News: G. Willi JV
Under the terms of letter of intent, all of the present activities of Shamir Salads are to be performed through the new entity NewCo. Willi Food would hold a 51% interest in NewCo, and the current owners of Shamir Salads would hold the remaining interest. Alternatively, in its sole discretion, Willi Food would buy 51% interest in Shamir Salads on a fully diluted basis after receiving full indemnification from the owners of Shamir Salads for the period before the closing. The closing of the transaction is planned to be completed by early 2008, but closing is subject to completion of legal, financial and business due diligence, Willi Food board approval and Israeli antitrust approval. There is no guarantee that the transaction will in fact close.
In consideration for the 51% interest in NewCo (or in Shamir Salads, as the case may be), Willi Food would pay to the owners of Shamir Salads an amount equal to 2.55 times NewCo's net profit after all applicable taxes, as determined in accordance with NewCo's audited financial statements for the year 2008 (but in any event not less than the advance payment). The consideration would be payable by Willi Food within 14 days following the publication of the audited financial results of NewCo for 2008. A non-refundable advance payment of NIS 5 million ($1.25 million) would be made; however, the advance payment would be less in the event Shamir Salads' financial results do not meet expectations for the August-November 2007 period. In addition, a loan for the amount NIS 1.5 million ($375,000) would be paid at closing. The loan would bear an interest rate of Israeli prime +3.5% per year and would be payable within 14 days following the publication of the audited financial results of NewCo for 2008.
The current owners of Shamir Salads would be appointed as joint chief executive officers of NewCo for a term of at least three years. Willi Food would appoint the chairman and the chief financial officer of NewCo. So long as the ownership of NewCo does not change, the owners of Shamir Salads and Willi Food would each appoint an equal number of directors in NewCo. Willi Food would have "effective control" over NewCo.
Zwi Williger, president and COO of Willi Food, commented, "The growth and popularity of Mediterranean style foods has grown beyond ethnic food borders and into the diet of mainstream consumers. Shamir Salad's line of kosher Mediterranean hummus, dips and spreads, appetizers and gourmet specialties are in line with Willi-Food's core kosher and healthy living businesses."
"The acquisition of Shamir Salads adds additional items to our growing line of products. Shamir Salads is currently exporting product to countries in North America and Europe, and we believe that Willi Food can increase the demand and scale of export of products into these regions. Since our new logistic center has roughly four times the capacity of our formerly leased warehouses, we are prepared to aggressively launch new products into the regions in which we currently operate, as well as Russia, where we expect to make inroads in 2008." concluded Williger.
From the November 5, 2007, Prepared Foods e-Flash