Following the exposure from the beginning of last week, the Ace home products chain (ACE) joins the stock exchange. The offering was led by the controlling shareholder Keren Kedma (98%), which offered it to the public in accordance with preliminary estimates, at a company value of NIS 400 million. The company is selling about 25% of its shares and as part of the allocation of institutional shares, they will also invest about NIS 50 million.
Recall that the IPO was launched after about two and a half years ago, the controlling shareholder declined its intention to issue an IPO.
The chain operates in the heat of retail, and operates 34 branches nationwide, operating under the ACE, Depot Auto and Electric Ace brands. The chain stores, market products for upgrading and maintaining the house, yard and vehicle.
In 2017, the chain was acquired by Keren Kedma from Electra Consumer for NIS 145 million, and at a company value of about NIS 190 million. About two and a half years ago, the fund operated to issue the chain on the Tel Aviv Stock Exchange at a value of NIS 330 million “before the money”. But the cold shoulder it received from investors led the fund to withdraw from the king. The fund has now received a boost following the corona crisis, both due to the improvement in results and due to the reality created in the markets. This time, as mentioned, the offering is underway.
But the company’s affair with the stock market began even earlier, and it has even traded on it in the past without much success. The chain was issued in 2007, but suffered weak results and heavy losses, which led it to freeze proceedings, resulting from heavy debts, until in 2014 it was put up for sale, and was finally acquired by Electra Consumer for NIS 129 million.
Improvement in third quarter results
The company ended the third quarter of 2020 with revenues of NIS 193.7 million, an increase of 29% compared to NIS 149.7 million in the corresponding quarter last year. Bottom line, the company reported a net profit of about NIS 13 million, a jump of about 160% compared to about NIS 5 million in the corresponding quarter last year.
Gross profit in the third quarter was NIS 81.6 million, an increase of 22% compared to NIS 66.7 million in the corresponding quarter last year. Operating profit amounted to NIS 20.2 million, an increase of 104% compared to operating profit of NIS 9.9 million in the corresponding quarter last year.
The draft prospectus published ahead of the IPO also shows that the company’s annual revenues for 2020 are expected to amount to NIS 660 million, a growth of about 15% compared to 2019, and that its net profit in 2020 is expected to amount to NIS 36 million.
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