Affinity Fund Led by Jared Kushner Completes 15% Acquisition of Shlomo Group's Automotive Operations

Shlomo Group has successfully concluded a deal to sell 15% of its automotive operations to the Affinity Fund, headed by Jared Kushner. The completion of this transaction marks Affinity Fund's inaugural foray into the Israeli market.

The deal, while maintaining its fundamental structure, saw a slight adjustment in both investment scope and value. Originally slated for $150 million, Kushner's fund will now inject $110 million into the venture. Consequently, the company's valuation in the transaction stands at NIS 2.7 billion, reflecting a 12% decrease from the previously agreed-upon value of NIS 3.8 billion in September.

The modified terms consider the challenges faced in 2023, a year impacted by market upheavals stemming from a legal coup, rising interest rates, and the conflict in Gaza. The adjusted valuation of NIS 3.1 billion takes into account a higher investment and a share allocation mechanism based on 2022 results.

The credit activity related to vehicle purchases will not be part of the current transaction. Affinity Fund is set to seek approval from the Capital Market Authority for control over this credit activity. Key investors in Affinity include Saudi Arabia, Qatar, and the Emirates.

To facilitate the deal's completion, the Shlomo Group will extend a seller's loan of $46.75 million to the Affinity Fund. Additionally, a provision stipulates that if the average net profit of the company between 2023-2024 falls below NIS 412 million, Affinity will be entitled to an additional 3% of the activity.

Assi Schmelzer, Chairman of the Shlomo Group, expressed excitement about the partnership, emphasizing the company's resilience amid challenging times in Israel. He conveyed hope that the collaboration would yield substantial growth in the coming years.

Jared Kushner, CEO of Affinity Partners, echoed the sentiment, stating that Affinity looks forward to exploring more promising business opportunities in Israel and the broader region.