HMS Networks explores the conditions to carry out a directed share
issue of approximately SEK 1,400 million
NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS,
ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA),
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, OR ANY OTHER JURISDICTION
IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL
OR REQUIRE REGISTRATION OR ANY OTHER MEASURES.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO PURCHASE THE SECURITIES DESCRIBED HEREIN, NOR SHALL THERE
BE ANY SALE OF THE SECURITIES REFERRED TO HEREIN, IN OR INTO ANY
JURISDICTION WHERE SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH JURISDICTION.
In accordance with previous
communication from HMS Networks AB (publ) (“HMS” or the "Company"),
the Board of Directors of HMS has mandated Skandinaviska Enskilda
Banken AB (“SEB”) to evaluate the conditions for carrying out a
directed share issue (the “Share Issue”). The Share Issue is
expected to amount to approximately SEK 1,400 million and will be
directed towards Swedish and international institutional investors
by way of a book building procedure. The accelerated book building
procedure will be initiated immediately after the publication of
this press release. HMS intends to use the proceeds from the Share
Issue to repay the bridge loan facility of approximately USD 120
million used as part of the financing of the acquisition of 100
percent of the shares in Red Lion Controls Inc. and Red Lion Europe
GmbH as well as certain assets in other jurisdictions (“Red Lion
Controls”), and to secure an efficient capital structure.
Investment AB Latour has committed to, and AMF Fonder has declared
its intention to, invest in the Share Issue up to an amount
corresponding to their respective ownership levels. Investment AB
Latour and AMF Fonder together represent 33.5 percent of the shares
and votes in HMS.
The Board of Directors of HMS intends to resolve
on the Share Issue with deviation from the shareholders’
preferential rights, based on the authorisation from the
extraordinary general meeting held on January 26, 2024. The
subscription price and the number of newly issued shares in the
Share Issue will be determined through an accelerated book building
procedure. The completion of the accelerated book building
procedure, pricing and allotment of new shares are expected to take
place before the commencement of trading on Nasdaq Stockholm on
April 18, 2024. The bookbuilding procedure may, at the discretion
of the Company, be shortened or extended and may be cancelled at
any time. HMS will communicate the result of the Share Issue in a
press release following the completion of the bookbuilding
procedure.
As previously communicated, the purpose of the
Share Issue is to repay the bridge loan facility of approximately
USD 120 million used as part of the financing of the acquisition of
Red Lion Controls and to secure an efficient capital structure. The
Board of Directors of HMS has carefully considered the option to
raise capital through a rights issue and makes the assessment that
it is more beneficial for the shareholders to raise capital through
a directed issue which enables HMS to execute on its successful
acquisition strategy in a timely and cost-effective manner, in
combination with limiting market exposure. Considering (i) the
Share Issue’s close connection with the closing of the Red Lion
Controls acquisition, (ii) the limited size of the Share Issue in
relation to the market capitalisation of HMS, (iii) the cost
savings associated with a prompt repayment of the bridge loan
facility, (iv) that a directed share issue can be carried out at a
lower cost and with less complexity than a rights issue, and (v)
HMS’ desire to diversify its shareholder base with institutional
investors in order to enhance the liquidity of HMS’ share, the
Board of Directors of HMS overall assessment is that the reasons
for carrying out the Share issue in this manner are in the best
interest of the Company and all shareholders, and thereby the most
suitable alternative. Since the subscription price in the Share
Issue will be determined through a bookbuilding procedure, the
Board of Directors assess that the subscription price will reflect
current market conditions and demand.
HMS’ largest shareholder, Investment AB Latour,
has committed to, and the third largest shareholder, AMF Fonder,
has declared its intention to invest in the above-mentioned share
issue up to an amount corresponding to their respective ownership
levels. This support has provided important conditions for enabling
a successful completion of the acquisition of Red Lion Controls and
the Share Issue.
