Bank Leumi Announces Agreement for Strategic Investment Into Bank Leumi USA, Setting the Latter’s Value Just Under 1 billion USD

The strategic investment brings extensive expertise in the U.S. financial services and banking fields, will assist in the continued evolution and success of Bank Leumi USA and will lead to the creation of greater value for the Leumi Group.

TEL AVIV, Israel–(BUSINESS WIRE)–Bank Leumi le-Israel B.M. (“Bank Leumi”) (TASE: LUMI) reported today that it has signed an agreement providing for strategic investment into Bank Leumi le-Israel Corporation (“BLC”), the U.S. bank holding company of Bank Leumi USA (“BLUSA”). The strategic investment, which involves the sale by Bank Leumi of shares it holds in BLC, is being led by Endicott Management Company (“Endicott”) and includes MSD Capital, L.P. (“MSD Capital”), representing an aggregate of 15% of the shares of BLC. The aggregate value of the BLC shares to be sold is anticipated to amount to approximately USD141 million, thus reflecting a net worth value just under 1 billion USD for Bank Leumi USA. Completion of the transaction is subject to customary closing conditions, including any required regulatory approvals. The transaction is not expected to have a material effect on the Leumi Group’s business.

Founded in 1996, Endicott is a leading U.S. investment firm, with their main field of expertise being investment in financial institutions, particularly banks. Wayne Goldstein, one of two founding partners of Endicott, is expected to be appointed as a Board Member of both BLUSA and BLC following the closing of the transaction.

MSD Capital is a private investment firm, established in 1998, to manage the assets of Michael Dell, founder of Dell Technologies, and his family.

This investment will bring strategic value to BLUSA and is a further step in the successful implementation of a new operational and business plan undertaken during the last four years under the leadership of BLUSA President & CEO, Avner Mendelson. The transaction will enable BLUSA to take further steps in its continued growth.

Bank Leumi President & CEO, Rakefet Russak-Aminoach: “The successful implementation of a strategic plan in BLUSA over the past four years has positioned BLUSA as an attractive bank for investors. After examining several options, we decided to partner with Endicott and MSD Capital, which can bring significant advantages to BLUSA, including expansion of its customer base, greater access to the U.S. capital markets, and the ability to leverage Endicott’s significant experience in the U.S. financial markets. The investment in BLUSA by Endicott and MSD Capital is recognition of the success of BLUSA’s business strategy, and of the Leumi Group’s innovation strategy.”

Wayne Goldstein, Co-Founder and Principal of Endicott, said: “We are excited to make this investment in BLUSA together with MSD Capital. The timing is ideal for both of us – BLUSA, with the benefit of Avner Mendelson’s leadership, is showing stronger performance following internal restructurings that focused on business strategy, technology and infrastructure and human capital. This investment provides a path for Endicott to help BLUSA consider and implement capital market transactions and strategic opportunities that were previously inaccessible.”

Dan Bitar, Managing Director at MSD Capital, added: “We are pleased to be investors in this unique opportunity. Partnering with BLC, Endicott and the BLUSA management team is consistent with MSD Capital’s philosophy to support strong teams with a clear strategy to build sustained value over longer periods of time.”

Sandler O’Neill & Partners, L.P. served as financial advisor to Bank Leumi and Kilpatrick Townsend & Stockton LLP provided legal advice. Endicott was advised by the law firm Schulte Roth & Zabel LLP and MSD Capital was advised by the law firm Wachtell, Lipton, Rosen & Katz.

About Bank Leumi

Bank Leumi (TASE: LUMI) is one of the leading financial corporations in Israel, providing comprehensive banking services and holding an approximate 30% domestic market share. Headquartered in Tel Aviv, Bank Leumi has a presence in key financial centers across the globe, including London, New York, Palo Alto and Shanghai. Bank Leumi is leading the way for innovation in global banking. Today, ‘Leumi Digital’ spearheads the digital banking field in Israel, with a wide range of innovative services based on cutting-edge technologies. Bank Leumi was the first financial organization in Israel, and one of few in the world, to implement cloud computing technology, in addition to establishing a Digital Banking Division and appointing a Chief Digital Officer (CDO). Bank Leumi is the first Israeli bank to launch a standalone fully-mobile banking platform – ‘Pepper.’

About Endicott Management Company

Endicott Management Company, founded in 1996 by Wayne K. Goldstein and Robert I. Usdan, has managed a group of private investment partnerships primarily focused on equity investments in financial institutions, with a further emphasis on U.S. banks. Since 2009, Endicott’s Opportunity Funds have owned concentrated positions in a portfolio of banks and bank holding companies, many of which Endicott has worked with to implement strategic and capital markets strategies to enhance shareholder value.

About MSD Capital, L.P.

MSD Capital, L.P. is the private investment firm that was established in 1998 to exclusively manage the capital of Michael Dell and his family. The firm utilizes a multi-disciplinary investment strategy focused on maximizing long-term capital appreciation by making investments across the globe in the equities of public and private companies, credit, real estate and other asset classes and securities. MSD Capital’s team operates from the firm’s offices in New York, West Palm Beach and Santa Monica.

Contacts

Leumi
John McGann, 917-542-2345
john.mcgann@leumiusa.com
or
Debra Bar, 917-542-2353
debra.bar@leumiusa.com
or
Intermarket Communications
Jade Faugno, 212-754-5425
jfaugno@intermarket.com