International and Israeli investors have agreed to acquire up to 21.5% of Phoenix Group Holdings, an Israeli financial group, from investment firms Centerbridge Partners and Gallatin Point.
The investment involves the sale of 4.95% of Phoenix shares to Affinity Partners, a global investment company headquartered in Miami.
Additionally, approximately 6.5% of the shares will be sold in off-market transactions to various international institutional investors, including Lazard Asset Management.
Affinity Partners has also committed to acquiring an additional 4.95% of Phoenix, pending regulatory approval. All transactions are priced at NIS 37.50 per share.
Jared Kushner, CEO and Founder, Affinity, commented: “We are excited to become significant shareholders in Phoenix. Affinity is long-term bullish on Israel because it is one of the fastest growing countries in the OECD, both in terms of population and GDP growth. We look forward to working closely with the company as it continues its journey toward becoming a globally recognised financial services provider.”
Concurrently, various agreements between the funds and Delek are being finalised, including the repayment of a loan related to the 2019 acquisition of the controlling stake from Delek. As part of this process, Delek will acquire a 4.99% stake in Phoenix at the agreed price of NIS 37.50 per share.
Following these transactions, Centerbridge and Gallatin Point, who took control of Phoenix in 2019, will retain approximately 10% ownership in the company.
Ben Langworthy, Senior Managing Director, Centerbridge and Lee Sachs, Co-Founder and Managing Partner, Gallatin, said: “The management team and employees of the Phoenix are among the best in the industry. We have been proud to work alongside them as they transformed Phoenix into one of the nation’s leading financial institutions.”
“We are excited that these transactions will further diversify the shareholder base of Phoenix. These transactions represent a significant vote of confidence in Phoenix and Israel, and the company’s excellent work over the past several years. We look forward to continuing to support the management team as they lead Phoenix to even greater heights.”
Phoenix, with over $130 billion USD under management, has been a trusted name in Israeli financial services for 70 years.
Its extensive market presence, serving half of Israel’s adult population, and strong financial performance, including a 15% return on equity and 19% annual growth in assets under management over the past five years, have been key factors attracting investor interest.
With Israel’s expanding population and GDP, coupled with management and investment partnerships, Phoenix is poised to maintain its leadership in the Israeli financial services sector.
CEO Eyal Ben Simon, Chairman Benny Gabbay, and other key directors will continue to lead Phoenix. The funds, in accordance with their holding permit, will gradually transition their affiliated directors off the board.
Ben Simon and Gabbay said: “Today signifies a significant milestone for Phoenix. Alongside Centerbridge and Gallatin, we have laid the strategic groundwork that has shaped Phoenix into a leading financial group in Israel, attracting interest from top international investors. We look forward to continuing to develop and grow the company, bringing it to new heights for the benefit of all our shareholders.”
Ben Simon and Gabbay, who recently made personal investments in Phoenix, along with other members of the management team, plan to increase their holdings in the future.
Jefferies served as the exclusive global coordinator, bookrunner, and financial advisor to Centerbridge and Gallatin Point throughout the transaction.
Fischer (FBC & Co.) and White & Case LLP provided legal counsel to the sellers. Gornitzky & Co. and McDermott Will & Emery acted as legal advisors to Affinity.
Mizrahi Tefahot Bank Ltd. acted as the lender to Centerbridge and Gallatin for their initial share purchase and also as the agent for this transaction.
