the global food and beverage industry, to which it supplies the fructose for candy and starches, to also market the advanced product. Until the sale to Pimi, Kibbutz Manit’s partner in the Glaam company was, as mentioned, the Hanamof Bereshit Fund – a private investment fund established at the initiative of the Ministry of Finance after the 2008 crisis, together with two other investment funds, based on state and institutional funds. The fund is owned by Manny Wasserman, Ran Grodetsky, Tzuri Lavi and Gabi Perl, and it started working in 2009 after raising about NIS 2 billion from the institutions and the state. Bereishit invested NIS 94 million in Golam in 2010 at a value higher than NIS 300 million per Golam. The deal included the Enzymotech company that produces medical food and which was sold in 2017 to Frutarom for $210 million. In 2014 Glaam sold Enzymotech shares for $46 million and sold the rest to Frutarom in the big deal in 2018.
Fimi is the largest private equity fund in Israel. It was established in 1996, manages assets amounting to 5.5 billion dollars, and last year raised the seventh fund, the largest in its history, and the largest in the history of the local private equity market – 1.2 billion dollars. Fortissimo, the second largest private equity fund, raised its sixth fund shortly after, amounting to 1.1 billion dollars, thus closing the gap with the market leader.