Komplett ASA: Komplett and NetOnNet doubling in size by combining their businesses
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Oslo, 9 February 2022: Komplett ASA ("Komplett") and NetOnNet AB ("NetOnNet") are pleased to announce that an agreement for the combination of the two companies has been entered into. Bringing these companies together will strengthen their position as a leading online-first electronics platform in the Nordic area with an aggregated revenue in 2021 of NOK 18.5 billion. The transaction is expected to enable realisation of cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with expected full effect within 24 months of the completion of the transaction. Komplett will retain its strong financial position and attractive dividend policy after the transaction.
The combination is structured as an acquisition by Komplett of all the shares in NetOnNet from its sole shareholder SIBA Invest Aktiebolag (“SIBA Invest”). As consideration for the shares in NetOnNet, SIBA Invest will receive 35,242,424 new Komplett shares and NOK 1,500 million in cash. Based on Komplett’s close of day share price on 8 February 2022 of NOK 62.60, this values NetOnNet’s share capital at NOK 3,706 million, corresponding to an enterprise value of NOK 3,797 million (equal to 13.3x EBIT (adj.) 2021) based on year-end 2021 net interest bearing debt (excluding lease liabilities).
Komplett and NetOnNet are both attractively positioned in the large and structurally growing Nordic electronics and IT-products market and they benefit further from the growth impact of accelerating online migration. Following completion of the transaction, the companies’ aggregated market share in the Nordic area is estimated to be in the level of 10 per cent, approximately double that of the respective companies’ current estimated market shares. Komplett and NetOnNet will together become the largest online-first electronics platform in the Nordic area.
Komplett and NetOnNet are both recognised for their scalable business models and cost leadership positions and share a strong track record of profitable growth and market share gain. NetOnNet also contributes with an extensive portfolio of own brands enabled by a local purchasing presence in China since 2005. Building on their complementary market positions and strengths, Komplett and NetOnNet will be even better positioned together to deliver a market leading online shopping experience to their customers.
The companies had illustrative unaudited aggregated revenue in 2021 of NOK 18.5 billion and EBIT (adj.) of NOK 674 million, and some 1,370 employees (FTEs) combined across Norway and Sweden.
Komplett will retain its robust financial position and dividend capacity after the transaction. Proposed dividend for the financial year 2021 is NOK 2.90 per share, which also will be payable to the consideration shares to be issued to SIBA Invest, subject to final approval of such dividend at Komplett’s annual general meeting.
Completion of the transaction is subject to customary closing conditions including approval at a general meeting in Komplett and competition authority clearances.
Canica Invest AS (“Canica Invest”) will remain the largest and a long-term shareholder in Komplett after the combination with an approximate shareholding of 40 per cent before the intended issuance of new shares to finance the cash consideration to SIBA Invest, as further described below. Canica Invest has undertaken to attend and vote in favour for the transaction as well as the dividend proposal at the respective general meetings.
Nils K. Selte, Chairman of Komplett, commented: “We are very pleased to announce the combination of Komplett and NetOnNet, two attractively positioned companies with complementary strengths. As a combined unit, the companies will become even better positioned to leverage their strong consumer brands and proven scalable business models to continue delivering attractive profitable growth. In addition, increased scale will contribute towards material value creation among other through realising significant cost synergies that are mainly related to sourcing improvements".
Fabian Bengtsson, Chairman of SIBA Invest and proposed new board member in Komplett, commented: “We are excited to become the second largest and a long-term shareholder in Komplett alongside Canica Invest after the combination. NetOnNet has a strong track record of growth and revenue has increased by around SEK 5 billion, corresponding to an annual average organic growth rate of ca 12 per cent, since we took the company private from the Stockholm Stock Exchange in 2011. We have a strong belief in the strategic merits of the transaction, with two successful businesses joining forces to become even better together. We therefore look forward to taking part in the future development and value creation in the new combined company”.
Lars Olav Olaussen, CEO of Komplett, commented: “Komplett looks very much forward to join forces with NetOnNet, a company with a winning culture that fits very well with us. Both companies have strong focus on their customers and there are clear business similarities between us, with both offering consumer electronics and IT products based on scalable online-first business platforms. Together, we will broaden our geographical footprint, especially in the Swedish market. Our joint ambition is to enable an even more attractive offering and the best shopping experience to our consumer- and business customers.”
Susanne Holmström, CEO of NetOnNet commented: “There is strong industrial logic in combining our two businesses with highly appreciated brands and complementary market positions. Combined, NetOnNet and Komplett will be the largest online-first platform in the Nordic area. By joining forces and building on our complementary strengths, we will be even stronger and better positioned to continue to gain market shares across the Nordics based on a highly competitive, scalable and cost-efficient business model”.
