Acquisition of HEMA by Mississippi Ventures and Parcom Capital

HEMA B.V. (“HEMA”, the “Company” or, together with its subsidiaries, the “Group”) and HEMA’s senior secured bondholders (the “Bondholders”), represented by a majority group (the “Ad Hoc Group”) are pleased to announce that HEMA has entered into a sale and purchase agreement with the 50/50 consortium of Parcom and Mississippi Ventures. With the positive outcome of the due diligence and the bank financing from Dutch banks in place, the main conditions of the lock-up and exclusivity agreement that was signed on 21 October, have been fulfilled. Closing of the transaction is expected to occur February 2021

With the agreement on the restructuring reached with the Ad Hoc Group in June 2020, HEMA’s original bond debt more than halved from € 750 million to € 300 million. With the Dutch bank financing in place after completion, the interest costs will decrease to below € 10 million on an annual basis from over € 50 million before restructuring. Including the bank financing, the Consortium has arranged acquisition financing of €400m and a €80m new revolving credit facility, which together with c. €38m cash from balance sheet will be used to redeem the Private Place Notes, the SSNs and pay the Share Consideration to the Seller, subject to post-completion adjustment at Completion in February 2021.

During the third quarter, HEMA again showed a solid operational performance, with the decrease in revenues limited to 2.2%, despite the continued pressure of COVID-19. Online sales significantly increased and a further increase in in-store sales is expected when COVID-19 restrictions throughout Europe ease as a vaccine becomes available in the near term. HEMA ended the third quarter with a positive equity and a robust liquidity position. These developments underline the resilience and relevance of the HEMA brand. The steps taken to restructure its ownership and debt structure will enable HEMA to once again focus fully on its future.

Tjeerd Jegen, Chief Executive Officer: “Today’s announcement is a major milestone for HEMA, as the bank financing was a crucial condition for the successful conclusion of the agreement on the acquisition. When we finalize the transaction early 2021, we will not only have a healthy financial situation with a significantly decreased debt level and ample room to invest in our future development, but we will also have very supportive new long term owners providing HEMA with a stable operating platform going forward.

We look forward to this next stage in HEMA’s development, and are confident that this is in the best interest of all our stakeholders. With this agreement we can once again fully focus on the future, and on delivering fantastic products to our customers.”

Frits van Eerd, on behalf of Mississippi Ventures: “We are proud to be given the opportunity to acquire the beautiful Dutch HEMA. And we particularly appreciate the support of the three major Dutch banks ABN AMRO, ING and Rabobank in this transaction. Together we are going to prepare HEMA for a new phase, while retaining the special character of the brand and its people: the good price-quality ratio, the appealing atmosphere and the distinctive design. We realize that times are uncertain at this moment, but look forward to HEMA’s future with confidence and are incredibly keen to be part of it.”

Bas Becks, partner Parcom: “The resilience and perseverance of the HEMA employees in recent times deserves great praise and appreciation. We are incredibly proud to be part of HEMA’s future. We are closing this agreement at a crucial time for HEMA. Together with the Van Eerd family, we will do our utmost to support the brand and people of HEMA, building on a solid foundation.”

Next steps
With the bank financing and due diligence condition now fulfilled and today’s signing of the agreement, HEMA and the consortium can work towards closing of the transaction. Upon closing, all shares will be owned by the consortium, in a 50/50 partnership. Under the new ownership, HEMA will be able to further roll out its strategic plans.

The transaction and improved capital structure will give HEMA ample headroom and allow the Group to better navigate the challenging market environment. All current arrangements with the Works Council, relevant trade unions and HEMA’s staff remain in place. The Works Council has rendered a positive advice on the transaction.

Closing is expected to occur February 2021 and is subject to customary pre-closing conditions, among which a positive advice from the Works Council on the new financing structure, and approval of the relevant competition authorities.

Announcement date: December 2020

Client: Mississippi Ventures
Target: HEMA
Buyer: Mississippi Ventures and Parcom Capital
Seller: Ad-Hoc Group