Valora Holding AG

EANS-Adhoc: Valora Holding AG
Valora to buy highly profitable Ditsch/Brezelkönig group of companies - unique opportunity for strategically significant acquisition - strong anchor shareholder secured for Valora

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Valora to buy highly profitable Ditsch/Brezelkönig group of companies - unique
opportunity for strategically significant acquisition - strong anchor
shareholder secured for Valora

25.09.2012

Valora to buy highly profitable Ditsch/Brezelkönig group of companies - unique
opportunity for strategically significant acquisition - strong anchor
shareholder secured for Valora

- Acquisition of Ditsch/Brezelkönig gives Valora additional retail format with
leading position in German and Swiss markets
- Focused product range and extension of Valora's outlet portfolio ideally
complement the Group's retail formats in Germany and Switzerland
- Current owner's assumption of anchor shareholder role ensures long-term
commitment to Valora - seat on Valora Board planned 
- Focus on "Valora for a fast moving world" approach, enhancing the Group's
retail profile and sustainably increasing the profitability of the network of
more than 3,000 outlets it now operates in four countries

Acquisition of Ditsch/Brezelkönig gives Valora additional retail format with
leading position in German and Swiss markets

Through its acquisition of Ditsch Brezelbäckerei GmbH and Brezelkönig GmbH & Co
KG, Valora has gained an additional small-outlet-retail format with a network of
230 sites in Germany and Switzerland. This company, which has been family-owned
and family-managed for three generations, generates annual sales of some CHF 190
million, on which it earns a highly profitable EBIT margin of more than 14
percent and an EBITDA margin of some 20 percent. For Valora, the firm's
integrated business model - based on the production and distribution of
lye-bread bakery products and an outstanding network of outlets operated by
agent-managers - provides an ideal opportunity to enter into the attractive and
rapidly expanding immediate-consumption food product market. The nationwide
coverage arising from the firm's 195 Ditsch outlets in Germany and the strong
brand recognition achieved by its 35 Brezelkönig sites in Switzerland provide
significant scope for further expansion. Both parties have agreed that the
purchase price will remain confidential (7-9x EBITDA multiple).

Valora's Board commissioned a recognised, independent firm of auditors to
evaluate the terms of the transaction, which this firm has assessed as being
fair and appropriate.

A portion of the consideration, amounting to some CHF 100 million, will be paid
in Valora shares. To that end, Valora will issue 635,000 new shares of
authorised share capital to the vendor, Peter Ditsch. Once the transaction is
complete, this will result in Peter Ditsch becoming the anchor shareholder in
Valora, with 18.5% of the company's outstanding shares. Valora will finance the
remainder of the purchase price by drawing on a new CHF 450 million syndicated
loan facility, which will replace its current CHF 300 million arrangement. The
divestments Valora has already announced - the Handelshaus building in Muttenz
and Valora Services Austria - will provide the Group with additional financial
headroom. Completion of the transaction requires approval by the
Bundeskartellamt, Germany's independent competition authority, which is expected
during the fourth quarter of 2012. 

Focused product range and extension of Valora's outlet portfolio ideally
complement the Group's retail formats in Germany and Switzerland 

The newly acquired outlets provide an ideal extension to Valora's existing
retail network. Many of the sites are located at public transport hubs which
generate substantial sales volumes. Specialisation in a limited number of
product groups - Ditsch is noted for its specialist lye-bread baking expertise -
the firm's highly automated processes and the ease with which the products can
be handled at the individual outlets all contribute to ensuring that a high
level of floorspace productivity is achieved and that the products they sell are
both very fresh and of high quality. The new format ideally complements the
concepts Valora is already deploying and will create numerous synergies and
opportunities for raising efficiency levels.
The new firm's product-range know how and the high quality of its products will
also help Valora's existing outlets to raise the proportion of their total sales
they generate from food. In future, all possible approaches to enhancing
Valora's existing outlet portfolio will be examined, and the Group will
establish additional sites as well. Ditsch is also a popular supplier of
individual-sized frozen baked goods to the food retail and wholesale sectors.
The firm's focused specialisation on lye-bread products and its efficient
production processes are very appealing both to Valora's own Retail division and
third party specialist retailers, thus paving the way for further international
expansion. The fact that it operates its own production facilities also enables
the firm to be extremely flexible, both in reacting to changing consumer
preferences and in developing new, exclusive products. 

