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G. WILLI-FOOD INTERNATIONAL SIGNS BINDING LETTER OF INTENT
TO PURCHASE MAJORITY INTEREST IN ISRAELI MEDITERRANEAN
FOOD MANUFACTURER
YAVNE, ISRAEL - NOVEMBER 2, 2007 - G. WILLI-FOOD INTERNATIONAL LTD. (NASDAQ:
WILC) (THE "COMPANY" OR "WILLI FOOD"), one of Israel's largest food importers
and a single-source supplier of one of the world's most extensive range of
quality kosher food products, today announced that it had signed a binding
letter of intent to form a new joint company ("NewCo") with the owners of Shamir
Salads (2006) Ltd. ("Shamir Salads"), an Israeli manufacturer and distributor of
pre-packaged chilled kosher Mediterranean dips and spreads in Israel and
abroad,.
Under the terms of letter of intent, all of the present activities of Shamir
Salads are to be performed through the new entity NewCo. Willi Food would hold a
51% interest in NewCo, and the current owners of Shamir Salads would hold the
remaining interest. Alternatively, in its sole discretion, Willi Food would buy
51% interest in Shamir Salads on a fully diluted basis after receiving full
indemnification from the owners of Shamir Salads for the period before the
closing. The closing of the transaction is planned to be completed by early
2008, but closing is subject to completion of legal, financial and business due
diligence, Willi Food board approval and Israeli antitrust approval. There is no
guarantee that the transaction will in fact close.
In consideration for the 51% interest in NewCo (or in Shamir Salads, as the case
may be), Willi Food would pay to the owners of Shamir Salads an amount equal to
2.55 times NewCo's net profit after all applicable taxes, as determined in
accordance with NewCo's audited financial statements for the year 2008 (but in
any event not less than the advance payment). The consideration would be payable
by Willi Food within 14 days following the publication of the audited financial
results of NewCo for 2008. A non-refundable advance payment of NIS 5 million
(USD 1.25 million) would be made; however, the advance payment would be less in
the event Shamir Salads' financial results do not meet expectations for the
August-November 2007 period. In addition, a loan for the amount NIS 1.5 million
(USD 375,000) would be paid at closing. The loan would bear an interest rate of
Israeli prime + 3.5% per year and would be payable within 14 days following the
publication of the audited financial results of NewCo for 2008.
The current owners of Shamir Salads would be appointed as joint Chief Executive
Officers of NewCo for a term of at least three years. Willi Food would appoint
the Chairman and the Chief Financial Officer of NewCo. So long as the ownership
of NewCo does not change, the owners of Shamir Salads and Willi Food would each
appoint an equal number of directors in NewCo. Willi Food would have "effective
control" over NewCo.
Mr. Zwi Williger, President and COO of Willi Food commented, "The growth and
popularity of Mediterranean style foods has grown beyond ethnic food borders and
into the diet of mainstream consumers. Shamir Salad's line of kosher
Mediterranean hummus, dips and spreads, appetizers and gourmet specialties are
in line with Willi-Food's core kosher and healthy living businesses."
"The acquisition of Shamir Salads adds additional items to our growing line of
products. Shamir Salads is currently exporting product to countries in North
America and Europe, and we believe that Willi Food can increase the demand and
scale of export of products into these regions. Since our new logistic center
has roughly four times the capacity of our formerly leased warehouses, we are
prepared to aggressively launch new products into the regions in which we
currently operate, as well as Russia, where we expect to make inroads in 2008."
concluded Mr. Williger.
ABOUT G. WILLI-FOOD INTERNATIONAL, LTD.
G. Willi-Food International Ltd. is one of Israel's largest food importers and a
single-source supplier of one of the world's most extensive ranges of quality
kosher food products. It currently imports, markets and distributes more than
400 food products manufactured by some 100 top-tier suppliers throughout the
world to more than 1,700 customers. Willi Food excels in identifying changing
tastes in its markets and sourcing high-quality kosher products to address them.
The Company's Gold Frost Ltd. subsidiary develops and distributes kosher chilled
and frozen dairy food products internationally, while its Laish Israeli
subsidiary and joint venture with the Baron Family engage in the global import,
export and distribution of kosher products worldwide. For more information,
please visit the Company's website at www.willi-food.co.il.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
RELATING TO FUTURE EVENTS OR OUR FUTURE PERFORMANCE, SUCH AS STATEMENTS
REGARDING TRENDS, DEMAND FOR OUR PRODUCTS AND EXPECTED REVENUES, OPERATING
RESULTS, AND EARNINGS. FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN
RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS
OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY
FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR
IMPLIED IN THOSE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS
INCLUDE BUT ARE NOT LIMITED TO: CHANGES AFFECTING CURRENCY EXCHANGE RATES,
INCLUDING THE NIS/U.S. DOLLAR EXCHANGE RATE, PAYMENT DEFAULT BY ANY OF OUR MAJOR
CLIENTS, THE LOSS OF ONE OF MORE OF OUR KEY PERSONNEL, CHANGES IN LAWS AND
REGULATIONS, INCLUDING THOSE RELATING TO THE FOOD DISTRIBUTION INDUSTRY, AND
INABILITY TO MEET AND MAINTAIN REGULATORY QUALIFICATIONS AND APPROVALS FOR OUR
PRODUCTS, TERMINATION OF ARRANGEMENTS WITH OUR SUPPLIERS, IN PARTICULAR ARLA
FOODS, LOSS OF ONE OR MORE OF OUR PRINCIPAL CLIENTS, INCREASING LEVELS OF
COMPETITION IN ISRAEL AND OTHER MARKETS IN WHICH WE DO BUSINESS, CHANGES IN
ECONOMIC CONDITIONS IN ISRAEL, INCLUDING IN PARTICULAR ECONOMIC CONDITIONS IN
THE COMPANY'S CORE MARKETS, OUR INABILITY TO ACCURATELY PREDICT CONSUMPTION OF
OUR PRODUCTS AND RISKS ASSOCIATED WITH PRODUCT LIABILITY CLAIMS. WE CANNOT
GUARANTEE FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS. THE
MATTERS DISCUSSED IN THIS PRESS RELEASE ALSO INVOLVE RISKS AND UNCERTAINTIES
SUMMARIZED UNDER THE HEADING "RISK FACTORS" IN THE COMPANY'S ANNUAL REPORT ON
FORM 20-F FOR THE YEAR ENDED DECEMBER 31, 2006, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THESE FACTORS ARE UPDATED FROM TIME TO TIME THROUGH THE
FILING OF REPORTS AND REGISTRATION STATEMENTS WITH THE SECURITIES AND EXCHANGE
COMMISSION. WE DO NOT ASSUME ANY OBLIGATION TO UPDATE THE FORWARD-LOOKING
INFORMATION CONTAINED IN THIS PRESS RELEASE.
COMPANY CONTACT:
G. Willi Food International Ltd.
Gil Hochboim, Vice President
(+972) 8-932-1000
gil@willi-food.co.il
IR CONTACT:
The Global Consulting Group
Christopher Chu
(646) 284-9426
cchu@hfgcg.com