In connection with the Share Issue, the Company
has agreed to a so called lock-up undertaking, subject to customary
exceptions and under the condition that the Share Issue is carried
out, whereby the Company’s Board of Directors may not propose or
resolve on any new share issuances for a period of 90 calendar days
from the settlement date of the Share Issue. In addition, CEO
Staffan Dahlström, CFO Joakim Nideborn, and all members of the
Board of Directors of HMS1, have undertaken, with
certain exceptions and under the condition that the Share Issue is
carried out, not to sell or otherwise dispose of their shares in
HMS for a period of 90 calendar days after the settlement date of
the Share Issue.
Advisors
SEB acts as Sole Global Coordinator and
Bookrunner and Mannheimer Swartling Advokatbyrå acts as legal
counsel to HMS in connection with the Share Issue. Roschier
Advokatbyrå acts as legal counsel and Milbank LLP as international
counsel to SEB in connection with the Share Issue.
For more information, please contact:
Staffan Dahlström, CEO HMS, +46 (0)35 17 29 01
Joakim Nideborn, CFO HMS, +46 (0)35 710 69 83
HMS Networks AB (publ) is a
market-leading provider of solutions in Industrial Information and
Communication Technology (Industrial ICT) and employs over 1 200
people. Local sales and support are handled through over 20 sales
offices all over the world, as well as through a wide network of
distributors and partners. HMS reported sales of SEK 3,025 million
in 2023 and is listed on the NASDAQ OMX in Stockholm in the Large
Cap segment and Telecommunications sector.
IMPORTANT INFORMATION
This announcement is intended for the sole
purpose of providing information. Persons needing advice should
consult an independent financial adviser. This announcement does
not constitute an investment recommendation. The price of shares
and any income expected from them may go down as well as up and
investors may not get back the full amount invested upon disposal
of the shares. Past performance is no guide to future
performance.
This announcement is not being made in and
copies of it may not be released, distributed or published or sent
into the United States (including its territories and possessions,
any state of the United States and the District of Columbia, the
“United States”), Australia, Canada, Japan, South Africa or any
other jurisdiction in which the release, distribution or
publication would be unlawful or require registration or any other
measure in accordance with applicable law.
This announcement is not a prospectus and does
not constitute or form a part of any offer or solicitation to
purchase or subscribe for securities in the United States,
Australia, Canada, Japan, South Africa or any other jurisdiction in
which such offers or sales are unlawful (the “Excluded
Territories”). Any failure to comply with this may constitute a
violation of United States, Australian, Canadian, Japanese or South
African securities laws or the securities laws of other states as
the case may be.
The securities referred to in this announcement
have not been, and will not be, registered under the U.S.
Securities Act of 1933, as amended (the “U.S. Securities Act”), or
under the securities laws of any state of the United States, and
may not be offered, sold, resold or delivered, directly or
indirectly, in or into the United States absent registration except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the U.S. Securities Act. Subject
to certain limited exceptions, the securities referred to in this
announcement are being offered and sold only outside the United
States in reliance on Regulation S under the U.S. Securities Act.
The securities offered in connection with the offering have not
been and will not be registered under any applicable securities
laws of any state, province, territory, county or jurisdiction of
the Excluded Territories. Accordingly, such securities may not be
offered, sold, resold, taken up, exercised, renounced, transferred,
delivered or distributed, directly or indirectly, in or into the
Excluded Territories or any other jurisdiction if to do so would
constitute a violation of the relevant laws of, or require
registration of such securities in, the relevant jurisdiction.
There will be no public offer of securities in the United States or
elsewhere.
This communication and offering are only
addressed to and directed at persons in member states of the
European Economic Area (the “EEA”) who are “Qualified Investors”
within the meaning of Article 2 (e) of Regulation (EU) 2017/1129 of
the European Parliament and of the Council of 14 June 2017 (the
“Prospectus Regulation”). The securities are only available to, and
any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in only with
Qualified Investors. This communication should not be acted upon or
relied upon in any member state of the EEA by persons who are not
Qualified Investors.
