Candyking to be listed - Accent Equity Partners

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SOUTH AFRICA OR THE UNITED STATES. Press Release
Candyking to be listed
Stockholm, November 29, 2013
Candyking Holding AB (publ) (“Candyking” or the “Company”) and the principal shareholders
Accent1 and EQT2 (the “Principal Shareholders”) have decided to diversify the ownership base
of the Company to support Candyking’s continued growth and development. The board of
directors of Candyking has therefore applied for listing of the Company’s shares on NASDAQ
OMX Stockholm. A prospectus is made public today, November 29, 2013.
Candyking is the leading supplier of pick & mix confectionery and natural snacks in the
Nordics and is currently present in more than 10,000 retail outlets. The Company offers
stores a complete “shop-in-shop” solution, including products and displays as well as
merchandizing and logistic services. The Company currently operates through four concepts:
Candyking (Karamellkungen in Sweden), Parrot’s, Premiyum and Candyking Favourites. In
2012, the Company’s net sales amounted to SEK 1,748 million, corresponding to more than
40,800 tonnes of sold confectionery and natural snacks.
•
•
•
•
•
•
•
•
•
•
The Offering comprises of an institutional offering and an offering to the public in Sweden
(“the Offering”).
The Offering is comprised of a maximum of 18,518,517 shares, where a maximum of
11,481,481 newly issued shares are offered by the Company and a maximum of 7,037,036
existing shares are offered by the Principal Shareholders.
The number of shares in the Offering may be increased at the discretion of the Principal
Shareholders by up to 8,208,585 existing shares.
The Principal Shareholders have granted Carnegie Investment Bank AB (publ) (“Carnegie”)
and Nordea Bank AB (publ) (“Nordea”) an option to acquire up to 4,009,065 additional
existing shares from the Principal Shareholders to cover over-allotment, if any, in
connection with the Offering.
The price in the Offering is expected to be set within the range SEK 27-32 per share.
The total value of the Offering amounts to approximately SEK 500 million. Assuming the
Offering is increased in full, the total value of the Offering amounts to approximately SEK
722 million (and approximately SEK 830 million assuming the over-allotment option is also
exercised in full).
Based on the price range of the Offering, Candyking’s shares are valued at approximately
SEK 994-1,045 million.
The bookbuilding period of the institutional Offering will commence on December 2, 2013
and is expected to close on December 11, 2013.
The application period of the Offering to the public in Sweden will commence on December
2, 2013 and is expected to close on December 10, 2013.
Trading on NASDAQ OMX Stockholm is expected to commence on December 12, 2013,
under the trading symbol “CANDY”.
1
AccentTwo Holding Limited, one of Accent Equity 2008 L.P. wholly-owned subsidiaries, through its general partner AEP
2008 Ltd. registered on Lime Grove House, Green Street, St. Helier, JE12ST Jersey.
2
EQT Expansion Capital I Limited, a limited liability corporation incorporated in Guernsey registered on National
Westminster House, Le Truchot, StPeter Port, Guernsey GY1 3RA, Channel Islands, in the capacity of (1) general partner for
EQT Expansion Capital I (General Partner) LP, which is in capacity of general partner for EQT Expansion Capital I Limited
Partnership, and (2) manager for EQT Expansion Capital I Co-Investment Scheme. 1 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SOUTH AFRICA OR THE UNITED STATES. •
Carnegie and Nordea are acting as Joint Lead Managers and Bookrunners in connection
with the Offering (the “Managers”).
David von Laskowski, President and CEO, comments:
”During the last two years, Candyking has focused on efficiency improvements and structural
changes, which has laid a foundation from which we can now focus on growth and concept
innovation. We have identified several exciting opportunities for the future and look forward to offer
existing, as well as new, customers and consumers a high degree of freedom of choice, in a
public setting.”
Mats G. Jansson, Chairman of the Board, comments:
”A listed Candyking represents a unique possibility for investors to be a part of a market leading
player with stable cash flows and a successful customer offering. Candyking has, as a result of its
attractive position in the value chain, created the right conditions for growth and is ready to take
the next important step in the Company’s development.”
Jan Ohlsson, board member by the mandate of Accent, comments:
“Since its foundation 30 years ago, Candyking has successfully developed from a local Swedish
phenomenon to a leading Nordic player with operations in 10 countries and several confectionery
and natural snacks pick & mix concepts. We look forward to the coming journey on the public
markets fully confident that the hard work of the last years of rationalization and
internationalization will bring favorable results.”
