MIRA INFORM REPORT

 

 

Report Date :

31st May 2006

 

IDENTIFICATION DETAILS

 

Name :

CARELINE (PHARMAGIS) LTD.

 

 

Registered Office :

4 Drezner Street

Segula Industrial Zone’

Petach Tikva49277         Israel

 

 

Country :

Israel

 

 

Financials (as on) :

31/12/2004

 

 

Date of Incorporation :

4.5.1971

 

 

Legal Form :

Private limited company

 

 

Line of Business :

Developers, manufacturers, exporters and marketers of cosmetics and perfumes

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

 

Status :

Good 

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

NAME & ADDRESS

 

CARELINE (PHARMAGIS) LTD.

Telephone         972 3 905 64 44

Fax                   972 3 905 64 70

P. O. Box 333 (49102)

4 Drezner Street

Segula Industrial Zone’

PETACH TIKVA49277    ISRAEL

 

 

HISTORY

 

Originally incorporated as a private limited company as per file No. 51-057031-0 on the 4.5.1971.

 

Originally incorporated under the name of "PHARMAGIS LTD" which changed to "PHARMADEAL LTD" on the 21.6.1977 and changed again to the first name on the 30.3.1981.

 

On the 16.7.1987 name changed to the present one.

 

Converted into a public limited liability company and registered as such as per file

No. 52-003649-2 on the 22.1.1990. Subject’s shares were listed for trade on the Tel Aviv Stock Exchange.

 

On 30.6.1996 subject was acquired by AGIS INDUSTRIES (1983) LTD., and following which its shares were de-listed from trade.

 

 

SHARE CAPITAL

 

Authorized share capital NIS 30,000,000.00, divided into -

30,000,000 ordinary shares of NIS 1.00 each, of which shares amounting to NIS 19,403,500.00 were issued.

 

 

SHAREHOLDERS

 

Subject is fully owned by PERRIGO ISRAEL PHARMACEUTICALS LTD. (formerly AGIS INDUSTRIES (1983) LTD.), a fully owned subsidiary of PERRIGO COMPANY of the USA, a public limited liability company, whose shares are traded on the NASDAQ and the Tel Aviv Stock Exchanges.

                                                           

 

 

DIRECTORS

 

1. Moshe (Modi) Arkin,

2. Rafael Label,

3. David Gibbons.

 

 

GENERAL MANAGER

 

Elhanan Shaked.

 

 

BUSINESS

 

Developers, manufacturers, exporters and marketers of cosmetics and perfumes.

 

Subject is part of the CARELINE-NECA group, which includes the AGIS group’s consumer manufactured products.

 

Among suppliers: ZOHAR DALIA, HENKEL (Germany), DRAG CO.

 

Operating from an owned plant on an area of 25,000 sq. metres in the Industrial Zone, Yeruham and offices and distribution center in 4, Drezner Street, Segula Industrial Zone, Petach Tikva.

 

The Group is also operating from plants and laboratories in Tel Aviv, Germany and the USA.

 

Having some 200 employees (2,000 in the PERRIGO ISRAEL Group, 1,480 in Israel).

 

 

MEANS   

 

Financial data is included in the consolidated statements of parent company, PERRIGO ISRAEL PHARMACEUTICALS LTD., whose B/S (last obtainable) showed:

 

                                                                                  NIS (thousands)

                                                                        31.12.2003        31.12.2004

ASSETS

Current Assets

Cash and cash equivalents                                 305,533 160,609

Short Term Investments                                        14,436              98,133

Customers                                                        367,529 380,718

Other debtors                                                    103,354 134,961

Stock    _                                                          452,346 492,014

                                                                      1,243,198          1,266,435

 

Long term investments                                         79,173               77,607

Fixed assets                                                     486,477              522,416

Other assets and

Deferred expenses                                             _97,817 __86,899

                                                                       1,906,665           1,953,357

                                                                        ========        ========

 

LIABILITIES

Current liabilities                                                  478,190              539,327

Long term liabilities                                               320,355             271,995

Equity                                                               1,108,120          1,142,035

                                                                          1,906,665        1,953,357

                                                                        ========        ========

 

 

 

Subject is an “Approved Enterprise” and such entitled for State’s benefits. The Israeli Investment Centre approved investments of US$ 8 million and additional US$ 9 million for enlarging subject’s plant in Yerucham.

 

In May 2003, the Investment Center Administration approved the expansion of subject's plant, for a sum of US$ 2.7 million.

 

There are 2 charges for unlimited amounts registered on the company's assets, in favor of the State of Israel.

 

                                   

ANNUAL SALES

 

CARELINE-NECA group’s consolidated sales in 2000 claimed to be

NIS 300,000,000 (of which NIS 10 million were for export), making a net profit of NIS 16,213,000.

CARELINE-NECA group’s consolidated sales in 2001 claimed to be

NIS 300,000,000 (of which NIS 10 million were for export), making a net profit of

NIS 10,057,000.

CARELINE-NECA group’s consolidated sales in 2002 NIS 300,000,000 ending with a loss.

CARELINE-NECA group’s consolidated sales in 2003 NIS 290,000,000.

CARELINE-NECA group’s consolidated sales in 2004 NIS 287,000,000.

Subject ended 2004 with a net loss of NIS 1,286,000.

 

 

PERRIGO ISRAEL PHARMACEUTICALS LTD.

