It will pay SEK 325m ($37m), but the purchase price could rise depending on future performance of Cloetta and Candyking’s joint pick & mix business.
Candyking: 370 employees and 8,000 retailers
“The acquisition of Candyking will significantly strengthen Cloetta’s position in Denmark, Norway and the United Kingdom,” said Danko Maras, CFO and outgoing CEO of Cloetta.
Candyking has roughly 370 employees. It does not produce itself and instead sources from various suppliers.
It sells pick & mix to around 8,000 retailers, mainly in the UK, Norway and Denmark. It has a smaller presence in Finland, Ireland and Poland.
In 2014, Candyking lost out to Cloetta as Coop Sverige’s pick & mix supplier after the retailer refused to renew an earlier contract.
Candyking pulled the plug on a $76.2m initial public share offering in the same year after fires at two of Candyking’s suppliers.
Candyking also sells natural snacks through its Parrot brand, which will further strengthens Cloetta’s position in the snacks space.
Cloetta launched its own natural snacks pick & mix platform “Godisfavoriter” and “Natursnacks” in 700 Coop Sverige stores in 2015.
Cloetta will acquire 100% of shares in Candyking from Candyking CEO Dani Evanoff and holders of Candyking’s bond loan. It will also assume all of its debt.
Candyking had issued a SEK 750m ($84.41m) bond loan, but Cloetta will now delist Candyking’s bonds from Nasdaq Stockholm.
Swedish entrepreneur Evanoff became CEO of Candyking in June last year and acquired the company in November from investment fund Accent Equity in 2008.
Cloetta has paid SEK 325m ($37m) for the business. It may pay an additional amount up to a maximum of SEK 225m ($25m) based on Candyking and Cloetta’s joint sales volumes in pick & mix confectionery and natural snacks in the Nordic countries, the UK and Poland in 2018.
Candyking’s annual sales amount to SEK 1.3bn ($147m) on a 12-month rolling basis from Q3 figures. Annual underlying EBITDA is around SEK 70m ($8m).
The acquisition is subject to Swedish competition authority approval.