Komplett ASA: Komplett and NetOnNet doubling in size by combining their businesses

09 Feb 2022 06:50 CET

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Oslo, 9 February 2022: Komplett ASA ("Komplett") and NetOnNet AB ("NetOnNet")
are pleased to announce that an agreement for the combination of the two
companies has been entered into. Bringing these companies together will
strengthen their position as a leading online-first electronics platform in the
Nordic area with an aggregated revenue in 2021 of NOK 18.5 billion. The
transaction is expected to enable realisation of cost synergies, mainly related
to sourcing, of at least NOK 200 million on an annual basis with expected full
effect within 24 months of the completion of the transaction. Komplett will
retain its strong financial position and attractive dividend policy after the
transaction.

The combination is structured as an acquisition by Komplett of all the shares in
NetOnNet from its sole shareholder SIBA Invest Aktiebolag ("SIBA Invest"). As
consideration for the shares in NetOnNet, SIBA Invest will receive 35,242,424
new Komplett shares and NOK 1,500 million in cash. Based on Komplett's close of
day share price on 8 February 2022 of NOK 62.60, this values NetOnNet's share
capital at NOK 3,706 million, corresponding to an enterprise value of NOK 3,797
million (equal to 13.3x EBIT (adj.) 2021) based on year-end 2021 net interest
bearing debt (excluding lease liabilities).

Komplett and NetOnNet are both attractively positioned in the large and
structurally growing Nordic electronics and IT-products market and they benefit
further from the growth impact of accelerating online migration. Following
completion of the transaction, the companies' aggregated market share in the
Nordic area is estimated to be in the level of 10 per cent, approximately double
that of the respective companies' current estimated market shares. Komplett and
NetOnNet will together become the largest online-first electronics platform in
the Nordic area.

Komplett and NetOnNet are both recognised for their scalable business models and
cost leadership positions and share a strong track record of profitable growth
and market share gain. NetOnNet also contributes with an extensive portfolio of
own brands enabled by a local purchasing presence in China since 2005. Building
on their complementary market positions and strengths, Komplett and NetOnNet
will be even better positioned together to deliver a market leading online
shopping experience to their customers.

The companies had illustrative unaudited aggregated revenue in 2021 of NOK 18.5
billion and EBIT (adj.) of NOK 674 million, and some 1,370 employees (FTEs)
combined across Norway and Sweden.

Komplett will retain its robust financial position and dividend capacity after
the transaction. Proposed dividend for the financial year 2021 is NOK 2.90 per
share, which also will be payable to the consideration shares to be issued to
SIBA Invest, subject to final approval of such dividend at Komplett's annual
general meeting.

Completion of the transaction is subject to customary closing conditions
including approval at a general meeting in Komplett and competition authority
clearances.

Canica Invest AS ("Canica Invest") will remain the largest and a long-term
shareholder in Komplett after the combination with an approximate shareholding
of 40 per cent before the intended issuance of new shares to finance the cash
consideration to SIBA Invest, as further described below. Canica Invest has
undertaken to attend and vote in favour for the transaction as well as the
dividend proposal at the respective general meetings.

Nils K. Selte, Chairman of Komplett, commented: "We are very pleased to announce
the combination of Komplett and NetOnNet, two attractively positioned companies
with complementary strengths. As a combined unit, the companies will become even
better positioned to leverage their strong consumer brands and proven scalable
business models to continue delivering attractive profitable growth. In
addition, increased scale will contribute towards material value creation among
other through realising significant cost synergies that are mainly related to
sourcing improvements".

Fabian Bengtsson, Chairman of SIBA Invest and proposed new board member in
Komplett, commented: "We are excited to become the second largest and a long
-term shareholder in Komplett alongside Canica Invest after the combination.
NetOnNet has a strong track record of growth and revenue has increased by around
SEK 5 billion, corresponding to an annual average organic growth rate of ca 12
per cent, since we took the company private from the Stockholm Stock Exchange in
2011. We have a strong belief in the strategic merits of the transaction, with
two successful businesses joining forces to become even better together. We
therefore look forward to taking part in the future development and value
creation in the new combined company".

Lars Olav Olaussen, CEO of Komplett, commented: "Komplett looks very much
forward to join forces with NetOnNet, a company with a winning culture that fits
very well with us. Both companies have strong focus on their customers and there
are clear business similarities between us, with both offering consumer
electronics and IT products based on scalable online-first business platforms.
Together, we will broaden our geographical footprint, especially in the Swedish
market. Our joint ambition is to enable an even more attractive offering and the
best shopping experience to our consumer- and business customers."

