Private equity firm Fortissimo Capital, which signed an agreement last month to buy a controlling stake in telecommunication company Cellcom from Discount Investment, has brought insurance group Migdal into the deal for a total of NIS 200 million.
Fortissimo is paying NIS 925 million for Discount Investment’s 35.6% holding in Cellcom. Of that amount, Migdal will invest NIS 150 million through a special purpose vehicle headed by Fortissimo and invested in by several investors, of which Migdal is the largest.
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Migdal already holds 7.9% of Cellcom, the largest stake held by a financial institution in the company, with a current value of NIS 200 million. After the investment alongside Fortissimo, its stake in Cellcom will rise to 14%. For Migdal, this is a passive investment, and it is not due to have any representation on the Cellcom board. Migdal will also inject NIS 50 million as an investment in the Fortissimo 6 fund.
The Cellcom deal is at a valuation of NIS 2.6 billion for the company. Cellcom’s market cap is approaching that valuation, and is currently at NIS 2.5 billion. Fortissimo is currently awaiting the required regulatory approvals to complete the deal.
Fortissimo, headed by Yuval Cohen, is one of the largest private equity firms in Israel. It was founded in 2004, and has so far raised $2.7 billion in six funds from investors in Israel, the US, and Europe.
Published by Globes, Israel business news – en.globes.co.il – on January 29, 2024.
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