Jared Kushner's Affinity Partners investing $110M to acquire 15% of Shlomo Group's auto and credit operations
Jared Kushner's Affinity Partners investing $110M to acquire 15% of Shlomo Group's auto and credit operations
Affinity Partners, which has raised $3 billion mainly from Saudi Arabia's wealth fund, is making its first investment in an Israeli company
Jared Kushner’s Affinity Partners has completed a deal to acquire 15% of Shlomo Group’s automotive and credit company for $110 million. The investment is intended to expand the Group’s automotive and credit operations in Israel to countries in the Middle East and North Africa.
The transaction was closed in the midst of the war in Gaza and the currently complex economic and geopolitical conditions in Israel and the Middle East. The consideration for the transaction reflects a market cap of NIS 2.7 billion (approximately $740 million) for the automotive and credit operation. Kushner received a significant discount of $40 million on the price published at the signing of the agreement in September, with the value of the activity decreasing from NIS 3.8 billion at the time of the agreement's signing to NIS 2.7 billion upon completion of the deal. This represents a decline of almost 29% in the company's value and a 12% drop in its effective market cap.
Since it was established in 2021, Affinity Partners has examined more than 1,000 companies, and made investments of more than $700 million out of the $3 billion it raised, mainly from Saudi Arabia's wealth fund.
The parties have agreed that, at present, the new company will only hold shares related to Shlomo Group’s automotive division, including the vehicle leasing, rental and sale operations, where the fund will have an additional period of 12 months after transaction closing to turn to the Capital Market, Insurance and Savings Authority to apply for a license to hold over 10% of Credit Path, a private company engaged in non-bank credit.
Under the agreement, Shlomo Group will grant Affinity Fund a loan of $46.75 million to finance the investment transaction.
Shlomo Group has a vehicle fleet of over 78,000 vehicles in Israel and a market share of around 30% of the industry.
“We are excited to partner with the Shmeltzer family through our investment in Shlomo, which has continued to exhibit the same resilience as the entire country. Affinity is looking forward to more promising opportunities in Israel and the region,” Kushner said.
Asi Shmeltzer, Chairperson, Shlomo Group, said: “This transaction has succeeded despite the challenging times in Israel. The investment was made possible by the sincere confidence in the Group, its employees and managers and in Israel’s economy. We hope that this partnership will lead to significant growth and profitable yields in the near future.”