Consolidated Statement of Income

NIS (thousands)

Year ended 31.12

 

                                                2002                 2003                 2004

Sales                                        1,385,382          1,691,554          1,821,241

 

Gross profit                               501,513 637,805 713,868

 

Operating income                       80,968              184,971 192,979

 

Pre-tax income                          71,577              167,128 108,367

 

Net income                                61,837              136,916 90,436

                                                ======            ======            =======

 

Later sales figures not forthcoming.

 

 

SISTER COMPANIES

 

PERRIGO ISRAEL PHARMACEUTICALS LTD., Manufacturers, importers, marketers and exporters of pharmaceuticals (also generic), cosmetics, toiletries, detergents and cleaning products, raw materials to the pharmaceutical industry, etc. Also Operates as manufacturers of pharmaceuticals as sub-contractors for other companies and as Importers and marketers of medical equipment.

PERRIGO ISRAEL also controls (all fully owned subsidiaries, unless otherwise mentioned):

 

 

CHEMAGIS LTD.

NECA CHEMICALS (1952) LTD., manufacturers of chemicals, detergents and toiletries.

AGIS COMMERCIAL AGENCIES (1989) LTD.     

DAN – AGIS LTD., 50%, distributors of the CARELINE-NECA group products and other products.

AGIS DISTRIBUTION AND MARKETING (1989) LTD.,      

AGIS INVESTMENTS (2000) LTD.,

WESTECH LTD.,          

DUBCHEM LTD., 70%,

NECA MARKETING (1983) LTD.,

CLAY PARK LABS INC., New York,

ASSETS & INVESTMENTS (2003) LTD.,

CHEMAGIS USA INC.,

CHEMAGIS GERMANY GmbH.

PHARMA CLAL LTD.

CHEMAGIS (NETHERLANDS) B.V

INFRASERV GmbH & CO WIESBADEN KG, 7%,

 

PERRIGO COMPANY, a global pharmaceuticals company, shares are traded on the NASDAQ and the Tel Aviv stock exchanges, market value US$ 1.538 billion.

 

 

BANKERS     

 

Bank Leumi LeIsrael B.M., Main Business Branch (No. 802), Tel Aviv.

Bank Hapoalim Ltd., Main Branch (No. 600), Tel Aviv.

United Mizrahi Bank Ltd., Main Business Branch (No. 461), Tel Aviv.

 

 

CHARACTER AND REPUTATION   

 

Nothing unfavorable learned.

 

Subject officials refused to disclose any details.

 

PERRIGO ISRAEL is the 2nd largest pharmaceutical company in Israel, with a 14% market share (the leading company is TEVA, with a 25% market share).

 

PERRIGO ISRAEL group is the largest local cosmetic manufacturer and second largest supplier of pharmaceuticals to the local market (after TEVA), also second largest manufacturer of generic raw materials for the international pharmaceutical market (also after TEVA).

                                                                                               

In February 2002, subject launched a new brand of men’s perfume, under the name New York. Subject invested NIS 1.5 million in an advertising campaign for the new product.

 

In June 2002, it was reported that subject is negotiating a deal to merge with the INTERCOSMA Group, also a well known cosmetic group.

 

In August 2002, subject launched a US$ 250,000 advertising campaign for its new women’s perfume, Ocean.

 

In October 2002, it was reported that AGIS is negotiating a deal to sell its detergents and cosmetic activities (mainly carried out by NECA and subject) to SANO, for a sum of US$ 70-100 million. This is part of the strategy to remain only in core activities – those related to pharmaceuticals.

 

In January 2003, AGIS signed a letter of intent to merge NASH TAMRURIM (1991) LTD. marketing activities with CARELINE-NECA Group.

 

In March 2003, it was reported that subject launched a new make-up brand under the name Careline Look, in an investment of US$ 5 million.

 

In May 2003, it was reported that following a decrease in sales, subject retrenched 15 employees.

Later in September 2003, it was reported that subject was suffering from heavy losses and AGIS may even consider shutting down the plant in Yerucham and to move part of the manufacturing activities abroad.

 

In September 2003, it was reported that subject launched a new deodorant brand, in an investment of US$ 5 million.

 

In July 2004, it was reported that subject launched an advertising campaign, in an investment of US$ 250,000.

 

In November 2004, AGIS signed a merger agreement with PERRIGO of the USA, according to which PERRIGO will acquire all of AGIS's shares, in return  of US$ 450 million in cash and 23% of PERRIGO shares (the deal reflects a 900 million company value to AGIS). The deal was finalized on 17.3.2005, and following that AGIS shares were de-listed from the Tel Aviv stock exchange.

 

 

In August 2005, it was reported that subject launched an advertising campaign, in an investment of NIS 6 million.

 

The local cosmetics estimated market value is US$ 210 million in retail prices.

 

According to the chairman of the cosmetics branch in the industrialists association, sales of cosmetic products in Israel during the first half of 2004 were NIS 460 million, a 15% increase from the parallel period in 2003.

 

Exports of the branch were US$ 80 million, a 9.6% increase, and imports summed up at US$ 132 million, a 5.7% increase.

 

As of 2004, 5,000 employees are employed directly in the branch, and another 10,000 are employed indirectly.

 

In general, there are peaks in sales during the year, towards Easter (April) and New Years Eve (December).

 

 

SUMMARY

 

Good for US$ 1,500,000.

 

 

 

 

 

 

 

 

 

RATING EXPLANATIONS

 

 

RATING

STATUS

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

Credit not recommended

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions