STOCKHOLM, Sweden, May 24, 2002 (PRIMEZONE) -- J.W. Childs Equity Partners III, L.P. ("J.W. Childs"), announces a recommended offer ("the Offer") to purchase all of the outstanding shares of Esselte AB (publ) ("Esselte"). The Offer will be made through a wholly-owned Swedish subsidiary of J.W. Childs to be established ("JWCA").
-- The Offer is SEK 90 in cash for each Series A share and each
Series B share of Esselte.
-- Bid premium. The Offer represents a premium of approximately 30
percent in relation to the average closing price of the Esselte
Series B shares on the Stockholm Exchange during the last 30
trading days prior to the announcement of the Offer and
approximately 31 percent in relation to the average closing price
of the Esselte Series A shares during the same period. The Offer
values the total outstanding share capital of Esselte at
approximately SEK 3,100 million.
-- Esselte Board recommendation. The Offer has been unanimously
recommended by the Board of Directors of Esselte.
-- Irrevocable acceptance. Ratos, Esselte's largest shareholder, has
irrevocably undertaken to accept and support the Offer in respect
of its entire holding of 32.8 percent of the voting rights and
16.9 percent of the issued share capital of Esselte. In addition,
Ratos has granted JWCA an option to acquire up to its entire
shareholding in Esselte.
-- Shareholder support. SEB Fonder, Esselte's second largest
shareholder (representing 9.3 percent of the voting rights and 6.8
percent of the issued share capital of Esselte), has declared that
it is in favour of the Offer.
-- Acceptance period. The acceptance period is expected to begin
June 6 and end June 27, 2002.
Press Conference today, Friday, May 24, 2002.
Time: 13.30 (CET)
Place: Operaterassen, Stockholm
Telephone conference: +44 20 8240 8240 or +44 20 8240 8242
Background and reasons for the Offer
Esselte is a leading global office supplies manufacturer. During the last two years management has focused on internal cost reduction initiatives resulting in improved profitability and reduced working capital. J.W. Childs believes that the company is now ready for the next steps, which include an enhanced focus requiring substantial investment to grow the company in order to maintain its global status. Together with a management team led by Magnus Nicolin, J.W. Childs intends to grow the business organically through a number of initiatives in terms of product innovation, brand building and new geographic markets. In addition, J.W. Childs intends to drive the future consolidation of the office supplies industry.
Magnus Nicolin, formerly an Executive Vice President of Esselte, will become Chief Executive Officer and President of Esselte following the completion of the Offer.
"We see great potential in returning Esselte to growth. Given our experience in the branded consumer goods sector, we are confident that J.W Childs is well suited to work with management to support the growth and expansion of Esselte's global operations. We capitalize our companies to support growth and see significant opportunities of expanding Esselte's business through additional capital investments," commented John W. Childs, President of J.W. Childs Associates, L.P., manager of J.W. Childs.
"We are pleased that J.W. Childs is stepping in as owners of Esselte and believe this will be beneficial to the company's staff, customers and suppliers. In addition, the price offered is fair for shareholders," commented Kurt Jofs, Esselte's Chairman of the Board.
The Offer
JWCA will offer SEK 90 in cash for each Esselte Series A share and each Series B share validly tendered into the Offer. No commission will be charged. The Offer values the total outstanding share capital of Esselte at approximately SEK 3,100 million.
Esselte's Series A shares and Series B shares are listed on the A-list on the Stockholm Exchange and on the London Stock Exchange.
The closing price on the Stockholm Exchange on May 23, 2002, the last day of trading prior to announcement of the Offer, was SEK 81.50 for Esselte's Series B shares and SEK 78.00 for Esselte's Series A shares. In relation to the closing prices on May 23, 2002, the Offer represents a premium of approximately 10 percent for the Series B shares and approximately 15 percent for the Series A shares. Compared with the average closing prices during the last 30 trading days prior to today's announcement, the Offer represents a premium of approximately 30 percent for the Series B shares and approximately 31 percent for the Series A shares.
Neither J.W. Childs nor JWCA currently owns any shares in Esselte.
Recommendation by the Board of Directors of Esselte
The Board of Directors of Esselte has unanimously decided to recommend that shareholders of Esselte accept the Offer. The Board of Directors' recommendation is supported by a fairness opinion delivered to the Esselte Board of Directors by its financial advisor, Enskilda Securities.
Irrevocable undertaking
Esselte's largest shareholder, Ratos, representing 32.8 percent of the voting rights and 16.9 percent of the issued share capital of Esselte, has irrevocably undertaken to accept and support the Offer in respect of its entire holding.
In addition, Ratos has granted JWCA an option to acquire up to Ratos' entire shareholding in Esselte (i.e. 5,163,207 A-shares and 611,600 B-shares), exercisable up to two months from today or, under certain circumstances, up to three months from today.
