Menorah acquires ERN in NIS 600m deal

Menorah, which until now held a 40% share of the company's shares, will increase its holdings by an additional 30% to 70%. 

 Menorah Insurance Company (photo credit: Wikimedia Commons)
Menorah Insurance Company
(photo credit: Wikimedia Commons)

Insurance companies deepen their activities in the financial system.

After Phoenix acquired control of the Gamma Management and Clearing company, and after Clal has sought control of the Max credit company and is waiting for approval of regulation, it was Menorah Mitvachim's turn.

The company acquired control on 11/09 of ERN for NIS 600 million. Menorah, which until now held a 40% share of the company's shares, will increase its holdings by an additional 30% to 70%. 

The net profit for this move will be NIS 80-100 million. ERN is growing and soon its shares will be listed on the stock exchange. ERN guarantees checks, provides standing orders for businesses and gives companies loans through its subsidiary Maimon Baklik.

In 2016 Menorah first bought 40% of ERN for NIS 250 million. For this deal, Menorah will invest an additional NIS 60 million in the company at a value of NIS 600 million and at the same time will purchase an additional 15% from Roni Nathanson, the previous controlling owner, for NIS 90 million. 

 Israeli money bills. (credit: PIXABAY) Israeli money bills. (credit: PIXABAY)

Also, Menorah will exercise an option to buy an additional 10% from Nathanson under a 2016 investment agreement for NIS 38.5 million.

After the transaction, Menorah's holdings will increase to 70% of the company and the Nathanson family will retain 30%. 

What are the management changes?

Roni Nathanson will continue to be the company chair for the next five years and Shai Preminger will be general manager. Menorah intends to issue ERN on the stock exchange at a value of NIS 600 million. 

ERN ended 2021 with revenues of NIS 144 million and a profit of NIS 34 million, which increased by 68% compared to 2020.

The company employs 230 people and operates in 15,000 sales points, with transactions amounting to NIS 5.6 billion. Their credit portfolio equaled NIS 1.3 billion in the first half of 2022.

Ari Kalman, CEO of Menorah stated that the agreement between Menorah, Roni Nathanzon and ERN is a winning connection that has proven itself in recent years. The strengths will lead the company to further business activities and success with impressive growth and profitability.