Komplett ASA

M&A Activity • Feb 9, 2022

Komplett ASA: Komplett and NetOnNet doubling in size by combining their businesses

Komplett ASA: Komplett and NetOnNet doubling in size by combining their businesses

NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN

OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE HONG KONG SPECIAL

ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN, OR ANY OTHER

JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Oslo, 9 February 2022: Komplett ASA ("Komplett") and NetOnNet AB ("NetOnNet")

are pleased to announce that an agreement for the combination of the two

companies has been entered into. 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 NOK 18.5 billion. The

transaction is expected to enable realisation of cost synergies, mainly related

to sourcing, of at least NOK 200 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 Aktiebolag ("SIBA Invest"). As

consideration for the shares in NetOnNet, SIBA Invest will receive 35,242,424

new Komplett shares and NOK 1,500 million in cash. Based on Komplett's close of

day share price on 8 February 2022 of NOK 62.60, this values NetOnNet's share

capital at NOK 3,706 million, corresponding to an enterprise value of NOK 3,797

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 per cent, 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 NOK 18.5

billion and EBIT (adj.) of NOK 674 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 NOK 2.90 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 AS ("Canica Invest") will remain the largest and a long-term

shareholder in Komplett after the combination with an approximate shareholding

of 40 per cent 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

SEK 5 billion, corresponding to an annual average organic growth rate of ca 12

per cent, 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".

Transaction highlights

· The transaction is structured as an acquisition by Komplett of all the

shares in NetOnNet from its sole shareholder SIBA Invest owned by the Bengtsson

family.

· Komplett will remain listed on the Oslo Stock Exchange.

· As consideration for the shares in NetOnNet, SIBA Invest will receive

35,242,424 new Komplett shares and NOK 1,500 million in cash. Based on

Komplett's close of day share price on 8 February 2022 of NOK 62.60, this values

all shares in NetOnNet at NOK 3,706 million, corresponding to an enterprise

value of NOK 3,797 million (equal to 13.3x EBIT (adj.) 2021) based on year-end

2021 net interest bearing debt (excluding lease liabilities). The cash

consideration is subject to an addition of 4 per cent per annum for the period

from 30 September 2021 until completion of the transaction.

· The Komplett shares to be issued to SIBA Invest will correspond to

approximately 32.8 per cent of the outstanding shares in Komplett after the

transaction, but before dilution effect of the new issuance of Komplett shares

to finance the cash consideration / replace the bridge facility as referred to

below.

· Financing to settle the cash consideration is secured through a NOK 1,500

million committed 15-month bridge loan facility. Komplett intends to replace the

bridge loan facility with proceeds from the issuance of new shares in due

course. Canica Invest has committed to subscribe for at least NOK 500 million in

such a share issue.

· Lars Olav Olaussen to continue as CEO for the combined company with Susanne

Holmström as Deputy CEO and managing director of NetOnNet.

· Fabian Bengtsson, chairman of SIBA Invest, is proposed as a new board member

of Komplett and Roland Vejdemo, current chairman of the board of NetOnNet, as a

new observer in the board of Komplett, and with Carl Erik Hagen (currently a

deputy board member) as an observer to the board. Martin Bengtsson, CEO of SIBA

Invest, to be represented on Komplett's nomination committee.

· Completion of the transaction is subject to approval by Komplett's general

meeting and necessary competition authority clearances in Norway and Sweden.

· Komplett's general meeting is expected to be held during March, and

completion of the transaction is expected in Q2 2022, subject to timing of

competition authority clearances.

Key facts and figures

NetOnNet's revenue of approximately NOK 7.5 billion in 2021 is split into 88 per

cent in Sweden and 12 per cent in Norway, compared to Komplett's revenue of

approximately NOK 11 billion in 2021 which is split into 32 per cent in Sweden,

65 per cent in Norway and 3 per cent in Denmark. Combined, illustrative

unaudited aggregated revenue split in 2021 is balanced with 55 per cent in

Sweden, 43 per cent in Norway and 2 per cent in Denmark.

Through the transaction, Komplett significantly expands its presence and

footprint in the Swedish market. Komplett and NetOnNet had preliminary unaudited

aggregated revenue in Sweden of NOK 10.1 billion in 2021, compared to NOK 3.6

billion for Komplett stand alone.

Komplett's main Swedish brand, Webhallen, has 18 mainly city-centre / shopping

-mall located stores across Sweden, with a particular strong presence in the

greater Stockholm area. NetOnNet has a network of 29 cost-efficient service

centres ("Lagershoppar") mainly located outside city centres, of which 26 are

located across Sweden and 3 are in Norway. Given complementarity to both format

and locations, the combined networks enable a significantly broadening of market

reach in Sweden. Furthermore, while Webhallen has its main presence in the

gaming sector, NetOnNet has a broader customer base, resulting in limited

customer overlap.

