Vis børsmeldingen
Ingredients AS (“OFI”). The transaction implies an enterprise value of NOK 15.5
billion.
Orkla and Rhône expect that the partnership will enable the OFI group to
continue on its growth journey. The Rhône team has experience in the consumer
sector and food and beverage industry through past and current investments. The
partnership with Rhône aims to build upon and strengthen OFI’s existing
businesses, with an ambition to create shareholder value through volume growth,
margin improvements, capital efficiency and structural growth.
OFI was established by Orkla in 1999 and has since grown 9-fold to NOK 18.1
billion in sales for the 12 months ending 30 September 2023 with an adj. EBIT of
NOK 1.1 billion. OFI has become a leading food ingredients solutions provider in
Europe, spanning a range of categories from bakery, pastry and ice cream
ingredients to plant-based dairy alternatives for consumers. This growth has
been the result of organic expansion and a successful M&A strategy, with over 50
acquisitions across Europe and North America.
By closing of the transaction, OFI will replace existing financing from Orkla
with a NOK 6.4 billion committed bank facility (not to be fully drawn at
closing) with no recourse to Orkla ASA, containing net debt to EBITDA and
interest cover covenants. In addition, OFI’s balance sheet will contain a
subordinated long-term payable to Orkla ASA of c. EUR 89 million. Inclusive of
other adjustment items, the equity value of OFI on a 100% basis is c. NOK 6.5
billion. Rhône will have the option, exercisable through 31 March 2027, to
acquire an additional 9% of OFI equity at the same price per share as the
transaction announced today.
OFI will continue to be consolidated in Orkla’s accounts. The net proceeds from
the transaction will be used for net debt reduction at Orkla ASA and for future
investments, including in OFI. Orkla’s dividend and leverage policies remain
unchanged following the transaction. The agreement between Rhône and Orkla
contains customary provisions governing the partnership.
“The partnership search for OFI attracted strong interest. I am proud that we
are joining forces with a best-in-class organisation in Rhône. The Rhône team’s
partnership commitment and strategic attributes clearly stood out. This is a
landmark deal for Orkla that puts OFI in a position to continue its organic and
structural growth journey. This transaction is an example of the flexibility and
value creation ambition that we have sought to create with Orkla’s new operating
model,” said Nils K. Selte, Orkla’s President & CEO.
“Rhône is pleased to partner with Orkla in this next phase of OFI’s growth. OFI
is a market leader across many European countries and in North America, where
its differentiated regional and local approach to its customer base is value
enhancing. We look forward to partnering with Orkla to assist OFI in building on
its existing foundation and support OFI’s management team in driving the
company’s continued growth and development over the coming years,” said Patrick
Mundt, Managing Director at Rhône.
Orkla and Rhône will both have representatives on OFI’s board of directors,
which will be led by Orkla Executive Vice President Øyvind Torpp. Johan Clarin
will continue as CEO and manage OFI on the basis of its business plan.
“This transaction is testament to the success, strength and resilience of OFI
built over many years. I am very proud that a firm of Rhône’s calibre has
decided to invest in OFI and partner with Orkla,” Johan Clarin, CEO of OFI,
pointed out. He added, “We will now have two strong and capable owners joining
forces to develop OFI as a leading ingredients business in Europe and North
America. We look forward to driving continued growth, accelerate our margin
expansion and make value creative investments with the support of our
shareholders.”
The transaction is expected to be completed by the end of the first quarter of
2024, subject to customary conditions to closing, including approvals from
relevant authorities.
In connection with the transaction, BofA Securities acted as financial adviser
to Orkla and Rothschild & Co acted as financial adviser to Rhône.
Orkla’s President & CEO, Nils K. Selte, will make further comments regarding the
transaction and answer questions at today’s third quarter results presentation.
About Orkla
Orkla is a leading industrial investment company focusing on brands and consumer
- oriented companies. The current investment portfolio comprises 12 companies in
areas such as paints and coatings, foods, confectionery and snacks, health and
food ingredients, among others. In 2022, Orkla had operating revenue of NOK 58.4
billion and net profit of NOK 5.3 billion. Orkla’s portfolio companies have more
than 30,000 employees. Orkla is listed on the Oslo Stock Exchange and the
headquarter is in Oslo.
About OFI
OFI was established in 1999 and is present in 23 countries with over 4,000
employees across its footprint. Today the business is organised in three
clusters. Bakery Ingredients makes up about 63% of OFI’s operating revenue,
consists of both production and sales and distribution, and spans a broad range
of bakery ingredients categories. Sweet Ingredients, representing about 21% of
OFI’s operating revenue, has grown into a market leading supplier of ice cream
ingredients across several customer channels and value- adding confectionery
ingredients to industrial customers. Plant Based generates about 17% of OFI
operating revenue and is a regional leader within margarine and dairy
alternative products.
About Rhône
Rhône, established in 1996, is a global private equity firm with a focus on
investments in businesses with a transatlantic presence. Rhône’s investment
philosophy includes the development of strong, strategic partnerships with the
companies in which it invests.
Rhône has a history of completing corporate carve-out transactions and working
with entrepreneur and family-led businesses, and operates across its London, New
York, Madrid, and Milan offices. Rhône has invested in a diversified portfolio
of companies including investments in the business services, consumer, and
industrial sectors. For more information about Rhône, its investment
professionals, and its current portfolio, please visit:
https://www.rhonegroup.com/.
Orkla ASA
Oslo, 26 October 2023
Contacts
EVP Communication and Corporate Affairs, Orkla ASA
Håkon Mageli, Tel.: +47 928 45 828
SVP Investor Relations, Orkla ASA
Kari Lindtvedt, Tel.: +47 950 75 114
For Rhône:
Brunswick Group
Alex Yankus / Harry Mayfield RHONE@brunswickgroup.com
(917) 818-5204 / (917) 200-1539
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act.
This stock exchange announcement was published by Kjetil Sørum, VP Investor
Relations at Orkla ASA, on 26 October 2023 at 06:53 CET.
Kilde
