Tomer Behind The Deal: How Much Profit Is Real, How Much Risk Sits In Debt And Covenants
Tomer finished 2025 with 20.2% revenue growth, NIS 20.4 million of EBITDA, and NIS 28.1 million of operating cash flow. The same filings, however, also show NIS 66.6 million of bank debt, covenant breaches at two year-end dates, and an unlimited guarantee that Cipia is meant to provide to the banks if the deal closes.
The main article already established that Tomer is the real replacement engine inside the Cipia story. This follow-up does not revisit whether the acquisition changes the strategic picture. It isolates a narrower question: what kind of business is actually coming in. Is this a clean operating asset that brings profit and flexibility, or a business that runs through working capital, bank credit, and continued tolerance from lenders.
The cash frame here is the actual cash picture, not a normalized reading before working-capital movements. In other words, how much cash Tomer really produced after balance-sheet movement, and what bank debt still sits against that. On that reading the answer is not black and white. Tomer’s profit is real. The balance-sheet cleanliness is not.
In 2025 revenue rose to NIS 244.9 million, EBITDA rose to NIS 20.4 million, and net profit reached NIS 3.1 million. This is not just paper economics. But the same set of documents also shows operating cash flow that jumped mainly because of working-capital changes, NIS 66.6 million of bank debt, and failure to meet financial covenants both at the end of 2025 and at the end of 2024. In plain terms, Cipia is not buying only an earnings engine. It is also buying dependence on the banking system.
That becomes sharper once you look at the deal structure itself. To close the transaction, Cipia must arrive with at least NIS 8.375 million of available cash, and if it is not expected to meet that threshold it will need to raise public equity during the interim period. At the same time, subject to closing, Cipia also committed to provide an unlimited guarantee in favor of Tomer’s banks. The filings do not explicitly say that this liquidity cushion was designed to solve Tomer’s covenant problem, but the combination is clear enough: the deal does not inject a ready-made cash buffer into Cipia. It imports a business that still requires both cash and calm lenders.
The Profit Is Real, But It Does Not Tell The Whole Story
In 2025 Tomer recorded 20.2% revenue growth, from NIS 203.7 million to NIS 244.9 million. Gross profit rose 18.3% to NIS 47.2 million, EBITDA rose 9.3% to NIS 20.4 million, and operating profit rose 5.4% to NIS 12.3 million. The bottom line also improved, with net profit reaching NIS 3.1 million versus NIS 2.2 million a year earlier. That is the truth that needs to stay on the table. Otherwise it becomes too easy to reduce the entire story to a financing wrapper.
But the first yellow flag comes precisely from the gap between growth and profitability. Revenue rose by NIS 41.1 million, while operating profit rose by only NIS 0.6 million. So Tomer is clearly generating profit, but not at a pace that by itself resolves the funding question. Looking only at EBITDA is therefore not enough.
Cash Improved, But Mainly Through Working Capital
The sharpest number in this package is not net profit. It is operating cash flow. It moved from negative NIS 10.3 million in 2024 to positive NIS 28.1 million in 2025, a swing of NIS 38.4 million in a single year. But Tomer’s own explanation is that the change was driven mainly by working-capital movements. That is the core of this continuation.
The balance sheet explains why. Trade receivables fell to NIS 56.3 million from NIS 62.0 million. Inventory fell to NIS 61.8 million from NIS 67.2 million. Both directions support cash release. On the other hand, other receivables rose to NIS 12.8 million from NIS 8.8 million, mainly because of higher advances to suppliers. That also matters, because it shows the cash improvement was not one-directional. Even so, the overall picture is clear: 2025 looks like a year in which Tomer improved cash not only through profit and expense control, but also through more aggressive working-capital management.
That is not proof that the profit is “not real.” It proves something else. At Tomer, cash quality sits heavily on working capital. Even the explanation for the lower customer balance does not read like a sterile commercial picture, because the company attributes the decline to large transactions under credit terms it describes as better than usual. Even without deciding exactly in whose favor those terms improved, the wording signals that cash was influenced by deal terms, not only by sales volume.
