CVC and Nordic Capital's LEAF in reverse takeover with Cloetta

LEAF will merge with, and acquire the name of, Cloetta. The deal values LEAF at SEK 6.8bn, which puts the EV/EBITDA multiple at 9x for the fiscal year ending in August 2011. The transaction consists of a SEK 1.5bn cash payment, a SEK 1.05bn rights issue, and LEAF's net debt – worth SEK 2.9bn – being retired by the new entity.

A five-year SEK 4.2bn credit facility has been arranged with Svenska Handelsbanken to refinance LEAF debt, partially finance the transaction, and to provide further finance for the new entity.

The SEK 1.05bn rights issue will be underwritten by Cloetta majority owner Malfors Promotor, CVC, and Nordic Capital. Malfors Promotor has also committed to invest a further SEK 545m in the transaction.

Cloetta shareholders will take a 42.4% stake and LEAF shareholders a 57.6% stake in the new entity. Subject to the fulfilment of all agreements, CVC will hold a 33% stake (25.4% of votes), Nordic Capital 24.6% (18.9% of votes), and Malfors Promotor 22% (39.9% of votes).

Previous funding
LEAF, previously a confectionery division of Dutch CSM, was auctioned to CVC and Nordic Capital for €850m in 2005. Svenska Handelsbanken provided a senior debt facility and mezzanine for the transaction.

Company
LEAF, spun-out from a CSM-division in 2005, but tracing back to a Dutch family-owned business, is a confectionery company focusing on candy, gum and pastilles. The company holds a number of local brands in the Nordics, Netherlands, Belgium and Italy. Headquartered in Solna, Sweden, it had €526m sales and €67m EBITDA in 2010. LEAF employs around 2,400 staff in 12 countries and operates 11 factories in seven countries.

People
Partner Hans Eckerström, director Johnny Engman and investment manager David Samuelsson worked on the deal for Nordic Capital. Partner Peter Thörnquist managed the deal on behalf of CVC. LEAF CEO Bengt Baron is set to take over as chairman in the new entity.

Advisers
Vendor – Sundling & Wärn, Krister Sundling (Corporate finance); White & Case, Anna Sundberg (Legal).
Management – Cederquist, Wilhelm Lüning (Corporate finance).

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• Topics
• Nordics
• Exits
• Consumer
• Sweden
• Nordic Capital
• CVC Capital Partners