17.04.2024 17:31:05 - dpa-AFX: GNW-Adhoc: HMS Networks explores the conditions to carry out a directed share issue of approximately SEK 1,400 million
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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 HMS(1), 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.
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(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.
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