Technology-focussed private equity firm Viola Group is moving to acquire a significant stake in Israeli satellite transmissions business RRSat Global Communications.
Through a series of share purchase agreements in early April, Viola acquired a 20%…
Technology-focussed private equity firm Viola Group is moving to acquire a significant stake in Israeli satellite transmissions business RRSat Global Communications.
Through a series of share purchase agreements in early April, Viola acquired a 20% holding in the company. It has entered into further agreements which could see it hold around 36% of RRSat’s share capital.
The initial transactions saw Viola acquire a 7% stake (1,214,259 shares) from RRsat’s founder, director and former CEO David Rivel and a 13% holding (2,255,053 shares) from one of the company’s principal shareholders Kardan Communications. Viola paid US$8 per share for the stakes valuing them at approximately US$9.7m and US$18m respectively.
Viola is also has a proxy vote to purchase both Rivel and Karden remaining 5% and 11% shareholdings raising its overall stake to 36%.
Viola made its purchases through three funds, Viola Private Equity, Viola Credit (previously Plenus Ventures) and VP Partners.
As part of the transaction, Viola has signed a joint control agreement with RRSat’s principal shareholder Del-Ta Engineering, which owns 39.26% of the company. This will see both investors each nominate four directors to the board, alongside one independent director, adopt a dividend policy to distribute 50% of the RRSat’s net income, and amend the articles of associations so a majority vote of 70% is required for specified material matters such as acquisitions and share offerings.
Commenting on the investment, Harel Beit-On, founder and general partner at Viola, commented: “we see great potential in RRsat. The cooperation between the Viola Group Funds allow us to purchase a meaningful stake in the company. Led by a seasoned management team, the company has demonstrated operating excellence and financial resilience. Its business model may serve as an attractive platform for organic and non-organic growth. We look forward to developing the company in cooperation with the existing shareholders.”
Avi Cohen, RRsat’s chief executive, added: “These agreements represent a significant vote of confidence by a leading private equity investment group and helps improve the diversification of our shareholder base.”
