Rights issue 2022

The Board of Directors of Svedbergs Group AB (publ) (‘Svedbergs‘) has, pursuant to the authorisation granted by the Extraordinary General Meeting on 27 December 2021, decided to carry out a rights issue with preferential rights for existing shareholders in order to ensure an optimal capital structure following the acquisition of Roper Rhodes Ltd (‘Roper Rhodes‘).

Background and rationale for the rights issue

On 1 December 2021, it was announced that Svedbergs had entered into an agreement to acquire Roper Rhodes, a well-established UK supplier and designer of bathroom furniture and bathroom products. The fixed purchase price has amounted to approximately GBP 82 million, based on an enterprise value of GBP 76 million, on a cash and debt free basis, and a net claim on the acquired company of approximately GBP 6 million. In addition, an additional purchase price of GBP 12 million, equivalent to fair value, has been agreed and will be paid in 2025 depending on the financial performance of Roper Rhodes.

In order to meet the liquidity needs of the combined operations of Svedbergs and Roper Rhodes, and to finance the acquisition of Roper Rhodes, Svedbergs increased its credit facilities by SEK 400 million and secured two bridge facilities for a total of SEK 620 million in connection with the acquisition. The rights issue is being carried out to ensure an optimal capital structure as part of the repayment of the bridge facilities.

The acquisition is in line with Svedberg’s strategy to grow organically and through strategic acquisitions and to allow companies to operate independently with their own management and strategic focus areas with access to Svedberg’s core functions and experience. Through the acquisition, Svedbergs establishes a position in the United Kingdom – a large and attractive market characterised by a fragmented dealer structure and an underlying need for new construction and refurbishment. The acquisition of Roper Rhodes marks an important step in Svedberg’s active acquisition agenda and vision to become the leading bathroom interior designer in selected markets in Europe, and may also provide good opportunities for synergies with Svedbergs as Roper Rhodes sources its products from manufacturers.

Subject to the rights issue being fully subscribed, the share capital will be increased by a maximum of SEK 17,654,697.50 through the issue of a maximum of 14,123,758 new B-shares. The subscription price has been set at SEK 35 per new share, which corresponds to a total issue proceeds of approximately SEK 494 million before deduction of issue costs, assuming that the rights issue is fully subscribed. The net proceeds of the offering will be used in full to repay a portion of Svedberg’s SEK 500 million bridge loan facility.