STOCK EXCHANGE RELEASE MAY 3, 2021 AT 4.00 P.M.
Wulff Group Plc, Insider information, May 03, 2021 at 4.00 P.M.
On May 3, 2021, Wulff Group Plc, a professional in work environment products and services, signed an agreement whereby Wulff acquires the other leading player in the field, Staples Finland Oy, and its Finnish parent company EMO Finland Oy (hereinafter Staples). Both companies have roots as experts in the Finnish working life. As a result of the transaction, Wulff will become a clear market leader in Finland. The transaction was completed on May 3, 2021.
Staples (formerly Oy Lindell Ab) was founded in 1890 in Helsinki and is known as a strong contract supplier of workplace products and work environment solutions to large companies and the public sector. Staples’ net sales in 2020 were EUR 55.8 million. With the acquisition, Wulff, founded in 1890, will diversify its product and service portfolio and at the same time Wulff’s purchasing power will increase.
Wulff Group’s CEO Elina Pienimäki comments:
“The acquisition will significantly accelerate the implementation of our growth strategy, doubling our net sales and expanding our service portfolio to our customers. We were offered the opportunity for a strategic acquisition when the current owner decided to divest all of Staples’ European businesses. With the combination of two 130-year-old companies, we will become the clear market leader in Finland, which will benefit our customers. When we combine our abilities and expertise, we are always able to offer customers up-to-date solutions for all work environments directly from one and the same supplier. I am excited that we are getting Staples Finland’s very talented team as a part of Wulff.”
Information about the acquisition
The subject of the transaction is EMO Finland Oy and its wholly owned Staples Finland Oy. The net sales of Staples in 2020 was approximately EUR 55.8 million*. The combined net sales of the entity resulting from the acquisition are approximately EUR 113.4 million**, EBITDA 4.9**, EBITDA EUR 4.9 million** and operating profit 2.9** in 2020. The combined adjusted EBITDA of the resulting entity in 2020 is approximately EUR 8.5 million*** and adjusted operating profit 6.0***. The acquisition does not require the approval of the competition authority.
The purchase price of EMO Finland Oy’s shares is approximately EUR 6.0 million and includes approximately EUR 0.5 million cash. The purchase price was paid in cash upon execution of the transaction. The final purchase price will be revised by the end of September, following normal adjustments to the working capital and debt like items on May 1, 2021. The balance sheet of the acquired entities includes lease liabilities of approximately EUR 0.8 million and no other interest-bearing debt at the time of execution.
As a result of the acquisition, the company estimates that a non-recurring income of approximately EUR 4.5 million from the recognition of negative goodwill will be recognized based on the preliminary purchase price of EUR 6.0 million and an estimated equity of EUR 10.5 million at the time of the acquisition. The recognition of negative goodwill is specified in connection with the revision of the purchase price.
To finance the acquisition, Wulff Group Plc raised a EUR 6.8 million senior financial loan, of which EUR 2.0 million is to be repaid with cash flow released from working capital within one year of the completion of the transaction and EUR 4.8 million within 5 years. The acquisition will increase interest-bearing net debt by EUR 7.1 million at the time of completing the transaction.
*) Figures for 2020 refer to consolidated unaudited data for the financial period 1.2.2020 – 31.1.2021
**) Figures are summed up from the Wulff Group’s financial statements for the period 1.1.-31.12.2020 and the figures of the consolidated unaudited financial statements of EMO Finland Oy and Staples Finland Oy for the financial period 1.2.2020 – 31.1.2021
***) Figures are summed up from the Wulff Group’s financial statements for the period 1.1.-31.12.2020 and the figures of the consolidated unaudited financial statements of EMO Finland Oy and Staples Finland Oy for the financial period 1.2.2020 – 31.1.2021, less the group services that cease after the transaction and added the adjustments according to the IFRS accounting principles
Key figures for the subject of the transaction
Consolidated unaudited figures according to the Finnish Accounting Principles:
|Adjusted operating profit****||-0.2||2.2|
|Balance sheet total||15.3||20.9|
****) Adjusted EBITDA and operating profit take into account group services that cease after the completion of the transaction
The company estimates that the acquisition will bring significant value to shareholders through synergies. Wulff aims for yearly synergy benefits of approximately EUR 3 million by 2023. Synergies are sought by combining product portfolio, procurement, and operations. Achieving synergies requires integration and other non-recurring costs. The estimate of non-recurring acquisition related expenses is approximately EUR 0.7 million. In addition the company invests in the integration of the business and its development during 2021-2023.
Because of the acquisition, Wulff updated and published its outlook for net sales, operating profit and comparable operating profit on May 3, 2021. The company estimates that net sales in 2021 will increase to approximately EUR 90 million (EUR 57.5 million in 2020), operating profit will increase from the previous year significantly and comparable operating profit will remain at a good level in 2021.
The company’s earlier outlook was: Wulff estimates that the net sales will grow from 2020 (EUR 57.5 million) and the comparable operating profit will remain at a good level in 2021.
In Espoo on May 3, 2021
WULFF GROUP PLC
BOARD OF DIRECTORS
CEO Elina Pienimäki
tel. +358 40 647 1444
NASDAQ OMX Helsinki Oy
A better world – one workplace at a time. Wulff’s goal is a perfect workday! We enable better working environments and create workplaces, wherever you are. More comfortable, healthier, safer, more enjoyable, more active and more diverse? How do you want to better you workday and working environment? Wulff has the solution. We offer our customers hygiene- and protective products, air purifiers, office supplies, facility management products, catering solutions, IT supplies, ergonomics, first aid, and innovative products for worksites. Customers can also acquire international exhibition services from Wulff. In addition to Finland, Wulff operates in Sweden, Norway, and Denmark. Check out our products and services at wulff.fi/en.