LONDON - Rockpool Acquisitions Plc, a Special Purpose Acquisition Company (SPAC) listed on the London Stock Exchange (LON:LSEG), has signed a heads of agreement for the potential acquisition of European Lingerie Group AB (ELG AB), with plans to re-admit the combined entity to the Main Market. The deal, if completed, would mark a reverse takeover and has prompted Rockpool to temporarily suspend its listing.
ELG AB, a vertically-integrated intimate apparel group with origins dating back to 1885, is recognized for its brands including Felina, Senselle, and Conturelle. The group operates production facilities in Germany, Hungary, and Latvia, and supplies fabrics to other lingerie producers through its Lauma fabrics division.
The transaction is structured to settle the consideration for ELG AB through the issuance of new ordinary shares of Rockpool, with a valuation pegged at 10p per share. This price reflects a significant premium over the mid-market closing price of 2.85p on Tuesday.
In 2023, ELG AB reported a turnover of at least €53 million and an adjusted EBITDA of at least €2.1 million, with ongoing initiatives aimed at improving EBITDA further. The acquisition is expected to be accompanied by fundraising efforts by both Rockpool and ELG AB, intended to provide additional working capital and fund new business initiatives.
The completion of the acquisition is subject to several conditions, including due diligence, formal sale and purchase agreement, and regulatory approvals. The acquisition and re-admission costs will initially be covered by Rockpool's cash reserves, with subsequent contributions from ELG as outlined in the press release.
Rockpool's founders are set to receive four-year options over 4% of the fully diluted share capital of Rockpool post-readmission, with an exercise price of 11p per share, along with a cash bonus on readmission.
The exclusivity period for the transaction ends on June 30, 2025, with provisions for termination of negotiations under certain conditions.
Mike Irvine, co-founder of Rockpool, expressed confidence in the potential acquisition's value creation for both Rockpool's and ELG AB's shareholders. Indrek Rahumaa, CEO of ELG AB, highlighted the strategic benefits of the transaction, including the use of Rockpool shares as acquisition currency and the capital for executing planned celebrity brand launches and distribution model improvements.
The LYCRA Company, a major supplier to ELG AB, voiced enthusiasm for a closer relationship following the acquisition.
This report is based on a press release statement from Rockpool Acquisitions Plc.
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