Relais Group Plc strengthens its position in Sweden by acquiring the majority of shares of TD Tunga Delar Sverige AB and carries out a directed share issue

Relais Group Plc

Company Release 6 February 2020 at 3.45 p.m.

Inside information

Relais Group Plc (”Relais”, ”Relais Group”, “Company”), an importer and technical wholesaler of spare parts and electrical equipment for vehicles, has today, on 6 February 2020, acquired 95.25% of the shares of TD Tunga Delar Sverige AB (”TD”, ”Tunga Delar”) from the company’s shareholders (“Acquisition”). Tunga Delar is a wholesaler of spare parts and equipment for heavy duty vehicles with multiple locations in Sweden. The Acquisition is in line with Relais Group’s growth strategy, and it will strengthen the Company's position as an independent importer and technical wholesaler of spare parts and equipment for heavy-duty vehicles and buses in Sweden. 

Founded in 2012, Tunga Delar’s turnover for the year 2019 was SEK 99.5 million (2018: SEK 101.6 million), with an EBITDA of SEK 19.9 million (SEK 20.1 million). On 31 December 2019, Tunga Delar's balance sheet total was SEK 57.6 million (SEK 50.3 million), while its shareholders' equity stood at SEK 36.9 million (SEK 37.9 million). The company employs 31 people. The figures for the year 2019 are unaudited.

The purchase price paid upon the closing of the Acquisition (“Purchase Price”) was approximately SEK 142.9 million, of which roughly SEK 87.9 million was paid in cash and SEK 55.0 million in Relais Group’s shares as described below. The company's debt-free value (enterprise value) is SEK 140.0 million. In addition, the parties have agreed on an arrangement whereby Relais will pay an additional consideration if certain financial targets agreed on by the parties are met by the end of 2022. The additional consideration is estimated to be relatively small compared to the total value of the transaction. Relais will also have the option to acquire the remaining shares of Tunga Delar owned by the minority shareholders during March–April 2022. 

Tunga Delar will be reported as part of Relais Group as of 1 February 2020. The Acquisition is estimated to boost the growth of Relais net sales with an immediate positive impact on earnings before interest, taxes and amortisation (EBITA). 

Relais Group CEO Arni Ekholm on the Acquisition:

"In Sweden, the aftermarket for heavy-duty vehicles and buses has traditionally been dominated by the large OEM companies. Through the close cooperation of Tunga Delar and Huzells, which joined the Relais family in June 2019, Relais will now have the opportunity to become a prominent player in the Swedish independent spare parts and equipment market for heavy-duty vehicles and buses. 

The Acquisition will further expand our product portfolio, allowing us to offer even more comprehensive services to our customers. TD and Huzells complement each other in terms of geographic coverage, customer segments as well as kills and knowledge." 

Mikael Öbrink, Managing Director of TD Tunga Delar Sverige AB: 

“We see that this arrangement will clearly benefit our customers. Together with the other Relais Group companies, Tunga Delar will now be able to offer them a much wider range of products and services. By joining forces with Relais Group we will become bigger and stronger, which is beneficial also for both our personnel and suppliers. Tunga Delar is well established on the Swedish market, and as owners we are happy to become members of the Relais family, being able to continue to develop the business of our company.

The Acquisition is in line with Relais Group’s growth strategy, which includes the following objectives:

• continuing to grow faster than the market average, which is supported by targeted synergies, such as cross sales between existing and acquired companies.
• creating added value for our customers with our comprehensive product catalogue, digital platform and top-quality customer service.
• striving to continue targeted acquisitions and becoming an active player in the consolidation of the vehicle aftermarket in the Nordic and Baltic regions.

The goal of Relais Group is to double its turnover in the next five years both organically and through acquisitions. 

Directed Share Issue related to Acquisition

The Company paid SEK 55.0 million of the Purchase Price (“Share Component”) by issuing in a directed share issue (“Share Issue”) a total of maximum 606,250 new Relais Group’s shares (“Consideration Shares”) to the shareholders of Tunga Delar (“Sellers”) in connection with the closing of the Acquisition. The Sellers subscribed for the issued Consideration Shares offered for subscription in the Share Issue in full, and the Board of Directors of Relais Group accepted the Sellers’ share subscriptions.

The Share Issue was carried out by the decision of the Board of Directors of Relais Group under the authorisation given by the Extraordinary General Meeting of Relais Group on 18 September 2019. The Share Issue was carried out in order to develop Relais Group’s business and finance the corporate transaction, so there is a weighty financial reason for deviating from the pre-emptive right of the shareholders within the meaning of the Finnish Limited Liability Companies Act. The subscription price for the Consideration Shares was EUR 8.6091 per Consideration Share, which corresponds to the volume weighted average price of Relais Group Plc’s share in the Nasdaq First North Growth Market Finland for the period of 30 trading days before the closing of the Acquisition.

The Consideration Shares represent approximately 3.6 per cent of Relais Group’s shares and votes after the Share Issue. The Consideration Shares will entitle their holders to full dividends possibly distributed by Relais Group 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 are subject to a lock-up period of 360 days as of their issuance as separately agreed. The Company will apply for the admission of the Consideration Shares to public trading on the Nasdaq First North Growth Market Finland in the same class of shares as the Company’s old shares after registration of the Consideration Shares in the Trade Register. After the registration the number of Relais Group’s shares is 16,820,050.

The terms and conditions for the Share Issue are appended to this company release.

Relais Group Plc

Board of Directors

Further information 

Relais Group Plc

Arni Ekholm, CEO

e-mail: arni.ekholm@relais.fi

+358 40 760 3323

Certified advisor:

Evli Bank Plc, tel. +358 40 579 6210

Relais Group in brief

Relais Group is an importer and technical wholesaler that actively develops its vehicle electrical equipment and spare parts business operations in the Nordic and Baltic countries. Relais creates added value for its customers by offering vehicle spare parts, electrical equipment and specialist services throughout the life cycle of vehicles in a reliable, efficient and timely manner. As a strongly growth-oriented company, Relais aims to be an industry forerunner in the vehicle life cycle enhancement business. The reported net sales of Relais Group amounted to EUR 72.5 million in 2018 and, illustrating the impact of Relais' acquisition of ABR and Huzells in May 2019, the pro forma net sales of Relais Group amounted to EUR 119 million in 2018. The company employs more than 260 people in six countries. Relais Group shares are listed on the Nasdaq First North Growth Market Finland marketplace and the share trading code is RELAIS.

www.relais.fi