Tokmanni Group Corporation announces preliminary price range and further information about its initial public offering on Nasdaq Helsinki

Not for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South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

15 April 2016

Tokmanni Group Corporation announces preliminary price range and further information about its initial public offering on Nasdaq Helsinki

Following the announcement of its intention to float on 5 April 2016, Tokmanni Group Corporation ("Tokmanni" or the "Company") today announces the preliminary price range for its planned initial public offering (the "Offering") of its shares and listing on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki"). The prospectus is expected to be published on or about 18 April 2016 before the start of the subscription period.

The Offering in Brief

  • The Offering consists of a public offering to private individuals and entities in Finland (the "Public Offering"), a personnel offering to all permanent employees of Tokmanni (the "Personnel Offering") and an institutional offering to institutional investors in Finland and internationally.
  • Through the Offering, the Company aims to raise gross proceeds of approximately EUR 96 million by offering new shares in the Company (the "New Shares") for subscription (the "Share Issue").
  • In addition, 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 (together with Cidron, the "Selling Shareholders") offer initially a minimum of 8,609,050 and a maximum of 10,259,050 existing shares in the Company (the "Sale Shares") for purchase (the "Share Sale").
  • Cidron's aim is to sell such number of Sale Shares in the Offering that would result in a free-float of approximately 40 percent (approximately 46 percent, if the Over-allotment Option is exercised in full).
  • Assuming the final subscription price per Offer Share (the "Final Subscription Price") is set at the mid-point of the Preliminary Price Range, the maximum number of Sale Shares are sold at such Final Subscription Price and the Over-allotment Option is exercised in full, the Offering will amount to up to 26,893,785 Offer Shares, representing up to 46 percent of the shares following the Offering.
  • The preliminary price range for the Offer Shares is a minimum of EUR 6.25 and a maximum of EUR 7.60 per Offer Share (the "Preliminary Price Range"), corresponding to a market value between EUR 375 million and EUR 435 million for the Company.
  • A prospectus with full terms and conditions of the Offering is expected to be published on or about 18 April 2016 on the Company's website (www.tokmanni.fi/listautumisanti).
  • Trading in the shares on Nasdaq Helsinki is expected to commence on or about 29 April 2016 and the shares will trade under the symbol "TOKMAN".

Heikki Väänänen, CEO comments:

"During the past years we have developed our company with determination into a profitably growing business that is now ready to go public. Through the listing, Tokmanni proceeds to its next development stage, with further potential to enhance its competitiveness."

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

"Nordic Capital is very proud of the outstanding job carried out by Heikki Väänänen and his team during the last three years. Tokmanni has developed into a modern discount retailer with a strong concept and an outstanding value proposition for its customers. In my view, there is no better place for value shopping in all of Finland. Nordic Capital is convinced that the significant investments made in the concept and the brand will carry Tokmanni forward for many years."

Background and Reasons for the Offering

The objective of the Offering is to position Tokmanni for its next stage of development by further raising its profile and enhancing Tokmanni's visibility in Finland and internationally. The Offering will enable the Company to obtain access to capital markets, expand its ownership base and increase the liquidity of its shares. Additional visibility is also expected to further increase Tokmanni's recognition among the public and as an employer, and thus enhance Tokmanni's competitiveness.

