Diplomat Expands to Mexico, Acquiring Stakes in Two Companies for $37 Million
Translated & summarized from Calcalist by baba
Food importer Diplomat is expanding into Mexico by acquiring a 60% controlling stake in two local companies for 142 million shekels. The deal price was reduced due to the target companies' declining profits. Diplomat plans to leverage its global network and operational expertise to grow the acquired businesses, making Mexico its eighth international market. This expansion follows a recent bond issuance and a new distribution agreement.
The story in 6 lines · by baba
- Diplomat is acquiring a 60% controlling stake in two Mexican companies for 142 million shekels.
- The acquisition price was reduced by 40% from the initial agreement due to profit declines.
- Mexico will become Diplomat's eighth international market after the deal's completion.
- The acquired companies distribute food, personal care, and beauty products in Mexico.
- Diplomat plans to enhance sales and operational efficiency through strategic initiatives.
- The deal follows Diplomat's recent 300 million shekel bond issuance.
Diplomat, a food and consumer goods importer, is expanding its global presence by acquiring a controlling stake in two Mexican companies. The deal, valued at 142 million shekels (approximately $37 million), involves purchasing 60% of each company. The final price was reduced by about 40% from the initial memorandum of understanding signed in March, reflecting the acquired companies' net profit decline in 2025 and net debt.
Diplomat currently operates in seven countries: Israel, South Africa, Georgia, New Zealand, Cyprus, Greece, and Romania. Mexico will become the eighth country in its operational portfolio upon completion of the transaction. The two target companies have a long history in the Mexican consumer market, distributing food, personal care, cleaning, health, and beauty products to various retail and wholesale clients.
Financial details reveal that one acquired company saw its sales grow 13% to 1.2 billion Mexican pesos in 2025, but its net profit dropped 36% to 42 million pesos. The second company experienced a 2% sales increase to 634 million pesos, with its net profit falling 16.4% to 36.7 million pesos, despite a 17.2% rise in operating profit.
Following the acquisition, Diplomat plans to implement business strategies to boost sales, leveraging its global supplier connections and exploring local mergers and acquisitions. The company also intends to enhance operational efficiency through technology integration and process improvements in sales and operations.
Yaron Blum, CEO of Diplomat Group, stated that the acquisition is a significant step in the company's global expansion, aligning with its strategy to enter new markets and diversify revenue streams. He expressed confidence in the Mexican market's potential and believes the synergy between the acquired companies' infrastructure and Diplomat's expertise will accelerate growth and create substantial value.
This move into Mexico follows Diplomat's recent completion of a 300 million shekel bond issuance and a distribution agreement with JTI, a tobacco and smoking products marketer, set to begin in February.