Sharholder support
SEB Fonder, Esselte's second largest shareholder (representing 9.3 percent of the voting rights and 6.8 percent of the issued share capital of Esselte), has declared that it is in favour of the Offer but has not agreed to tender its shares.
Financing
J.W. Childs and JWCA have received firm financing commitments for the debt financing required for the transaction. Such commitments are only conditioned upon the same conditions as for the Offer (see conditions (1) - (4) below).
Conditions for the Offer The Offer is conditional upon:
(1) that the Offer is accepted to such an extent that JWCA
becomes the owner of more than 90 percent of the total
number of shares representing more than 90 percent of
the votes in Esselte on a fully diluted basis. However,
JWCA reserves the right to complete the Offer at a lower
level of acceptance,
(2) that all necessary authority approvals and clearances are
obtained on terms, which in JWCA's view does not
materially affect the Offer, the acquisition of Esselte
or the business of Esselte negatively,
(3) that the acquisition of Esselte, prior to the announcement of
the completion of the Offer, is not entirely or
partially made impossible or materially obstructed as a
result of any legislation, court ruling, authority
decision or similar event in Sweden or abroad, which is
actual or anticipated, or for any other reason beyond
control of JWCA,
(4) that JWCA has not, prior to the completion of the Offer,
become aware that information made public by Esselte in
any material respect is incorrect or misleading and such
circumstance or fact is detrimental to Esselte or that
any material fact which should have been made public by
Esselte and which is detrimental to Esselte has not been
made public, and
(5) that JWCA has obtained funding sufficient to consummate the
Offer pursuant to the financing commitment obtained by
JWCA as of the publishing of the Offer (see further
above under the caption Financing).
JWCA will be permitted to waive the above conditions, in whole or in part.
Preliminary timetable
A prospectus detailing the Offer to the shareholders of Esselte is expected to be distributed to the shareholders of Esselte on or about June 6, 2002. The acceptance period is expected to begin on June 6 and is anticipated to end on or about June 27, 2002, subject to required regulatory approvals. Assuming that the acceptance period ends on June 27, 2002, settlement is expected to occur on or about July 4, 2002. JWCA will reserve the right to extend the acceptance period, as well as to defer the date for settlement.
Advisor
Carnegie is acting as financial advisor to J.W. Childs and JWCA in connection with the Offer.
J.W. Childs in brief
J.W. Childs Associates, L.P. ("Childs Associates"), the manager of J.W. Childs, is a leading private equity investment firm based in Boston, Massachusetts, U.S.A, specializing in the consumer products, health care and specialty retail industries. Childs Associates looks to invest in firms with $150 to $700 million in total enterprise value. Target companies typically have strong brand franchises, leading market shares or other attributes that have the potential to create above average profitability. The firm has been successful in assisting companies to grow through new product introductions, product line extensions, expanded channels of distribution and geographic expansion. The principals of Childs Associates have successfully and consistently employed this private investment approach for more than a decade, and have completed 33 transactions since 1987. Childs Associates presently manage $3.4 billion of equity capital from leading financial institutions, pension funds, insurance companies and university endowments from around the world.
Childs Associates believes that growth of many portfolio companies can be accelerated through selective follow-on acquisitions. These acquisitions often work to strengthen the market position and expand the revenue both of new and existing portfolio companies. Of the 22 portfolio companies acquired by Childs Associates and its affiliates since 1995, 10 companies have made over 25 follow-on acquisitions.
Childs Associates places particular emphasis on investing in consumer product companies. Some of the companies that Childs Associates have invested in include the NutraSweet Company (the global market leader in the high intensity sweetener industry and the worlds largest producer of Aspartame), the Meow Mix Company (the leading dry cat food brand in the U.S.) and Hartz Mountain Corporation (the leading U.S. manufacturer of pet supplies).
This announcement does not constitute an offer or invitation to exchange or sell or an offer to exchange or purchase any securities.
The Offer is not being made, directly or indirectly, in or into Australia, Canada, Japan, South Africa or New Zealand, and it may not be accepted in or from Australia, Canada, Japan, South Africa or New Zealand. In addition, except with respect to U.S. residents, the Offer is not directed towards any person, whose participation requires an additional prospectus, registration or other measures than those required by Swedish law.
The Offer has not yet commenced. Any offer in the United States will only be made through offer documentation to be distributed by JWCA in due course. Esselte shareholders are advised to read the offer documentation because it will contain important information relating to the Offer.
Statements in this announcement relating to future status or circumstances, including statements regarding future performance, growth and other trend projections and the other benefits of the Offer are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as "anticipates", "intends", "expects", "believes", or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Childs Associates, J.W. Childs, Esselte and JWCA, including the effect of changes in general economic conditions, the level of interest rates, fluctuation in demand for Esselte's products, competition, technological change, employee relations, regulations, and the potential need for increased capital expenditure (such as that resulting from increased demand, new business opportunities and deployment of new technologies).
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