Apax signs deal to buy control of Israel’s Psagot

Private equity firm Apax Partners has signed a deal to buy a majority stake in Psagot, Israel’s largest investment house, from shareholders led by York Capital Management.

Apax said the deal was subject to regulatory approval. Psagot told the Tel Aviv Stock Exchange in a statement that the deal was signed on December 11.

A financial source in Tel Aviv told Reuters on December 10 that Apax would buy a 76% stake in Psagot from York in a deal that valued the brokerage at 3.1bn shekels (US$822m).

“This is a company that we have been tracking for some time, and we are delighted to have the opportunity to support a very strong management team in its next phase of growth,” Zehavit Cohen, head of Apax Israel, said in a statement.

It remains unclear whether Markstone Capital, which owns the remaining 24%, will choose to sell its stake. A spokesman for Markstone declined comment.

York bought 100% of Psagot, which manages assets of 122bn shekels, three years ago from Bank Leumi for nearly US$300m.

York now holds 57% of Psagot and is expected to post a capital gain of about 1bn shekels from the sale, the source told Reuters on Thursday.

Apax’s assets in Israel include a stake in Tnuva, Israel’s largest foodmaker.

Apax and two other partners agreed in October to sell their 30.6% stake in Bezeq Israel Telecom, Israel’s largest telecom group, to 012 Smile Communications for 6.5bn shekels (US$1.72bn).

Markstone is a US-Israeli investment fund whose former chairman Elliot Broidy pled guilty last week to a felony charge for bribing four senior officials who managed New York State’s pension fund.