Entrepreneurs, investors, CEOs and company owners participated in the Work After Work conference of Calcalist and KPMG, which was held on Wednesday evening in Tel Aviv. This is the first meeting in a series of meetings with the leading investors in the economy, this time dedicated to growing companies. During the evening, which also included Happy Hour at sunset, a panel was held with the participation of Julia Zohar – founder and director of Tahin al-Erez; Yaakov Gamliel – Partner, Head of Enterprise Growing Business, KPMG Israel; Gilad Halevi – Managing Partner, Kedma Foundation; Hazon Foundation – Chairman and Owner, Thorpez Industries, and led by Yarden Rozensky, Capital Market Editor, Calcalist.
Many of the stories we hear about companies that have grown and managed to establish themselves as significant long-term companies are tied in one way or another to private equity funds. What place do they occupy in the market?
Gamliel: “The place of private funds is a very positive place in the macro and micro aspects. The companies are invested in loyal hands that give a return on our pensions, GDP and taxes. The micro aspect also has value – the owner not only meets with money in a particular transaction, he also enjoys a strategic perspective of growth. There is a lot of contribution to the community here beyond a triple return on the money. ”
What do we need these companies for in the economy?
Gamliel: “The company has a lot of opportunities to grow on its own through an issue of the shares. But being a public company has a price. Of exposure, of immaturity and of size. This place of funds fills a certain gap. “There are funds that focus on local industry, abroad. There is also a trend of companies becoming sectoral, for example in the field of food or iron. Everything is done with a very strategic view of connections and growth for Israeli businesses.”
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Panelists from the right: Moderator Yarden Rozensky, Julia Zohar, founder and CEO of Tahinat El-Erez, Keren Hazon, Chairman and Owner of Thorpez Industries, Yaakov Gamliel Partner, Head of Enterprise Growth Business, KPMG Israel and Gilad Halevi Partner, Director of Kedma Foundation
(Photo: Uriel Cohen)
The point that a company meets in the fund is not simple, how do you deal with it?
Halevy: “There are huge macro benefits to private funds. According to studies they have done, these funds increase the number of employees, profitability and indices. But when you come to a particular company you do not have to explain the benefits in the macro, but the micro. “Once through very talented entrepreneurs, and you put global methods into it. You put strategic thinking into it, not just 60 or 90 days ahead. When you come up with that message and give companies a sense that they can grow with you, that’s the key to success.”
Do we have to reach the public market to develop a global company?
Vision: “You do not owe anything. I think we need to see what is right for the owner and find the most suitable partner in terms of what will bring acceleration to growth. There are very successful private funds, but it is also possible to choose the public path. It depends on the timing, the nature of the owner, the amount of money required and what your ambitions are. ”
How do you plan a growth trajectory in a situation that has changed quite significantly since you came to the stock market?
Vision: “We have chosen a path that is very right for us. We chose to be a public company because we are building one of the largest companies in the world in the taste and smell industries. And to make the purchases we want in the world, it requires quite a bit of money. The capital market allows you flexibility and the ability to raise. The stage of private funds can be a step on the way to the next stage. Instead of walking up two steps, we chose to jump up one step. I am glad that we have chosen the right path for us and that it brings the fruits to our investors and owners. ”
Julia, how did you get to where you are today?
“I came to the factory under bad and unhappy circumstances, when my husband passed away in 2003. But I thought about the factory, my children and how I can help them. Since then I have worked so hard to grow the factory, establish it and give it added value. You might say I do not know how to work in terms of budget, but the fact that it worked. Then the kids joined me in 2014. Along the way we grew up and built a new factory, combining tradition with tahini creation with technology. I got to the point where I had to grow even more “A big body that will stand by my side and together we will take this product to heaven. I have found good people who can help and take this factory and market it even more, it has not yet been implemented, but one day we will make the deal.”
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Growing Business Conference. In the photo are the participants of the evening held in Tel Aviv
(Photo: Uriel Cohen)
With regard to the macro environment, are private companies a type of shelter in such a period?
Gamliel: “It is not a shelter by definition, it is a stage in evolution. There has been some unnatural move here in my eyes in the last two years, when immature companies have reached the public markets, and there have been offerings from companies that have not yet had the critical mass and growth engines to survive there. These funds allow companies not to think about the next quarter, to look further, and to maximize value in a way that frees us from the thought of what the market will say. To bring companies to the next level, they need to be in this place. ”
Halevi: “There is also a disadvantage in being private. A private body is not measured by day and sees before its eyes only the share price and it does not influence its decisions. But a public body is also more pointed, you are exposed to criticism, you can not help but react to events and have them pass you by. Under a private fund you are in the middle. You act and react as if you are in the public market, but you have patience. In the crisis that will come, private companies will be harmed as public ones, but in a different aspect. ”
Vision: “When it rains, everyone gets hurt. You can take shelter for a period of time but not always. We are going through a very strange period, the events are completely global. The plague, inflation, labor, oil prices, logistics, everything is related to everything and it affects you no matter where you are. In a situation like this, whether you are private or public, you need to be very sharp and focused. Concentrate on business rather than the stock price. I’m busy every day running my business. If my business will be good and we’ll find it true, it’s irrelevant whether the capital market has risen or fallen. If he goes down he goes down with everyone, even if you do the best results. You just have to make sure that your business is even more managed than before. ”
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Yaniv Yasharim – Partner, Head of Marketing and Growth at KPMG Israel
(Photo: Uriel Cohen)
How do you advise companies that ask you: We are at a crossroads, what do we do?
Gamliel: “I think we should respond to external events, but also look inside. Most of the transactions that the funds carry out are from companies that have been in the economy for 20 years, and have already gone through several crises. There is no magic formula for all companies, you have to see where this crisis meets you, but do not lose your way. ”
What is sustainable growth for you?
Halevi: “In Kedma, when we sell a company and see that the buyer did better than us – took what we started and earned much more, it is sustainable growth. It means we have sown seeds that people can reap after that. ”
Vision: “Sustainable growth is when you not only build the company, but also the people within your organization, so even if you move forward, the organization has continuity. The greatest pleasure is to see how the company continues to exist even the day after. Know how to grow your managers forward. ”
At the beginning of the evening, Yaniv Yasharim, partner, head of the marketing and growth division, KPMG Israel, spoke. He said, “When we thought about the launch of the event we imagined exactly what we see here – connections in a free atmosphere between potential investors and companies, CEOs, owners and entrepreneurs. We started the evening with growing companies and there are a lot of marathoners here. We identify a trend of growth companies that are moving forward and planning long-term moves, and this has brought the attractiveness of investors to this market and this phenomenon is increasingly producing a win-win situation – funds enjoy investments without much risk and growth potential and companies also get strategic vision. This combination has created a shock absorber for a period of volatility, one that we are probably on the verge of, and will help many companies overcome this challenge. “