Tokmanni Group Corporation: The final offering price in Tokmanni Group Corporation's initial public offering has been set at EUR 6.70 per share

Tokmanni Group Corporation                        Company Announcement           April 28th, 2016      14:45 EET

Not for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Singapore.

The final offering price in Tokmanni Group Corporation's initial public offering has been set at EUR 6.70 per share

Tokmanni Group Corporation ("Tokmanni" or the "Company") today announces the outcome of its initial public offering (the "Offering") and the listing of its shares on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki").

The Offering attracted strong interest among Finnish and international institutional investors as well as Finnish retail investors. The Offering was well over-subscribed.

The Offering in Brief

  • The final offering price ("Final Offering Price") has been set at EUR 6.70 per share, corresponding to an equity value of approximately EUR 394 million for Tokmanni.
  • The Offering consists of 9,227,621 existing shares that have been offered by the Company's current principal shareholder Cidron Disco S.à r.l. ("Cidron", a company ultimately owned by Nordic Capital Fund VII[1] , together with associated co-investment vehicles) and certain other existing shareholders of the Company and 14,319,880 new shares (the "New Shares") that have been offered by the Company.
  • To cover possible over-allotment in connection with the Offering, Cidron has granted an over-allotment option of up to 3,532,124 additional existing shares, corresponding to up to 15 percent of the total number of shares offered in the Offering. If the over-allotment option is exercised in full, the Offering comprises in total 27,079,625 shares, corresponding to 46 percent of the shares in Tokmanni.
  • The total value of the Offering, assuming that the over­allotment option is exercised in full, amounts to approximately EUR 181 million.
  • The Company will receive gross proceeds of approximately EUR 96 million through the issue of New Shares ("Share Issue") as a part of the Offering. The Company expects to use the proceeds from the Share Issue to repay the principal amount of the shareholder loans and accrued interest following the completion of the Offering. In addition to repaying the shareholder loans, Tokmanni will also refinance its loans from financial institutions with lower interest rates than its prior outstanding debt. As a result, Tokmanni expects that its interest expenses going forward will be significantly reduced compared to previous years. In 2015, interest expenses of shareholder loans amounted to EUR 6.9 million and interest expenses of loans from financial institutions amounted to EUR 10.2 million.
  • Following completion of the Offering, Cidron will remain the largest shareholder in Tokmanni and will hold approximately 42 percent of the shares, Rockers Tukku is expected to own approximately 8 percent and members of the Board of Directors and executive management of the Company are expected to own approximately 4 percent in the aggregate, in each case assuming the over-allotment option is exercised in full.
  • Assuming full exercise of the over-allotment option, a total of 26,031,048 shares will be allocated to institutional investors in Finland and internationally (the "Institutional Offering") and 1,048,577 shares will be allocated to private individuals and entities in Finland (the "Public Offering") and to permanent employees of Tokmanni (the "Personnel Offering"). The final subscription price in the Personnel Offering is 10 percent lower than the Final Offering Price, i.e. EUR 6.03 per share.
  • The shares offered in the Public Offering and in the Personnel Offering are expected to be registered with the Trade Register on 28 April 2016 after which the total number of shares in the Company will be 45,597,449 shares. The shares allocated to institutional investors are expected to be registered with the Trade Register on 3 May 2016 after which the total number of shares in the Company will be 58,868,752 shares.
  • The shares offered in the Public Offering and in the Personnel Offering are expected to be recorded in the book-entry accounts of investors who have made an approved commitment on the first banking day after the pricing has taken place, i.e. on 29 April 2016. In the Institutional Offering, the shares will be ready to be delivered against payment on or about 3 May 2016 through Euroclear.
  • Trading in Tokmanni's shares is expected to commence on the pre-list list of Nasdaq Helsinki on or about 29 April 2016 and on the official list on or about 3 May 2016.
  • The shares will be traded under the symbol "TOKMAN".
  • Goldman Sachs International, as stabilisation manager, may, to the extent permitted by applicable law, within 30 days from commencement of trading in the shares on Nasdaq Helsinki (which is expected to be between 29 April 2016 and 28 May 2016) engage in measures that stabilise, maintain or otherwise affect the price of the shares.
  • Goldman Sachs International and Nordea Bank Finland Plc are acting as joint global coordinators and joint bookrunners (the "Joint Global Coordinators") in the Offering. BofA Merrill Lynch and Carnegie Investment Bank AB, Finland branch, are acting as joint bookrunners (together with the Joint Global Coordinators, the "Managers"). Sundling Wärn Partners is acting as financial advisor to Tokmanni and its principal shareholders.

Heikki Väänänen, CEO comments:

"I am very pleased with the strong interest in Tokmanni that we have seen from both domestic and international investors. To me this is a sign that there is a strong confidence in Tokmanni and its future prospects. Being publicly listed enables delivering an even stronger customer value proposition. As a sizeable, public company our bargaining power is expected to improve further and we anticipate having the ability to offer our customers an even more interesting assortment at everyday low prices, as well as a good in-store customer experience. This is expected to support our objective to delivering profitable growth in the future. As Tokmanni becomes listed it begins its next development phase and I wish to thank all new shareholders who have made this possible."

