Group of Arab Investors to Buy 80% of Shopss.com for $88 Mln
Keren Tsuriel, Ella Jacoby, and Avishai Ovadia
06.02.2000 17:58
An agreement in principle has been signed for the sale of 80% of Israeli company Shopss.com, which operates a virtual shopping mall, to a group of Arab investors. This was announced today by Shopss.com’s parent company OSCM-One Stop. The deal will be at a company value of $100 million, so that the investors will invest some $88 million.
The deal is subject to a number of conditions, among them a final purchase agreement. If it goes ahead, the Shopss.com site will be translated into Arabic, and will operate in Arabic speaking countries.
The purchasers are investors from Middle Eastern countries that have no formal ties with Israel, but have traded with Israel for several years. As far as is known, the group includes businessmen from Oman, Qatar, and the Emirates.
It is further reported that the Shopss.com’s latest sales drive, in October 1999, whereby new members of the customers club received a personal computer free on registering was carried out in the framework of the contract with the Arab investors, and was aimed at increasing the number of subscribers to the virtual mall by 20,000. In the campaign, Shopss.com offered new subscribers a free personal computer in exchange for an undertaking to buy at least $30 worth of goods a month for two years, or to make a fixed payment of $20 a month. The company, which is traded OTC on NASDAQ, lost heavily in terms both of share value and image, after it failed to meet its commitment and supply the computers.
Shopss.com is a e-commerce company that sells a variety of goods and food. Orders can be supplied within fifteen minutes by means of the company’s fleet of trucks, each of which carries the entire stock range.
Up to now, Shopss.com has operated as an independent division within OSCM. The parent company is a US company registered in Florida that deals in Internet, e-commerce, hardware manufacture, and provision of network and telecommunications services. It employs 200 people, and has monthly sales of $10 million.
OSCM was founded by Israel Rosenfeld, who was among the owners of Internet service provider Shani, and of Activinet, which went into liquidation, leaving debts totaling NIS 5 million to Bezeq, customers who did not receive goods paid for in advance, and employees who were owed wages. OSCM’s current CEO, Rami Adler, is a disappointed Activinet customer, which is how he met Rosenfeld.
Published by Israel's Business Arena on February 2, 2000 |
