ISRAEL: G Willi-Food signs joint venture deal
G. Willi-Food International said today that its Gold Frost Ltd. subsidiary has signed a deal with the owners of a Denmark-based manufacturer of kosher dairy products to form a joint company.
Under the terms of the deal, Gold Frost would hold a 51% interest in the new company and the owners of the distributor would hold the remaining interest.
The closing of the transaction is subject to completion of legal, financial and business due diligence and final Gold Frost board approval and is scheduled to be concluded by early 2008. There is no guarantee that the transaction will close, a statement said.
According to the release, the distributor - which was not named - is a global distributor of both kosher and non-kosher dairy food products.
As part of the transaction, the distributor will transfer US$200,000 to the new company as well as 35 customers from 15 countries worldwide, including a US import licence, which is expected to generate US$4.3m in revenues for 2007.
The new company would be granted the exclusive right to use the distributor's trademarked brand name in sales and marketing of kosher products. The distributor would retain the right to use its trademarked brand name for non-kosher dairy products. It is intended that ultimately the new company would seek to broaden its penetration into the kosher European and North American markets.
In consideration for the 51% interest in the new company, Gold Frost will pay at the closing US$400,000 to the distributor. In addition, Gold Frost will pay the new company, after the publication of its 2008 audited financial statements, a capital equivalent of three times the new company's net profit after taxes from its first four quarters of operation, not to exceed US$150,000, multiplied by 51%.
Zwi Williger, president and COO of Willi Food said: "We believe that this is an excellent opportunity for Gold Frost to expand its international reach and increase market penetration. Willi Food also announced yesterday the acquisition of a Russian dairy manufacturer. These combined transactions strengthen our ability to source unique kosher foods and dairy products and broaden the distribution platform for our premium brand of products worldwide. In addition the transaction would secure for Gold Frost a US import licence, a vital component for the launch of a future US dairy strategy. Our goal remains unchanged - to be the premiere global manufacturer and distributor of innovative kosher foods worldwide."
Companies: G. Willi-Food International
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