Founder plans Eden Springs water group sale

LONDON Mon Jan 16, 2012 12:17pm EST

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LONDON (Reuters) - The founder of Israeli mineral water group Mayanot Eden MEYD.TA, best known for its Eden Springs office watercooler brand, is planning a sale of the business, people familiar with the situation said.

Eden's chairman and founder Roni Naftali, together with other Naftali family members, owns close to two thirds of the Tel Aviv-listed group, according to Tel Aviv market data, and has invited banks to pitch for the role of selling the business, the people said.

The company had 2011 earnings before interest, tax, depreciation and amortization of about 50 million euros ($63 million), one of the people said, giving it a potential value of 500 million euros.

A second person said they believed the business could fetch around 350 million euros.

However, its shares were trading at 4.05 shekels on Monday, down 1.2 percent on the day, valuing the shares in issue at 74.5 million Israeli shekels ($19 million), according to Thomson Reuters data.

New York-based hedge fund Och-Ziff (OZM.N) holds 10.1 percent of the company, according to the Tel Aviv stock exchange.

Eden is one Europe's largest suppliers of watercoolers to offices, distributing more than 368 million liters of water yearly to some 450,000 customers in 16 countries. Its Switzerland-based European business recently won the contract to supply the World Health Organization headquartered in Geneva.

The company competes with the likes of PHS Waterlogic, part of the workplace services group owned by private equity group Charterhouse CHCAP.UL, that also supplies watercoolers across Europe.

A sale could see Eden draw interest from private equity groups or vending machine suppliers, such as Britain's Autobar, one of the people said.

In its home market it sells under the popular Mey Eden brand, drawing water from the Golan Heights, an area Israel captured from Syria that is a flash point for Arab and Israeli tensions.

Around Europe, the company takes its supplies from local springs, and has had to chart choppy waters since launching its first operations in Poland in 1998.

French dairy and water group Danone (DANO.PA) established a European joint venture with Eden in 2003, investing in the company at a huge premium to its share price at the time.

Danone later booked an impairment of about 150 million euros on the investment and sold its shares in the partnership to Eden Springs in 2007.

Later that year, Och-Ziff invested 81 million euros for a 20 percent equity stake in Eden, with a bond that could convert to a further 8 percent stake.

For the first nine months of 2011 Eden said it had revenues of 191 million euros and earnings before interest, tax, depreciation and amortization (EBITDA) of 36 million euros.

Eden declined to comment.

(This story was corrected in fifth paragraph to read 4.05 shekels, not 405 shekels, and 74.5 million instead of 7.45 billion shekels)

($1=0.7895 euros)

($1=3.8510 Israeli shekels)

(With additional reporting by; Tova Cohen in Tel Aviv; Editing by Greg Mahlich)

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