A new joint venture agreement between Strauss Water and Haier group
Further to the Immediate Report dated 14/1/2015 (Reference No. 2015-01-011371), the Company hereby announces that its subsidiary, Strauss Water Ltd. (“Strauss Water”), signed with companies from the Haier Group a series of share transfer and exchange agreements, and a Joint Venture Agreement, for restructuring the Haier Strauss Water joint venture in China. The restructure will expand the joint venture business, by adding water purification products in technology that to-date was owned byHaier. The new joint venture company, Qingdao HSW Health Water Appliance Co., Ltd. will engage in research, development, installation, sale, maintenance, treatment and water purification, and from now on will also include the reverse osmosistechnology.
Pursuant to the Joint Venture Agreement with the Haier Group companies: Haier Group Corporation, Health Water Equipment (HK) Co., Limited. and Haier International Co., Limited, the joint venture will be owned by the companies from the Haier Group 66% and Strauss Water 34%. To complete Strauss Water’s share in the joint venture to 34%, Strauss Water will pay Haier approximately NIS 31 million. Under the Joint Venture Agreement, Strauss Water has an option to purchase up to an additional 15% of the shares of the joint venture in 2017 for a consideration determined in accordance with the valuation of the joint venture which will be based on its 2016 financial results, and in any event will not exceed NIS 90 million.
In addition, the Joint Venture Agreement governs the relations between the parties and their share in the management of the joint venture, and determines that the Board of Directors of the joint venture will consist of 5 members, with 3 members appointed by Haier and 2 appointed by Strauss Water. Chairman of the Board of Directors of the joint venture will be appointed by Strauss Water and the CEO will be appointed by the Board per the recommendation of Haier.
In addition, Strauss Water and the joint venture signed a License Agreement under which Strauss Water has granted an exclusive license to the joint venture to use the Maze technology in China. The HaierGroup will provide distribution, marketing, sales, development and service to the joint venture.
Turnover of the joint venture (pro-forma) in 2014 was NIS 210 million, with 67% annual growth rate compared to 2013.