girl reading book 370.
(photo credit: Marc Israel Sellem)
Steimatzky, Israel’s largest book chain, was rescued from near bankruptcy on Wednesday when Arledan Investments agreed to buy the cashstrapped company from Markstone, the private equity group that bought it in 2005.
Arledan CEO Tzali Reshef called the acquisition “a strategic step,” and said he “believes in Steimatzky and its employees, and will continue to develop the chain.”
The value of the deal was not publicized and the acquisition’s finality is subject to regulatory approval and due diligence by Arledan.
Markstone’s chairman, former UN ambassador Dan Gillerman, resigned over the group’s inability to support companies in its portfolio.
Steimatzky’s CEO Iris Barel, however, will stay on.
In a letter, she promised employees that Arledan would work to “consolidate the company’s position as the country’s leading bookseller and content provider, and will continue to develop its business in the coming years.”
The fate of the financially fraught book retailer, which alongside its fiercest competitor Tzomet Sfarim controls the vast majority of the country’s book market, has been in question in recent weeks.
In early April, Markstone had to inject money into the chain just to ensure that it could pay its suppliers. The next day, Bank Hapoalim foreclosed on NIS 125 million of its assets to recover part of the roughly NIS 140m. it is owed in loans. The bank extended the company’s credit line by some NIS 4m. to allow it to stay open for a few months.
According to Globes, Steimatzky has over NIS 350m. in debts, a deficit of NIS 166m., and is losing “tens of millions of shekels” annually. Markstone bought the company in 2005 for $55m. from Eri Steimatzky, whose father Yechezkel founded the company in 1925.
A possible deal to sell the chain to Yediot Books reportedly fell through when Markstone manager Amir Kess died in a bicycling accident on his way to work on April 3. Several other groups were in talks to buy it as well.