Susanne Holmström, CEO of NetOnNet commented: "There is strong industrial logic
in combining our two businesses with highly appreciated brands and complementary
market positions. Combined, NetOnNet and Komplett will be the largest online
-first platform in the Nordic area. By joining forces and building on our
complementary strengths, we will be even stronger and better positioned to
continue to gain market shares across the Nordics based on a highly competitive,
scalable and cost-efficient business model".

Transaction highlights

· The transaction is structured as an acquisition by Komplett of all the
shares in NetOnNet from its sole shareholder SIBA Invest owned by the Bengtsson
family.
· Komplett will remain listed on the Oslo Stock Exchange.
· As consideration for the shares in NetOnNet, SIBA Invest will receive
35,242,424 new Komplett shares and NOK 1,500 million in cash. Based on
Komplett's close of day share price on 8 February 2022 of NOK 62.60, this values
all shares in NetOnNet at NOK 3,706 million, corresponding to an enterprise
value of NOK 3,797 million (equal to 13.3x EBIT (adj.) 2021) based on year-end
2021 net interest bearing debt (excluding lease liabilities). The cash
consideration is subject to an addition of 4 per cent per annum for the period
from 30 September 2021 until completion of the transaction.
· The Komplett shares to be issued to SIBA Invest will correspond to
approximately 32.8 per cent of the outstanding shares in Komplett after the
transaction, but before dilution effect of the new issuance of Komplett shares
to finance the cash consideration / replace the bridge facility as referred to
below.
· Financing to settle the cash consideration is secured through a NOK 1,500
million committed 15-month bridge loan facility. Komplett intends to replace the
bridge loan facility with proceeds from the issuance of new shares in due
course. Canica Invest has committed to subscribe for at least NOK 500 million in
such a share issue.
· Lars Olav Olaussen to continue as CEO for the combined company with Susanne
Holmström as Deputy CEO and managing director of NetOnNet.
· Fabian Bengtsson, chairman of SIBA Invest, is proposed as a new board member
of Komplett and Roland Vejdemo, current chairman of the board of NetOnNet, as a
new observer in the board of Komplett, and with Carl Erik Hagen (currently a
deputy board member) as an observer to the board. Martin Bengtsson, CEO of SIBA
Invest, to be represented on Komplett's nomination committee.
· Completion of the transaction is subject to approval by Komplett's general
meeting and necessary competition authority clearances in Norway and Sweden.
· Komplett's general meeting is expected to be held during March, and
completion of the transaction is expected in Q2 2022, subject to timing of
competition authority clearances.

Key facts and figures

NetOnNet's revenue of approximately NOK 7.5 billion in 2021 is split into 88 per
cent in Sweden and 12 per cent in Norway, compared to Komplett's revenue of
approximately NOK 11 billion in 2021 which is split into 32 per cent in Sweden,
65 per cent in Norway and 3 per cent in Denmark. Combined, illustrative
unaudited aggregated revenue split in 2021 is balanced with 55 per cent in
Sweden, 43 per cent in Norway and 2 per cent in Denmark.

Through the transaction, Komplett significantly expands its presence and
footprint in the Swedish market. Komplett and NetOnNet had preliminary unaudited
aggregated revenue in Sweden of NOK 10.1 billion in 2021, compared to NOK 3.6
billion for Komplett stand alone.

Komplett's main Swedish brand, Webhallen, has 18 mainly city-centre / shopping
-mall located stores across Sweden, with a particular strong presence in the
greater Stockholm area. NetOnNet has a network of 29 cost-efficient service
centres ("Lagershoppar") mainly located outside city centres, of which 26 are
located across Sweden and 3 are in Norway. Given complementarity to both format
and locations, the combined networks enable a significantly broadening of market
reach in Sweden. Furthermore, while Webhallen has its main presence in the
gaming sector, NetOnNet has a broader customer base, resulting in limited
customer overlap.

Planned optimisation and streamlining of sourcing will leverage learnings from
Komplett's improvements since 2018, NetOnNet's sourcing capabilities and the
combined company doubling in size. Cost synergies that are mainly related to
sourcing are expected to be at least NOK 200 million on an annual basis, with
expected full effect within approximately 24 months from completion of the
transaction. The assessment of sourcing synergies is based on a detailed review
including of product overlaps and purchasing costs.

Komplett will maintain a robust balance sheet following the combination,
supporting financial flexibility and a continued attractive dividend policy.
Preliminary aggregated net interest bearing debt at year-end 2021 is NOK 656
million (excluding lease liabilities), corresponding to ca 0.8x EBITDA
(adjusted).