The Offering

  • The Offering consists of the Public offering to private individuals and entities in Finland, the Personnel Offering to all permanent employees of Tokmanni, and an institutional offering to institutional investors in Finland and internationally, pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933 (the "U.S. Securities Act"), including in the United States to QIBs as defined in Rule 144A under the U.S. Securities Act (the "Institutional Offering").
  • Through the Share Issue, the Company aims to raise gross proceeds of approximately EUR 96m by issuing 13,876,850 New Shares (the number of New Shares is calculated assuming that the Final Subscription Price for the New Shares would be at the mid-point of the Preliminary Price Range and that Tokmanni's permanent employees would subscribe for a total of 246,000 New Shares at the discount applicable to such New Shares in accordance with their allocation preference in the Personnel Offering).
  • In addition, the Selling Shareholders offer initially a minimum of 8,609,050 and a maximum of 10,259,050 existing shares in the Company for purchase.
  • Cidron's aim is to sell such number of Sale Shares in the Offering that would result in a free-float of approximately 40 percent (approximately 46 percent, if the Over-allotment Option is exercised in full).
  • To cover the possible over-allotment in connection with the Offering, Cidron is expected to agree to grant to the Managers  an over-allotment option to purchase, or to procure purchasers, for up to 3,597,291 additional shares (the "Additional Shares") solely to cover over-allotments (the "Over-allotment Option") representing approximately 8 percent of the Shares and votes before the Offering and 6 percent after the Offering, assuming that all New Shares initially offered in the Offering are fully subscribed for. Unless the context indicated otherwise, the New Shares, the Sale Shares and the Additional Shares are referred to together herein as the "Offer Shares").
  • Prior to the Offering, Cidron owns approximately 83 percent of the shares in the Company, Rockers Tukku Oy owns approximately 11 percent and members of the Board of Directors and executive management of the Company own approximately 6 percent.
  • Directly after completion of the Offering, Cidron is expected to own 23,400,487 shares, corresponding to 41 percent of shares and votes, assuming that the Over-allotment Option is exercised in full and that the Selling Shareholders sell the maximum number of Sale Shares and the Company issues 13,876,850 New Shares (the number of New Shares is calculated assuming that the Final Subscription Price for the New Shares would be at the mid-point of the Preliminary Price Range and that Tokmanni's permanent employees would subscribe for a total of 246,000 New Shares at the discount applicable to such New Shares in accordance with their allocation preference in the Personnel Offering), 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.
  • With the Share Issue, the Company aims to raise gross proceeds of approximately EUR 96 million and, to achieve this goal, it may increase or decrease the number of New Shares offered in the Share Issue within the limits of the terms and conditions of the Offering.
  • The Company expects to use the net proceeds from the Share Issue to repay the principal amount of the shareholder loans and accrued interest following the completion of the Offering.
  • The Preliminary Price Range for the Offer Shares is a minimum of EUR 6.25 and a maximum of EUR 7.60 per Offer Share.  In the Public Offering, the subscription price per Offer Share may be a maximum of EUR 7.60.
  • In the Personnel Offering, the subscription price per Offer Share is 10 percent lower than the Final Subscription Price. In the personnel offering, the subscription price per Offer Share may be a maximum of EUR 6.84.
  • The Company and Cidron, acting on behalf of the Selling Shareholders, after consultation with the Joint Global Coordinators, will determine the number of Offer Shares and the Final Subscription Price on the basis of the bookbuilding process in the Institutional Offering and the number of commitments received in the Public Offering and the Personnel Offering.
  • The Final Subscription Price is expected to be published on or around 29 April 2016.
  • Assuming that the Final Subscription Price is set at the mid-point of the Preliminary Price Range, the maximum number of Sale Shares is sold in the Offering at such Final Subscription Price and the Over-allotment Option is exercised in full, the aggregate gross amount of the Offering will be approximately EUR 186 million.
  • The Board of Directors of the Company and Cidron, acting on behalf of the Selling Shareholders, have, in the event of an oversubscription, the right to discontinue the Institutional Offering, the Public Offering and the Personnel Offering by joint decision at the earliest on 25 April 2016 at 4 p.m. (Finnish time).
  • 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 the Helsinki Stock Exchange (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.

Preliminary Timetable

Submission of listing application: on or about 15 April 2016

Publication of prospectus: on or about 18 April 2016

Subscription period of the Public Offering: 18 - 26 April 2016

Subscription period of the Institutional Offering: 18 - 28 April 2016

Announcement of the final results of the Offering: on or about 29 April 2016

Trading in the shares commences on the pre-list of Nasdaq Helsinki: on or about 29 April 2016

Settlement date: on or about 3 May 2016

Trading in the shares commences on the official list of Nasdaq Helsinki: on or about 3 May 2016

Publication of January-March interim report: 4 May 2016

The Prospectus

The Company has submitted a prospectus for approval by the Finnish Financial Supervisory Authority. The prospectus is expected to be approved on or about 15 April 2016. The prospectus will be available in electronic format on the website of Tokmanni (www.tokmanni.fi/listautuminen) on 18 April 2016 before the start of the subscription period.

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 is 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 will be published and, when published, 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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