Cloetta, a Swedish confectionery company and LEAF merged

The combined company will take the renowned Cloetta brand name and become a leading Swedish confectionery company with a strong base in the Nordic region, as well as in Italy and the Netherlands. The new brand will manage a portfolio of iconic brands and have pro forma net sales of SEK 5.7 billion and recurring EBITDA of SEK 666 million.

Cloetta’s largest shareholder, AB Malfors Promotor, is to invest SEK 545 million in the merger, showing its strong commitment to the brand. Bengt Baron, CEO of LEAF, said: “This merger is a perfect match where we will unite iconic, local brands, from complementary categories with very few overlaps.

The new Cloetta will offer a full range of strong brands, and a very strong route to market in the Nordic countries as well as in Italy and in the Netherlands.

In an industry where the brand is nearly as important as the taste of the product, this transaction makes both industrial and strategic sense.” Willem Blom, a partner at Deloitte Belastingadviseurs BV, assisted reinforced Deloitte’s long-standing relationship with Leaf, represented  the company  and its shareholders CVC and NC in the vendor process (diligence and valuation)and the subsequent unwinding of the existing (tax) structure.

Blom commented: ““One of the major challenges faced was to demonstrate the existence of additional (tax) value within the structure opposed to the initial valuation.These challenges were overcome via presenting all parties involved with additional tax structuring steps in combination with an in-depth risk analysis substantiated by additional information.”

Björn Hallin a partner at KPMG and Jan Källqvist, partner at KPMG, and their team advised Cloetta in the whole process with deal structuring, valuation, accounting matters, financial and tax due diligence. Hallin commented: “the major challenge was to create and devise a structure that would work considering the various objectives of all parties involved. The transaction was complex with several restrictions from a financial, tax and accounting perspective which we managed to solve in a manner that supported the feasibility of the transaction”