Sonnenberg Family, 3G Capital Ink

Ownership Deal for Hunter Douglas

January 4, 2022


Hunter Douglas logo
Hunter Douglas logo

ROTTERDAM, Netherlands and NEW YORK—Ralph Sonnenberg, the controlling shareholder of Hunter Douglas Group, has entered into a definitive agreement to transfer a controlling interest in the company to 3G Capital based on a value of €175 per ordinary share.
Hunter Douglas (AEX: HDG) is considered the global market leader in window coverings and a major manufacturer of architectural products while 3G Capital is a global investment firm and private partnership.
Hunter Douglas has its head office in Rotterdam, the Netherlands, and a management office in Lucerne, Switzerland. The Group is comprised of 136 companies with 47 manufacturing and 89 assembly operations in more than 100 countries. Hunter Douglas says it employs about 23,000 people and had sales in the first nine months of 2021 of USD 3.4 billion.
The common shares of Hunter Douglas N.V. are traded on Amsterdam's Euronext and the Frankfurter Börse.
Under the new agreement with 3G, the Sonnenberg Family will retain a 25% interest in Hunter Douglas, for the new capital structure. The Board of Directors of Hunter Douglas, represented only by its independent directors, unanimously supports the transaction, and has entered into a separate agreement with 3G Capital and Ralph Sonnenberg to facilitate and secure a cash exit for all minority shareholders based on the same price per ordinary share.
Completion of the transaction is subject to limited closing conditions, including approval by the general meeting of Hunter Douglas.
The transaction values the ordinary shares of Hunter Douglas ("Ordinary Shares") at €175 per Ordinary Share (the "Ordinary Share Price"), implying an enterprise value of approximately $7.1 billion1. The Ordinary Share Price represents a 73% premium to Hunter Douglas' closing ordinary share price on December 30, 2021, of €101.40 and a 64% premium to Hunter Douglas' all-time high closing ordinary share price of €106.40.
"3G Capital has deep respect for Hunter Douglas, its diverse portfolio of brands and the steadfast leadership of the Sonnenberg family over three generations. We are honored to be partnering with the Sonnenberg family and to work with Hunter Douglas' management team on the company's next phase of global expansion," said Daniel Schwartz, Co-Managing Partner and Alex Behring, Co-Founder and Co-Managing Partner of 3G Capital. "Our team at 3G Capital has deep experience building consumer branded businesses over a long-term horizon, and we look forward to investing in Hunter Douglas to continue to strengthen its brands and further its expansion. Hunter Douglas' strong market position is the product of its specialized expertise built over the past century. We are committed to preserving this expertise by empowering and supporting Hunter Douglas' leadership and partnering closely with Hunter Douglas' exceptional team of founders and entrepreneurial managers and unrivaled network of dealers and fabricators."
Current Hunter Douglas Group Co-President and Co-CEO, David Sonnenberg, will transition to Executive Chairman of the Board of Directors of the Hunter Douglas Group after the closing of the transaction and will continue to be highly involved in the day-to-day business and business strategy, tapping into his 30 years of knowledge and active experience in the company.
"We look forward to partnering with 3G Capital in the next chapter of Hunter Douglas' history. As owner-operators with a long-term investment horizon and significant experience operating global branded businesses alongside founding families, 3G Capital is a dynamic steward to continue the legacy of Hunter Douglas," David Sonnenberg said.
"As a private enterprise, Hunter Douglas will have the opportunity to advance and expand our business while preserving the family-led culture and strong relationships with stakeholders which have been core to our success."
João Castro Neves, a Senior Partner at 3G Capital, is expected to serve as Hunter Douglas Group CEO upon completion of the transaction. João Castro Neves has significant experience in consumer-facing companies growing global and local brands in both emerging and developed markets and working closely with a network of independent wholesalers to better serve customers and consumers, including as CEO of Anheuser-Busch and North America Zone President of Anheuser-Busch InBev from January 2015 to December 2017. João Castro Neves is a Board Member of Kraft Heinz and Restaurant Brands International.
"3G Capital and Hunter Douglas share a strong belief in durable value creation through operational excellence, entrepreneurship and a culture of meritocracy," said João Castro Neves, 3G Capital. "I look forward to working closely with David Sonnenberg and the Hunter Douglas management team as we accelerate Hunter Douglas' growth in partnership with our remarkable founders, managers and business partners."
It is expected that the block trade and the asset sale will close in the first quarter of 2022.

In the announcement about this deal, HD went on to say: In Q4 2021, consumer confidence and trading conditions remained constructive, and Hunter Douglas expects sales to be in line with Q3. Q4 EBITDA is expected to be between USD 195 – 205 million.
An HD spokesman said: The outlook for 2022 is positive, but uncertainties remain as to when consumer discretionary spending will normalize. Hunter Douglas continues to be in a strong position. Assuming continuation of current market conditions, management anticipates delivering full-year 2022 sales and EBITDA growth of mid-single digits percent versus full-year 2021, excluding the impact from acquisitions and divestments, with an EBITDA margin in excess of 18%.

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