Phoenix Financial Bolsters Stakes in Brokers and Advisors Business with Strategic Acquisition

Phoenix Financial Enhances Stake in Phoenix Agencies

Phoenix Financial Ltd., a prominent asset management and insurance company headquartered in Israel, has made a significant move to expand its business operations. Recently, the company announced the acquisition of an additional 17% stake in its subsidiary, Phoenix Agencies, raising its total ownership from 78% to an impressive 95%. This strategic acquisition is part of Phoenix Financial's broader growth objectives, aimed at maximizing value creation within its platform for brokers and advisors.

Strategic Growth Initiatives

The decision to augment its stake in Phoenix Agencies aligns with the company's strategy to enhance its offerings in the financial services sector. Phoenix Agencies operates as a leading platform within Israel, consolidating various entities, including insurance agencies, brokers, benefits administrators, retirement planners, and financial solution distributors. This means that by increasing its share, Phoenix Financial is not only solidifying its presence in the market but also reinforcing the potential for accelerated growth moving forward.

According to updated projections, Phoenix Financial anticipates that this acquisition will result in an increase in their adjusted EBITDA target from NIS 600-700 million to NIS 700-800 million by 2027. Alongside this, the net income target has also been revised upwards from NIS 250-350 million to NIS 350-450 million. Moreover, the company estimates that this strategic move could boost net income by NIS 50-70 million in 2026 alone.

Financial Details of the Acquisition

To execute this acquisition, Phoenix Financial will be purchasing the shares from current chairman of Phoenix Agencies, Itzik Oz, for a total sum of NIS 763 million. This amount consists of NIS 381 million in cash, along with the remaining balance paid in shares of Phoenix Financial, amounting to 1.55% of the company. In light of this transaction, Oz will remain in his role as chairman, and an updated agreement will be established to provide him with restricted shares worth NIS 32 million, vesting over a span of three years.

Phoenix Financial CEO Eyal Ben Simon commented on the acquisition, stating, "Phoenix Agencies is a significant growth engine for the group with immense potential. This transaction shows our capability in leading strategic initiatives that ultimately create value for our shareholders. We have identified the trends shaping the financial world, especially regarding agencies and brokers, and how they can play a notable role in our growth strategy."

Leadership Changes to Ensure Growth

As Phoenix Agencies enters this next phase of expansion, there are significant changes in leadership to ensure the company's objectives are met. Oren Cohen, who is currently the chairman of Oren Mizrah Agency, is set to take over as the CEO of Phoenix Agencies. His leadership is expected to be pivotal in implementing the next stage of the company's growth strategy. Cohen holds a 1.75% stake in Phoenix Agencies, giving him a vested interest in the operational and strategic success of the subsidiary.

Future Directions and Expectations

The ongoing development and transformation of Phoenix Agencies will allow for organic growth across financial and investment solutions, business development, and improved infrastructural capabilities. Phoenix Financial has committed to enhancing its corporate infrastructure by emphasizing technology, human capital, and operational efficiency.

In conclusion, Phoenix Financial's aggressive growth strategy underlined by this acquisition not only strengthens its market position but also sets the stage for further expansion within the financial services industry. The company plans to revisit its wider strategic targets later this year, reinforcing its commitment to delivering value for its shareholders and establishing itself as a leader within the financial sector in Israel and beyond.

As the company awaits necessary regulatory approvals to finalize this acquisition, stakeholders remain optimistic about the future trajectory of Phoenix Financial and its subsidiaries.