Transaction highlights
- The transaction is structured as an acquisition by Komplett of all the shares in NetOnNet from its sole shareholder SIBA Invest owned by the Bengtsson family.
- Komplett will remain listed on the Oslo Stock Exchange.
- As consideration for the shares in NetOnNet, SIBA Invest will receive 35,242,424 new Komplett shares and NOK 1,500 million in cash. Based on Komplett’s close of day share price on 8 February 2022 of NOK 62.60, this values all shares in NetOnNet at NOK 3,706 million, corresponding to an enterprise value of NOK 3,797 million (equal to 13.3x EBIT (adj.) 2021) based on year-end 2021 net interest bearing debt (excluding lease liabilities). The cash consideration is subject to an addition of 4 per cent per annum for the period from 30 September 2021 until completion of the transaction.
- The Komplett shares to be issued to SIBA Invest will correspond to approximately 32.8 per cent of the outstanding shares in Komplett after the transaction, but before dilution effect of the new issuance of Komplett shares to finance the cash consideration / replace the bridge facility as referred to below.
- Financing to settle the cash consideration is secured through a NOK 1,500 million committed 15-month bridge loan facility. Komplett intends to replace the bridge loan facility with proceeds from the issuance of new shares in due course. Canica Invest has committed to subscribe for at least NOK 500 million in such a share issue.
- Lars Olav Olaussen to continue as CEO for the combined company with Susanne Holmström as Deputy CEO and managing director of NetOnNet.
- Fabian Bengtsson, chairman of SIBA Invest, is proposed as a new board member of Komplett and Roland Vejdemo, current chairman of the board of NetOnNet, as a new observer in the board of Komplett, and with Carl Erik Hagen (currently a deputy board member) as an observer to the board. Martin Bengtsson, CEO of SIBA Invest, to be represented on Komplett’s nomination committee.
- Completion of the transaction is subject to approval by Komplett's general meeting and necessary competition authority clearances in Norway and Sweden.
- Komplett's general meeting is expected to be held during March, and completion of the transaction is expected in Q2 2022, subject to timing of competition authority clearances.
Key facts and figures
NetOnNet’s revenue of approximately NOK 7.5 billion in 2021 is split into 88 per cent in Sweden and 12 per cent in Norway, compared to Komplett’s revenue of approximately NOK 11 billion in 2021 which is split into 32 per cent in Sweden, 65 per cent in Norway and 3 per cent in Denmark. Combined, illustrative unaudited aggregated revenue split in 2021 is balanced with 55 per cent in Sweden, 43 per cent in Norway and 2 per cent in Denmark.
Through the transaction, Komplett significantly expands its presence and footprint in the Swedish market. Komplett and NetOnNet had preliminary unaudited aggregated revenue in Sweden of NOK 10.1 billion in 2021, compared to NOK 3.6 billion for Komplett stand alone.
Komplett's main Swedish brand, Webhallen, has 18 mainly city-centre / shopping-mall located stores across Sweden, with a particular strong presence in the greater Stockholm area. NetOnNet has a network of 29 cost-efficient service centres (”Lagershoppar”) mainly located outside city centres, of which 26 are located across Sweden and 3 are in Norway. Given complementarity to both format and locations, the combined networks enable a significantly broadening of market reach in Sweden. Furthermore, while Webhallen has its main presence in the gaming sector, NetOnNet has a broader customer base, resulting in limited customer overlap.
Planned optimisation and streamlining of sourcing will leverage learnings from Komplett’s improvements since 2018, NetOnNet's sourcing capabilities and the combined company doubling in size. Cost synergies that are mainly related to sourcing are expected to be at least NOK 200 million on an annual basis, with expected full effect within approximately 24 months from completion of the transaction. The assessment of sourcing synergies is based on a detailed review including of product overlaps and purchasing costs.
Komplett will maintain a robust balance sheet following the combination, supporting financial flexibility and a continued attractive dividend policy. Preliminary aggregated net interest bearing debt at year-end 2021 is NOK 656 million (excluding lease liabilities), corresponding to ca 0.8x EBITDA (adjusted).
