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Jays Group AB signs a definitive agreement to acquire Krusell group

Regulatory press release
Jays Group AB (publ) has the 2nd of May 2018 signed a Share Purchase Agreement to acquire 100% of the shares of Krusell United AB. The acquisition is the first deal that Jays Group completes after the announcement of the new Jays´ group-strategy in end of 2017. Jays Group will after the integration of the Krusell group of companies have an annual turn-over of more than 150MSEK proforma 2018 which means an annual growth of more than 400% (vs 22MSEK 2017).

Jays Group and the sellers have agreed on an initial purchase price of 45.3MSEK with an additional purchase consideration (earn out) of 0.5xEBITDA based on the performance 2018 and 2019. The initial purchase price consists of 12MSEK cash, 4MSEK as a promissory note from the sellers and 29.3MSEK as a share issue to the sellers. The share price will be decided the 30th of May 2018 and the sellers will have a lock-up during 3 years. Jays Group will acquire 100% of the business of Krusell with the total booked value of 39.3MSEK as per the audited Annual Report 2017. The acquisition is subject to customary closing conditions and the closing date is planned to 31st of May 2018. Jays will finance the cash part of the acquisition through an external credit facility.

Krusell group designs and produces bags and cases for portable electronics. Krusell offers accessories, bags, cases and protection products for mobile, smart phones, tablets and laptops with own brand names but also on OEM basis to larger global customers. The company has operations and sales offices in several countries in Europe and Asia, as well as long-term partnerships with major global industry leaders. Krusell has its own R&D and design in Gothenburg Sweden and in Bangkok Thailand, where also the own production facility is located. Krusell will be operated as an independent business within Jays Group with full access to the group’s resources and represented in the Jays Group´s management team and board. All the key-resources within Krusell will continue in the company group after the deal is completed.

”We are very excited to start the work together with Jays Group´s management team and board to create the future success of the new company group. Jays Headphones and Krusell work in associated verticals within the industry for portable electronics and have several common - as well as new potential - partnerships to further develop together. Krusell´s and Jays´ established marketing and sales channels globally sums up to more than 100 countries worldwide, which will be a great asset to leverage on when promoting our individual brands as well as existing and new product solutions. Krusell´s experience, the complete product portfolio for all available smart phones in the market and our legacy within crafted leather products provides a continuous strong growth potential”, says Ulf Sandberg CEO of Krusell and the representative of the sellers.

”Based on my earlier experience as an International Sales Manager of Krusell, as well as in another major European company with similar products, we are confident that the acquisition of Krusell would considerable strengthen the growth potential of Jays Group. Since there is a growing usage of smartphones and portable electronics globally we are positive that that the demand and volumes for design and quality accessories, such as headphones, mobile cases and similar products, will continue to be strong. We will continue our newly initiated growth journey and we are actively evaluating new potential acquisitions to add value to our existing brands and product portfolios. We have a strong commitment to continuously increase the awareness and interest in Jays Group as well as our various brands and products” says Jays Group´s CEO Henrik Andersson.

Jays Group´s future success will be based on both organic and acquisition driven growth. The objective of the new Jays´ group-strategy is to create long-term shareholder value and the target acquisitions will primary take place within the audio-, mobile-, electronics- and design areas with the focus to build a strong business based on technology, innovative design, strong brands, strong product portfolios and smart connectivity. The target acquisitions of Jays Group should also create new opportunities in new markets and market channels. Based on the foundation of Jays Headphones and the Krusell acquisition, the Jays Group´s management team and board of directors will continue the execution of the new group-strategy to create a company group with several independent strong brands and product portfolios.

”According to our earlier communication acquisitions is an important component in Jays Group´s new growth strategy. Thus it is very positive that we already now could announce Jays Group´s first acquisition as per the new group-strategy presented in end of 2017. After the integration and consolidation of Krusell the total proforma turn-over of Jays Group will become over 150MSEK in 2018, which out-performs and exceeds the earlier communicated growth objectives of 2018”, comments Håkan Larsson Chairman of the Board and Jays Group´s main owner.

Jays Group´s long-term financial objectives is to have annual growth in net sales of 20 percent with a profit of minimum 10 percent EBITDA margin and an equity ratio (solidity) over 30 percent. The company does not publish forecasts and will not present updated detailed forecasts to the market. The business will merely be focusing on meeting the long-term financial targets as per its 3 years group-strategy presented in November 2017. The Jays Group has a strategy plan to make several acquisitions coming years with the objective to diversify and create a strong company group with a focus on long-term profitable growth.

Law firm Vinge KB has acted as legal counsel to Jays Group for its acquisition of Krusell group.

For further information, please contact:
Henrik Andersson, CEO Jays Group AB
Mobile: +46 761 99 35 55

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