Israeli private equity fund First Israel Mezzanine Investors Fund (FIMI) has increased its stake in Gilat Satellite Networks to 23.2%, making it the company’s largest shareholder.
FIMI signed an agreement with Gilat’s previous largest shareholder,…
Israeli private equity fund First Israel Mezzanine Investors Fund (FIMI) has increased its stake in Gilat Satellite Networks to 23.2%, making it the company’s largest shareholder.
FIMI signed an agreement with Gilat’s previous largest shareholder, hedge fund York Capital Management, to purchase 2,106,121 ordinary shares of Gilat at a price of US$5 per share, an 8% premium to the closing price of Gilat’s shares on the day prior to the purchase agreement announcement.
While FIMI has now increased its holding from 18.5% to 23.2%, York has seen its stake reduced to 14.5%.
According to the terms of the agreement, York will have a tag along right on sales of Gilat’s shares by FIMI for a period of four years from the date the agreement is signed.
FIMI first began amassing a position in Gilat in September 2012 when it bought Menorah Insurance company’s 10.5% stake for around NIS63m (US$18m). It quickly followed this in November with two more purchases of 4% each.
The investments are being made through FIMI’s fifth fund, which raised US$850m in 2012 and was the largest fund ever raised by an Israeli investment fund.
The private equity firm currently has two places on the Gilat board, Ishay David, the founder and chief executive of FIMI, and Amiram Boehm, a partner at the sponsor.
York has had an interest in Gilat since 2005 when it bought the company’s US$71.4m convertible loan that was owed to Bank Hapoalim. In September 2006 it converted the debt into a 33% stake but subsequently reduced this as part of Gilat’s secondary offering later that year.
