Tiv Taam 2025: How Much of the Trade Surge Was Truly Organic

What This Follow-Up Is Isolating

The main article argued that trade was the engine that carried Tiv Taam through 2025 while retail barely grew. This follow-up narrows the question to one issue: how much of the jump in trade came from the business that was already inside the group, and how much was simply acquired with East & West.

This is not a narrow accounting debate. East & West entered consolidation only at the end of April 2025, meaning just three quarters of contribution, and the final deal economics are still not settled. So anyone reading the trade surge as clean proof of organic acceleration is reading too fast.

The 2025 Surge Was Almost Entirely Acquired

The number that settles the argument: trade-segment sales rose to NIS 570.5 million in 2025 from NIS 391.4 million, a 45.7% jump. But in the same filing the company says explicitly that excluding East & West, the segment's business results showed a net sales decline of about 0.4%.

The arithmetic is straightforward. If the legacy trade base was down 0.4%, then legacy trade sales in 2025 were only about NIS 389.9 million. Against reported trade-segment sales of NIS 570.5 million, that implies roughly NIS 180.6 million of contribution from East & West. In other words, more than the entire net increase of the segment came from the acquisition, while the pre-existing business actually slipped slightly.

There is another nuance worth keeping straight. The NIS 570.5 million figure is the segment-sales measure management uses, including NIS 123.5 million of internal sales into retail. The segment's external revenue was NIS 447.0 million. So the 2025 story is first and foremost a sharp expansion of the trade platform inside the group, not necessarily a one-for-one jump in new external market capture.

There Is an Organic Core, but It Is Still Not Measured Clearly Enough

The more interesting angle sits in the fourth quarter. There, trade-segment sales rose to NIS 160.6 million from NIS 96.9 million, while operating profit jumped to NIS 11.4 million from NIS 3.3 million. Gross margin improved to 26.9% from 20.4%, and operating margin to 7.1% from 3.5%.

But discipline matters here as well. The company does say that even excluding East & West, the segment grew in the fourth quarter. What it does not say is by how much. That matters. The filing proves there was some improvement in the underlying base in the last quarter, but it does not provide the quantitative split needed to say how organic Q4 really was and how much of the headline simply reflected a full quarter of East & West inside the numbers.

The category detail supports the same reading. In the legacy base, frozen fish and seafood, cheese and dairy, and wine and alcohol all grew. Frozen meat also strengthened after a Zilber rebranding move and a restaurant-chain agreement. On the other side, the thermal category weakened because higher raw-material costs fed into pricing and hurt demand. So this was not a broad-based organic breakout across the whole segment. It was a mixed underlying picture that still needs proof.

This also explains why East & West moved the numbers so quickly. It was not a tiny bolt-on. The business imports, markets, and distributes exclusive Asian food products, beverages, cookware, and accessories for the Oriental kitchen, with most of its products kosher, a broad institutional and retail customer base, and 97 employees. So 2025 instantly gets more volume, a different mix, and access to a customer set the group did not previously reach in the same way.

The Deal Itself Is Still Not Closed

The point a reader could easily miss is that East & West's operating performance and the economics of the deal are not two separate stories. The purchase-price formula itself is based on a 6x multiple of East & West's average EBITDA across 2023, 2024, and 2025, plus financial-debt and working-capital adjustments, and an additional 20% of East & West's 2025 net income. In other words, the same year that flatters the trade segment can also raise the acquisition bill.

Under the provisional measurement recorded in the filing, purchase cost was set at NIS 121.1 million: NIS 73.0 million already paid in cash and another NIS 48.1 million booked as deferred consideration. Against that, identifiable net assets were recorded at NIS 109.3 million, with NIS 5.0 million of intangible assets and the balance recorded as NIS 11.8 million of goodwill.

But this is still far from final. The company states explicitly that the measurement remains provisional because a final external valuation of the acquired assets and liabilities had not yet been received when the statements were approved. At the same time, a dispute emerged over the first tranche of the purchase price. Israco's position is that total consideration should be about NIS 115.4 million, implying a first-tranche payment of NIS 69.3 million. The seller's position is that total consideration should be about NIS 159.9 million, implying NIS 95.9 million for that same first tranche. The company says it cannot estimate what the arbitrator will ultimately decide.

The implication is clear: 2025 shows the reader a stronger trade segment, but also an acquisition whose final price and fair-value allocation were still open when the report was signed. The NIS 48.1 million deferred consideration already sits in accruals, and it is due within 30 days of East & West's 2025 audited statements and in any event no later than April 30, 2026. So the surge is already inside the P&L, while the economics of the transaction are still moving underneath it.

What Has to Be Proved Next

Management has already flagged the next real test. Over the coming quarters, Israco plans to focus on selling the group's kosher products to East & West's customers, given East & West's position in the Israeli kosher market, while also strengthening synergy between the businesses and reducing costs in imports and trade.

That matters because this is where the line sits between acquired growth and genuinely new organic value. If East & West's customer base really becomes a new distribution channel for the group's products, and if the synergy starts showing up in the cost base as well, then East & West will not remain only an externally purchased volume engine. It will start becoming a true quality upgrade for the segment. If that does not happen, then 2025 will remain mainly a successful consolidation year rather than a proof year for the legacy trade platform.

The thermal category is also still an important test. The filing says the weakness there came from higher raw-material costs and softer demand, and the company has already responded with aggressive marketing, promotions, and new launches. Until that category stabilizes, it is hard to argue that the trade segment has a clean organic engine on its own.

Bottom Line

The conclusion of this follow-up is fairly blunt: Tiv Taam's 2025 surge in trade was mainly an acquired surge. The reported number looks very strong, but the filing itself says the legacy trade base was slightly down on a full-year basis. In the fourth quarter there is already a sign that the base is growing again, just without the numerical split needed to tell how much of that growth truly belonged to the old business.

That is the heart of the story. 2025 does prove that Tiv Taam bought itself a larger, more kosher-oriented, and more diversified trade platform. It still does not prove that the legacy platform reaccelerated on its own, and it still does not close the economics of the acquisition. The right way to read 2025 in trade, then, is as an integration year first, and only later, if synergy and the legacy categories start producing cleaner evidence, as an organic-growth year.