This communication does not constitute an offer
of the Securities to the public in the United Kingdom. No
prospectus has been or will be approved in the United Kingdom in
respect of the Securities. In the United Kingdom, this
communication is being distributed to and is directed only at
“Qualified Investors” within the meaning of Article 2 (e) of
Regulation (EU) 2017/1129 of the European Parliament and of the
Council of 14 June 2017 as it forms part of assimilated law in the
United Kingdom by virtue of the European Union (Withdrawal) Act
2018 (the “EUWA”) (the “UK Prospectus Regulation”), and who are (i)
investment professionals within the meaning of Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (the “Order”); (ii) high net worth entities, and other persons
to whom it may lawfully be communicated, falling within Article
49(2)(a) to (d) of the Order; or (iii) other persons to whom it may
otherwise lawfully be communicated (all such persons together being
referred to as “Relevant Persons”). Any investment activity to
which this communication relates will only be available to and will
only be engaged with, Relevant Persons. Any person who is not a
Relevant Person should not act or rely on this document or any of
its contents.
SEB is acting for HMS in connection with the
transaction and no one else and will not be responsible to anyone
other than HMS for providing the protections afforded to its
clients nor for giving advice in relation to the transaction or any
other matter referred to herein.
This announcement contains forward-looking
statements that reflect HMS’ intentions, beliefs, or current
expectations about and targets for HMS’ future results of
operations, financial condition, liquidity, performance, prospects,
anticipated growth, strategies and opportunities and the markets in
which HMS operates. Forward-looking statements are statements that
are not historical facts and may be identified by words such as
“believe”, “expect”, “anticipate”, “intend”, “may”, “plan”,
“estimate”, “will”, “should”, “could”, “aim” or “might”, or, in
each case, their negative, or similar expressions. The
forward-looking statements in this announcement are based upon
various assumptions, many of which are based, in turn, upon further
assumptions. Although HMS believes that the expectations reflected
in these forward-looking statements are reasonable, it can give no
assurances that they will materialize or prove to be correct.
Because these statements are based on assumptions or estimates and
are subject to risks and uncertainties, the actual results or
outcome could differ materially from those set out in the
forward-looking statements as a result of many factors. Such risks,
uncertainties, contingencies and other important factors could
cause actual events to differ materially from the expectations
expressed or implied in this release by such forward-looking
statements. HMS does not guarantee that the assumptions underlying
the forward-looking statements in this announcement are free from
errors nor does it accept any responsibility for the future
accuracy of the opinions expressed in this announcement or any
obligation to update or revise the statements in this announcement
to reflect subsequent events. Readers of this announcement should
not place undue reliance on the forward-looking statements in this
announcement. The information, opinions and forward-looking
statements that are expressly or implicitly contained herein speak
only as of its date and are subject to change without notice.
Neither HMS nor anyone else undertake to review, update, confirm or
to release publicly any revisions to any forward-looking statements
to reflect events that occur or circumstances that arise in
relation to the content of this announcement, unless it is not
required by law or Nasdaq Stockholm’s rulebook for issuers of
shares.
Solely for the purposes of the product
governance requirements contained within: (a) EU Directive
2014/65/EU on markets in financial instruments, as amended (“MiFID
II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU)
2017/593 supplementing MiFID II; and (c) local implementing
measures (together, the “MiFID II Product Governance
Requirements”), and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any “manufacturer”
(for the purposes of the MiFID II Product Governance Requirements)
may otherwise have with respect thereto, the shares in HMS have
been subject to a product approval process, which has determined
that such shares are: (i) compatible with an end target market of
retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the “Target
Market Assessment”). Notwithstanding the Target Market Assessment,
Distributors should note that: the price of the shares in HMS may
decline and investors could lose all or part of their investment;
the shares in HMS offer no guaranteed income and no capital
protection; and an investment in the shares in HMS is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the share issue. Furthermore, it is noted that, notwithstanding
the Target Market Assessment, SEB will only procure investors who
meet the criteria of professional clients and eligible
counterparties. For the avoidance of doubt, the Target Market
Assessment does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of MiFID II; or (b) a
recommendation to any investor or group of investors to invest in,
or purchase, or take any other action whatsoever with respect to
the shares in HMS. Each distributor is responsible for undertaking
its own target market assessment in respect of the shares in HMS
and determining appropriate distribution channels.
1 All members of the Board of Directors of HMS
eligible for re-election on the Annual General Meeting to be held
on April 23, 2024.
- HMS Networks explores the conditions to carry out a directed
share issue
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