Cloetta Acquires Candyking
Swedish confectionery group Cloetta has signed an agreement to acquire Candyking Holding – a leading concept supplier of pick and mix candy in the Nordic countries and the United Kingdom. The acquisition strengthens Cloetta’s position within pick & mix and creates substantial synergies. This is in line with the strategy to grow within the category since it is an important and in many countries growing part of the confectionery market.
The initial purchase price amounts to SEK325 million (€34 million) on a cash and debt free basis with a potential additional purchase price of maximum SEK225 million based on the result of Cloetta’s and Candyking’s combined sales volume of pick and mix in confectionary and natural snacks in the Nordic countries, the United Kingdom and Poland during 2018.
Founded in 1862, Cloetta manufactures sugar confectionery, chocolate products, pastilles and chewing gum and has established a strong presence in the Nordic region, The Netherlands, and Italy. In total, Cloetta products are sold in more than 50 markets worldwide.
“The acquisition of Candyking will significantly strengthen Cloetta’s position in Denmark, Norway and the United Kingdom. Cloetta will be able to develop the Candyking brand and product offering, in order to offer an attractive customer and consumer experience. The acquisition will also strengthen our position in natural snacks with the Parrot brand. In addition, there are substantial cost synergies that make the acquisition attractive,” says Danko Maras, chief finance offices and outgoing chief executive of Cloetta.
Candyking offers stores a complete concept in pick and mix candy including products, displays and accompanying store and logistic services. Candyking itself does not manufacture any products, instead it purchases products from different suppliers. The company currently supplies approx. 8,000 retail outlets in seven countries. Sweden, the United Kingdom, Norway and Denmark are the largest markets. Other markets are Finland, Ireland and Poland. In total Candyking have approx. 370 employees.
Candyking’s total sales (including Danish tax) amounted to approx. SEK 1.30 billion on a rolling twelve month basis per the third quarter of 2016. Underlying EBITDA was approx. SEK 70 million and underlying EBIT approx. SEK 30 million.
Candyking’s trademarks in confectionary are Candyking, Karamellkungen and Candyking Favourites. The company is also a leading pick and mix supplier within natural snacks in Sweden and Finland under the Parrot brand.
The acquisition is expected to create substantial synergies that will gradually be realized during the years 2017–2020.
The transaction is subject to approval from the Swedish Competition Authority.The acquisition will be financed by Cloetta using cash and its existing credit facilities.
