Markstone Capital Group agreed to purchase full control of the Steimatsky Group for an undisclosed amount, the investment firm said Sunday.
Market sources said that the deal had a value in excess of NIS 200 million, based on previous failed attempts to sell the bookstore chain.
Markstone, which will take over Steimatsky's operation in Israel and abroad, said it would not make any managerial or employee-related changes at the company when the deal closes.
"Ari Steimatsky will continue in his position of Chairman at the company, and Yehoshua Mazliach will remain the CEO," the fund said in a statement.
The companies were not available for comment and did not say when they expected the sale to go through.
Founded in 1925 by Yehezkel Steimatsky when he opened his first bookstore in Jerusalem, the company has grown to 150 stores today.
For Markstone, the deal is its first investment since raising $800m. at the beginning of October, making it Israel's largest private equity fund.
Until then, Markstone had raised approximately $700m. in funds earmarked for investments in Israel.
Run in Israel by its two managing directors and co-founders Ron Lubash and Amir Kess, and in the US by co-founder Elliot Broidy who serves as its chairman, Markstone's portfolio of investments includes a controlling stake in phone directory company Golden Pages, which it bought for NIS 500m. in October 2004 as its first investment. Subsequent deals included a 40% purchase of engineering company PRS Mediterranean for $100m. and 20% of textile company Nilit.
Last week, a court appointed arbitrator ruled in favor of Markstone to purchase seed and vegetable producer Zeraim Gadera, over a bid by Japanese seed producer Sakata for the company.
The fund's advisory board includes United Mizrahi Bank CEO Ya'acov Perry; former finance minister Ya'acov Neeman; Teva Pharmaceuticals CEO Eli Hurvitz; Lehman Brothers vice-chairman Harvey Krueger; and Home Depot founder Kenneth Langone.