* All of the amounts have been recalculated to SEK from GBP (FX GBP TO SEK 11.83)
THE Transaction in brief
- Solent’s net revenues and adjusted EBITDA1 for the last 12 months amount to SEK 963 million and SEK 141 million, respectively.
- The Company is forecasting net revenues and adjusted EBITDA for the coming 12 months of SEK 1,153 million and SEK 158 million, respectively.
- Solent is a leading provider of branded, licensed and white label products to the consumer sector. The company has operations in the UK, China, Hong Kong, South Africa, Vietnam and Australia.
- The Company has a vast distribution network and a strong focus on healthy impulse snacking as well as environmentally friendly sustainable products in numerous categories such as Healthy Snacks & Personal Care, Household, and Reusables.
- The Purchase Price amounts to SEK 968.4 million, of which SEK 802.8 million (equal to 83% of the Purchase Price) will be paid in cash and SEK 165.6 million (equal to 17% of the Purchase Price) will be paid with 6,311,648 newly issued shares in Humble. The consideration shares will be issued at a price equal to SEK 26.19 per share (the volume weighted average price (VWAP) during a period of 14 trading days prior to signing of the agreement plus 10 per cent).
- The deferred compensation amounts to SEK 91.1 million, whereby SEK 71 million will be paid provided that the founder has not voluntarily resigned from his employment in the Company and SEK 20.1 will be paid based on sales. SEK 79.2 million of the deferred compensation will be paid in cash and SEK 11.8 million will be paid with newly issued shares in Humble. The earn-out of maximum SEK 325.3 million will be paid out based on the EBITDA results for 2022 and 2023. An amount equal to 95 per cent of the earn-outs shall be paid in cash and 5 per cent shall be paid with newly issued shares in Humble.
- The Transaction is intended to be financed through issuing of consideration shares and Humble’s cash position. In order to finance the cash portion of the Purchase Price, Humble will carry out a private placement of shares in Humble through an accelerated book building procedure, as will be announced in a separate press release following the publication of this press release.
- In order to increase Humble’s financial preparedness for future acquisitions, Humble intends to explore the conditions of issuing subsequent bonds under its 2021/2025 senior secured bond loan with a framework amount of SEK 1,500,000,000 (ISIN SE0016273742), provided favourable market conditions.
- Solent and the management team in Humble has identified several material potential synergies with increased opportunities within manufacturing, cross-selling and expanded R&D between the current operating companies. Following the Transaction, Solent’s sales network will merge with Humble’s sales network.
- The combined group will continue to optimize and develop the Company’s brands in order to launch further products to the market. Furthermore, the Transaction opens up both the UK and several key international markets with the Company’s own business operations by adding many new points of sales to grow the export for Humble’s other brands.
- The sellers have entered into lock-up agreements regarding 100% of the shares that the sellers will receive as part of the Purchase Price. The lock-up period comprising two years starting from closing of the Transaction.
- The sellers and the Company’s founders have committed to continue to manage and develop the Company for more than three years after the completion of the Transaction.
- The parties’ intention is that the completion of the Transaction shall take place as soon as possible and no later than 60 days from today.
”Through the acquisition of Solent, we acquire a high-quality company with strong profitability as well as a high-performing and entrepreneurial team. Solent has some of Europe’s largest store chains as customers and the Transaction opens both the UK and several key international markets around the world by adding many new points of sales to grow the export for Humble’s other brands. This acquisition shows our capacity to attract leading industrial players with more than 25 years of operating history and enables a new segment of companies available to us. The M&A pipeline looks very strong and we are well prepared to continue scaling Humble rapidly. It is with great pleasure that we welcome Solent and the team to Humble.” says Simon Petrén, CEO of Humble.
”I am delighted to announce the exciting development of our merger with Humble Group. This exciting new chapter accelerates our growth ambition to become a market leader in our Personal Care and Beauty, Homecare and Food categories with the aim of creating a £1bn market share by 2025. Simon and the Humble team have a fantastic vision which we share, and we will now contribute to more sustainable products for both humanity and the planet.” says Richard Porter, founder of Solent Global Limited.
“I am really looking forward to join forces with Humble Group as between our businesses we hold a shared culture and DNA of disrupting markets with innovation that helps our customers to live healthier and more sustainable lives while adding value to our grocery & retail partners. Together we will be able to accelerate our plans and continue to lead the markets in which we serve, and we look forward to working with Simon, Noel and the Humble teams to continue our joint success.” says Ashley Symonds, CEO of Solent.
