Private equity firms Nordic Capital and CVC are forming a new Swedish chocolate and candy company by merging their LEAF company with well-known name Cloetta, Reuters wrote Friday. The deal values LEAF at 6.8 billion Swedish crowns ($974.8 million) on a cash and debt-free basis. After the deal, current top Cloetta shareholder Malfors Promotor will hold 22% of the share capital and 39.9% of the votes in the new company, Reuters reported. CVC will hold 33% of the share capital and 25.4% of the votes, while Nordic Capital will hold 24.6% of the shares and 18.9% of the votes.
(Reuters) – Private equity groups Nordic Capital and CVC are to form a new leading Swedish chocolate and candy company by joining their LEAF company with well-known name Cloetta, the companies said on Friday.
The deal, which values LEAF at 6.8 billion Swedish crowns ($974.8 million) on a cash and debt-free basis, is part of a steady flow of completed or planned private equity deals in the Nordic region, including Triton’s plan for a sale of Bravida and EQT’s planned sale of bath maker Sanitec.
“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 companies said in a statement.
After the deal, current top Cloetta shareholder Malfors Promotor will hold 22.0 percent of the share capital and 39.9 per cent of the votes in the new company.
CVC will hold 33.0 percent of the share capital and 25.4 percent of the votes, while Nordic Capital will hold 24.6 percent of the shares and 18.9 percent of the votes.
Cloetta is a well known name in Sweden and makes several popular candy and chocolate bar brands. LEAF makes candy, pastilles and chewing gum. The combined firm will have 5.7 billion Swedish crowns of sales.
Under the deal, Cloetta will pay 1.5 billion crowns for LEAF, using cash, loans from CVC and Nordic Capital and an issue of shares in the new company to the two private equity firms.
Cloetta will finance the deal with the net proceeds of a rights issue worth 1.05 billion crowns and part of a loan from 4.2 billion crowns from Handelsbanken to repay loans to CVC and Nordic Capital.
The new Cloetta will assume LEAF’s 2.9 billion crowns of debt. ($1 = 6.9757 Swedish crowns) (Reporting by Patrick Lannin; Editing by David Holmes)