Business in Brief: November 29

Strauss Coffee buys Russia’s Le Café; Viola invests $27m. in Degania Silicone; Hapoalim’s Adabank bid rejected; gasoline prices to rise again.

By GLOBES
Strauss Coffee buys Russia’s Le Café • By YAEL GRUNTMAN
Strauss Group Ltd. subsidiary Strauss Coffee BV has acquired the Le Café label, sold in Russia and CIS countries, for $37 million. Le Café also sells non-branded instant coffee in Russia and CIS countries. Le Café had $16m. in sales in January-September 2010, compared with $23m. in all of 2009.
Strauss Coffee also acquired 51 percent of Le Café’s shares for $6m. Le Café owns buildings, warehouses and other real-estate properties, which will serve as Strauss Coffee’s logistics center in Russia and for the construction of a coffee-products factory. Strauss Coffee will invest an additional $6m. in 2011-12 in the construction.
“This acquisition is another step in the company’s growth strategy in Russia,” Strauss CEO Gadi Lessin said. “The company’s business in Russia has grown over the past four years, due to acquisitions and organic growth that has turned Strauss Coffee Russia from a $20 million company at the end of 2007 to a $160 million company following the latest acquisition.”
Viola invests $27m. in Degania Silicone • By TALI TSIPORI
Viola Private Equity has invested in Degania Silicone Ltd., a manufacturer of high-quality silicone products, controlled by Kibbutz Degania B. The investment was the latest in a series of deals for kibbutz companies, following the sale of Shamir Optical Industries Ltd. to France’s Essilor International S.A. Viola acquired 40 percent of Degania Silicone for $27 million, giving a company value of $68m. (NIS 243m.), after money. Most of the shares were bought from Kibbutz Degania B, which will report a large capital gain, and will own 36% of the company after the sale.
Kibbutz Degania B has a population of 510: 220 members, 70 children, with the rest soldiers and residents and their children. Degania Silicone is the kibbutz’s most important factory, alongside Degania Sprayers Company Ltd., a manufacturer of agricultural and industrial sprayers, and Deganit B&B. Other shareholders in Degania Silicone after Viola’s investment include 20% held by IGI, a private-equity unit of BRM Capital, and Degania Silicone managing director Amos Nahir, with 4%.
Hapoalim’s Adabank bid rejected • By ERAN PEER
Bank Hapoalim’s attempt to solve the problem of its Turkish subsidiary BankPozitif Credi Ve Kalkinma Bankasi AS’s lack of a deposit permit has failed. Turkey’s Savings Deposit Insurance Fund (TMSF) canceled the tender for Adabank after the sole bid by Bank Hapoalim, $42 million, was declared too low. TMSF set a $90m. target price for Adabank, reflecting a return on equity of 2.5 for the bank.
Bank Hapoalim’s bid reflected a return on equity of 1.2.
Bank Hapoalim wanted to acquire Adabank, a small bank that was nationalized seven years ago, because it has deposits from the public permit. Bank Hapoalim planned to merge it with BankPozitif, which can only expand by increasing its equity basis because it lacks deposits from the public permit. As a result, BankPozitif is stagnating and its return on equity is low. Acquiring a bank such as Adabank, which has a deposits from the public permit, would solve this problem. Bank Hapoalim acquired the 69.8 percent controlling interest in BankPozitif four years ago.
Gasoline prices to rise again • Globes correspondent
The maximum price of gasoline, controlled by the government, will rise again, according to the fuel prices for December announced Sunday by the National Infrastructures Ministry. At midnight Tuesday, the price of self-service unleaded 95-octane gasoline will rise 1.36 percent to NIS 6.71 per liter from NIS 6.62. The price of gasoline in Eilat (which is VAT-free) will rise to NIS 5.80 per liter.
The National Infrastructures Ministry said the price hike is due to $0.01 per liter (2.52%) rise of CIF La Vera trade prices for fuels in the Mediterranean basin. In addition, the shekel-dollar exchange rate rose 0.88% in November.
Taken together, the price of gasoline rose 3.4%, or NIS 0.09 per liter, in November. The full-service fee at gas stations will remain unchanged at NIS 0.13 per liter.
Africa-Israel Investments rises 6.5%
The TA-25 Index was little changed on Sunday, declining less than 0.1 percent to 1,262.18 at the 4:30 p.m.
close in Tel Aviv. Investors traded about NIS 1.08 billion in shares and convertible securities.
Africa-Israel Investments, Lev Leviev’s holding company, increased 6.5% after it posted third-quarter net income of NIS 651,000, compared with a loss of NIS 348 million in the same period last year.
Teva Pharmaceutical Industries rose 1.7% after Europe’s drug regulator set out guidelines for copying some of the most expensive biotechnology medicines, giving companies such as Teva access to a $36.4b. market.
Zerah Oil & Gas Exploration advanced 1.3% after it received approval for extending its Zurim drilling license until the end of 2011. • Bloomberg