Relais Group Plc acquires Swedish Strands Group AB and significantly strengthens its lighting business

Relais Group Plc acquires Swedish Strands Group AB and significantly strengthens its lighting business

Relais Group Plc, Inside Information 14.12.2020 at 9.30

Relais Group Plc (“Company”, “Relais”), one of the leading players in the Nordic automotive aftermarket, has signed an agreement (“Purchase Agreement”) on the acquisition of the entire share capital of the Swedish company Strands Group AB (“Strands”) (“Corporate Acquisition”). The closing of the Corporate Acquisition is estimated to take place on 5 January 2021, provided that certain customary conditions for the closing of the Corporate Acquisition are met.

Strands is one of the fastest growing brands in the vehicle lighting and accessories aftermarket in Europe. The Corporate Acquisition is fully in line with Relais’ growth strategy and significantly broadens the Company’s range of lighting products and brands. In addition, the Corporate Acquisition opens up additional geographic markets for the Company in Europe and elsewhere. The Corporate Acquisition further strengthens the position of vehicle lighting aftermarket as a strategic growth area for Relais.

Established in 2002, Strands’ business operations have been based on its own strong lighting products and brands. Strands Group AB’s 2020 net sales is estimated to be approximately SEK 150 million and the EBITDA approximately SEK 25 million. Export accounts for approximately 55% of the turnover. The company employs approximately 30 people.

Strands Group AB’s key figures

The purchase price of the entire stock of Strands is estimated at SEK 182,200,000, which will be adjusted as per the terms of the Purchase Agreement. Approximately SEK 40,700,000 of the purchase price will be paid by shares in Relais. Rest of the purchase price will be paid in cash. The Purchase Agreement also includes the Sellers’ right to an additional purchase price of a maximum of SEK 25,000,000 if the financial targets agreed by the parties are reached by the end of 2022.

Key benefits of the Corporate Acquisition:

• The Corporate Acquisition supports the further implementation of Relais’ growth strategy
• The share of own brands in Relais’ business grows significantly and the Company´s leadership in the Nordic vehicle lighting market strengthens
• Clear synergy benefits and economies of scale in production, sourcing, product development, product range management as well as increased cross-selling possibilities

Arni Ekholm, CEO of Relais Group Plc, comments:

“Strands is an excellently managed growth company and one of the most significant vehicle lighting and accessories operators in the Nordic aftermarket. The company's brands and lighting products give us a platform with significant growth potential and strengthen our role as the pioneer of lighting know-how in the demanding Nordic conditions.

From a growth strategy perspective, the Corporate Acquisition enhances our position in the Nordic countries even further and opens up new export possibilities.

Strands’ values are very well in line with our other group companies, and it is an excellent strategic fit. The company’s founder Jon Strand has created a unique concept in the industry. I am very impressed by his passionate attitude which is reflected throughout Strands’ entire operations: understanding of the clients, marketing and branding, quality, and the design presentation of the products. We also share his view on the importance of the consolidation of the market and the growth potential in digitalisation.”

Jon Strand, founder of Strands AB:

“Strands is a company driven by passion having a clear focus on profitable growth. The strength of our brand has again been demonstrated during this year as we have been able to grow even more profitably, despite the exceptional circumstances caused by the COVID-19 pandemic.  I see a fantastic opportunity for Strands to reach synergy benefits together with Relais Group, as well in procurement as in marketing and other areas. I am convinced that Relais will offer Strands a solid platform for continued growth in the Nordic markets, simultaneously as Strands can contribute to Relais’ further growth in the European markets.“

Share issue related to the Corporate Acquisition

Relais pays SEK 40,700,000 of the purchase price by issuing, in a directed share issue organised in connection with the closing of the Corporate Acquisition, a maximum total of 388,851 new Relais Group shares (“Consideration Shares”) to the sellers of Strands Group shares. Rest of the purchase price will be paid in cash.

The directed share issue will be carried out in derogation of the pre-emptive subscription right of the shareholders by the decision of Relais’ Board of Directors on the authorisation of the Company’s Annual General Meeting held on 8 June 2020. The directed share issue will be organised in order to develop Relais’ business and to finance the Corporate Acquisition, so there is a weighty financial reason for the derogation from the pre-emptive right of the shareholders within the meaning of the Finnish Limited Liability Companies Act. The subscription price of the Consideration Shares is EUR 10.2243 per share, which corresponds to the share’s trade volume weighted average rate on Nasdaq Helsinki First North’s Growth Market for 30 trading days preceding the signing of the Purchase Agreement.

The Consideration Shares will represent approximately 2.26 per cent of Relais shares and votes after the Share Issue. The Consideration Shares will entitle to full dividends possibly distributed by Relais and to other distribution of assets as well as carry other shareholder rights in the Company starting from when the Consideration Shares have been entered in the Trade Register and the shareholders’ register of the Company. The Consideration Shares will be subject to a 360-day lock-up period as of their issue as separately agreed. The Company will apply for the admission of the Consideration Shares to trading in Nasdaq First North Growth Market Finland with the same share class as the Company’s old shares after the Consideration Shares have been entered in the Trade Register.

Relais Group Plc

Board of Directors

For further information, please contact:

CEO Arni Ekholm
Email: arni.ekholm@relais.fi
Telephone: +358 40 760 3323 
 

Certified adviser:

Evli Bank Plc
Telephone: +358 40 579 6210 
 

Distribution:

Nasdaq Helsinki Ltd
Financial Supervisory Authority
Main media
www.relais.fi

Relais Group Plc in brief

Relais Group is an importer and technical wholesaler of vehicle spare parts and equipment operating in the Nordic and Baltic countries. We are an industrial operator with a sector focus in vehicle life cycle enhancement and related services. We also serve as a growth platform for the companies we own.

We are a profitable company seeking strong growth. We carry out targeted corporate acquisitions in line with our growth strategy and want to be an active player in the consolidation of the aftermarket in our area of operation. Our corporate acquisitions are targeted at companies having a good strategic fit with our group companies.

Our net sales amounted to EUR 98.9 (2018: 72.5) million in 2019, and we employed 258 professionals in five different countries. Our share is listed on Nasdaq Helsinki Ltd's Nasdaq First North Growth Market Finland with the stock symbol RELAIS.
www.relais.fi