Israeli Banks' Investment Arms Eye Stake in Adler Chomsky Ad Group
Translated & summarized from Calcalist by baba
Leumi Partners and Discount Capital are considering a joint investment of 30% in the Adler Chomsky advertising group, valuing the company at approximately 500 million shekels. The deal would involve purchasing shares from existing owners and injecting capital for the group's development. This move could be the start of a trend for financial institutions investing in the Israeli advertising sector, which has seen limited financial backing historically.
The story in 5 lines · by baba
- Leumi Partners and Discount Capital are exploring a joint 30% acquisition in the Adler Chomsky advertising group.
- The deal values the Israeli advertising firm at approximately half a billion shekels.
- The investment aims to provide capital for Adler Chomsky's development and allow existing shareholders to sell stakes.
- Eyal Chomsky is expected to retain controlling interest in the company.
- This investment could signal a new wave of financial backing for the Israeli advertising industry.
Leumi Partners and Discount Capital, the investment arms of Bank Leumi and Bank Discount respectively, are reportedly in discussions to acquire a combined 30% stake in the Adler Chomsky advertising group. The deal, which values the Israeli advertising firm at approximately half a billion shekels, would see each bank's investment arm purchase a 15% share. Eyal Chomsky is expected to retain controlling interest in the company. Victor Wekert leads Leumi Partners, while Michal Kessous Herzog manages Discount Capital.
The proposed transaction involves both injecting new capital into the group for its development and purchasing shares from existing shareholders, including Chomsky and other minority stakeholders and executives. This structure aims to provide Adler Chomsky with funds for future growth while allowing current owners to partially divest their holdings. The exact investment amount and the split between capital infusion and payments to existing shareholders have not yet been disclosed.
Currently, Chomsky holds about 70% of the company, with the remainder owned by executives and partners in subsidiaries. Post-acquisition, Chomsky's stake would likely decrease to around 50%, with executives and partners collectively holding approximately 20%. The deal also presents an interesting dynamic as Discount Bank is a client of Adler Chomsky, while Bank Leumi's advertising budget is handled by McCann Tel Aviv, a competitor. McCann Tel Aviv is fully owned by the US-based Omnicom Group, which does not take on local partners, making Adler Chomsky, one of the few remaining Israeli-owned advertising groups, an attractive investment target for financial institutions looking to enter the sector.
Adler Chomsky, founded in 1996 by Reuven Adler and Eyal Chomsky, has grown into a group with numerous subsidiaries and approximately 400 employees. Its major clients include Discount Group, Bezeq, and The Phoenix. The Israeli advertising market is projected to reach about 4.9 billion shekels by 2025, with digital advertising experiencing significant growth. This potential investment could signal a broader trend of banks and institutional investors entering the advertising industry, which has historically attracted limited financial investment.