Wesure group is continuing to deploy for completion of the deal for the acquisition of the Ayalon Holdings insurance group, and last week reported on the signing of amended agreements, running up to completion of the deal, with the Levy Rachmani estate’s executor and with Caesarea Medical Electronics (Caesarea), controlled by Tzvi and Anat Barak.

According to the updated agreement with the executor of the estate, agreement was reached, amongst other things, on a reduction of 10 million shekels in the consideration amount, to 462.7 million shekels, in consideration of which Wesure will acquire 67% of the Ayalon Group shares. According to the terms of the agreement, Wesure has so far paid an advance of 16 million shekels on account of the total consideration amount, and on fulfillment of the various pre-conditions, it will pay an additional 34 million shekels by May 10 2022 – and the balance on the updated completion date – June 30 2022.

Wesure director and founder Emil Weinschel: “We are continuing our deployment for completion of the deal for the acquisition of Ayalon, and we have accordingly signed an annex to the agreement with the executor. We are at the same time also acting with various financing parties to complete optimal financing to be used by Wesure in completing the transaction. We have also signed an updated agreement with our partners, Tzvi and Anat Barak, under which Caesarea Medical Electronics, which is owned by them, will carry out the entire investment in Wesure share capital, at a price of 6.3 shekels per share. We are very proud that the Barak family has become a very significant part of the group’s control core, amongst other things with a view to a long term, balanced, fruitful and successful partnership and as a real expression of faith in the Ayalon deal and in the company.

According to the updated agreement with Caesarea Medical Electronics, the company will carry out the entire investment totaling 270 million shekels in Wesure’s share capital, and not splitting the offer for the Ayalon shares as was previously agreed (one third in an allocation of Wesure shares and two thirds in an acquisition of Ayalon shares). The purpose of the update is to strengthen Wesure’s capital base and its financial flexibility and in addition, the creation of an identity of interests between the controlling shareholders, both in the activity of Wesure in Israel and in its planned expansion of activity abroad. The deal will also strengthen Wesure’s capital base, running up to completion of the Ayalon acquisition deal.

Correct as at the date of the report, the company is currently in discussions with a number of parties in order to complete the balance of the financing of the transaction optimally.

According to the terms of the updated agreement, Caesarea will invest the said sum in consideration of an allocation of 42.9 million Wesure shares, and it will be executed at a price of 6.3 shekels per Wesure share, reflecting a valuation of approximately 422 million shekels (before the money), a price which is 8% higher than the value at which Wesure’s IPO was carried out on the Tel Aviv Stock Exchange last March. Following the allocation of shares to Caesarea, Wesure’s equity will increase accordingly.

In addition, a joint control agreement in the company was signed between Wesure’s current controlling shareholder U. Digital, which is controlled by Emil Weinschel  and Nitzan Tzair Harim and Caesarea, regulating the relations between them with a view to enabling professional and fruitful focusing.

Within the framework of the updated agreements with the executor of the Rachmani estate, it was also agreed that the shareholders loan which was given to Ayalon Holdings in 2016 in an amount of 55 million shekels will be endorsed to Wesure. At the same time, the vendors will provide a vendors loan to Wesure in the same amount. These two loans, on which a guarantee has been also given by Caesarea, will be repayable over a period of five years in ongoing equal payments starting in September 2023.

The above transactions are subject the fulfillment of pre-conditions as set forth in the company’s announcements, including approval by the Capital Market, Insurance and Savings Commissioner. They are also subject to approval by the companies’ relevant organs.


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