SKEL's Strategic Acquisition of Samkaup
In a bold move that signals a transformative phase in the Icelandic retail sector, SKEL fjárfestingafélag hf. has entered into a purchase agreement for a substantial stake in Samkaup hf. This significant agreement builds on previous discussions between SKEL, Samkaup, and Orkan IS ehf., which sought to merge with Atlaga ehf.
Recently, further conversations unfolded with Kaupfélag Suðurnesja svf., the primary shareholder in Samkaup. These dialogues have revitalized plans for a merger, culminating in a formal agreement by the end of the previous year. This merger has gained traction, particularly after securing approval from the competition authorities earlier this year.
Details of the Purchase Agreement
Today marks a pivotal moment as SKEL, through Orkan, has agreed to buy all shares held by KSK in Samkaup, which totals a nominal value of ISK 221,386,719, representing 51.3% of the company’s shares. The agreed purchase price for these shares amounts to ISK 2,878 million; this evaluation is founded on a total equity value of ISK 5,610 million for Samkaup, translating to ISK 13 per share. Such a price implies an enterprise value of ISK 9,606 million for Samkaup, considering the company’s debt as of the last quarter.
This acquisition will be facilitated through the issuance of new share capital in Orkan. At the time of settlement, Orkan’s shares are valued at ISK 10,669 million, leveraging the company’s financial position reported at the end of the last fiscal year. Additionally, Orkan maintains a significant share in Lyfjaval, recorded at ISK 1,928 million, alongside a share in Samkaup valued approximately at ISK 545 million.
Future Prospects for the Group Structure
The agreement not only confirms the purchase but sets the stage for a group structure akin to those of noted retail companies in Iceland. The initial operational focus will span various sectors such as groceries, energy, pharmaceuticals, and car wash services, all managed under a consolidated framework.
However, this transaction is contingent upon several crucial conditions, including the successful merger completion between Samkaup and Atlaga, securing at least ISK 2,000 million in subscriptions from investors or underwriters for capital growth, and achieving a minimum acquisition of 90.01% shares from other Samkaup stakeholders. Approval from the KSK supervisory council and a nod from the Competition Authority are also essential steps before finalizing the deal.
Strategic Goals and Shareholder Involvement
Upon successful completion of the transaction, both SKEL and Orkan plan to work collaboratively to rejuvenate Samkaup, capitalizing on internal as well as external growth strategies. An ambitious goal has been set to aim for a public listing of the parent company’s shares on the regulated Icelandic market by the designated deadline in 2027.
Once the transaction is finalized, SKEL’s stake in the parent company is projected to be around 63%, approximating a value of ISK 13,500 million. All Lyfjaval shareholders will be invited to participate in this venture under the same conditions, along with other Samkaup shareholders once prerequisite conditions are satisfied.
Remarks from the CEO of SKEL
In light of this development, Ásgeir Helgi Reykfjörð Gylfason, the CEO of SKEL, expressed optimism regarding their strategic move: "We are excited to move forward in reinventing the competitive landscape of the Icelandic retail sector. This aligns perfectly with our outlined objectives regarding Orkan’s structural developments. With a rich history and reliable customer base, Samkaup is well-placed for transformation. We are committed to refining operational efficiencies and prioritizing customer satisfaction, leveraging the successful strategies applied at Orkan. Although both Samkaup and Atlaga encountered hurdles, we believe this merger and restructuring will foster a formidable market competitor."
Legal and financial advisory roles were comprehensively covered by BBA//Fjeldco and the corporate finance division of Fossa fjárfestingarbanki hf. respectively. For those seeking more information on this pivotal transaction, inquiries can be made with Ásgeir Helgi Reykfjörð Gylfason, CEO, at fjarfestar@skel.is.
Frequently Asked Questions
What does the agreement between SKEL and Samkaup involve?
The agreement facilitates SKEL's acquisition of shares in Samkaup, aiming to enhance market competitiveness.
What capital will be used for the transaction?
The purchase will be conducted through the issuance of new share capital in Orkan.
What are the future goals for the merged entity?
The parties aim to revitalize Samkaup and ultimately seek a public listing by 2027.
Who is the advisory team behind this transaction?
BBA//Fjeldco serves as legal advisor, while financial advice comes from Fossa fjárfestingarbanki hf.
How will shareholders benefit from this transaction?
Current and potential shareholders can participate under favorable terms once specific conditions are met.
