Walla, Israel’s number 2 internet site behind Ynet, announced today (Sunday) that it will acquire 75% of the Korel Tal company, which currently controls the Yad2 internet site, in return for NIS117.5 million. Yad2 is Israel’s leading online classifieds section, offering real estate, motor vehicles, furniture, and other items. The deal is worth about NIS156 million to Yad2. According to the acquisition deal, Walla will gain control of the site as well as 42.5% of Kama, the leading Israeli site for internet price comparison.
The framework of the deal calls for the sale of 49% of Korel Tal as currently owned by Tiger Holdings, to Walla. Additionally, Sean Tal, founder and chairman of Yad2, and the Waldemar company, which together own 51% of stock, will sell 26% of their stock to reduce their control to 25%. The acquisition deal includes Yad2 car sales and job listings section Job City, which Yad2 and Walla jointly established last year.
According to the announcement relayed to the markets, Yad2 2009 gross earnings totaled NIS37.3 million, profit margins clearing NIS9.4 million. Under the deal, Yad2 will continue to operate as an independent business with Tal continuing as the active chairman of the company for at least three more years in cooperation with Yavin Gil-Mor, who was recently appointed as the CEO of Yad2. The completion of the deal is contingent on several conditions, including the go-ahead from the government appointee on business transactions.
The deal comes after a very long period in which both Walla and Yad2 have been engaged in wide-ranging strategic cooperation. In the past year, the two have established the employment listings site JobCity under joint ownership, and cooperated in promoting the site while Yad2 was linked to the Walla homepage and various other engines of each site were intertwined together.
Yeshua: “Yad2 has high profit margins”
According to Walla CEO Ilan Yeshua, “We’re talking about one process in a series of strategic processes focused on growth, designed to ensure the standing of the Walla group as an internet leader in Israel.” In his words, “Yad2 is a growing company in the business, growing with high profits. Aside from the benefit and value the site will bring to our visitors, it is considered one of the most efficient and focused sites for advertisers. The synergy between Walla and the Yad2 group of websites is extensive and touches on all layers.”
Yad2 was rated as the 7th most popular site in Israel last May with a 34.6% market share. It gets 2.5 million hits a month, with 250 million pages being visited in the same time period.