Even at the age of 80, Ehud Barak still feels fit enough to engage in entrepreneurship. He not only sits on the board of directors of SHL Telemedicine, but also of several other Israeli technology companies and a cannabis producer.
In 2019, Ehud Barak once again threw himself into the Israeli election campaign, but he is now only active in business.
Only a few companies succeed in recruiting a former prime minister for the presidency of the board of directors. Especially not small ones. The Israeli medical technology company SHL Telemedicine, which is listed on the SIX Swiss Exchange, nevertheless made it with Ehud Barak. The company’s shareholders elected the 80-year-old co-president at an extraordinary general meeting in Tel Aviv on Thursday.
Door opener – not just a figurehead
Company circles say that Barak is still “in top form”. The former army general and former top politician, who worked from 1995 to 2013 as foreign and defense ministers and prime minister of Israel (in the latter office from 1999 to 2001), should serve the company primarily as a door opener in the USA and Germany. The company, which specializes in telemedicine services, has set itself the goal of primarily expanding in these two markets.
A spokesman said that Barak was not brought in as a mere figurehead, he will be actively involved in the company’s business affairs. Consistent with this is Barak’s statement that he is delighted to be joining senior management at SHL Telemedicine, which runs the company in the communique announced his candidacy at the end of June 2022.
Political comeback fails
The perennial leader of the Labor Party attempted a political comeback in 2019 by founding a new political group called Democratic Israel. But his efforts to be re-elected to Parliament in old age failed. At the same time, Barak remained entrepreneurial. Since March 2019 he has headed the supervisory board of the Israeli medical cannabis producer Intercure. He is also on the boards of directors three Israeli technology companies represent.
SHL Telemedicine specializes in remote monitoring, primarily for heart patients. The company’s devices and counseling services enable patients to request early help from home should their condition worsen. The company was founded in 1987. It opened to the public in Switzerland at the end of 2000.
Unwelcome Chinese shareholders
The last few years have always been accompanied by problems. They culminated in a heated argument between the company’s Israeli decision-makers and the major Chinese shareholders Cai Mengke and Shen Kun. The latter had at times built up a majority stake, which prompted the Takeover Commission at the beginning of 2018 to require them to submit a mandatory offer in favor of all shareholders. The investors did not comply with the condition despite two extensions of the deadline, whereupon the authority revoked their voting rights.
Such a process has never happened a second time in Switzerland. The reputational damage that SHL Telemedicine is still struggling with is correspondingly large.
The Israeli decision-makers around the previous chairman Yariv Alroy, who will share the presidency of the board of directors with Barak, should be credited for daring to make a fresh start. Last year, the company raised $40 million in fresh equity in two rounds. This made it possible to dilute the Chinese shareholders’ stake to 41.09 percent, as both investors stayed away from the capital increase. However, Cai Mengke and Shen Kun still hold the largest share, ahead of the Alroy family with 17.26 percent.
company at a loss
In the past year, the company also felt a tailwind in its operational business. Sales rose 23 percent year-on-year to $49.6 million, the highest level since 2010. At the same time, SHL Telemedicine slipped into the red like in 2015 and 2016. The shortfall reached $13.9 million.
The deficit is attributed to high investments in Germany and the USA. Germany and Israel were the only markets in 2021 where the company generated notable revenues. The USA should now be added. Management has high hopes for cooperation agreements that have been concluded with the American pharmacy chain CVS Pharmacy and Henry Schein, the outfitter for medical practices.
However, the company management still has to prove that it will be able to re-enter the huge and highly competitive American healthcare market. SHL Telemedicine had already been active in the USA years ago, but then decided to sell the business there due to lack of success.