Summary
ZetaDisplay has entered into an agreement to acquire Seasam Oy, the second largest supplier of Digital Signage in Finland.
In 2016, Seasam had sales of approximately MSEK 33.8 with an EBITDA of MSEK 4.4 and operating earnings of MSEK 2.6.
ZetaDisplay is acquiring all of the shares in Seasam Oy for a fixed purchase price of MSEK 43.9. No supplemental purchase price is payable.
Seasam is expected to demonstrate strong growth and contribute to increased profitability during the year as compared with 2016.
The acquisition is being financed through new loans in the amount of MSEK 29.3, a note issued by the sellers in the amount of MSEK 9.8, and MSEK 4.9 in the form of newly-issued common shares in ZetaDisplay.
Background to the acquisition of Seasam Oy
ZetaDisplay’s ambition is to continue its journey of growth and actively participate in the ongoing consolidation of the industry in Europe. The acquisition of Seasam means that the company is further strengthening its position on the Finnish market, where it has had a presence for some time and where it carried out a successful acquisition of Marketmedia in 2015.
Seasam is Finland’s second-largest supplier of Digital Signage with many years of experience in the industry and some twenty employees. Seasam’s customer base includes K-citymarket, Kotipizza, Burger King, Picnic, Neste, O’Learys, and Helmi Savings Bank, among others. Together with ZetaDisplay’s existing operations, the merged operations will have a more prominent position with a very strong customer base in Finland.
“The acquisition of Seasam is in line with ZetaDisplay’s strategy of participating in the consolidation underway in the industry while maintaining solid profitability. Based on our Nordic platform, we will continue this expansion, benefiting from economies of scale and leading to gradually higher sales and increased profitability. Seasam is expected to report strong growth and contribute to higher profitability in 2017 as compared to 2016”, according to Leif Liljebrunn, CEO of ZetaDisplay.
In 2016, Seasam reported sales of approximately MSEK 33.8 (27.7) with an EBITDA of MSEK 4.4 (2.2), operating earnings of MSEK 2.6 (1.5) and total assets of MSEK 23.6.
“For some time, Seasam has been building up a strong position on the Finnish market with an attractive range of products and services offered to a broad customer base. It is in the interest of both Seasam and our customers to merge two companies with unique products and services in order to develop into an even stronger full-service supplier. Together with ZetaDisplay, this will become a reality and we will be able to offer complete solutions at the cutting edge of technology to existing and new customers”, says Manu Mesimäki, CEO of Seasam.
The ZetaDisplay Group including Seasam Oy
Had Seasam Oy been consolidated as per 1 January 2016, the new group, including ProntoTV, would have had pro forma sales during the 2016 financial year of MSEK 205 with a positive EBITDA of MSEK 27, based on an exchange rate of 9.76 SEK per Euro.
MSEK 2016
Sales 205
EBITDA 27,0
Operating earnings 18.5
Gross margin in % 52 %
The purpose of the pro forma information is to present the hypothetical impact which the acquisition and financing might have had on the ZetaDisplay Group’s consolidated income statement for 2016.
Implementation of the acquisition of Seasam Oy
The acquisition of Seasam Oy is being carried out through ZetaDisplay acquiring all of the shares in Seasam Oy in exchange for a fixed purchase price totaling MSEK 43.9. No supplemental purchase price is payable. Payment will be made at the time of closing on the shares which is anticipated to occur in July 2017. However, closing is conditional on ZetaDisplay having obtained complete financing for the acquisition.
The financing of the acquisition of Seasam Oy
The acquisition is being financed through new loans in the amount of MSEK 29.3, a promissory note issued by the sellers in the amount of MSEK 9.8, and MSEK 4.9 in the form of newly-issued common shares in ZetaDisplay.
ZetaDisplay has received a loan commitment in the total amount of MSEK 30 for the purpose of carrying out the acquisition. The loan financing is on market terms and conditions. Over the course of the past twelve months (up to and including 30 June 2017), ZetaDisplay paid off principal in the amount of approximately MSEK 17 on loans it had previously taken up for the two most recent acquisitions during 2015 — 2016 which make it possible for the company to continue to make acquisitions largely debt-financed.
The note from the sellers in the amount of MSEK 9.8 is for a term of twelve months at 5% interest.
ZetaDisplay will make payment of MSEK 4.9 of the purchase price in the form of common shares in ZetaDisplay which will be issued to the seller. The subscription price is calculated based on the volume-weighted average price on First North during a period of 30 days prior to the day before the closing date, with a discount of 8%. Payment using common shares entails a dilution of approximately 2.3% of the share capital and votes.
Advisor
Fredersen Advokatbyrå is the legal advisor to ZetaDisplay in conjunction with the acquisition.
In the event of questions, please contact:
ZetaDisplay AB (publ)
CEO Leif Liljebrunn
Telefon: +46 70 845 80 52
E-mail: leif.liljebrunn@zetadisplay.com
The information contained in this press release is the type of information which ZetaDisplay is obligated to publish according to the Market Abuse Regulation. Leif Liljebrunn caused the information to be submitted for publication on 9 June 2017 at 8:55 AM.
About ZetaDisplay
ZetaDisplay is a leading supplier of Digital Signage to large retail chains and the service industry on the European market. ZetaDisplay’s headquarters are located in Sweden with sales offices located in Denmark, Norway, Finland, Estonia, and the Netherlands. Since April 2011, its shares have been traded on NASDAQ First North Premier, with the ticker symbol ZETA. The Certified Adviser is Erik Penser Bankaktiebolag. More information is available at http://www.zetadisplay.com.
About Digital Signage and multi-channel communication
ZetaDisplay defines Digital Signage as systems for advertising, profiling and stores communications that convey sound, images, and films at shops and in public environments. Solutions based on digital screens are a large part of the market, but the development is towards utilizing ever more digital channels in order to communicate offers and other information to customers. This involves solutions that are integrated with social media and websites, as well as applications for smart mobile telephones and tablets which create interactivity with the customer. The development is also towards integrating solutions with the cashier systems of the store chains for automatic price updates and automatic replacement of messages on the digital screens.