HMS Networks completes a placement of 3,500,000 shares, raising proceeds of SEK 1,400 million

17/04/2024

HMS Networks completes a placement of 3,500,000 shares, raising proceeds of SEK 1,400 million 17 Apr 2024 at 20:45

Regulatory press release

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.

HMS Networks AB (publ) ( HMS or the Company) has, based on authorisation from the extraordinary general meeting on January 26, 2024, resolved to carry out a placement of 3,500,000 newly issued shares at a subscription price of SEK 400 per share (the Share Issue ). The subscription price has been determined through an accelerated bookbuilding procedure performed by Skandinaviska Enskilda Banken AB ( SEB ). After the Share Issue, the total number of shares in HMS will amount to 50,318,868 shares. The Share Issue was oversubscribed and a large number of Swedish and international institutional investors, as well as certain existing shareholders, participated in the Share Issue.

The bookbuilding procedure that was announced by the Company earlier today has been completed and HMS' Board of Directors has resolved to carry out a placement of a total of 3,500,000 shares at a subscription price of SEK 400 per share, consequently raising proceeds of SEK 1,400 million before transaction costs. A large number of institutional investors have subscribed for shares in the Share Issue, among these the existing shareholders Investment AB Latour and AMF Fonder.

As previously communicated, 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 were in the best interest of the Company and all shareholders, and thereby the most suitable alternative. Since the subscription price in the Share Issue was determined through a bookbuilding procedure, the Board of Directors assessment is that the subscription price reflects current market conditions and demand. The subscription price in the Share Issue corresponds to a discount of approximately 1 percent relative to the closing price on April 17, 2024. HMS will use the proceeds of the Share Issue to repay the bridge loan facility of USD 120 million used as part of the financing of the acquisition of Red Lion Controls and to secure an efficient capital structure.

The Share Issue entails an increase in the number of shares in HMS by 3,500,000 from 46,818,868 shares to 50,318,868 shares. The Share Issue results in a dilution of approximately 7 percent of the number of shares and votes in HMS (calculated as the number of newly issued shares divided by the total number of shares in HMS upon completion of the Share Issue). The share capital will increase by SEK 87,500.00 from SEK 1,170,471.70 to SEK 1,257,971.70.

In connection with the Share Issue, the Company has agreed to a so called lock-up undertaking, subject to customary exceptions, 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 Dahlstr m, CFO Joakim Nideborn, and all members of the Board of Directors of HMS1, have undertaken, with certain exceptions, 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 Advokatbyr acts as legal counsel to HMS in connection with the Share Issue. Roschier Advokatbyr acts as legal counsel and Milbank LLP as international counsel to SEB in connection with the Share Issue.

For more information, please contact:

Staffan Dahlstr m, CEO HMS, +46 (0)35 17 29 01

Joakim Nideborn, CFO HMS, +46 (0)35 710 69 83

This information is such that HMS Networks AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 22:45 CEST on April 17, 2024.

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 p

LINK:	http://www.hms-networks.com/news-and-insights/news-from-hms/2024/04/17...
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HMS Networks completes a placement of 3,500,000 shares, raising proceeds of SEK 1,400 million

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