Current owner's assumption of anchor shareholder role ensures long-term
commitment to Valora - seat on Valora Board planned

Integration of the newly acquired company into Valora's existing operations will
not require any major modifications. Ditsch/Brezelkönig will become part of
Valora's Retail division, but will operate with its current lean and efficient
organisational structure as a business unit in its own right, reporting directly
to the Group CEO. The entire management team will remain with the firm, thus
ensuring that know how is maintained and that there is a smooth transition from
its current status as a family-owned company to that of a business unit within
an exchange-listed group. Overall management responsibility for the
Ditsch/Brezelkönig business will be assumed by Thomas Eisele, who has hitherto
worked as Valora's Head of Corporate Business Development and has many years of
M&A and management experience, as well as significant retail expertise. Once the
transaction is completed, Peter Ditsch, the current owner and Managing Partner
of Ditsch Brezelbäckerei GmbH, will switch from operational to strategic
leadership duties and will also become a significant anchor shareholder in
Valora. This move on Peter Ditsch's part underscores his intention of making a
long-term commitment to the Valora Group. At the Annual General Meeting of
shareholders in April 2013, Valora's Board of Directors will recommend that
Peter Ditsch be elected to join its ranks as an additional Board member.
Klaus Stahl, the current Managing Director of Brezelkönig Switzerland, of which
he is also a co-owner, will assume new, overarching responsibilities in business
development.

Focus on "Valora for a fast moving world" approach, enhancing the Group's retail
profile and sustainably increasing the profitability of the network of more than
3,000 outlets it now operates in four countries

This latest acquisition, which extends the list of purchases the Group has
carried out over the last 24 months, completes the implementation of the
successful Valora 4 Growth strategy. The firm will now concentrate on a "Valora
for a fast moving world" approach, whose primary focus is on sustainably raising
its profitability. Since the beginning of this year, Valora's Board has, with
the help of UBS as a financial advisor, carried out a detailed evaluation of
this transaction. Based on that analysis, the Board is convinced that this
strategically significant step has enabled the Group to achieve a major
milestone in its development. The Ditsch/Brezelkönig acquisition also provides
Valora with an excellent opportunity further to raise its retail profile through
a network which now comprises more than 3,000 outlets in four countries.

Options for repositioning Valora's Services division so as to reduce dependence
on the press market will be evaluated. Valora Trade will continue to operate as
a European distributor of fast-moving consumer goods and intends to sharpen its
focus on categories with above-average growth rates.

In its current financial year, Valora expects to generate operating earnings of
some CHF 65-70 million. The Group intends to maintain its shareholder-friendly
dividend policy, with a pay-out ratio in line those in recent years. 

Summing up the transaction, Rolando Benedick, Valora's Board Chairman and CEO
said, "The purchase of Ditsch/Brezelkönig is an ideal modular match for our
existing outlet formats and meets all our requirements for a successful future."
 


*PRESS CONFERENCE***********************************************
We are pleased to invite you to attend today's press conference on the
Ditsch/Brezelkönig acquisition. This will take place at our Muttenz
headquarters:


Date/time:      25.9.12, 11.30 drinks / conference commences at 12.30
Venue:          Hofackerstrasse 40, 4132 Muttenz
Speakers:       Rolando Benedick, Peter Ditsch, Thomas Eisele, Lorenzo Trezzini



A presentation containing further details of the transaction is available for
download on www.valora.com
http://www.valora.com/en/media/newsinformation/news_00474.php
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Ditsch/Brezelkönig key metrics, expected 2012


                            Germany     Switzerland          Total
Sales(in CHF miollion)          140              50            190
 through own retail channels    56%             95%            65%
 3rd party retailser            44%              5%            35%
Outlets                         195              35            230
Staff                           510              85            595
Production facilities             2               1              3



Overview of Valora Retail's outlet network


                     CH        DE        Lux        AT       Total
k kiosk             918       107         70                 1'095
P&B                  25       175                   10         210     
tabacon                        72                               72
avec.               105                                        105
CC (various formats)        1'274                            1'274
Caffè Spett.         39                                         39
Ditsch                        195                              195
Brezelkönig          35                                         35

TOTAL             1'122     1'823         70        10       3'025




+++++++
Peter Ditsch, born 1956, German citizen, Managing Partner
Current activities:
Managing Partner, Brezelbäckerei Ditsch GmbH (since 1985);
Founding Partner and Managing Director, Ditsch Ltd (UK); 
Member of the Board of Trustees of the Stiftung Tumorforschung Kopf-Hals (in
English, "Head and Neck Tumour Research Foundation") (since 1993), Treasurer and
Supervisory Board member since 2001;
Member of the Plenary Session of the German Chambers of Commerce and Industry
(since 2004);
Supervisory Board member, Mainzer Volksbank eG (2005).

