Press release from the Iceland Enterprise Investment Fund and Bygma Gruppen A/S

Bygma acquires Húsasmidjan

The Iceland Enterprise Investment Fund has sold the operations and assets of Húsasmidjan to the Danish construction material distributor Bygma Gruppen A/S (Bygma). The divestment of Húsasmidjan has been in progress since last August, and Bygma came in with the highest offer. The contract for the sale is valued at approximately ISK 3.3 billion and provides, among other things, for the assumption by Bygma of Húsasmidjan’s interest-bearing debt in the amount of ISK 2.5 billion and a cash payment of ISK 800 million. Bygma will also take over other debts of Húsasmidjan, all employment contracts, lease contracts and other operation-related obligations. No debts will be written off in connection with the sale, and operations will continue under the name of Húsasmidjan after the new owner takes over the company on 1 January 2012.

Bygma Gruppen A/S is a Danish private company engaging in sales and distribution of timber, construction and DIY products. Bygma operates over 65 outlets in Denmark, Sweden and the Faeroe Islands, employing more than 1500 people.  Bygma’s sales in 2011 are projected at approximately €630 million, corresponding to about ISK 100 billion. Bygma was established almost 60 years ago and has been under the ownership of the same family from the outset.

Peter H. Christiansen, CEO of Bygma Gruppen A/S:

Following the acquisition by Bygma of Húsasmidjan, we are pleased to announce that it is our intention to strengthen and expand Húsasmidjan’s operations in Iceland still further. Húsasmidjan and Bygma have much in common, both with regard to underlying ideology and corporate culture. The acquisition of Húsasmidjan is also an important element of Bygma’s long-term strategy of operating in all the Nordic countries. We are looking forward to the challenging task of becoming an active participant in the Icelandic market.”

One of the principal objectives with the establishment of the Iceland Enterprise Investment Fund was to participate in the reconstruction of the Icelandic economy and in shaping its financial and operational structure. With the sale of the operations and assets of Húsasmidjan to a strong company like Bygma the reorganisation of Húsasmidjan has been successfully concluded.

Finnbogi Jónsson, CEO of the Enterprise Investment Fund:

“The acquisition by Bygma of Húsasmidjan, a leading commercial retailer in Iceland, represents a direct and important foreign investment in the Icelandic economy. Bygma has a long and successful history of operation, and we are convinced that their involvement in Húsasmidjan will benefit both Icelandic consumers and the company’s employees. It is of vital importance for the staff of Húsasmidjan that a strong new owner is now permanently involved in the company.  When the Iceland Enterprise Investment Fund acquired Húsasmidjan a year ago, we announced our objective of selling the company by means of an open procedure, and we are extremely satisfied that this objective has now been achieved.

Húsasmidjan is one of the largest service and trade companies in the construction industry in Iceland. The company currently has approximately 450 employees and operates 16 outlets around the country under its own name and flower shops under the name of Blómaval.   In addition, the company operates the wholesalers Ískraft and H.G. Gudjónsson.

Landsbanki’s Corporate Advisory division assisted the Iceland Enterprise Investment Fund in the transaction.

Information from the Iceland Enterprise Investment Fund: The proceeds from the sale will accrue to the owners of the Investment Fund in accordance with the Fund’s rules and articles of association. It is not clear at this time what this amount will be, as the seller will retain liability for two potential obligations to the Icelandic State, which were formed before EIF acquired the company. On the one hand, there is a potential fine for an alleged past violation of competition  law, which the Competition Authority has under consideration. On the other hand, there is a potential tax reassessment relating to alleged tax law violations dating back to a merger of certain holding companies with Húsasmidjan in the years 2003-2006.

Further information:

Pétur Óskarsson, Cellphone +354 863 6075,  petur@framtakssjodur.is

Peter H. Christiansen, tel. +45 4454 1700, phc@bygma.dk