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The sale of Superhome Center to Vasilitsi DIY for €94 million has been approved by the Board of Directors of Ermes Department Stores Plc. The transaction includes the sale of the 51% stake in Superhome Center DIY held by Ermes, as well as the sale of the remaining 49% stake held by Secora BV.
The purchase price of €94 million will be reduced by €3.74 million for Superhome's bank liabilities and €3 million for projects that Superhome will carry out for its stores. The net total value of the 100% stake being sold is €87,260,165. Of this amount, €10 million will remain in escrow until certain conditions of the agreement are met, which are expected to be completed in 3 to 5 years. If these conditions are not met within 6 years of the share transfer date, or if other events occur that are detailed in the agreement, this amount will be deducted from the sale price and will no longer be payable by the sellers.
Superhome was established in Cyprus in 1998 and has since been engaged in the retail sale of home improvement and DIY products through 6 stores in all cities. It is 51% owned by Ermes Department Stores Plc and 49% by Secora BV.
Superhome Center DIY Ltd's profitability for the last three years was net profit of €7.4 million in 2023, €6.8 million in 2022 and €4.6 million in 2021.
This transaction was done on a purely commercial basis, and its price was based on Superhome's historical performance and future cash flows. Superhome continues to be profitable with continuously increasing turnover and profitability.
Specifically, Ermes from the sale of its entire stake amounting to 51% of the total issued share capital of Superhome will receive an amount of €39,403,000 and will repay bank and other borrowings of itself and other companies of the CTC Group to which it belongs, amounting to €33,600,000.
In determining the value of the Company, the Board of Directors of Ermes relied on recent valuations of Superhome's value as recorded in the Company's audited and published accounts as at 31/12/2023, previous offers it received from other interested parties and current economic conditions.
Under the circumstances, the Board of Directors considered the price reasonable, and has not appointed or received relevant advice from experts regarding the design of the transaction.
The transfer of 100% of the shares of Superhome and the payment of the total amount of €77,260,165 (€39,403,000 for Ermes) against the price is expected to be made by the end of February 2025 on the basis of terms and conditions included in the sale agreement.
The part of the price of €10,000,000 (€5,100,000 for Ermes) will remain committed in a deposit at a domestic banking institution until the fulfillment of those terms of the agreement or otherwise, as mentioned above.
This transaction is not related to, nor does it affect any interests of any Secretary of the issuer or "designated person", within the meaning given in Article 137(3) of the Securities and Cyprus Stock Exchange Laws, N. 14(I)/1993 as amended.
Although Ermes will show an accounting loss of €12 million, the actual profit from the disposal of the above investment amounts to €30 million in relation to the acquisition cost.
The transaction is considered fair and beneficial to the Company as it will have a positive effect on the rationalization of its financial situation, and beneficial to the related parties of the CTC Group and their shareholders since with this arrangement all parties will benefit from a significant reduction in their leverage.
