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Merger between Cloetta and LEAF – Presentation

The Swedish confectionery companies Cloetta (ticker: CLA B) and LEAF today announced a merger of the two companies (the “Transaction”). The combined company will take the well established name of Cloetta and become a leading Swedish confectionery company with a strong base in the Nordic region as well as in Italy and the Netherlands. The new Cloetta will manage a portfolio of iconic brands and have pro forma net sales of SEK 5.7 billion and recurring EBITA of SEK 666 million (note 1).

Highlights of the merger include the following:

  • Strong portfolio of iconic, local, long-established brands including Kexchoklad, Läkerol, Polly, Ahlgrens bilar, Plopp, Malaco and Cloetta in Scandinavia, Jenkki in Finland, Sperlari and Saila in Italy and Red Band and Sportlife in the Netherlands.
  • Highly complementary combination of two strong companies, creating a full range of confectionery products by combining Cloetta’s strength in the chocolate segment with LEAF’s leading operations within the sugar confectionary segments.
  • Significant value creation potential through strengthened strategic position and improved earnings potential. The merger is expected to be accretive to earnings per share for the shareholders of Cloetta.
  • AB Malfors Promotor (“Malfors Promotor”), Cloetta’s largest shareholder, to invest SEK 545 million in the Transaction, showing its strong commitment to the new Cloetta.
  • The remainder of the rights issue connected to the Transaction will be fully underwritten by Malfors Promotor, CVC and Nordic Capital (note 2) without the charging of customary underwriting commission.
  • Significant synergy potential in excess of SEK 65 million annually to be achieved within two years of closing of the Transaction. In addition, LEAF is currently in the process of finalizing a supply chain restructuring program expected to yield another SEK 45 million in annual cost savings as of Q1, 2012.
  • Leading position in an attractive industry with stable earnings growth and strong cash flows.

(1) Pro forma for the twelve months ended August 31, 2011 excluding non-recurring items.
(2) Funds advised by CVC Capital Partners (”CVC”) and Nordic Capital Fund V Limited (“Nordic Capital”)