G. Willi-Food International, the Israeli-based kosher food importer and supplier, has joined forces with the Baron family, kosher food exporters, to form a joint global kosher trade and export company, which it says will enhance its international trade capabilities.
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G. Willi will hold a 50.1% stake in the new company, with the Baron family controlling the remaining equity. Under the terms of the agreement, all of the current food export operations of the Baron family will be executed under the new entity. These comprised the export of kosher products from more than 100 suppliers, predominantly from Israel, to the US, Canada, England, Belgium, France, Switzerland, Australia, South Africa, Mexico, Argentina and Chile.
The product categories Baron dealt in include confectionery, preserves, cakes and cookies, snacks, cereals, frozen pastries and ice creams, baby food and general grocery items.
“We are very excited about this opportunity,” said Willi-Food president and chief operating officer Zwi Williger. “The transaction will significantly expand our geographic reach through the addition of several export markets as well as increase our penetration into the US market and complement our recent acquisition of Laish. We will also benefit from a wider overall product offering and new supplier relationships.”
The new company is expected to turn over around US$10.0m in 2007. In consideration for the 50.1% interest, Willi-Food is to pay up to $2m in trade financing, as required. Of this amount, an amount equal to two times net profit before tax during the first four full consequtive quarters (after closing) will be converted into equity, up to a maximum amount of $1m, G. Willi-Food said.
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By GlobalData“We are delivering on our expansion strategy,” Williger added. “This deal provides multiple outlets for future growth by extending Willi-Food’s international market reach and by adding another dimension to the business.”
