Arbitrator rules: Tiv Taam will pay 8% more for Mizrach Ve-Maarav than the amount in the original agreement
Arbitrator Chen Schreiber has determined that the total value of Tiv Taam's acquisition of Mizrach Ve-Maarav will be 131 million shekels. This figure is 8% higher than the valuation set in the original December 2024 agreement.
A year and a half after signing an agreement to acquire the Asian food company Mizrach Ve-Maarav at a valuation of 121 million shekels, the arbitrator, CPA Chen Schreiber, determined that the value at which the transaction will be executed stands at 131 million shekels — 8% above the value set in the agreement.
The parties turned to the arbitrator after a dispute arose regarding the company's valuation. According to Yesharko, the subsidiary of Tiv Taam through which the acquisition was carried out, the total consideration should stand at approximately 115.4 million shekels, while according to Oded Kalif, the founder of Mizrach Ve-Maarav, the total consideration should be approximately 159.9 million shekels.
In December 2024, an agreement was signed in which Tiv Taam would acquire Mizrach Ve-Maarav, with the company valued at 121 million shekels. This was based on a multiplier of 6 on the average EBITDA of Mizrach Ve-Maarav for 2023-2025, plus 20% of the net profit in 2025. The transaction was structured in two stages; in the first tranche in April 2025, Tiv Taam received 60% of the shares for 73 million shekels.
Disagreements followed: Tiv Taam claimed the consideration for the first tranche should have been 69.3 million shekels, while Kalif argued it should have been approximately 96 million shekels. Yesterday, the arbitrator issued a decision to resolve all disputes, including the consideration for the remaining 40% of shares.
According to the arbitrator's assessment, the total consideration for all Mizrach Ve-Maarav shares is 131 million shekels. From this, the 75.9 million shekels already paid to Kalif in the first tranche will be deducted, excluding interest and linkage. The final deferred consideration was set at approximately 55.1 million shekels, plus 1.1 million shekels in interest and linkage.
Tiv Taam stated that the decision is not expected to have a material impact on its business results and that Yesharko is preparing to complete the acquisition.
About two months ago, Chen Hagai Cohen, daughter of Tiv Taam's controlling shareholder Hagai Shalom, was appointed co-CEO of Mizrach Ve-Maarav. The appointment included a 25% increase in her annual compensation, rising to 1.44 million shekels from 1.15 million shekels in her previous position.
