Bank Leumi Le Israel BM : announces agreement for strategic investment into USA, setting the latter's value at just under 1 billion USD

The strategic investment brings extensive expertise in the US financial services and banking fields, will assist in the continued evolution and success of Bank Leumi USA and will lead to the creation of greater value for the Leumi Group.

22.01.2018

Bank Leumi reported today that it has signed an agreement providing for strategic investment into Bank Leumi le-Israel Corporation ('BLC'), the US bank holding company of Bank Leumi USA ('BLUSA'). The strategic investment, which involves the sale by Bank Leumi of shares it holds in BLC, is being led by Endicott Management Company ('Endicott') and includes MSD Capital, L.P. ('MSD Capital'), representing an aggregate of 15% of the shares of BLC. The aggregate value of the BLC shares to be sold is anticipated to amount to approximately USD141 million, thus reflecting a net worth value just under 1 billion USD for Bank Leumi USA. Completion of the transaction is subject to customary closing conditions, including any required regulatory approvals. The transaction is not expected to have a material effect on the Leumi Group's business.

Founded in 1996, Endicott is a leading US investment firm, with their main field of expertise being investment in financial institutions, particularly banks. Wayne Goldstein, one of two founding partners of Endicott, is expected to be appointed as a Board Member of both BLUSA and BLC following the closing of the transaction.

MSD Capital is a private investment firm, established in 1998, to manage the assets of Michael Dell, founder of Dell Technologies, and his family.

This investment will bring strategic value to BLUSA and is a further step in the successful implementation of a new operational and business plan undertaken during the last 4 years under the leadership of BLUSA President & CEO, Avner Mendelson. The transaction will enable BLUSA to take further steps in its continued growth.

Bank Leumi President & CEO, Rakefet Russak-Aminoach: 'The successful implementation of a strategic plan in BLUSA over the past 4 years has positioned BLUSA as an attractive bank for investors. After examining several options, we decided to partner with Endicott and MSD Capital, which can bring significant advantages to BLUSA, including expansion of its customer base, greater access to the US capital markets, and the ability to leverage Endicott's significant experience in the U.S. financial markets. The investment in BLUSA by Endicott and MSD Capital is recognition of the success of BLUSA's business strategy, and of the Leumi Group innovation strategy.'

Wayne Goldstein, Co-Founder and Principal of Endicott, said: 'We are excited to make this investment in BLUSA together with MSD Capital. The timing is ideal for both of us - BLUSA, with the benefit of Avner Mendelson's leadership, is showing stronger performance following internal restructurings that focused on business strategy, technology and infrastructure and human capital. This investment provides a path for Endicott to help BLUSA consider and implement capital market transactions and strategic opportunities that were previously inaccessible.'

Dan Bitar, Managing Director at MSD Capital, added: 'We are pleased to be investors in this unique opportunity. Partnering with BLC, Endicott and the BLUSA management team is consistent with MSD Capital's philosophy to support strong teams with a clear strategy to build sustained value over longer periods of time.'