Planned optimisation and streamlining of sourcing will leverage learnings from

Komplett's improvements since 2018, NetOnNet's sourcing capabilities and the

combined company doubling in size. Cost synergies that are mainly related to

sourcing are expected to be at least NOK 200 million on an annual basis, with

expected full effect within approximately 24 months from completion of the

transaction. The assessment of sourcing synergies is based on a detailed review

including of product overlaps and purchasing costs.

Komplett will maintain a robust balance sheet following the combination,

supporting financial flexibility and a continued attractive dividend policy.

Preliminary aggregated net interest bearing debt at year-end 2021 is NOK 656

million (excluding lease liabilities), corresponding to ca 0.8x EBITDA

(adjusted).

Conditions for the completion of the transaction

Completion of the transaction is subject to approval by Komplett's general

meeting of (i) the issuance of the consideration shares in Komplett to SIBA

Invest, (ii) an authorisation to the board of directors of Komplett to issue

further new shares to obtain proceeds to finance (in part or in full) the cash

consideration under the transaction and/or finance the repayment of the bridge

facility (if drawn-upon) and (iii) Fabian Bengtsson being elected as a board

member, Roland Vejdemo as an observer to the board as well as Martin Bengtsson

being elected as member of the nomination committee of Komplett with effect from

completion of the transaction, and with Carl Erik Hagen (currently a deputy

board member) as an observer to the board. Canica Invest has undertaken to vote

in favour of the resolutions at Komplett's general meeting. Completion of the

transaction is furthermore subject to obtaining necessary competition authority

clearances in Norway and Sweden.

Komplett has obtained the required waivers from the lock-up undertaking entered

into with the joint global coordinators in connection with the IPO completed in

June 2021.

Canica Invest and SIBA Invest - lock-up

SIBA Invest and Canica Invest will enter into lock-up agreements with Komplett

under which they will undertake not to sell or otherwise dispose of the shares

in Komplett for a period of 180 days from completion of the transaction. Both

SIBA Invest and Canica Invest intend to remain significant long-term

shareholders in Komplett.

Advisors

Skandinaviska Banken Enskilda (publ) AB, Oslofilialen, norsk avdeling av

utenlandsk foretak ("SEB") is acting as sole financial advisor to Komplett.

Advokatfirmaet Thommessen AS is acting as Norwegian legal advisor to Komplett,

while Advokatbyrået Setterwalls AB is acting as Swedish legal advisor to

Komplett. First House is engaged by Komplett as communication and IR adviser.

Carnegie Investment Bank AB (publ) ("Carnegie") is acting as sole financial

advisor to SIBA Invest. Gernandt & Danielsson Advokatbyrå is acting as Swedish

legal advisor to SIBA Invest, while Advokatfirmaet BAHR AS is acting as

Norwegian legal advisor to SIBA Invest.

SEB has been engaged by Komplett as Global Coordinator and Joint Bookrunner and

Carnegie as Joint Bookrunner for the intended new share issue to finance the

cash consideration / refinance the Bridge Facility.

Presentation and press conference

A presentation on the combination will be held today 9 February 2022 at

approximately 09:15 am CET, immediately after the presentation of the fourth

quarter results of Komplett ASA which will begin at 09:00 am CET. The

presentation will be hosted by CEO of Komplett Lars Olav Olaussen, CEO of

NetOnNet Susanne Holmström and CFO of Komplett Krister Pedersen. The

presentation will be held in English at Felix Conference Centre, Aker Brygge,

Oslo. In addition to the physical presentation in Oslo, the event will be live

streamed.

Please use the following link to register and view the webcast:

https://events.webcast.no/viewer-registration/nIYzmINK/register

Questions to the speakers will be addressed towards the end of the presentation.

A recorded version of the webcast will be available after the webcast has

concluded.

For further queries, please contact:

Kristin Hovland, Head of Communication

+47 98 65 28 60

Kristin.Hovland@komplett.com

Per Christian Brander, Head of Investor Relations

+47 40 63 63 49

PerChristian.Brander@komplett.com

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation (MAR) Article 7 and is subject to the disclosure

requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.

This stock exchange announcement was published by Per Christian Brander, Head of

Investor Relations, at the date and time as set out above.

About Komplett ASA and NetOnNet AB

Komplett Group is a leading online-first electronics and IT products retailer,

operating in Norway, Sweden and Denmark. Serving customers in the B2C, B2B and

distribution markets, the Group is deeply focused on delivering best in class

customer experience, built through decades of knowhow, expertise and deep

customer commitment. Komplett Group operates an efficiency and scalable business

model that supports costs leadership and enables a competitive product offering.

Founded in 1999, NetOnNet is a leading online-first electronics platform

offering both well-known and own brands. Sales are generated online as well as

through complementary service centres in Sweden and Norway. NetOnNet is known

for low prices and a passion for making electronics accessible in the most

convenient way possible. The customer loyalty club, Klubbhyllan, has over one

million members which represent a majority of revenue. Head office and main

fulfilment centre are located in Viared, outside Borås.