Conditions for the completion of the transaction
Completion of the transaction is subject to approval by Komplett's general meeting of (i) the issuance of the consideration shares in Komplett to SIBA Invest, (ii) an authorisation to the board of directors of Komplett to issue further new shares to obtain proceeds to finance (in part or in full) the cash consideration under the transaction and/or finance the repayment of the bridge facility (if drawn-upon) and (iii) Fabian Bengtsson being elected as a board member, Roland Vejdemo as an observer to the board as well as Martin Bengtsson being elected as member of the nomination committee of Komplett with effect from completion of the transaction, and with Carl Erik Hagen (currently a deputy board member) as an observer to the board. Canica Invest has undertaken to vote in favour of the resolutions at Komplett’s general meeting. Completion of the transaction is furthermore subject to obtaining necessary competition authority clearances in Norway and Sweden.
Komplett has obtained the required waivers from the lock-up undertaking entered into with the joint global coordinators in connection with the IPO completed in June 2021.
Canica Invest and SIBA Invest - lock-up
SIBA Invest and Canica Invest will enter into lock-up agreements with Komplett under which they will undertake not to sell or otherwise dispose of the shares in Komplett for a period of 180 days from completion of the transaction. Both SIBA Invest and Canica Invest intend to remain significant long-term shareholders in Komplett.
Advisors
Skandinaviska Banken Enskilda (publ) AB, Oslofilialen, norsk avdeling av utenlandsk foretak ("SEB") is acting as sole financial advisor to Komplett. Advokatfirmaet Thommessen AS is acting as Norwegian legal advisor to Komplett, while Advokatbyrået Setterwalls AB is acting as Swedish legal advisor to Komplett. First House is engaged by Komplett as communication and IR adviser.
Carnegie Investment Bank AB (publ) ("Carnegie") is acting as sole financial advisor to SIBA Invest. Gernandt & Danielsson Advokatbyrå is acting as Swedish legal advisor to SIBA Invest, while Advokatfirmaet BAHR AS is acting as Norwegian legal advisor to SIBA Invest.
SEB has been engaged by Komplett as Global Coordinator and Joint Bookrunner and Carnegie as Joint Bookrunner for the intended new share issue to finance the cash consideration / refinance the Bridge Facility.
Presentation and press conference
A presentation on the combination will be held today 9 February 2022 at approximately 09:15 am CET, immediately after the presentation of the fourth quarter results of Komplett ASA which will begin at 09:00 am CET. The presentation will be hosted by CEO of Komplett Lars Olav Olaussen, CEO of NetOnNet Susanne Holmström and CFO of Komplett Krister Pedersen. The presentation will be held in English at Felix Conference Centre, Aker Brygge, Oslo. In addition to the physical presentation in Oslo, the event will be live streamed.
Please use the following link to register and view the webcast:
https://events.webcast.no/viewer-registration/nIYzmINK/register
Questions to the speakers will be addressed towards the end of the presentation. A recorded version of the webcast will be available after the webcast has concluded.
For further queries, please contact:
Kristin Hovland, Head of Communication
+47 98 65 28 60
Per Christian Brander, Head of Investor Relations
+47 40 63 63 49
PerChristian.Brander@komplett.com
This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) Article 7 and is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Per Christian Brander, Head of Investor Relations, at the date and time as set out above.
About Komplett ASA and NetOnNet AB
Komplett Group is a leading online-first electronics and IT products retailer, operating in Norway, Sweden and Denmark. Serving customers in the B2C, B2B and distribution markets, the Group is deeply focused on delivering best in class customer experience, built through decades of knowhow, expertise and deep customer commitment. Komplett Group operates an efficiency and scalable business model that supports costs leadership and enables a competitive product offering.
Founded in 1999, NetOnNet is a leading online-first electronics platform offering both well-known and own brands. Sales are generated online as well as through complementary service centres in Sweden and Norway. NetOnNet is known for low prices and a passion for making electronics accessible in the most convenient way possible. The customer loyalty club, Klubbhyllan, has over one million members which represent a majority of revenue. Head office and main fulfilment centre are located in Viared, outside Borås.
Illustrative aggregated financial information
The illustrative aggregated unaudited financial information as included in the announcement presentation as separately enclosed to this release is based on unaudited consolidated financial statements for Komplett and NetOnNet’s for the year ended 31 December 2021 and respective audited consolidated financial statements for the year ended 31 December 2020. The illustrative aggregated financial information does not represent pro forma financial information as impacts such as among other those relating to purchase price allocation, differences in accounting principles, adjustments related to transaction costs and impacts of potential refinancing have not been taken into account. Expected potential synergies are not included. The illustrative aggregated income statement information and key figures have been presented as if the combined business had been carried on in the same group from the start of 2020. NetOnNet’s financial information presented in SEK has been converted to NOK at an exchange rate of 1.0.
Important notice
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