Fortissimo Capital will acquire telecommunications services company Leadcom Integrated Solutions Ltd. for $23 million, four years after the company's financial collapse. On Wednesday, the company's receiver, Adv. Ofer Shapiro, filed the private equity fund's offer with the Tel Aviv District Court for approval.
When the deal is closed, Fortissimo will pay $15 million for Leadcome's assets, and will pay $5 million a year after the closing, and a further $3 million a year after that. The deal is subject to certain conditions.
Leadcom's creditors - Bank Hapoalim (TASE: POLI), Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT), and First International Bank of Israel (TASE: FTIN) - will receive more than NIS 80 million from the sale, in addition to payments previously received from Leadcom's receiver. The banks have agreed to the sale.
Before its collapse, Leadcom provided telecommunications integration services in over 40 countries. It currently has almost 800 employees, and operates in Central and South America, Africa, India, and Nepal. The company was founded in 1982 by the Fore Group Management and Investments Ltd., owned by Moshe and Eli Shushan. It raised $18 million at a company value of $60 million in its IPO on London’s Alternative Investment Market (AIM) in 2005. The company's market cap peaked at $150 million. The Fore Group sold its 42% stake in the company a year after the IPO for $53 million. In late 2008, the company raised $30 million in bonds on the Tel Aviv Stock Exchange (TASE).
Leadcom collapsed shortly afterwards, because of too rapid growth and a lack of control of expenses. The company was unable to secure credit because of the global financial crisis, nor could it collect payment for its projects. Shapiro was appointed receiver in November 2009, after Leadcom's employees petitioned the court to liquidate the company, after it failed to meet a debt settlement on its $70 million debt to the banks and bondholders.
Leadcom subsequently completed a recovery plan. The motion filed with the court states that it had more than $80 million revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) of $9.5 million in 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2014
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