Illustrative aggregated financial information

The illustrative aggregated unaudited financial information as included in the

announcement presentation as separately enclosed to this release is based on

unaudited consolidated financial statements for Komplett and NetOnNet's for the

year ended 31 December 2021 and respective audited consolidated financial

statements for the year ended 31 December 2020. The illustrative aggregated

financial information does not represent pro forma financial information as

impacts such as among other those relating to purchase price allocation,

differences in accounting principles, adjustments related to transaction costs

and impacts of potential refinancing have not been taken into account. Expected

potential synergies are not included. The illustrative aggregated income

statement information and key figures have been presented as if the combined

business had been carried on in the same group from the start of 2020.

NetOnNet's financial information presented in SEK has been converted to NOK at

an exchange rate of 1.0.

Important notice

This release is not for publication or distribution, in whole or in part,

directly or indirectly, in or into Australia, Canada, Japan or the United States

(including its territories and possessions, any state of the United States and

the District of Columbia). This release is an announcement issued pursuant to

legal information obligations for information purposes only and does not

constitute or form a part of any offer of securities for sale or a solicitation

of an offer to purchase securities of the Company in the United States or any

other jurisdiction. The securities of the Company have not been, and will not

be, registered under the U.S. Securities Act of 1933, as amended (the "U.S.

Securities Act"). The securities of the Company may not be offered or sold in

the United States except pursuant to an exemption from the registration

requirements of the US Securities Act. Any sale in the United States of the

securities mentioned in this communication may solely be made to "qualified

institutional buyers" as defined in Rule 144A under the U.S. Securities Act.

In any EEA member state, other than Norway, this communication is only addressed

to and is only directed at qualified investors in that Member State within the

meaning of the EU Prospectus Regulation, i.e., only to investors who lawfully

can receive this information.

In the United Kingdom, this communication is only addressed to and is only

directed at Qualified Investors who (i) are investment professionals falling

within Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling

within Article 49(2)(a) to (d) of the Order (high net worth companies,

unincorporated associations, etc.) (all such persons together being referred to

as "Relevant Persons"). These materials are directed only at Relevant Persons

and must not be acted on or relied on by persons who are not Relevant Persons.

Any investment or investment activity to which this announcement relates is

available only to Relevant Persons and will be engaged in only with Relevant

Persons. Persons distributing this communication must satisfy themselves that it

is lawful to do so.

Any contemplated offering of securities in the Company referred to in this

release will only be made by means or a prospectus, as per the EU Prospectus

Regulation (as implemented under Norwegian law), or any applicable exemptions

from prospectus or other registration requirements. The expression "EU

Prospectus Regulation" means Regulation (EU) 2017/1129 of the European

Parliament and of the Council of 14 June 2017 (together with any applicable

implementing measures in any EEA member state).

Matters discussed in this announcement may constitute forward-looking

statements. Forward-looking statements are statements that are not historical

facts and may be identified by words such as "anticipate", "believe",

"continue", "estimate", "expect", "intends", "may", "should", "will" and similar

expressions. The forward-looking statements in this release are based upon

various assumptions, many of which are based, in turn, upon further assumptions.

Although the Company believes that these assumptions were reasonable when made,

these assumptions are inherently subject to significant known and unknown risks,

uncertainties, contingencies and other important factors which are difficult or

impossible to predict and are beyond its control. Such risks, uncertainties,

contingencies and other important factors could cause actual events to differ

materially from the expectations expressed or implied in this release by such

forward-looking statements. The information, opinions and forward-looking

statements contained in this announcement speak only as at its date and are

subject to change without notice.

This announcement is made by, and is the responsibility of, the Company. Any

advisors engaged in connection with the transactions described herein are acting

exclusively for the Company and no one else and will not be responsible to

anyone other than the Company for providing the protections afforded to their

respective clients, or for advice in relation to the contents of this

announcement or any of the matters referred to herein.

No advisor mentioned herein, nor any of their respective affiliates, makes any

representation as to the accuracy or completeness of this announcement and none

of them accepts any responsibility for the contents of this announcement or any

matters referred to herein.

This announcement is for information purposes only and is not to be relied upon

in substitution for the exercise of independent judgment. It is not intended as

investment advice and under no circumstances is it to be used or considered as

an offer to sell, or a solicitation of an offer to buy any securities or a

recommendation to buy or sell any securities of the Company. No advisor

mentioned herein, nor any of their respective affiliates, accepts any liability

arising from the use of this announcement.

Each of the Company, the advisors mentioned herein and their respective

affiliates expressly disclaims any obligation or undertaking to update, review

or revise any statement contained in this announcement whether as a result of

new information, future developments or otherwise.

The distribution of this announcement and other information may be restricted by

law in certain jurisdictions. Persons into whose possession this announcement or

such other information should come are required to inform themselves about and

to observe any such restrictions.