Pango reboots Gett deal with Leumi Partners and decentralized investor group
After regulatory pushback, a new $190M plan avoids control stakes and aims to sidestep Competition Authority scrutiny.
Leumi Partners and Pango are initiating a new deal to acquire Gett, with the participation of five different investors, none of whom will hold control over the company.
The move follows Pango’s withdrawal from a previous merger agreement with Gett due to opposition from the Competition Authority. The current deal, already under negotiation, is expected to value the taxi app at $190 million, higher than the original $175 million price tag.
According to the structure being crafted by Leumi Partners, led by Ron Ben-Haim, and Pango, the new transaction will proceed without any single investor gaining management or control rights. Pango, which originally aimed to control Gett, will now participate only as a financial investor, holding a 20% stake. Four other investors, including Leumi Partners, will each hold an identical 20% stake.
This decentralized model is expected to simplify and expedite the transaction. Lawyers advising Leumi and Pango estimate that the structure will not require approval from the Competition Authority, since no party will hold control or preferential rights. Additional financial players are expected to join the deal.
From Gett’s shareholders' perspective, this deal is preferable to a sale to a new player like Fortissimo, which would also face regulatory scrutiny due to potential limitations around its stake in Cellopark, Pango’s smaller rival. Additionally, the new structure raises the company’s valuation, making it more attractive to existing stakeholders.
Last month, the Competition Authority issued a formal letter of reservations to both companies, indicating a clear inclination to block the original $175 million merger deal. The letter cited serious concerns that the merger would significantly reduce competition in the market.
Gett’s largest shareholder is Swedish investment firm VNV Global, with a 43% stake. Over the years, Gett has raised a total of $900 million. High-profile investors like Volkswagen, which poured $300 million into the company in 2016, have since written off their investments. Today, Gett operates only in Israel and the UK, after abandoning its ambitions of global expansion. The company’s gross transaction volume (GMV) is estimated at $500 million, and it reported EBITDA of approximately $17 million last year.
Pango is owned by a consortium that includes the Weil brothers, Harel, and IIF.
