Volati intends to be listed on Nasdaq Stockholm

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Volati AB (publ) (“Volati” or the “Company”) today announces its intention to launch an initial public offering (the “IPO”) and listing of the Company’s common shares and preference shares on Nasdaq Stockholm. 

• The offering comprises approximately 19 million new common shares, corresponding to a total of approximately 24 percent of the total number of common shares outstanding in the Company following the IPO (the “Offering”). In addition, the Company intends to issue an overallotment option to the Joint Global Coordinators representing not more than approximately 1.9 million common shares, corresponding to up to 10 percent of the Offering and approximately 2 percent of the total number of common shares outstanding in the Company following the Offering assuming the overallotment option is exercised in full. 
• The proceeds from the new share issue are expected to amount to approximately
  SEK 1.2 billion before issue costs assuming the overallotment option is exercised in full and will be utilised to maintain a high acquisition rate. 
• Four investors have given undertakings to become cornerstone investors: Didner & Gerge Fonder, The Fourth Swedish National Pension Fund (AP4), Handelsbanken Fonder and Peter Lindell privately and through controlled companies, whose total undertakings amount to SEK 700 million, corresponding to approximately 58 percent of the Offering assuming the overallotment option is exercised in full. 
• The Offering is expected to be conducted at a fixed price of SEK 58 per common share, which corresponds to a total value of the Company’s common shares of SEK 4.7 billion following the Offering assuming the overallotment option is exercised in full. 
• In connection with the IPO, the Board of Directors of Volati has adopted an adjustment of the financial targets since the new share issue will change the capital structure and create the preconditions for a maintained rate of acquisitions. Adoption of the financial targets is conditional on completion of the Offering. 
• Nasdaq Stockholm has approved the Company’s shares for listing subject to customary conditions.
• First day of trading in the Company’s shares is expected to be on or around 30 November 2016.

The Board of Directors of Volati has decided to continue with the plans to launch an initial public offering and listing of the Company’s common shares and preference shares on Nasdaq Stockholm and to broaden the shareholder base through a new issue of common shares. The reason for the IPO is to promote Volati’s development and continued growth through, inter alia, improved access to the capital market and a diversified base of institutional shareholders. The Company has applied for the Company‘s shares to be admitted for trading on Nasdaq Stockholm, and Nasdaq Stockholm has approved the Company’s shares for listing subject to customary conditions.

Karl Perlhagen and Patrik Wahlén, the founders of Volati and Chairman and member of the Board of Directors, respectively:

“We are now listing our growing industrial group, Volati, on the stock exchange. Given our proven business model — acquiring well-functioning companies and developing them with an emphasis on long-term value creation — raising additional capital is a natural progression. We have done this before, in 2015, through a listing of preference shares on Nasdaq First North. We are now taking the next step by listing the common and preference shares on Nasdaq Stockholm. For us, as the founders, this is yet another milestone on the journey. We wish to continue contributing for a strong development, primarily through identifying and facilitating new acquisitions, and we strongly believe in the opportunities that Volati is offering. As we now open up the possibility of becoming an owner of common shares in Volati, we as founders will not sell any shares except the common shares that are to be offered to one existing minority owner in connection with this owner’s increased ownership in the Company. Volati accounts for a significant share of both of our capital and we regard Volati as the best alternative for receiving a solid return also going forward.”

Mårten Andersson, CEO of Volati:

“Volati was founded in 2003 with the business concept of acquiring companies with proven business models, leading market positions and strong cash flows at reasonable valuations, and developing these with an emphasis on long-term value creation. Volati has since grown substantially both organically and through the 22 acquisitions that we have completed. Volati is now a Swedish industrial group with stable, profitable business units in various sectors, and with net sales over the last twelve months of almost SEK 3.2 billion. Volati’s ownership approach is still long-term and the business model clear; we acquire well-managed companies and support their continued development. We want to create the preconditions for maintained high growth rate and allow more companies to grow under the ownership of Volati.”

Volati in brief

Volati is an industrial group comprising 13 business units organised into three business areas: Trading, Industry and Consumer. The Company has some 40 operating companies in 15 countries, with Sweden accounting for the largest share of net sales.

Acquisitions are central in Volati’s strategy. Volati acquires primarily companies with proven business models, leading market positions and strong cash flows at reasonable valuations, and develops these with an emphasis on long-term value creation. Volati’s business development strategy is based on retaining the companies’ local entrepreneurship and in addition adding leadership, expertise, processes and financial resources.

Volati has a flexible organisation that facilitates fast decision-making and a decentralised governance model that entails day-to-day decision-making at the operational level. This decentralised business model is a key success factor, as it encourages a high level of entrepreneurship in the business units, creates a clear framework of responsibilities and allows for Volati’s continued growth with limited central resources.

