Norwegian e-tailer Komplett and its Swedish competitor NetOnNet have reached an agreement for the combination of the two companies. 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 €1.84 billion. The transaction is expected to enable realisation of cost synergies, mainly related to sourcing, of at least €20 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. As consideration for the shares in NetOnNet, SIBA Invest will receive 35,242,424 new Komplett shares and €0,150 million in cash. Based on Komplett’s close of day share price on 8 February 2022 of €6.23, this values NetOnNet’s share capital at €370k, corresponding to an enterprise value of €377 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%, 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 €1.8 billion and EBIT (adj.) of €67 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 €0.29 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 will remain the largest and a long-term shareholder in Komplett after the combination with an approximate shareholding of 40% 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 €480 million, corresponding to an annual average organic growth rate of about 12%, 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.”