Fortissimo Capital to Acquire Control of "Cellcom" in Landmark NIS 2.6 Billion Deal

In a significant development within the Israeli communications market, the Fortissimo investment fund is set to acquire a controlling stake in Cellcom, a leading telecommunications company, at an estimated value of NIS 2.6 billion. The strategic move involves Fortissimo purchasing a substantial 36% holding from DSKSH for approximately NIS 925 million.

The private Israeli investment fund, Fortissimo Capital, founded in 2004 by Yuval Cohen, has made its mark with investments primarily focused on industrial and technology companies. Notable portfolio companies include Soget, Sodastream, Slowpark Technologies, and El Erez Tahinat.

The acquisition process took a significant step forward as Fortissimo signed a non-binding memorandum of understanding with the controlling owner of Cellcom, Discount Investments, on Monday night. Discount Investments Ltd. promptly notified the Stock Exchange of this development, citing the entry into a non-binding memorandum of understanding for the sale of Cellcom Israel shares.

A statement issued by Discount Investments Ltd. sheds light on the specifics of the agreement: "On December 4, 2023, [Discount Investments Ltd.] contracted with Fortissimo Capital in a non-binding memorandum of understanding for the sale of its entire holdings (about 35.6%) in Cellcom at a value of 2.6 billion NIS to Cellcom, which reflects a consideration of about 925 million NIS for the company's holdings in Cellcom."

The statement further elaborates that the memorandum of understanding grants the buyer a two-week window for due diligence and the subsequent entry into a binding purchase agreement. This agreement would be subject to regulatory approvals, emphasizing that the outcome is not guaranteed, and there is uncertainty regarding the finalization of the deal.

The proposed acquisition marks a pivotal moment in the Israeli communications landscape, potentially reshaping the dynamics of the industry. As the due diligence process unfolds, industry observers are keenly watching for further developments that could solidify this major move in the telecommunications sector.