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The Yochananoff network acquires the cheap stock Israel today

2021-03-01T08:40:26.018Z


| consumption The giant supermarket chain will acquire control of the household products chain for NIS 45 million • Eitan Yohannoff: "We want to reach every home" Eitan Yohannoff. Acquires control of the "Cheap Stock" network Photo:  Yossi Zeliger The stock industry is heating up:  After the Fox group announced a franchise agreement with the Greek retail giant Jumbo, a huge deal is now underway in the disc


The giant supermarket chain will acquire control of the household products chain for NIS 45 million • Eitan Yohannoff: "We want to reach every home"

  • Eitan Yohannoff.

    Acquires control of the "Cheap Stock" network

    Photo: 

    Yossi Zeliger

The stock industry is heating up: 

After the Fox group announced a franchise agreement with the Greek retail giant Jumbo, a huge deal is now underway in the discount chain industry - the Yochananoff chain acquires "Cheap Stock", the second largest chain in Israel.

Yohannoff acquires control (50.1%) of the Cheap Stock discount chain at a value of about NIS 90 million.

The Cheap Stock chain has over fifty stores across the country and is expected to expand to over 60 new stores by the end of May.

Yochananoff sees entering the field of products and home care as a significant opportunity for growth.

Yohananoff, a giant supermarket chain, entered into an agreement to acquire control (approximately 50.1%) of the Cheap Stock chain for NIS 45 million, at a value of NIS 90 million.

Cheap Stock, a chain of furniture, storage and home products, operates over 50 discount stores throughout the country and by May the company is expected to operate 10 more stores.

Cheap Stock is managed by Adir and Nono and Sahar Kochavi, who will hold approximately 49.9% after the acquisition (approximately 29.95% and 19.95%, respectively).

The purchase will be financed from Yochananoff's own sources.

The revenues of each Zul Stock group, including the revenues of franchised branches, in 2020 amounted to NIS 230 million.

Cheap Stock is a nationwide chain of stores selling retail products for the home and other products at competitive prices (discount).

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.

Cheap stock stores hold a permit and operate in an emergency, due to the fact that they sell essential products according to the definition of the Israeli government.

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 (a rate of 17% of sales). The net profit amounted to NIS 8.7 million in 2020.

According to Eitan Yohannoff, CEO of the Yohannoff chain: “The deal with Cheap Stock is part of the chain's strategic move to expand and reach every home in Israel through a launch activity for Yochannoff's food retail business.

We identify growth potential in the discount industry in Israel and the synergy between the companies' activities will create great value and improve the service experience for the customer.

In accordance with the company's vision, we expect to increase activity significantly and flood the value of Cheap Stock while examining market conditions with the intention of making a future IPO. "

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 Ltd., which owns and operates (through subsidiaries or franchisees) the chain of stores. The transaction is subject to its completion without exchange of shares 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 will purchase 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 (approximately 30%) and Sahar (approximately 19.9%) only.

Adir and Sahar will continue to manage the network and will be entitled to a grant for results.

The giant Yochananoff supermarket chain currently has 28 active supermarket branches nationwide, owned by the Yochananoff family, with the company expected to operate at least 35 branches by the end of 2021.

The supermarket chain includes a rich and diverse world of consumer products in its branches, and in each of the chain's branches, customers have an impressive supply of leading service departments in their field.

The chain, which began as a wholesale company in the 1970s when it was founded by Ilana and Mordechai Yochananoff, is managed and is still controlled by the Yochananoff family.

In 1992, the company began extensive retail operations and is managed by the Yochannoff family and maintains a family character led by CEO Eitan Yochannoff. 

Source: israelhayom

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