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Cloetta and Leaf Merge to Become a Nordic Confectionery Leader

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Cloetta and Leaf Merge to Become a Nordic Confectionery Leader

Cloetta and Leaf Merge to Become a Nordic Confectionery Leader
December 20
14:13 2011

Swedish confectionery companies Cloetta  and Leaf are being  merged. 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 SEK5.7 billion (Eur630 million) and recurring EBITA of SEK666 million.

 

The new Cloetta will have a strong portfolio of iconic, local, long-established brands including Kexchoklad, Lakerol, Polly, Ahlgrens bilar, Plopp, Malaco and Cloetta in Scandinavia, Jenkki inFinland, Sperlari and Saila in Italy and Red Band and Sportlife in the Netherlands. The two businesses are highly complementary and the merged company will have 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.

 

Synergies in excess of SEK65 million annually are expected to be achieved within two years of closing the deal. In addition, Leaf is currently in the process of finalising a supply chain restructuring programme expected to yield another SEK45 million in annual cost savings in 2012.

 

Bengt Baron, currently chief executive of Leaf, will be chief executive of the new Cloetta.

 

Leaf has been owned by private equity firms CVC and Nordic Capital since 2005. Since the acquisition by CVC and Nordic Capital, Leaf has focused on developing and building brands and improving efficiency. Non-core businesses have also been divested.

 

The transaction values Leaf at SEK6.8 billion on a cash and debt-free basis implying an EV/EBITDA multiple of 9.0x for the twelve months ended August 31, 2011. Upon completion of the transaction, Cloetta shareholders will hold 42.4% and Leaf shareholders 57.6% of Cloetta’s enlarged issued share capital.

 

The merger is conditional upon approval by the shareholders of Cloetta at an extraordinary general meeting and approval by the relevant competition authorities. The EGM is expected to be held on or around February 15, 2012.

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