Background and reasons
Candyking is the market leading provider of complete confectionery pick & mix solutions in the
Nordics. The Company was acquired in 2008 by its current principal shareholder Accent and
minority shareholder EQT. Accent and EQT are leading private equity funds in the Nordics, with a
business model driven by an operational approach and focused on the development of portfolio
companies through the execution of a strategy that is designed to generate returns through sales
and earnings growth. Accent and EQT typically exit their portfolio companies within four to eight
years of the acquisition. The Offering of Candyking’s shares is in line with this strategy.
Under the ownership of Accent and EQT, several important strategic initiatives have been launched
to improve Candyking’s business model. This has been completed by focusing on operational
efficiency and the establishment of a competitive cost profile that, in turn, has facilitated organic
and acquisition-driven growth and extension of its geographical reach into several European
markets. Candyking has also expanded its concept offering with Parrot’s, Premiyum and
Candyking Favourites, which has contributed to the strengthening of Candyking’s position in the
value chain.
Candyking’s board of directors and management expect that the Offering and listing of the shares
will generate increased attention and brand awareness among existing and potential customers,
suppliers and consumers. The Offering and listing also provide the Company with access to the
Swedish and international capital markets for any future capital needs as well as enable the
Company to pursue acquisitions with payment in own shares. Candyking’s board of directors and
management, together with the Principal Shareholders, have therefore made the assessment that
the Company is well positioned to capture the benefits from a public listing.
In addition, the purpose of the Offering is to reduce the Company’s indebtedness and repay the
Company’s shareholder loans, partly by way of a debt/equity swap where certain shareholder
2 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SOUTH AFRICA OR THE UNITED STATES. loans are converted into shares in connection with the Offering, and partly by way of using the net
proceeds from the new share issue to repay all other remaining shareholder loans from previous
owners, convertible subordinated debentures, vendor notes and the mezzanine loan. The shares
issued in the debt/equity swap are offered for sale in the Offering by the Principal Shareholders.
Assuming the Offering is increased in full, all shares that the Principal Shareholders acquire
through the debt/equity swap will be included in the Offering. In addition to the repayment of
loans to reduce indebtedness described above, the net proceeds received by the Company as a
result of the new share issue in the Offering will be used for general corporate purposes.
Following the completion of the Offering, Accent and EQT will maintain a significant portion of their
existing shareholding and will continue to contribute to the Company’s development. However,
neither Accent nor EQT currently intend to be long-term strategic shareholders of Candyking.
Based on the assumption that the price in the Offering is set to the mid-point in the price range
(SEK 29.50 per share) and assuming the Offering is not increased and the over-allotment is not
exercised, the Principal Shareholders will together hold approximately 51% of the shares and the
votes in the Company after completion of the Offering. Assuming the Offering is increased in full
and the over-allotment is exercised in full, the Principal Shareholders will together hold
approximately 18% of the shares and the votes in the Company after completion of the Offering
(based on the assumption that the price in the Offering is set to the midpoint of the price range,
SEK 29.50 per share).
The Offering in brief
The Offering comprises an institutional offering and an offering to the public in Sweden. The
Offering comprises up to 18,518,517 shares, of which the Company is offering up to 11,481,481
newly issued shares and the Principal Shareholders are offering up to 7,037,036 existing shares.
The total number of shares offered may be increased at the discretion of the Principal
Shareholders by up to 8,208,585 existing shares.
The Principal Shareholders have granted an option to the Managers, exercisable in whole or in
part for 30 days following the first day of trading in the shares on NASDAQ OMX Stockholm, to
purchase up to 4,009,065 additional existing shares from the Principal Shareholders, equivalent to
15% of the total number of shares in the Offering, at the price set in the Offering, to cover overallotments, if any, in connection with the Offering.
The Offering price is expected to be set within the range SEK 27-32 per share. The price will be set
by the board of directors of Candyking and the Principal Shareholders in consultation with the
Managers, based on the anticipated investment interest from institutional investors following a
book-building process. However, the price in the Offering to the public in Sweden will not exceed
SEK 32 per share. Brokerage commission will not be charged. The final offering price is expected
be announced through a press release on or about December 12, 2013.
Trading in Candyking’s shares on NASDAQ OMX Stockholm is expected to commence on
December 12, 2013 under the trading symbol “CANDY.” The expected settlement day of the
Offering is December 17, 2013.
Carnegie and Nordea are acting as Joint Lead Managers and Bookrunners in connection with the
Offering.
Prospectus
3 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SOUTH AFRICA OR THE UNITED STATES. A Swedish-language prospectus regarding the Offering will be published today, November 29,
2013. The prospectus and application form can be obtained from Carnegie or branches of Nordea,
as well as ordered from Candyking. The prospectus and application forms are also available on
Candyking’s website (www.candyking.com), Carnegie’s website (www.carnegie.se), Nordea’s
website (www.nordea.se, under Sparande/Handla och placera), Avanza’s website
(www.avanza.se) and Nordnet’s website (www.nordnet.se).
