Brief: Embellence Group Acquires US Company Artscape

Embellence AB (publ)

21/02/2022 07:02

Feb 21 (Reuters) - Embellence Group AB (publ)  EMBELL.ST :
    * EMBELLENCE GROUP ACQUIRES US COMPANY ARTSCAPE, INC
    * HAS ACQUIRED US COMPANY, ARTSCAPE INC
    * THROUGH THIS ACQUISITION, EMBELLENCE GROUP IS EXPANDING
ITS
OPERATIONS TO INCLUDE EXCLUSIVE PATTERN-BASED WINDOW FILM
    * PURCHASE CONSIDERATION ON A CASH-FREE AND DEBT-FREE BASIS
AMOUNTS TO MUSD 20, CORRESPONDING TO AN EV/EBITA MULTIPLE OF
APPROXIMATELY 5.5X
    * PARTIES HAVE JOINTLY DECIDED ON A TRANSACTION STRUCTURE
THAT
ENABLES SHARE ACQUISITION TO BE HANDLED FOR TAX PURPOSES AS AN
ASSET ACQUISITION
    * AFTER TAKING THIS TAX RELIEF INTO ACCOUNT, EFFECTIVE EBITA
VALUATION MULTIPLE AMOUNTS TO APPROXIMATELY 5.1X.
    * IN ADDITION, A POTENTIAL EARNOUT MAY BE PAID,
CORRESPONDING TO
AN EV/EBITA MULTIPLE OF APPROXIMATELY 6, BASED ON INCREASE IN
EARNINGS FOR 2022 COMPARED WITH 2021.
    * ACQUISITION WILL IMMEDIATELY INCREASE EARNINGS PER SHARE
IN
EMBELLENCE GROUP AND ENHANCE ATTRACTIVE OPPORTUNITIES FOR
EMBELLENCE GROUP
    * ACQUISITION IS BEING FINANCED THROUGH CASH PAYMENT
CORRESPONDING
TO 70% OF PURCHASE CONSIDERATION, 20% THROUGH OFFSET AGAINST
NEWLY ISSUED SHARES IN EMBELLENCE GROUP, AND REMAINING 10%
THROUGH A PROMISSORY NOTE LOAN
    * ACQUISITION IS EXPECTED TO RESULT IN AN INCREASE IN
EMBELLENCE
GROUP'S INTEREST-BEARING NET DEBT IN RELATION TO ADJUSTED EBITDA
RESULT (PRO FORMA FOR 12-MONTH PERIOD) FROM 1.2 AS OF DECEMBER
31, 2021 TO A MULTIPLE OF APPROXIMATELY 1.8, WHICH IS WITHIN
TARGET LEVEL OF BELOW A MULTIPLE OF 2.5.
    * ACCESS DATE IS MARCH 1, 2022
    * ACQUISITION OF ARTSCAPE IS AN IMPORTANT BUILDING BLOCK IN
REALIZING THESE FINANCIAL GOALS BOTH IN TERMS OF SALES AND EBITA
MARGIN

Source text for Eikon:  ID:nWkr5r8yyP 
Further company coverage:  EMBELL.ST 

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