FIMI Opportunity Funds yesterday sold its remaining 15% stake in Novolog Pharm-Up 1966 Ltd. (TASE: NVLG) at NIS 1.25 per share for NIS 67 million, a 2% premium on yesterday’s closing price for the share. Novolog, led by CEO Eran Taus, provides logistics and distribution services for drugs and medical accessories. The company held its IPO on the Tel Aviv Stock Exchange (TASE) in February 2017 through an offer for sale by its owners, FIMI and Ehud Pozis. Novolog’s share jumped 5% in trading today on the TASE, but its share price has declined 15% since the IPO, pushing the company’s market cap down to NIS 450 million.
Most of the shares sold were purchased by investor and businessperson Mori Arkin (9%) and Pozis, who bought 3.9% of the company’s shares, thereby increasing his holding to 39% of Novolog’s capital. Eli Dahan, who recently sold control of two companies to Novolog, bought 1.2%, and other investors 1%.
FIMI, led by Ishay Davidi, acquired 50% of Novolog’s shares from Pozis in November 2013 for NIS 80 million. FIMI improved the company by moving it to a new site in Modi’in, acquiring new international activities, and acquiring a number of companies with complementary activity.
Three and a half years after FIMI’s investment, the company held an IPO on the TASE in which 35% of the company’s share capital was sold for NIS 185 million. Novolog also distributed tens of millions of shekels in dividends in recent years. Taking this into consideration, FIMI made back its investment 3.5 times, reflecting a 45% internal rate of return (IRR).
Taus said, “In addition to Arkin’s investment, the shares purchased by current controlling shareholder Ehud Pozis and Eli Dahan, our business partner in two subsidiaries, constitute concrete evidence for us of the company’s great potential.” Arkin added, “We found in Novolog a rare combination of a solid and developing economic base in drug distribution and powerful growth engines in home medical treatment that reduces the burden on the medical system and hospitals. We also believe that in the future, the knowledge and experience acquired by Novolog in this sector can be applied in other markets around the world.”
Acquired Infomed and Target Care from Dahan
Last November, Novolog acquired 51% of the Infomed medical website from Dahan for NIS 6 million, reflecting a NIS 12 million company value. Infomed is a digital platform for medical information for the general public and digital solutions for doctors. It runs a website containing a comprehensive medical encyclopedia and indices of doctors, therapists, diseases, etc.
Although Infomed’s public activity is a content portal with advertisements from medical companies, its revenue is based mostly on its index of doctors, which constitutes a platform on which doctors can market themselves within the framework of regulatory restrictions on their advertising. Infomed also manages the digital reputation of doctors, promotes search engines, writes and creates content for medical groups outside the portal, etc.
Novolog reported another acquisition from Dahan last month – 51% of Target Care Health Services for NIS 15.2 million. Target Care develops systems for procuring medical equipment, operates and provides medical services, and clears claims for health institutions. The company’s operating profit totaled NIS 3.6 million in 2018.
Novolog’s revenue grew 8.5% to NIS 911 million in 2018. Its operating profit was up 2.3% to NIS 31.4 million, but its net profit dipped 2.5% to NIS 22 million.
FIMI, founded in 1996, has acquired control of 89 companies to date and sold 59 of them in deals totaling over $5.5 billion. Companies currently under its control have over 30,000 employees. FIMI operates in 50 enterprises in Israel, plus dozens of enterprises and companies abroad.
Published by Globes, Israel business news – en.globes.co.il – on April 4, 2019
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