During the twelve-month period from 1 October 2015–30 September 2016, Volati’s net sales were SEK 3,158 million and adjusted EBITA[1] SEK 340 million. In the 1 January 2011–30 September 2016 period, Volati reported a CAGR[2] in EBITA of 31 percent. Volati posted average annual organic EBITA growth of 11 percent over the corresponding period.[3]  

Volati believes the Company has the following key strengths and competitive advantages:

• Strong underlying businesses
• History of successful acquisitions
• Scalable business model
• Attractive financial profile
• Experienced management team and Board of Directors

Adjusted financial targets

Volati’s overriding objective is to generate long-term value growth for its shareholders. The financial targets are being adjusted in connection with the upcoming IPO since the new share issue will change the capital structure and thereby create the preconditions for a maintained rate of acquisitions. The Board of Directors of Volati has adopted the new financial targets, which should be evaluated as a whole. Adoption of the financial targets is conditional on completion of the Offering. The previous financial targets can be found in the Company’s 2015 Annual Report.

• EBITA growth: Volati’s target is to reach an adjusted EBITA[4] of SEK 700m no later than the end of 2019, implying just over a doubling of adjusted EBITA for the last twelve-month period as per 30 September 2016. The target for annual organic EBITA growth is 5 percent on average.
• Cash conversion: Volati’s target is to achieve an annual cash conversion of at least 85 percent.
• Return on adjusted equity: Volati’s long-term target is to achieve a return on adjusted equity of at least 20 percent.[5]
• Capital structure: Volati’s long-term target is that net debt in relation to rolling twelve months adjusted EBITDA[6] should not exceed 3.0 times.
• Dividend policy: Volati’s target for dividend on common shares is to distribute approximately 10–30 percent of the Company’s net earnings attributable to parent company’s owners. When deciding on dividends, future acquisition possibilities, development potential in existing companies, the Company’s financial position and other factors deemed to be of importance by Volati’s Board of Directors will be taken into consideration. Dividends on preference shares are to be issued at an annual amount of SEK 40.00 per preference share, through quarterly payments of SEK 10.00, in accordance with the Articles of Association.

Cornerstone investors

Subject to specific terms and conditions, the four cornerstone investors have committed to acquire common shares for a total of SEK 700 million, corresponding to approximately 58 percent of the Offering assuming the overallotment option is exercised in full, under the condition that the IPO is completed. The four cornerstone investors are Didner & Gerge Fonder (commitment to acquire common shares in the Company to an amount corresponding to SEK 250 million), The Fourth Swedish National Pension Fund (AP4) (SEK 200 million), Handelsbanken Fonder (SEK 150 million) and Peter Lindell privately and through controlled companies (SEK 100 million).

The Offering

The Offering in connection with the IPO will comprise a new issue of common shares to institutional investors in Sweden and internationally as well as to the general public in Sweden. The Company’s largest shareholder, Karl Perlhagen, will not be selling any shares. In connection with the IPO, the other current common shareholders have committed to sell common shares to a minority owner in Volati in connection with the sale of this minority owner’s existing minority holding in the parent company within the Trading Business Area to Volati.

The Offering comprises approximately 19 million new common shares, corresponding to a total of approximately 24 percent of the total number of common shares outstanding in the Company following the Offering. In addition, the Company intends to issue an overallotment option to the Joint Global Coordinators representing not more than approximately 1.9 million common shares, corresponding to up to 10 percent of the Offering and approximately 2 percent of the total number of common shares outstanding in the Company following the Offering assuming the overallotment option is exercised in full. The Offering is expected to be conducted at a fixed price of SEK 58 per common share, which corresponds to a total value of the Company’s common shares of SEK 4.7 billion following the Offering assuming the overallotment option is exercised in full. The proceeds from the new share issue are expected to amount to approximately SEK 1.2 billion before issue costs assuming the overallotment option is exercised in full. The net proceeds from the Offering create the preconditions for maintaining a high rate of acquisitions. Commitments from cornerstone investors correspond to approximately 58 percent of the total amount of shares in the Offering. Free float, including the common shares sold to the minority shareholder, is expected to amount to approximately 28 percent following the Offering assuming the overallotment option is exercised in full. 

A prospectus with the full terms, conditions and instructions for the Offering is expected to be published on Volati’s website www.volati.se on or around 18 November 2016. First day of trading in the Company’s shares is expected to be on or around 30 November 2016.

Carnegie and Nordea are acting as Joint Global Coordinators and Joint Bookrunners in connection with the IPO. Gernandt & Danielsson Advokatbyrå KB is acting as legal advisor to the Company and Advokatfirman Vinge as legal advisor to Joint Global Coordinators.

For further information, please contact:

Mårten Andersson, CEO of Volati AB, +46 (0)72-735 42 84, marten.andersson@volati.se

Mattias Björk, CFO Volati AB, +46 (0)70-610 80 89, mattias.bjork@volati.se

Volati AB (publ) 

Engelbrektsplan 1, SE-114 34 Stockholm, Sweden

Tel: +46 (0)8-21 68 40, e-mail: info@volati.se, Corp. Reg. No. 556555-4317

This information is such that Volati AB is obliged to disclose under the EU Market Abuse Regulation (MAR). The information was submitted for publication, through the agency of the contact person set out above, at 18.00 CET on 14 November 2016.

