Teddy Sagi seeks Best of the Best buyout

Last month, Israeli tech and property billionaire Teddy Sagi completed the process of delisting Israeli cybersecurity and privacy protection company Kape Technologies from London’s Alternative Investment Market (AIM) after buying public shares for $515 million. He is now planning to make a similar move for another company in which he owns a stake, although the amount he plans to invest in this case is more modest.

The company is Best of the Best (BOTB), which also trades on AIM in London with a current market capitalization of £44 million ($56 million). BOTB, with 26 employees, started as a chain of stores in airports and shopping centers in the UK, and over the years has changed its activities.

Today, the company operates as a website where skill-based competitions are held for cars, luxury watches, motorcycles, and electronic goods. Since 1999, £52 million in prize money has been awarded. While participants are required to play the games, BOTB is not a gambling company.

During the financial year ending in April, BOTB recorded revenue of £26.2m, down 24.5% on the previous year. The company’s revenue has been very volatile over the past few years. In financial year 2020, prior to the Covid pandemic, revenue was £17.8m, jumping to £45.7m in 2021 due to positive online business activity during the pandemic. In the financial year ending in April, the company posted a profit of £4.7m, up 9.3%, and cash flow from ongoing activities was £2.9m, down 31.8%.

Next period of growth

Sagi owns 29.9% of BOTB shares through Globe Invest. He acquired the share from the Hindmarch family at £4 per share with a total investment of £10m. He is now offering to buy Public shares at £5.35 a share – a 33.8% premium to his purchase price last September, for a total of £33.5m ($43m).

The offer reflects the company’s £45.3m valuation of BOTB, a premium of 8.9% over the average share price over the past year and 3.6% over the last share price before the offer was made. Since the beginning of the year, BOTB share price has increased by 30%.

Sagi has already secured the agreement of the shareholders who own 20.5% of the company’s capital including the founding family headed by CEO William Hindmarch. In order to delist the stock from the London Stock Exchange, Sagi requires the approval of 75% of the shareholders at the meeting, so that he can delist the stock even if he doesn’t get full ownership.

Saji said that the offer allows immediate liquidity to be provided to the company’s shareholders, whose trading volume is very low. Sagi said: “We are excited to continue to solidify the foundations laid by William Hindmarch and the BOTB team, by focusing on long-term sustainable strategic competitive growth, through continued investment in technology, customer and product analytics capabilities as well as development capabilities, both in the UK and the New Territories We plan to support BOTB in considering potential acquisitions. Through our business partners and other companies in the group, we look forward to providing operational and financial support and sharing the knowledge that will be needed for BOTB’s next period of BOTB growth.”

Sagi recently completed a similar move with Kape Technologies, which was acquired through Unikmind, which he also owns. Kape provides software solutions for cyber security and privacy protection. In February, when Sagi owned 54.8% of Kape’s shares, he offered to buy the holdings to the public at a price that reflected a 10% premium to the market price.

After the successful bid, Sagi’s holdings in Kape rose to 87.6%, allowing him to delist the company. “After weighing the pros and cons, and in light of macro uncertainty and weak equity trading, as well as new avenues for growth, we are determined that the next chapter of Kape’s life is in the arena of privacy,” he wrote.

With the exception of BOTB, there are currently no more publicly traded companies in which Sagi owns a stake, as he plans to make similar moves.

Published by Globes, Israel business news – en.globes.co.il – on June 26, 2023.

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