Conditions for the completion of the transaction

Completion of the transaction is subject to approval by Komplett's general
meeting of (i) the issuance of the consideration shares in Komplett to SIBA
Invest, (ii) an authorisation to the board of directors of Komplett to issue
further new shares to obtain proceeds to finance (in part or in full) the cash
consideration under the transaction and/or finance the repayment of the bridge
facility (if drawn-upon) and (iii) Fabian Bengtsson being elected as a board
member, Roland Vejdemo as an observer to the board as well as Martin Bengtsson
being elected as member of the nomination committee of Komplett with effect from
completion of the transaction, and with Carl Erik Hagen (currently a deputy
board member) as an observer to the board. Canica Invest has undertaken to vote
in favour of the resolutions at Komplett's general meeting. Completion of the
transaction is furthermore subject to obtaining necessary competition authority
clearances in Norway and Sweden.

Komplett has obtained the required waivers from the lock-up undertaking entered
into with the joint global coordinators in connection with the IPO completed in
June 2021.

Canica Invest and SIBA Invest - lock-up

SIBA Invest and Canica Invest will enter into lock-up agreements with Komplett
under which they will undertake not to sell or otherwise dispose of the shares
in Komplett for a period of 180 days from completion of the transaction. Both
SIBA Invest and Canica Invest intend to remain significant long-term
shareholders in Komplett.

Advisors

Skandinaviska Banken Enskilda (publ) AB, Oslofilialen, norsk avdeling av
utenlandsk foretak ("SEB") is acting as sole financial advisor to Komplett.
Advokatfirmaet Thommessen AS is acting as Norwegian legal advisor to Komplett,
while Advokatbyrået Setterwalls AB is acting as Swedish legal advisor to
Komplett. First House is engaged by Komplett as communication and IR adviser.

Carnegie Investment Bank AB (publ) ("Carnegie") is acting as sole financial
advisor to SIBA Invest. Gernandt & Danielsson Advokatbyrå is acting as Swedish
legal advisor to SIBA Invest, while Advokatfirmaet BAHR AS is acting as
Norwegian legal advisor to SIBA Invest.

SEB has been engaged by Komplett as Global Coordinator and Joint Bookrunner and
Carnegie as Joint Bookrunner for the intended new share issue to finance the
cash consideration / refinance the Bridge Facility.

Presentation and press conference

A presentation on the combination will be held today 9 February 2022 at
approximately 09:15 am CET, immediately after the presentation of the fourth
quarter results of Komplett ASA which will begin at 09:00 am CET. The
presentation will be hosted by CEO of Komplett Lars Olav Olaussen, CEO of
NetOnNet Susanne Holmström and CFO of Komplett Krister Pedersen. The
presentation will be held in English at Felix Conference Centre, Aker Brygge,
Oslo. In addition to the physical presentation in Oslo, the event will be live
streamed.

Please use the following link to register and view the webcast:

https://events.webcast.no/viewer-registration/nIYzmINK/register

Questions to the speakers will be addressed towards the end of the presentation.
A recorded version of the webcast will be available after the webcast has
concluded.

For further queries, please contact:

Kristin Hovland, Head of Communication

+47 98 65 28 60

Kristin.Hovland@komplett.com

Per Christian Brander, Head of Investor Relations

+47 40 63 63 49

PerChristian.Brander@komplett.com

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation (MAR) Article 7 and is subject to the disclosure
requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.
This stock exchange announcement was published by Per Christian Brander, Head of
Investor Relations, at the date and time as set out above.

About Komplett ASA and NetOnNet AB

Komplett Group is a leading online-first electronics and IT products retailer,
operating in Norway, Sweden and Denmark. Serving customers in the B2C, B2B and
distribution markets, the Group is deeply focused on delivering best in class
customer experience, built through decades of knowhow, expertise and deep
customer commitment. Komplett Group operates an efficiency and scalable business
model that supports costs leadership and enables a competitive product offering.

Founded in 1999, NetOnNet is a leading online-first electronics platform
offering both well-known and own brands. Sales are generated online as well as
through complementary service centres in Sweden and Norway. NetOnNet is known
for low prices and a passion for making electronics accessible in the most
convenient way possible. The customer loyalty club, Klubbhyllan, has over one
million members which represent a majority of revenue. Head office and main
fulfilment centre are located in Viared, outside Borås.

Illustrative aggregated financial information

The illustrative aggregated unaudited financial information as included in the
announcement presentation as separately enclosed to this release is based on
unaudited consolidated financial statements for Komplett and NetOnNet's for the
year ended 31 December 2021 and respective audited consolidated financial
statements for the year ended 31 December 2020. The illustrative aggregated
financial information does not represent pro forma financial information as
impacts such as among other those relating to purchase price allocation,
differences in accounting principles, adjustments related to transaction costs
and impacts of potential refinancing have not been taken into account. Expected
potential synergies are not included. The illustrative aggregated income
statement information and key figures have been presented as if the combined
business had been carried on in the same group from the start of 2020.
NetOnNet's financial information presented in SEK has been converted to NOK at
an exchange rate of 1.0.

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