Background and REASONS
Solent is a leading provider of branded, licensed and white label products to the consumer sector in both the UK and international markets. The Company has a vast distribution network, with a strong focus on healthy impulse snacking as well as environmentally friendly sustainable products in numerous categories such as Healthy Snacks & Personal Care, Household and Reusables. In addition to Solent’s head office in the UK, the Company has business operations in China, Hong Kong, South Africa, Vietnam and Australia. Around half of Solent’s 145 employees are based in the UK.
RESULTS, SYNERGIES AND CONSOLIDATION
Solent has forecasted net revenues and an adjusted EBITDA for the coming 12 months of SEK 1,153 million and SEK 158 million, respectively. The Transaction strengthens Humble’s net revenue and profitability on consolidated EBITDA.
The combined group will continue to optimize and develop the Company’s brands in order to launch further products to the market. Furthermore, the Transaction opens up both the UK and several key international markets with its own business operations by adding many new points of sales to grow the export for Humble’s other brands. Humble is expecting to realize several other synergies through the acquisition with a greatly improved gross-margin as well as increased growth opportunities within 18 months, starting from the completion of the Transaction.
Humble will consolidate Solent as a subsidiary. The parties’ intention is that the completion of the Transaction shall take place as soon as possible and no later than 60 days from today.
The Transaction is intended to be financed through issuing of 6,311,648 consideration shares and Humble’s cash position. In order to finance the cash portion of the Purchase Price, Humble intends to carry out a private placement of shares in Humble as will be announced in a separate press release following the publication of this press release. Following completion of the Transaction (including the shares issued for closing of SFG), Humble will have 209,067,355 issued and outstanding shares.
Rämsell Advokatbyrå AB is the Swedish legal advisor and Ropes & Gray International LLP is the international legal advisor to Humble in connection with the Transaction. Shoosmiths LLP is legal advisor to the sellers of Solent in connection with the Transaction.
1In order to normalise the comparison of LTM with historical FY and future development post transaction, the historical adj. EBITDA LTM Q2 2021 has been adjusted for extraordinary high freight cost during Q1 and Q2 2021, with regards to the covid19 and earlier Suez Canal-crisis. The extra incurred cost amounted to 19.9 MSEK, which is a total increase of +86 % for the period compared to the historical levels in Solent. In order to mitigate future risk of any freight deviances, the Company has now secured contracts that ensure stable and more normalised levels going forward.
For further information, please contact:
Simon Petrén, CEO, Humble Group AB
Tel: +46 70 999 94 55
The information in this press release constitutes inside information that Humble Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by Humble’s news distributor, Cision, at the publication of this press release.
Humble Group is a Swedish food-tech and FMCG-group, supplying the next generation of products that are good for people and the planet. Humble targets the segments of foodtech, eco, sustainability and vegan to drive high organic growth, acquisitions and utilize synergies in the different operation entities: Brands, Distribution, Manufacturing and Ingredients and R&D. Humble’s technology solutions, refined through scientific research and extensive market experience, facilitate new formulations and recipes that improve the taste and texture of the next generation of sugar-reduced, sustainable and vegan products. For more information visit www.humblegroup.se
Humble is listed on Nasdaq Stockholm, First North Growth Market, under the ticker HUMBLE
FN Sweden AB is Humble’s certified adviser. Tel: 08-528 00 399 E-mail: firstname.lastname@example.org
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Humble in any jurisdiction, neither from Humble nor from someone else.
This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States unless registered under the US Securities Act of 1933, as amended (the “Securities Act”), or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and in compliance with applicable United States state law. The offer and sale of the securities referred to herein have not been and will not be registered under the Securities Act or under the applicable securities laws of United States, Australia, Canada, New Zealand, Singapore, Hong Kong, Japan, South Africa or any other jurisdiction. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Canada, New Zealand, Singapore, Hong Kong, Japan, South Africa or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations. There will be no public offer of the securities referred to herein in Sweden, the United States or any other jurisdiction.
This announcement is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and has not been approved by any regulatory authority in any jurisdiction. Bayn Group has not authorized any offer to the public of shares or other securities in the United Kingdom or any member state of the EEA and no prospectus has been or will be prepared in connection with the Share Issue. In any EEA Member State, this communication is only addressed to and is only directed at “qualified investors” in that Member State within the meaning of the Prospectus Regulation.
In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” within the meaning of the Prospectus Regulation who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, Relevant Persons. Persons who are not Relevant Persons should not take any action on the basis of this press release and should not act or rely on it.
This press release contains forward-looking statements that reflect Humble’s intentions, beliefs, or current expectations about and targets for Humble’s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which Humble operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Humble believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Humble does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this press release or any obligation to update or revise the statements in this press release to reflect subsequent events. Readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither Humble nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless it is not required by law or Nasdaq Stockholm’s rule book for issuers.