Thomas Eisele, born 1974, Swiss citizen, master's degree in Political Science
from the University of Basel 
Previous activities: Assistant Executive Chairman, Valora Holding; Assistant
Executive Chairman, Projects, Manor Group; CFO/COO itheca Group; management
consultant with MCS. 
Current position at Valora: Head of Business Development / M&A since 2008.


*CONFERENCE CALL************************************************
Valora Telephone Conference - Analysts' and Media Conference
 on Ditsch GmbH acquisition
Tuesday, September 25, 2012 | 16:00 CET (English)

Rolando Benedick, CEO and Chairman of Valora Holding AG, Thomas Eisele, Managing
Director Ditsch / Brezelkönig, and Lorenzo Trezzini, CFO, will provide
information about the transaction during a telephone conference.

To participate in the conference: please call the following number (please call
10 to 15 minutes before the stated starting time):

+41 (0) 91 610 56 00   (Europe)
+44 (0) 203 059 58 62 (UK)
+1   (1) 866 291 41 66 (USA - toll-free)
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Valora 
- Valora is an independent consumer-goods trading company operating on a
Europe-wide scale (www.valora.com).
- Valora runs three separate business divisions, all operating in high-volume
consumer goods markets. The Group's activities are focused on those European
markets where modern, mobile lifestyles have become widespread.

Retail division
Market leader in small-outlet and micro-outlet convenience retail, operating a
range of standardised formats at heavily frequented locations.   

Services division
Market leader in the distribution of press products to the Group's own outlets
and third party retail. The division also runs a press and retail goods
wholesaling business.

Trade division
Exclusive distributor of branded food and non-food consumer goods to the retail
sector.

- Valora's Retail division comprises more than 3,000 kiosks, convenience stores
and gastronomy outlets (see outlet overview).
- Valora Retail is Switzerland's leading small-outlet and micro-outlet retailer.
The division operates the following standardised-format brands: 
k kiosk, avec., Press & Books, Caffè Spettacolo.
- With its P&B stores, Valora Retail Germany is the leading bookseller at German
railway stations and airports. The firm also operates a network of specialist
tobacco and press outlets, mostly located in shopping centres and department
stores.

- Ditsch Gmbh: The company, which has been family-owned and family-run for three
generations, has been producing traditional lye-bread baked goods for over 90
years and is a specialist maker of frozen dough products. For more than 10
years, Ditsch has also produced ready-baked frozen speciality products. Today,
the company employs some 500 staff. The firm's main production site and
administrative headquarters are in Mainz, with a further production facility in
Oranienbaum. With 195 outlets at heavily frequented sites, principally located
at public transport hubs and in shopping centres, Ditsch has a comprehensive
market presence across Germany and is known nationwide. As the market leader in
lye-bread products, the company is also a trusted and established supplier to
third-party retailers.
www.ditsch.de.

- Brezelkönig: In May 1996, this Swiss lye-bread specialist baker commenced
production in the heart of Central Switzerland. 
In January 2000, Brezelkönig was acquired by Peter Ditsch. Brezelkönig GmbH & Co
KG remains an autonomous company with its own corporate identity. In
Switzerland, the company sells its popular take-away products, ranging from
savoury pretzels to lye-bread baguette sandwiches with high-quality fillings, at
35 outlets located at busy, heavily frequented sites.
www.brezelkoenig.ch


Further inquiry note:
Investor Relations:	Tel:	+41 58 789 12 20
Mladen Tomic	         E-Mail:	mladen.tomic@valora.com 

Media Relations:	         Tel:	+41 58 789 12 01
Stefania Misteli	         E-Mail:	stefania.misteli@valora.com

end of announcement                               euro adhoc 
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issuer:      Valora Holding AG
             Hofackerstrasse 40
             CH-4132 Muttenz
phone:       +41 61 467 20 20
FAX:         +41 58 789 12 12
mail:     info@valora.com
WWW:      www.valora.com
sector:      Retail
ISIN:        CH0002088976
indexes:     
stockmarkets: Main Standard: SIX Swiss Exchange, stock market: BX Berne eXchange 
language:   English