Indicative timetable
• Publication of the prospectus and announcement of the price range: November 29, 2013
• Bookbuilding period for institutional investors: December 2, 2013 – December 11, 2013
• Application period for the public in Sweden: December 2, 2013 – December 10, 2013
• Announcement of the final offering price: December 12, 2013
• First day of trading on NASDAQ OMX Stockholm: December 12, 2013
• Settlement day: December 17, 2013
About Candyking
Candyking was founded in 1984 and is the leading provider of pick & mix confectionery in the
Nordics. Candyking is also active in the United Kingdom, Ireland, Poland, the Czech Republic,
Slovakia and Hungary. In all markets where the Company is present, it is the only specialized pick
& mix provider with international reach.
The cumulative value of the Nordic confectionery market in 2012 amounted to approximately SEK
36 billion, with an average annual growth rate amounting to 1.2% (measured in terms of volume)
between 2002 – 2012. Since Candyking launched its concept thirty years ago in Sweden,
consumption of pick & mix confectionery has steadily increased and today represents
approximately one third of the total confectionery consumption in Sweden.
Candyking offers a complete “shop-in-shop” solution within pick & mix. The Company’s business
model creates value for suppliers, customers and consumers, which gives Candyking a unique
position in the value chain. Candyking’s displays cover more than 30km in more than 10,000 pointof-sales. In addition to the confectionery pick & mix concept, referred to as Candyking
(Karamellkungen in Sweden), the Company’s operations also include Parrot’s, the natural snacks
pick & mix concept; Premiyum, the Company’s luxury chocolate pick & mix niche concept and
Candyking Favourites, the Company’s niche concept for pre-packed pick & mix. Furthermore, the
Company has established an efficient operational platform, which, combined with its low working
capital requirements and limited investment requirements, create good opportunities for growth,
while strong cash flows are maintained. Candyking has since 2011 implemented or launched
several cost saving initiatives in different business areas, which has contributed to optimizing of the
assortment, rationalization of supplier networks and customer networks, increased effectiveness in
the distribution network as well as structural changes to the organization. During 2013 Candyking
has continued to increase effectiveness in the merchandizing organization and to improve
sourcing and category management.
Candyking is well positioned to take advantage of several attractive growth alternatives, including:
growing the current business through increased sales to existing customers (by, for example,
rolling out additional concepts per store, increasing store space dedicated to Candyking’s
concepts and promotional sales activities) and expansion of the customer base (by, for example,
developing new customers, exploring new market channels, developing new concepts and
expanding geographically) as well as growing through strategic acquisitions.
4 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SOUTH AFRICA OR THE UNITED STATES. In 2012, Candyking had net sales of approximately SEK 1,748 million, corresponding to
approximately 40,800 tonnes of sold confectionery and natural snacks. Furthermore, the Company
had an average of approximately 913 employees, equivalent to 580 full-time equivalents (FTEs), of
which 416 FTEs belonged to the Company’s own in-house merchandizing organization.
For additional information, please contact:
David von Laskowski, President and CEO, +46(0)8 795 03 00
Anders Fogel, Founding Partner, Fogel & Partners, +46(0)722 044 750
More information is available on www.candyking.com
Press conference
Candyking has organized a press conference to be held today, November 29, 2013 at 9:30 CET at
Candyking’s headquarters in Solna (address: Telegrafgatan 8A, Solna). David von Laskowski,
President and CEO, and Johan Lindgren, CFO, will present the Company.
Important information
Copies of this announcement are not being made and may not be distributed or sent into
Australia, Canada, Japan, Hong Kong, New Zealand, South Africa or the United States.
The securities referred to herein may not be sold in the United States absent registration or an
exemption from registration under the U.S. Securities Act of 1933, as amended. Candyking Holding
AB (publ) does not intend to register any portion of the Offering of the securities in the United States
or to conduct a public offering of the securities in the United States.
In any EEA Member State, other than Sweden, that has implemented Directive 2003/71/EC as
amended (together with any applicable implementing measures in any member State, the
“Prospectus Directive”), this communication is only addressed to and is only directed at qualified
investors in that Member State within the meaning of the Prospectus Directive.
This communication does not constitute an offer of the securities to the public in the United
Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the
securities. This communication is being distributed to and is directed only at (i) persons who are
outside the United Kingdom or (ii) persons who are investment professionals within the meaning of
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the
“Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being
referred to as “Relevant Persons”). Any investment activity to which this communication relates will
only be available to and will only be engaged with, Relevant Persons. Any person who is not a
Relevant Person should not act or rely on this document or any of its contents.
5