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Yochananoff acquires control of the discount chain Cheap House for NIS 45 million
Yohannoff acquires control (50.1%) at a value of NIS 90 million The Cheap Stock chain has over fifty stores throughout the country and has a sales turnover of NIS 71 million in 2020
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Johnoff
Two Moses
Monday, 01 March 2021, 09:13
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Eitan Yohannoff (Photo: Globes, Photo: Eyal Yitzhar)
The chain controlled by the Yohannoff family has signed an agreement to acquire control (50.1%) of the Cheap Stock chain for NIS 45 million, at a value of NIS 90 million.
Cheap Stock, a furniture, storage and home products chain that competes with Max Stock, operates over 50 stores with a sales turnover of NIS 71 million in 2020, and a net profit of NIS 9 million.
The transaction will be completed around April 1st.
Yohannoff will acquire the shares from the four existing shareholders of the Cheap Stock Group (not in equal parts) so that after the acquisition the shareholders in the group will be Yochannoff (approximately 50.1%), Adir and Nono (approximately 29.95%) and Sahar Kochavi (approximately 19.95%).
Adir and Sahar will continue to manage the network and will be entitled to a grant for results.
The purchase will be financed from Yochananoff's own sources.
Cheap Stock is a nationwide chain of stores selling retail products for home and other products at discounted prices.
The chain imports and sells in stores products of various types, such as student supplies, housewares, disposable utensils, plastic products, storage utensils, cleaning products, toys, gifts, ornaments, storage products, kitchen utensils and more.
The chain benefited from the fact that, like Max Stock, it operated during the closure period as a chain that sold essential products for home maintenance.
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Cheap Stock recorded revenues of NIS 71 million in 2020, an increase of 27% compared to revenues of NIS 56 million in 2019. Operating profit amounted to NIS 12.3 million in 2020 (rate of 17% of sales) , The net profit amounted to NIS 8.7 million in 2020.
Yohannoff also notes that the revenues of each Cheap Stock group (including franchise branch revenues) in 2020 amounted to NIS 230 million.
The acquisition of control of Cheap Stock will be made through the purchase of shares that constitute approximately 50.1% of the issued and paid-up capital of the two private companies that centralize the activities of Cheap Stock:
Talia Import and Marketing, which owns and operates (through subsidiaries or franchisees) the chain of stores.
The transaction is subject to the fact that before its completion, shares will be exchanged without consideration so that Talia will hold the full issued and paid-up share capital (as a wholly owned subsidiary) of BA.
Cheap Stock Distribution Ltd., which acts as the import and distribution arm of Cheap Stock.
Yohannoff reveals that it intends to provide
Cheap Stock with
a credit line of up to NIS 30 million. The company also states that in the future it intends to issue the network it took over after the NIS 300 million issue.
Recently, the field of discount stores known as Stoke has received a great deal of attention and has even become attractive to investors, as evidenced by an IPO fund led by the Apax Fund to Max Stock worth NIS 1.7 billion. Other chains like Stoke and Jumbo Stoke.
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