The bottom line here is straightforward. Tomer did show in 2025 that it can generate cash. But the material disclosed here does not support reading the business as a clean, self-contained cash converter that is indifferent to trade terms. It looks more like a business that works, but works through the balance sheet.
The Bank Risk Did Not Disappear, It Just Moves Onto Cipia
This is the less comfortable part of the read. At the end of 2025 Tomer still had NIS 66.6 million of bank loans, down from NIS 83.6 million a year earlier. That is a meaningful reduction, and the explanation given is that operating cash was used to repay bank credit. In other words, part of the stronger cash year did in fact go toward deleveraging.
But the same disclosure also contains the decisive point: as of December 31, 2025, and also as of December 31, 2024, Tomer did not meet the financial covenants set by the banks, and as a result all bank loans were classified as short-term. This is not a technical footnote. It means the banks are already in the middle of the story, not at the edge of it.
| Risk Layer | What The Filings Show | Why It Matters |
|---|---|---|
| Existing bank debt | NIS 66.6 million at the end of 2025 | Even after a relatively solid year, Tomer remains bank-levered |
| Financial covenants | Not met in 2025 and also not met in 2024 | This is not a one-quarter issue |
| Debt classification | All bank loans were classified as short-term | The banks already shaped the way the balance sheet must be read |
| Deal liquidity cushion | Cipia must have at least NIS 8.375 million of cash at closing | The buyer cannot arrive without a separate liquidity buffer |
| Cipia’s direct bank exposure | Subject to closing, Cipia will provide an unlimited guarantee to Tomer’s banks | Tomer’s bank risk becomes a direct public-company exposure |
It also matters what was not disclosed here. The disclosure here does not provide the covenant formulas themselves, so it is impossible to measure exact headroom or say which ratio broke by how much. But what is disclosed is already sharp enough: this is not theoretical bank debt. It is debt that already sits alongside covenant breaches at two year-end dates.
What Cipia Is Really Importing
Amendment No. 2 did not change the economic direction of the deal, but it did make the framework tighter. Doron’s stake was updated to 70.99%, the arranger’s share rose to 4%, and the minimum required liquidity rose from NIS 8.0 million to NIS 8.375 million. At the same time, if Cipia is not expected to meet that threshold it must go to a public offering during the interim period, with the proceeds held until completion. Cipia’s annual report also states explicitly that the geopolitical situation may make it harder to attract investors in order to meet the required liquidity balance.
This is exactly the point where the layers need to be connected. Tomer brings Cipia a live business, not a presentation. But it does not bring a business that can come in without support. The profit is real. The 2025 cash flow is real as well. But that cash flow runs through working capital, and the balance sheet runs through banks that have already seen covenant breaches. So the right question after closing is not only whether Tomer earns money. It is whether the bank relationship and the working-capital profile can be stabilized so that Cipia does not become a public company holding a levered food business with an unstable bank layer.
The test over the first two to four quarters after closing will be narrow. Tomer needs to keep generating profit, but more importantly operating cash flow needs to stay positive without another sharp working-capital release, and the banks need to move from breach-and-short-term classification into something more stable. Until that happens, the deal cannot be read as the import of a clean engine. It is the import of an engine with a bank attached.
Conclusion
The right read on Tomer is neither “weak business” nor “clean business.” It is something in between, and more interesting: a profitable operating business that depends on working-capital management and on a banking system that has already flagged it. That is why the main article was right to present Tomer as Cipia’s replacement engine, but this continuation sharpens the price of that engine. Cipia is not buying only EBITDA. It is also buying covenants, guarantees, and the need to arrive at closing with its own cash cushion.
If Tomer can stabilize the bank layer and keep converting profit into cash without leaning mainly on balance-sheet conditions, the deal will look materially better in hindsight than it does now. If not, shareholders will be left with a public company holding a food business that works, but works too close to the bank.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.