Press release 2021-12-07
- The merger creates the leading voluntary specialist retail chain in the Nordic region for home products with a focus on kitchens, appliances, consumer electronics, lighting and interior design, offered to consumers and businesses.
- It is proposed that the combined company changes its company name to
Elon AB (publ). - Due to Electra's and Elon's size and diversification combined, the combined group will become an even stronger player with significantly enhanced opportunities to offer its customers competitive products, services and solutions.
- The merger enables a stronger customer proposition and a broader product offering including, inter alia, consumer electronics to customers throughout the Nordic region, available in more than 900 stores owned by voluntary specialist retailers who offer service, support and deliveries locally.
- The merger is expected to create significant shareholder value as a result of synergies, partly through revenue synergies in terms of Electra and Elon being able to offer the combined product range to their customers and partly through synergies in terms of a lower cost base for the combined group that is preliminary expected to decrease by
SEK 50 million , which is expected to be achieved gradually over the next five years.
Anneli Sjöstedt, President and CEO of Electra, comments:
”Electra's collaboration with Elon since 2019 regarding retail chain branding has turned out very well. A merger of both companies will generate an even stronger market position. Both companies aim to grow in the Nordic region, to operate leading retail chains and generate growth by offering attractive products and logistics services. The joint forces will enhance our ability to achieve our goals.”
Stefan Lebrot, President and CEO of Elon, comments:
”By forming a joint company with the Nordic region as our market, we merge two complementing and well-functioning companies into one group to reach new heights. Our goal is to become the leading retail chain in the Nordics where we can offer our customers all products for the home. The combined group is well-positioned to achieve this goal.”
Peter Elving, Chairman of the board of directors of Electra, comments:
”By merging we can provide a stronger service offering to our customers at the same time as revenue synergies and cost savings make us more competitive in the market.”
”Two units as strong as Elon and Electra can achieve fantastic success together. Through local presence in the Nordic region and solid knowledge of the various markets, our offering will attract customers and generate good opportunities for our shareholders. We secure our position as a strong and knowledgeable specialist retailer in the Nordic region with a competitive setup.”
Transaction structure:
- The merger will be completed by Electra acquiring all shares in Elon in exchange for 9,659,223 newly issued Electra shares through an issue in kind. Based on the closing price of Electra's share on
6 December 2021 ofSEK 65.0 per share, the value of the Electra shares issued amounts to approximatelySEK 628 million . - Electra’s board of directors will propose that a general meeting in Electra resolves on the issue in kind and Elon Group Holding’s board of directors will propose that
Elon Group Holding's general meeting resolves on the Transaction. - The Transaction is subject to approval by Electra's and
Elon Group Holding's general meetings, approval from the relevant competition authority and the SFSA’s1 approval of the prospectus that will be prepared by Electra due to the admission to trading of the shares issued in the issue in kind. - The Transaction entails that Electra undergoes a so-called substantial change of operations according to Nasdaq Stockholm's regulations, meaning that Nasdaq Stockholm will conduct a review of Electra in order to ensure that Electra meets applicable listing requirements. This review will be conducted before the completion of the Transaction. During the review, Nasdaq Stockholm will according to Nasdaq Stockholm's regulations resolve on an observation status of Electra’s share.
- Following completion of the Transaction, Electra's shareholders will hold 35 per cent of the shares and votes in the combined group after full dilution and
Elon Group Holding 65 per cent of the shares and votes. As a result of the issue in kind,Elon Group Holding will become the largest shareholder in the combined group.Elon Group Holding has been granted an exemption from the mandatory bid obligation from theSwedish Securities Council . - The largest shareholder in the combined group,
Elon Group Holding , is controlled by a broad base of owners consisting of more than 250 Elon retailers, of which no single retailer will own more than 2.5 per cent ofElon Group Holding .Elon Group Holding will retain a majority of the capital and votes in the combined group, expected in the range 51-55 per cent. The excess share up to 65 per cent will, no later than 13 months from the Transaction completion be distributed without restrictions in ownership rights to shareholders ofElon Group Holding . - In order to adjust the capital structure prior to the Transaction completion, Electra’s board of directors will propose that a general meeting in Electra resolves on an extra dividend of
SEK 15.6 million to Electra’s shareholders. - Electra’s board of directors intends to propose that a general meeting in Electra resolves on an incentive program for key employees in the combined group.
- The combined group’s management team will include, inter alia, Stefan Lebrot (president and CEO),
Anneli Sjöstedt (deputy CEO) and Peter Brodén (CFO). - The deal is supported by the respective board of directors in Electra and
Elon Group Holding .
Background and rationale for the Transaction
The merger creates a strong player with significant size and diversification and thereby better positioned to offer customers competitive products and services. The customer proposition is enhanced through Electra's and Elon's broad presence in the market with products and services offered in more than 900 stores owned by voluntary specialist retailers and entrepreneurs, spread across the five Nordic countries as well as an advanced IT and logistics solutions offering.
Electra and Elon operate in a competitive market where numerous products have global price transparency. In an industry experiencing substantial change, both management teams and the board of directors of Electra and Elon believe that the merger creates good potential for increased growth, competitiveness and profitability.
