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2021-12-01
Svedbergs continues to develop the group - expands into the
Background and rationale
- The acquisition is in line with Svedbergs' strategy to grow organically and through strategic acquisitions and let companies operate independently with their own management and strategic focus areas while benefitting from Svedbergs' central functions and experience.
-
Roper Rhodes is a well-established and profitable company in the
United Kingdom with a strong market position and more than 40 years in the industry. The company has three strong brands with innovative products in different sales channels and a diverse customer base. During the rolling twelve months ending30 September 2021 , net sales of Roper Rhodes amounted toGBP 70.8 million (corresponding to approximately SEK 826 million[2]). EBITA amounted toGBP 11.6 million (corresponding to approximately 135 million2).[3] -
With the acquisition, Svedbergs establishes a position in the
United Kingdom - a large and attractive market characterised by a fragmented retail structure and pent-up demand for new homes and refurbishment. - Furthermore, the acquisition can also provide good opportunities for synergies with Svedbergs as Roper Rhodes sources its products from manufacturers.
-
The acquisition of Roper Rhodes marks an important step in Svedbergs' active acquisition agenda and vision of becoming the leading bathroom supplier in selected markets in
Europe .
"Roper Rhodes is a perfect match with
"This strategic acquisition is a logical next step for
The Transaction in brief
- Svedbergs has entered into an agreement to acquire Roper Rhodes at a purchase price, on a cash and debt free basis (Enterprise value), of a maximum of
GBP 90 million (corresponding toSEK 1,084 million 1), comprised of a fixed consideration ofGBP 76 million and an earn-out of a maximum ofGBP 14 million . The size of the earn-out is based on Roper Rhodes' performance during the coming three years and will be paid after the end of the period 2022-2024. The Transaction has been completed today and Roper Rhodes is consolidated in Svedbergs as of1 December 2021 . -
In connection with the Transaction, Roper Rhodes' CEO
Leigh Leather joins the Group management of Svedbergs. -
In order to meet the liquidity needs of the combined operations of Svedbergs and Roper Rhodes and to finance the acquisition of Roper Rhodes, Svedbergs has increased its credit facilities by
SEK 400 million and secured two bridge facilities ofSEK 620 million in aggregate fromNordea Bank Abp , filial i Sverige ("Nordea"). -
To secure an optimal capital structure, Svedbergs intends to carry out a rights issue with preferential rights for existing shareholders of
SEK 500 million (the "Rights Issue") as part of the repayment of the bridge facilities. -
The shareholders
Stena Adactum AB and If Skadeförsäkring AB, representing, directly and indirectly, in aggregate 40 per cent of the shares and votes in Svedbergs, have undertaken to vote in favour of the authorisation at the extraordinary general meeting and to subscribe for their pro rata share of the Rights Issue. In addition,Nordea Fonder , representing 13 per cent of the shares and votes in Svedbergs, has expressed its support for the Transaction and its intention to subscribe for its pro rata share of the Rights Issue. - The Rights Issue is expected to be carried out during the first quarter of 2022.
Transaction rationale
With the acquisition of Macro Design in 2016, Svedbergs made an important step toward becoming the leading bathroom supplier in selected markets with an expanded product portfolio and market coverage. During 2019, Svedbergs set its continued strategy with independent companies that cooperate without confusion. The acquisition of Cassøe in 2020 was in line with this strategy and provided Svedbergs with a third independent brand and an increased exposure to the Danish market.
The acquisition of Roper Rhodes is in line with Svedbergs' strategy to grow organically and through strategic acquisitions and let companies operate independently with their own management and strategic focus areas while benefitting from Svedbergs' central functions and experience. With the acquisition, Svedbergs establishes a position in the
Key Transaction rationales:
- In line with Svedbergs' strategy. Svedbergs has a communicated growth strategy comprising organic growth and strategic acquisitions that complement current operations through a broader geographical presence, strengthened competence or new product categories. The acquisition is in line with Svedbergs' strategy of independent companies that operate with their own management and strategic focus areas.
- Perfect match in Roper Rhodes. Roper Rhodes is a well-managed and financially strong company with a strong market position and more than 40 years in the industry in the
United Kingdom . The company is similar to the other branded companies ofSvedbergs Group with strong brands and innovative products in different sales channels and a diverse customer base. - Strong market position in a large and attractive market. Roper Rhodes has a strong position in a large and attractive market characterised by a fragmented retail structure and pent-up demand for new homes and refurbishment.
- Synergies. The acquisition can also provide good opportunities for synergies with Svedbergs as Roper Rhodes sources its products from manufacturers.
- Paving the way for additional acquisitions. The acquisition of Roper Rhodes is an important milestone in Svedbergs' active acquisition agenda and paves the way for additional acquisitions.
Financials
The aggregated financial information presented in the table below is for illustrative purposes only. Roper Rhodes' financial information is prepared in accordance with
In the
Rolling twelve months, | |||
SEK million | Svedbergs | Roper Rhodes2 | Sum |
Net sales | 773 | 826 | 1,599 |
EBITA | 107 | 135 | 242 |
Financing and rights issue
In order to meet the liquidity needs of the combined operations of Svedbergs and Roper Rhodes and to finance the acquisition of Roper Rhodes, Svedbergs has increased its credit facilities by
To secure an optimal capital structure, Svedbergs intends to carry out a rights issue with preferential rights for existing shareholders of
The Rights Issue is expected to be carried out in the first quarter of 2022 and the conditions of the Rights Issue will be determined and announced together with a time plan following the announcement of the year-end report, which will be announced on
Extraordinary General Meeting
An extraordinary general meeting to authorise the board of directors to resolve on the Rights Issue will be held on
Advisors
Nordea is financial advisor to Svedbergs in connection with the Rights Issue. Mannheimer Swartling Advokatbyrå AB is legal advisor to Svedbergs.
For further information, please contact:
E-mail: per-arne.andersson@svedbergs.se
Tel: +46 70 638 50 12
E-mail: mats.lundmark@svedbergs.se
Tel: +46 70 677 05 83
This information is information that
About Svedbergs
Important information
The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in the Company in any jurisdiction. Any invitation to the persons concerned to subscribe for shares in Svedbergs will only be made through the prospectus that Svedbergs estimates to publish during the first quarter of 2022.
This press release may not be released, published or distributed, directly or indirectly, in or into
The securities referred to in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended ("Securities Act"), or under the securities laws of any state or other jurisdiction in
Within the European Economic Area (the "EEA"), no public offering of securities is made in other countries than
In the
This press release contains certain forward-looking information that reflects the Company's present view of future events as well as financial and operational development. Words such as "intend", "assess", "expect", "may", "plan", "believe", "estimate" and other expressions entailing indications or predictions of future development or trends, not based on historical facts, constitute forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties as it depends on future events and circumstances. Forward-looking information is not a guarantee of future results or development and actual outcomes may differ materially from the statements set forth in the forward-looking information.
[1] Applying exchange rate (GBP/SEK) of 12.0428, the exchange rate as of
[2] Applying exchange rate (GBP/SEK) of 11.6634, the average exchange rate for the period
[3] Roper Rhodes' financial information is prepared in accordance with
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