Following the Shlomo Group’s immediate report to the Tel Aviv Stock Exchange dated September 29, 2020 regarding preliminary negotiations with Thelma Travel and Tourism Ltd. for the acquisition of Thelma’s tourism operations, the group announces this morning an agreement to acquire 50% of Thelma’s tourism operations.
Under the agreement, the Shlomo Group will acquire 50% of the issued and paid-up capital of a new company established near the conclusion of the agreement – “Thelma-Shlomo” – and which is currently held by Thelma. “Thelma-Shlomo” will include the assets of Thelma’s business activities and related companies in the field of tourism, hotels, travel and flights (“the transferred activity”), while the transferred activity will not include the obligations of the Thelma Group to any third parties created until the date of completion of the transaction. In addition, “Thelma-Shlomo” will hold companies from the Thelma Group operating in the field of tourism, which were held by Thelma and the controlling shareholder in Thelma prior to the date of completion of the transaction.
In exchange for the sale of the shares, Shlomo Group will pay Thelma an immediate consideration in the amount of NIS 36 million, subject to the fulfillment of the conditions precedent for the completion of the transaction. Prior to the date of signing the agreement, Shlomo Group provided Thelma with loans in the amount of NIS 15.5 million, which will be repaid before the consideration is paid.
In addition, on the date of completion, the Shlomo Group will make a loan to Thelma in the amount of NIS 3 million for a period of 3 years, at the end of which, the loan will be repaid in cash or converted to Thelma-Shlomo shares or subject to the financial results of Thelma-Shlomo activities.
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In addition, subject to and in accordance with the financial results of Thelma-Shlomo in 2022 and 2023, the Shlomo Group will pay an additional contingent future consideration, in accordance with an agreed mechanism based on a net profit multiplier in Thelma-Shlomo in the said years.
It was agreed between the parties that Assi Schmelzer (Chairman of the Shlomo Group) and Erez Shmul (Chairman of Thelma Tourism and Travel) will serve as co-chairmen and that the CEO of “Thelma-Shlomo” Aya Magen, who served until Today as CEO of Thelma Tourism.
Completion of the transaction is subject to a number of conditions precedent, including the receipt of regulatory approvals, including the approval of the competition commissioner.
The attorneys who handled the transaction on behalf of the Shlomo Group are Adv. Erez Altit and Elon Stamri from the firm of Goldfarb Seligman & Co. and on behalf of Thelma, Adv. Shirley Katzir and Zohar Liss from the firm of Fischer-Bachar-Chen-Wall Orion & Co.
The Shlomo Group, founded 45 years ago by the late Shlomo Schmelzer, began its career as a car rental company leasing and providing services to vehicles. Schmelzer’s financial vision and deep economic understanding have led the group to success and constant growth, and today it is one of the leading investment groups in Israel. In addition to being the leading company in Israel in the field of automotive services, with a fleet of approximately 75,000 vehicles, the group has investments in various industries. Shlomo Group includes Shlomo Holdings, Afcon Holdings Group, Israel Shipyards, Real Estate Business, Gold Bond / Country Group – Container and Cargo Terminal, Tadiran Telecom and Shlomo Insurance. The group is headed by Asi Schmelzer, Chairman of the Shlomo Group.
Thelma Tourism Group owned by Erez Shmol is one of the largest tourism groups in Israel with multiple investments in the field of travel, business tourism, global wholesale, and more. The group has more than 3,000 business customers and before the outbreak of the Corona crisis, it employed about 500 employees, most of whom are currently in the IDF. Thelma’s profit before tax (which constitutes the bulk of the acquired activity) in 2019 amounted to approximately NIS 15.6 million. These data reflect Thelma’s activities before the outbreak of the Corona epidemic crisis, which significantly affected the tourism industry in Israel and around the world and as a result of which the Thelma Group’s activity in 2020 was significantly affected.