Arcus - Ratos
Share 2018-08-17 17:29 RATOS B 34.68 SEK

Arcus - a new Nordic leader

Arcus has evolved from a predominantly Norwegian spirits producer to a leading supplier of wine and spirits in the Nordic region through its own brands and leading agencies. In 2016, Arcus was listed on the Oslo Stock Exchange with a more diversified ownership and strong interest in the shares.

20 March 2017 Ratos sold its shareholding of 23,6% in Arcus ASA (publ) ("Arcus") to Canica AS and Sundt AS. The sale was made at a price of NOK 47,40 per share, a total of NOK 762m, and gives an estimated exit gain of approximately SEK 30m. Following the sale, Ratos owns no shares in Arcus.

Since Ratos acquired the company in 2005, significant strategic initiatives were carried out including the divestment of non-core operations, focusing on growth through Nordic expansion and higher production efficiency. A major investment in a new production facility in the Norwegian town of Gjelleråsen was completed, a smaller production facility was wound up and several new brands were purchased.

“During our eleven years of ownership, numerous value-creating strategic initiatives were implemented with a focus on increasing growth, broadening the customer offering, increasing the numbers of brands and raising production efficiency. Arcus now has a stable platform with continued development potential. Given its strong, well-known brands, such as Aalborg Akvavit, Linie Aquavit, Gammel Dansk, several own wine brands and many famous wine and several wine merchants such as Masi and Francois Lurton, we feel that Arcus is a Nordic consumer goods company that is well-suited to a stock-exchange listing,” says Mikael Norlander, Investment Director at Ratos and company executive for Arcus.

Sales, which amounted to approximately NOK 860m in 2005, have now climbed to approximately NOK 2.6 billion and operating EBITDA has increased from about NOK 30m in 2005 to approximately NOK 340m for the rolling 12 months at 30 September 2016. In total, the company has shown an average annual growth of approximately 11%. Ratos’s exit gain amounted to approximately SEK 1.4 billion, corresponding to an internal rate return (IRR) of 29% and a money multiple of 5.6x in SEK (6.1x in NOK).

“Our entire Arcus organisation is set on profitable growth. We are already the biggest in a few markets and product categories. We use our experience to maintain our edge and boost sales there. In other categories and markets we have significant potential to grow. We have undertaken to become the best in the Nordic wine and spirits sector and, as a listed company, we have greater potential for larger exposure to our Nordic consumers,” says Kenneth Hamnes, CEO of Arcus.

Facts about the investment

Investment year: 2005
Exit year: 2017

IRR: 30%
Money multiple: 6.2x
Annual growth: 11%