Robert Furuhjelm, Partner, NC Advisory Oy, advisor to the Nordic Capital Funds, and board member of Tokmanni comments:

"Tokmanni is well placed to benefit from a strong trend in Finland towards smart shopping and is established around the country. The management team has reshaped Tokmanni during the last years and it is now well suited to continue to develop as a listed company. I am proud of Tokmanni and Nordic Capital looks forward to continuing to support its development going forward."

About Tokmanni

Tokmanni is the largest general discount retailer in Finland measured by number of stores and revenue. In 2015, Tokmanni's revenue was EUR 755 million and on average it had approximately 3,200 employees. Tokmanni is the only nationwide general discount retailer in Finland, with 156 stores across Finland as at 31 December 2015. Tokmanni conducted an extensive brand harmonisation project between 2013 and 2015, unifying all of its stores under the Tokmanni brand. The brand harmonisation project was completed in October 2015. Based on a survey commissioned by Tokmanni from TNS Gallup in autumn 2015, approximately 42 percent of adult Finns visit a Tokmanni store at least once a month.

Tokmanni's value proposition combines an attractive and wide product assortment at low prices supported by a good in-store customer experience. Tokmanni offers its customers a broad assortment of products across six product categories: home cleaning and personal care; groceries; clothing; tools and electrical equipment; home, decoration and garden; as well as leisure and home electronics. Tokmanni's product assortment includes A-brand products from leading manufacturers, Tokmanni's private label products, licensed brand products and non-branded products.

Tokmanni employs a cost-efficient operating model with a focus on efficiency across the entire value chain from factory to customer. Tokmanni aims to maintain a low-cost base through centralised sourcing and an effective supply chain. Tokmanni manages its inventory centrally from its distribution centre located in Mäntsälä, Finland. Tokmanni's headquarters are also located in Mäntsälä.

Enquiries

Heikki Väänänen, CEO, tel: +358 20 728 6044

Sixten Hjort, CFO, tel: +358 20 728 6043

Joséphine Mickwitz, Head of IR and Communications, tel: +358 20 728 6535

Important Notice

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. The information in this announcement may be subject to change.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, the Hong Kong special administrative region of the People's Republic of China, Japan, New Zealand, South Africa or Singapore or any other jurisdiction where to do so would constitute violation of the relevant laws of such jurisdiction.

This announcement is not a prospectus for the purposes of Directive 2003/71/EC (such directive, as amended, together with any applicable implementing measures in the relevant member state of the European Economic Area under such Directive, the "Prospectus Directive"). A prospectus prepared pursuant to the Prospectus Directive and approved by the Finnish Financial Supervisory Authority has been published and can be obtained from the Company and other places indicated in the prospectus. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information contained in the prospectus.

This announcement does not contain or constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Company does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States.

This announcement is directed only at: (A) persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (the "Qualified Investors"); (B) in the United Kingdom, Qualified Investors who are persons who (i) have professional experience in matters relating to investments and who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order"); or (ii) are high net worth entities falling within Article 49 of the Order; and (C) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "Relevant Persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

None of the Managers or any of their respective affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

The Managers are each acting exclusively for the Company and for no-one else in connection with any transaction mentioned in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to any such transaction and will not be responsible to any other person for providing the protections afforded to their respective clients, or for advising any such person on the contents of this announcement or in connection with any transaction referred to in this announcement. The contents of this announcement have not been verified by the Managers.

FCA/ICMA Stabilisation

This announcement does not constitute a recommendation concerning the Offering. The price and value of securities and any income from them can go down as well as up. Past performance is not a guide to future performance. Information in this announcement or any of the documents relating to the Offering cannot be relied upon as a guide to future performance. There is no guarantee that the listing on Nasdaq Helsinki will occur and you should not base your financial decisions on the Company's intentions in relation to the listing at this stage. Potential investors should consult a professional advisor as to the suitability of the Offering for the entity concerned.

Each of the Managers and any of their respective affiliates, acting as investors for their own accounts, may purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the final prospectus, once published, to the shares being offered, acquired, sold, placed or otherwise dealt in should be read as including any offer, sale, acquisition, placing or dealing in the shares by any of the Managers and any of their affiliates acting as investors for their own accounts. In addition, certain of the Managers or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of shares. None of the Managers intends to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligations to do so.

No representation or warranty, express or implied, is given by or on behalf of the Managers or any of their respective subsidiaries, affiliates, agents or advisers or any of such persons' affiliates, directors, officers or employees or any other person as to the fairness, accuracy, completeness or verification of the information or the opinions contained in this announcement, and no liability is accepted for any such information or opinions. Each of the Managers or any such persons' directors, officers, employees or affiliates or any other person disclaim all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this announcement or its contents or otherwise in connection with this announcement.

Forward-looking Statements

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "will," "may," "continue," "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Tokmanni believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors, which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. No statement in this announcement is intended to be nor may be construed as a profit forecast.

Each of the Company, the Managers and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any of the forward-looking statements contained in this announcement whether as a result of new information, future developments or otherwise.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.




[1] "Nordic Capital Fund VII" refers to Nordic Capital VII Alpha, L.P. and Nordic Capital VII Beta, L.P., for which Nordic Capital VII Limited acts as General Partner.


About Us

Tokmanni is the largest general discount retailer in Finland measured by number of stores and revenue. In 2017, Tokmanni’s revenue was EUR 797 million and on average it had approximately 3,200 employees. Tokmanni is the only nationwide general discount retailer in Finland, with 175 stores across Finland as at 31 December 2017.

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