As part of the deal, M.Video will buy Eldorado for 45.5 billion rubles. In terms of turnover, the merged company will enter the world's top ten public electronic retailers. Its turnover by 2022 should be about 450 billion rubles.
Shareholders of PJSC M.Video at an extraordinary general meeting on April 13 will consider a deal to buy 100% of Eldorado LLC, the message says. M.Video. The buyer of Eldorado will be LLC M.Video Management, a subsidiary of PAO. The transaction amount, which is planned to be completed in the second quarter of 2018, will amount to 45.5 billion rubles. without taking into account the credit obligations of "Eldorado". Financing the deal "M.Video Management" will be at the expense of a loan of about 40 billion rubles. and own funds.
As a result, the combined debt portfolio of the combined company will reach the level of 47 billion rubles, the ratio of net debt to EBITDA will be 1.5 by the end of the year. Until the end of 2020, this figure is planned to be reduced to 0.5.
"We are implementing one of the largest deals in Russian retail and creating a highly effective player in the consumer electronics market," said Said Gutseriev, Chairman of the Board of Directors of M.Video, commenting on the future deal. It is expected that the turnover of the merged company by 2022 will be about 450 billion rubles.
M.Video is the largest retail network selling electronics and household appliances in Russia. At the end of 2017, it included 424 stores in 169 cities. Their total area is 937 thousand square meters. m (trade area - 693 thousand square meters). The controlling shareholder of PJSC "M.Video" is the group "Safmar" Mikhail Gutseriev. She owns 57.7% stake in the retailer. Revenues in 2017 - 198.2 billion rubles., Net profit - 6.95 billion rubles., EBITDA - 11.79 billion rubles.
"Eldorado" also belongs to the group "Safmar". There are 400 stores in 200 Russian cities.
As follows from the message "M.Video", upon completion of the transaction for the merged company will create a single legal entity, which in the first quarter of 2019 will be transferred all assets. According to M.Video estimates, the synergetic effect of combining commercial and non-commercial purchases, joint inventory management, etc. may amount to 18 billion rubles. on EBITDA in 2018-2020 with a 1.5 times increase in revenue, a doubling of EBITDA and net profit in the perspective of five years.
We intend to keep two brands (M.Video and Eldorado.-Kommersant), which will allow us to compete successfully with both Russian and foreign players in the traditional retail and online segment, "Mr. Gutseriev said.
Manage the merged company will continue the team of managers led by the founder and president of M.Video Alexander Tynkovan and CEO Enrique Fernandez, who will lead the operational business of the two companies. According to Mr. Fernandez, having united, M.Video and Eldorado will receive in Russia more than 30% of the market share. "The merged company will enter the top 10 public electronics retailers in the world from the next quarter. By 2020, we will take the second place in the world on the EBITDA margin (the ratio of EBITDA to revenue. - "b") in the world, second only to the American Best Buy ", said Mr. Tynkovan.
The minority shareholders of PJSC M.Video (including the Future Fund pension fund - 9.4%) who will not agree with the acquisition of Eldorado or will not take part in the voting will be able to present their shares for redemption. Its price was determined by the board of directors of PJSC in the amount of 401 rubles. per share.