Festi hf. and the owners of Lyfja, SID ehf., signed today, 13 July 2023, an agreement on Festi's acquisition of all shares in Lyfja hf. The purchase agreement is based on an agreement entered on 17 March 2023 which covered all major terms of the acquisition.
According to the purchase agreement, the enterprise value of Lyfja is valued at ISK 7.8 billion, but the final enterprise value and purchase price will depend on Lyfja's net debt position upon delivery, together with the price of shares in Festi at that time. Lyfja's estimates for 2023 assume that profit before interest, taxes, depreciation, and amortization (EBITDA), excluding IFRS16 effects, will amount to ISK 1,044 million. According to the purchase agreement, the purchase price will be paid by delivery of 10 million shares in Festi and a cash payment of ISK 6 billion less net interest-bearing debt of Lyfja on the fulfilment date.
The agreement is subject to, among other things, conditions on approval by Festi's shareholders' meeting, which will be held in the coming weeks and approval by the Icelandic Competition Authority. If the acquisition goes through, it is expected to be completed in the first quarter of 2024.
"We are very pleased with this acquisition. Lyfja is a is a well-run company with experienced and competent employees behind this strong and established brand. There are great opportunities for the integration of services across companies within Festi as well as the availability of a wider range of products at affordable prices for our customers all over the country. All companies have the same focus regarding preventive health care and increased shopping convenience," says Ásta S. Fjeldsted, CEO of Festi.
"I have been involved with Lyfja pharmacies for almost 30 years, first as a pharmacist and founder and later as an investor and chairman of the board of Lyfja. I am very proud of what our employees have achieved over the past five years and look forward to watching Lyfja prosper into the future within the Festi group. Festi has invested in and developed different retail companies with a philosophy that customers like, and the staff is proud of. I think Lyfja will be a good addition to this family," says Ingi Guðjónsson, chairman of the board of Lyfja and one of the owners of SID ehf.
Festi specializes in operating retail companies and operates, amongst others, Krónan, N1 and ELKO as well as owning and operating a total of 87 properties totalling approximately 95,000 square metres. The company also operates two warehouses under the name Bakkinn vöruhótel, which specializes in warehouse services and distribution. Festi and its subsidiaries employ 2,100 employees. Festi's total turnover was ISK 131 billion in 2022.
Lyfja specializes in pharmacy operations as well as wholesale and retail sales of health-related products. The company currently operates 45 pharmacies and branches all around the country as well as an online store and app. Lyfja and its subsidiaries employ approximately 380 employees. Lyfja's total turnover was ISK 15 billion in 2022.
For further information please contact Ásta S. Fjeldsted, CEO (asta@festi.is).