Important information

This announcement is not and does not form a part of any offer to sell or a solicitation of an offer to purchase, any shares or other securities in the Company.  

This announcement has not been distributed, and will not be distributed or in any other way sent, into the United States, Canada, Japan, Australia, New Zeeland, South Africa, Hong Kong or Singapore or any other jurisdiction in which such distribution would violate local securities laws or regulations in such jurisdiction or would require registration or other measures.

These materials are not an offer for sale of securities in the United States.  Securities may not be offered or sold in the United States. The Company does not intend to register any part of the Offering in the United States or to conduct a public offering in the United States.

This announcement is an advertisement and is not a prospectus for the purposes of the Directive 2003/71/EC (together with any applicable implementing measures in any member state, the “Prospectus Directive”). A prospectus prepared pursuant to the Prospectus Directive will be published, which, when published, can be obtained from the Company. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the prospectus.

In any EEA member state other than Sweden that has implemented the Prospectus Directive, this announcement is only addressed to and is only directed at qualified investors in that member state within the meaning of the Prospectus Directive, i.e., only to investors who can participate in the Offering without an approved prospectus in such EEA member state.

This announcement is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as “relevant persons”). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements refer to statements which do not refer to historical facts and events, and statements which are attributable to the future, such as expressions as “deem”, “assess”, “expect”, “await”, “judge”, “assume”, “predict”, “can”, “will”, “shall”, “should or ought to”, “according to estimates”, “consider”, “may”, “plan”, “potential”, “calculate”, “as far as is known” or similar expressions suitable for identifying information that refers to future events. This applies in particular to statements referring to future results, financial position, cash flow, plans and expectations for the Company’s business and management, future growth and profitability and general economic and regulatory environment and other circumstances which affect the Company. Forward-looking statements are based on current estimates and assumptions which are based on the Company’s current intelligence. Such future looking statements are subject to risks, uncertainties and other factors which may result in actual results, including the Company’s financial position, cash flow and profits, deviating considerably from the results which expressly or indirectly form the basis of, or are described in, statements, or may result in the expectations which, expressly or indirectly, form the basis of or are described in statements not being met or turning out to be less advantageous compared to the results, which expressly or indirectly formed the basis of or were described in the statements. The Company’s business is exposed to a number of risks and uncertainties which may result in forward-looking statements being inaccurate or an estimate or calculation being incorrect. Therefore, potential investors should not place undue reliance on the forward-looking statements herein and are strongly advised to read detailed description of factors which have an effect on the Company’s business and the market in which the Company operates that will be included in the prospectus. 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] Calculated as EBITA for the last twelve months for the companies consolidated in the Company at the reporting date, as if the companies had been owned for the last twelve-month period and adjusted for transaction related costs, restructuring costs, revaluation of earn-out payments, capital gains/losses on the sale of operations and other revenue and costs deemed as non-recurring.

[2] Compound annual growth rate, using the year prior to the first year of the defined period as base year. 

[3] Average organic EBITA growth has been calculated as the average of organic EBITA growth during the periods 2011, 2012, 2013, 2014, 2015 and 1 January–30 September 2016.

[4] Calculated as EBITA for the last twelve months for the companies consolidated in the Company at the reporting date, as if the companies had been owned for the last twelve-month period and adjusted for transaction related costs, restructuring costs, revaluation of earn-out payments, capital gains/losses on the sale of operations and other revenue and costs deemed as non-recurring. 

[5] Calculated as net profit (including the share attributable to non-controlling interests) less preference share dividend divided by average equity (including the share attributable to non-controlling interests) less preference share capital.

[6] Calculated as EBITDA for the last twelve months for the companies consolidated in the Company at the reporting date, as if the companies had been owned for the last twelve month-period and adjusted for transaction related costs, restructuring costs, revaluation of earn-out payments, capital gains/losses on the sale of operations and other revenue and costs deemed as non-recurring. 

Mårten Andersson, VD Volati AB, +46 72-735 42 84, marten.andersson@volati.se

Volati AB (publ) 

Engelbrektsplan, 114 34 Stockholm, Sweden, Phone: +46 8-21 68 40  

About Volati

Volati is a Swedish industrial group formed in 2003, comprising some 40 operating companies divided into 13 business units organised in three business areas: Trading, Consumer and Industry. Volati acquires mainly companies with proven business models, leading market positions and strong cashflow at reasonable valuations and develops these with an emphasis on long-term value creation. Volati’s strategy is to build on the identity and entrepreneurial spirit of the companies, adding, leadership, expertise, processes and financial resources. Volati has operations in 15 countries, with a total of about 1,300 employees and annual sales of approximately SEK 3bn. Volati’s preference share is traded on Nasdaq First North Premier and Avanza Bank is the company’s Certified Adviser. Further information is available at www.volati.se.