Overview of the combined group
Elon’s ownership structure
Elon's current parent company is
The combined group’s operations
The combined company will operate under the company name
The combined group’s management
Stefan Lebrot will be the president and CEO,
The combined group’s board of directors
Provided that Electra’s general meeting approves the issue in kind, Electra’s nomination committee has proposed that
Incentive program
Provided that Electra’s general meeting approves the issue in kind, Electra’s board of directors intends to propose that a general meeting resolves on an incentive program to key employees in the combined group. The purpose of the incentive program is to align key employees’ remuneration to the combined group’s long-term value creation and to retain key employees by ensuring a balance between variable and fixed remuneration as well as between long-term and short-term incentives. The incentive program will consist of warrants where full subscription would result in a dilution of approximately 4 per cent based on the new number of shares in the combined group after Transaction completion.
Financial information
The financial information presented below refers to information retrieved from each company's internal accounting system and is prepared in accordance with IFRS. The combined financial information constitutes a preliminary aggregate amount of the financial information from each company. The information has been prepared for illustrative purposes and should not be viewed as pro forma information. Unrealised gains and losses related to financial hedging instruments are recognised in the net financials. Future synergy effects have not been considered. The financial information has not been audited or otherwise reviewed by the companies' auditors.
Rolling twelve-month period, | ||||
SEK million | Electra | Elon | The combined group | |
Net sales | 1,960 | 4,238 | 6,198 | |
EBITDA | 58 | 142 | 200 | |
EBITDA margin | 2.9% | 3.3% | 3.2% |
The combined group’s indebtedness (net debt in relation to EBITDA) is not expected to be significantly affected as a result of the merger.
Pro forma information will be included in the prospectus that will be prepared by Electra due to the admission to trading of the shares issued in the issue in kind.
Synergies and integration
In total, Electra and
Integration costs and other one-offs to achieve a reduced cost base have been preliminarily estimated at approximately
The combined group’s ownership structure
The table below shows a summary of the ownership structure in the combined group following Transaction completion.
Shareholders3 | % of capital and votes |
65.0% | |
Håkan Lissinger and family5 | 10.6% |
3.6% | |
Alexander Oker-Blom | 1.7% |
1.6% | |
Avanza Pension6 | 1.5% |
Other shareholders | 16.0% |
Total | 100% |
Shareholders of Electra | 35% |
Shareholders of | 65% |
Additional information about the Transaction
On
Prior to entering the agreement to merge, the parties conducted a limited, customary due diligence review of certain business, financial and legal information regarding Electra and Elon, respectively. No information that was not previously public nor information that could have significant impact on Electra’s share price have been exchanged during this process.
Until the Transaction has been completed, Electra and Elon will continue to operate as separate companies, led by their respective current management teams.
Conditions for the Transaction completion
As stated above, the Transaction is conditional on, among other things, approval from the relevant competition authority and that the general meetings of Electra and
Electra's and
The Transaction is conditional on the SFSA’s approval of the prospectus that will be prepared by Electra in connection with the admission to trading of the shares issued in the issue in kind.
The Transaction entails a so-called substantial change of operations according to Nasdaq Stockholm's rulebook. For this reason, Nasdaq Stockholm will conduct a review of Electra in order to ensure that Electra meets applicable listing requirements. This review will be conducted before the Transaction completion.
Indicative time table
First half of 2022 Elon Group Holding’s general meeting resolves on the Transaction.
First half of 2022 Expected approval from relevant competition authority.
First half of 2022 Electra’s general meeting resolves on the issue in kind and other decisions attributable to the Transaction.
First half of 2022 Prospectus publication.
First half of 2022 Estimated Transaction completion and issuance of Electra’s shares to
Advisors
In connection with the Transaction, Nordea Bank Abp, filial i Sverige is financial advisor and Advokatfirman Vinge KB is legal advisor to Electra and Advokatfirman Lindahl KB is legal advisor to Elon.
This information is such that
About Electra
Electra develops and operates concepts for retail chains with independent entrepreneurs, especially within consumer electronics, and is a flexible logistics partner that offers advanced IT and logistics solutions. Electra was founded in 1949 by the Lissinger family as a trading company in the radio industry. The company has its headquarters and most of its operations in Kalmar. The company's share (ELEC) is listed on Nasdaq Stockholm. Electra's operations are divided into two segments and for the twelve-month period ended
About Elon
Elon is a leading voluntary specialist retail chain for home products with representation in
For more information please contact
Anneli Sjöstedt, President and CEO of Electra
Telephone: +46 (0)70-52 584 59
E-mail: anneli.sjostedt@electra.se
Stefan Lebrot, President and CEO of Elon
Telephone: +46 (0)76-76 236 29
E-mail: stefan.lebrot@elongroup.se
Camilla Waldmark, Media contact
Telephone: +46 (0)70-57 011 94
E-mail: camilla.waldmark@elongroup.se
1 Sweden’s financial supervisory authority (Finansinspektionen).
2 Source: GfK and Elektronikbranschen.
3 Source:
4 Refers to Elon Group Holding’s shareholding immediately after the Transaction completion and before the distribution of shares in the combined group that
5 Includes Håkan Lissinger (1,088,000 shares), Johanna Lissinger Peitz (240,000 shares) and Malin Lissinger Browall (240,000 shares).
6Avanza Pension's holdings exclude Alexander Oker-Blom's holdings via Avanza Pension, which amount to 152,000 shares.
7 The number of employees refers to Electra’s central organisation and excludes store employees.
8 The number of employees refers to Elon’s central organisation and excludes store employees.
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Attachment
- Pressmeddelande Elon Electra eng 2021-12-07
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