THE TRANSACTION IN BRIEF
- The SFG Group estimates total sales and adjusted EBITDA for 2021 of SEK 255 million and SEK 23 million respectively.
- SFG has experienced high organic growth, with a CAGR of over 21% over the last 5 years.
- Since its inception in 2012, SFG has focused on growing organically with rapid and efficient product development, consisting of the brands Pro!Brands, HealthyCo, Wolverine and Aloes Aloe Vera.
- In light of the Company's financial history and related sales synergies that the Group expects to realize during the autumn, Humble estimates a further increase in sales of SEK 174 million and improved adjusted EBITDA of SEK 38 million for the existing brands over the next 24 months.
- The Purchase Price amounts to SEK 251.5 million, of which SEK 101.5 million (corresponding to approximately 40% of the Purchase Price) shall be paid in cash and the remaining SEK 150 million (corresponding to approximately 60% of the Purchase Price) shall be paid in the form of consideration shares issued at a price of SEK 26.62 (implying a premium of approximately 9 percent compared to yesterday's closing price). SEK 51.5 million of the cash portion of the Purchase Price shall be paid within six months of Closing. The remaining part of the Purchase Price shall be paid on Closing. It is up to Humble to determine when the Closing shall take place, but at the latest within 60 days from the date of the agreement.
- The purchase price is financed through the issuance of consideration shares and Humble's existing cash.
- Earn-out payments based on the Company's adjusted EBITDA during Q4 2021, 2022 and 2023 may be paid totaling up to approximately SEK 85 million, which corresponds to the Company's forecasted adjusted EBITDA for the period.
- SFG and Humble's management have also identified several material synergies in strengthening the distribution of sports nutrition to over 25 markets as well as improved efficiency in product development, logistics and R&D.
- The Sellers have entered into a lock-up undertaking in respect of a majority of the shares received as part of the Purchase Price for a period of one year from Closing, whereby a sale of the shares after the lock-up period shall primarily be made through off-market block sales through brokers.
- The SFG Group's management team and CEO have committed to continue to operate and develop the Company for at least three years following completion of the Transaction.
SEE Video presentation about the ACQUISITION here
"The Swedish grocery trade is a key channel where, until now, we have not had the distribution that I think our market-leading brands deserve. Through the acquisition of SFG, we secure a stable structural platform for food and a fantastic sales culture, where we can quickly scale out several of the Group's brands and ensure good exposure in stores. Over the years, the company has succeeded in establishing a hungry sales force that successfully targets several of the toughest categories, with a focus on health and sustainability. It is a great pleasure to welcome the team behind SFG to Humble Group and we are looking forward to an exciting fall." says Simon Petrén, CEO Humble Group AB (publ).
"We are a bunch of driven entrepreneurs who have made a rapid journey in establishing and developing some of Sweden's strongest brands in health and sports nutrition. The entire FCB Group is characterized by a great passion for what we do. From the very first day when we got in touch with the management of Humble Group, we understood that there is an attractive mix of drive, speed and entrepreneurship that is something out of the ordinary, and it therefore feels like a natural step to continue our growth journey together. For us, it has always been an important part of constantly developing in such an innovative and dynamic market. Even before the deal, we have identified which interesting companies are in the group, where we with our sales force and expertise in DVH hope to contribute and together establish Humble Group as a leading total supplier for the FMCG products of the future." says Martin Trnovsky, CEO Swedish Food Group AB
BACKGROUND AND MOTIVES
The acquisition is highly structural in nature and the consolidation will provide Humble with a leading sales force that will enable Humble to further scale up sales of its merchandise and products. The company has stable underlying profitability, growth and cash flows. Together with the existing development and sales of brands in Humble, the management of the Company and Humble see many material potential synergies and opportunities to accelerate the commercialization and development of the branded segment within Humble Group.
RESULTS, SYNERGIES AND CONSOLIDATION
SFG estimates total sales and EBITDA for 2021 of SEK 255 million and SEK 23 million respectively.
Humble will account for SFG as a subsidiary of Humble and Closing will occur within 60 days from today. The completion of the transaction will be accretive to Humble's revenue and significantly improve its profitability at the consolidated EBITDA level.
The combined group will continue to optimize and further develop the Company's brands to bring additional products to market. Humble expects the acquisition to result in a number of synergies with significantly improved gross margins and increased growth opportunities within 18 months of completion of the Transaction.
Funding and financing
The acquisition is financed through the issuance of consideration shares and Humble's existing cash.
ADVISORS
Rämsell Advokatbyrå AB is acting as legal advisor to Humble in connection with the Transaction and Advokatfirman LA PARTNERS AB is acting as legal advisor to the sellers in connection with the Transaction.
For further information, please contact:
Simon Petrén, CEO, Humble Group AB
Phone: +46 70 999 94 55
E-mail: simon.petren@humblegroup.com
This information is information that Humble Group is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information in this press release was published by the contact person above, at the time stated by Humble Group's news distributor Cision at the publication of this press release.
About Humble
Humble Group is a Swedish foodtech and FMCG group delivering the next generation of consumer products that are good for people and the planet. Humble focuses on the foodtech, eco, sustainability and vegan segments. The companies are growing through organic growth, acquisitions and leveraging synergies in the different business units: brands, distribution, manufacturing and ingredients. Humble's technologies, refined through scientific research and extensive market experience, facilitate new formulations and recipes that improve taste and texture for the next generation of sugar-reduced, sustainable and vegan products. For more information, visit www.humblegroup.com
Humble is listed on Nasdaq Stockholm, First North Growth Market, under the ticker HUMBLE
FNCA Sweden AB is Humble's certified adviser. Tel: 08-528 00 399 E-mail: info@fnca.se
Forward-looking statements
This press release contains forward-looking statements that reflect Humble's intentions, beliefs or expectations regarding 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 can be identified by the use of words such as "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "anticipates", "should", "could" and, in each case, the negatives thereof, or similar expressions. The forward-looking statements in this press release are based on various assumptions, many of which are based on additional assumptions. Although Humble believes that the assumptions reflected in these forward-looking statements are reasonable, there can be no assurance that they will materialize or that they are accurate. Because these assumptions are based on assumptions or estimates and are subject to risks and uncertainties, actual results or outcomes could differ materially from those in the forward-looking statements for a variety of reasons. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this press release by the forward-looking statements. Humble does not guarantee that the assumptions underlying the forward-looking statements contained in this press release are accurate and any reader of the press release should not place undue reliance on the forward-looking statements contained in this press release. The information, opinions and forward-looking statements expressed or implied herein are made only as of the date of this press release and are subject to change. 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, except as required by law or Nasdaq First North Growth Market's Rule Book for Issuers.
