Israeli Investor Reportedly Pursuing Acquisition of 50% Stake in AVATRADE

Investor Zvika Barenboim is reportedly seeking to acquire a 50% stake in the trading platform AVATRADE, in a deal estimated to value the company between $400 million and $500 million. The proposed transaction is currently awaiting approval from the Israeli Securities Authority.

The deal, if approved, is described as a combined acquisition involving the purchase of shares from existing shareholders and the issuance of new shares. Barenboim is identified as the dominant buyer within a group of investors, with some current shareholders, including co-founder Negev Nossatzky, expected to increase their existing holdings. Emanuel Kronitz, another co-founder who currently holds a 35% stake, is reportedly the primary seller to Barenboim. Other smaller shareholders, including Shuki Abramovich (AVATRADE's President), Moshik Lifshitz, and Ilan Click, are also mentioned.

AVATRADE, founded in 2006 by Emanuel Kronitz and Negev Nossatzky, is registered in Ireland and operates 20 branches globally, employing approximately 450 staff. Initially established as a forex company, it has since evolved into a trading venue. Its website indicates 400,000 users worldwide with a reported monthly trading volume of $60 billion. As a private company, its general and financial data are not publicly known, but its estimated annual EBITDA is around $90 million. AVATRADE also operates ATRADE, a subsidiary in Israel.

This is not the first instance of AVATRADE being considered for sale. A decade ago, Playtech, under Teddy Sagi's control, had intended to acquire AVATRADE for $105 million. That deal, which included plans to acquire Plus500, ultimately did not materialize as Sagi reportedly failed to secure regulatory approval from the central banks of England and Ireland.

Zvika Barenboim is active in the fintech and online sectors, and he also owns Nara, which is described as Israel's second-largest private hospital network. He typically works with groups of investors. This marks Barenboim's second attempt to enter the online trading platform sector; in May 2021, he led an investor group aiming to acquire 100% of TradeTech, a Playtech subsidiary. That deal was subsequently superseded by an offer from Chinese investment firm GOPHER.

The current proposed acquisition takes place amidst a reported boom in the valuation of trading and forex companies. Israeli company eToro, which provides a trading platform, recently completed an IPO at a valuation of $4.4 billion (currently estimated at $5 billion) with 40 million users, significantly more than AVATRADE's stated 400,000 users. Other competitors like Plus500 are traded at a market capitalization of $3.3 billion, having seen a 32% increase in the last 12 months. Additionally, Safra Bank acquired a 70% stake in Saxo Bank, another retail trading entity, for $1.7 billion in March. A source close to the AVATRADE deal commented, "We've been working on this deal for a long time. In fact, if we had started it today, the price would be higher, probably double." The source also linked eToro's IPO to setting new valuations in the sector, suggesting, "In the medium to long term, AVA should also be listed on the capital market and its valuation should be derived from that of eToro."