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Glaston Corporation Stock Exchange Release 29 May 2019 at 10.55 EET
This stock exchange release may not be published or distributed, in whole or in part, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States or any other country where such publication or distribution would violate applicable laws or rules or would require additional documents to be completed or registered or require any measure to be undertaken, in addition to the requirements under Finnish law. For further information, see “Important notice” below.
The Board of Directors of Glaston Corporation (“Glaston” or the “Company”) has resolved on a rights offering of approximately EUR 34 million (the “Offering”) with pre-emptive subscription right for existing shareholders based on the authorization granted by the Extraordinary General Meeting held on 26 February 2019. The proceeds received by the Company as a result of the Offering will be used for the repayment of an outstanding bridge facility related to the acquisition of Bystronic glass business from the Conzzeta Group, a Swiss-German based globally operating high-end machinery, systems and services provider for the processing of glass (“Bystronic glass”), comprising all outstanding shares in the Swiss Bystronic Maschinen AG and German Bystronic Lenhardt GmbH and their subsidiaries (the “Bystronic glass Acquisition”). The Bystronic glass Acquisition was completed on 1 April 2019, with the exception of the acquisition of a small Russian entity of Bystronic glass, for which Glaston Corporation received an approval from the Russian competition authority on 2 April 2019. The Board of Directors of Glaston today announces the terms and conditions of the Offering. Nordea Bank Abp and OP Corporate Bank plc act as the joint bookrunners in the Offering (Nordea Bank Abp and OP Corporate Bank plc together the “Joint Bookrunners”).
The Offering in brief
Background and rationale
On 25 January 2019, Glaston announced that it had entered into a share purchase and transfer agreement with Conzzeta AG and Conzzeta Holding Deutschland AG, pursuant to which Glaston agreed to acquire, through its fully owned subsidiary Glaston Services Ltd., the Bystronic glass business of the Conzzeta Group comprising all outstanding shares in the Swiss Bystronic Maschinen AG and German Bystronic Lenhardt GmbH and their subsidiaries. The acquisition was completed on 1 April 2019, with the exception of the acquisition of a small Russian entity of Bystronic glass, for which Glaston received an approval from the Russian competition authority on 2 April 2019. The Bystronic glass Acquisition was carried out against a cash consideration for an enterprise value of EUR 68 million and financed through a combination of debt and equity financing.
The acquisition supports the Company’s ambition to further strengthen its position in the glass processing chain, adding offering in insulation for the architectural glass market as well as Cut & Grind technology, i.e. pre-processing to the automotive, appliance and display glass markets. As a result of this transformational acquisition, the Company will have an extensive offering, which the management believes to benefit its customers. The Company expects that the acquisition will provide opportunities for cross-selling of new equipment and providing services from one supplier and co-develop integrated lines. Bystronic glass also supports the Company’s future growth ambitions in emerging technologies.
As a result of the acquisition, the Company’s size has increased significantly. The Company expects the annual cost synergies to total approximately EUR 4 million by 2021, stemming mainly from lowered cost of goods sold, sales & marketing and administration expenses. One-time costs and capital expenditure related to the achievement of synergies are estimated at EUR 7–8 million over the same period. The majority of one-time costs is estimated to occur during the first year of integration. The Company’s management estimates that the acquisition also provides additional synergy potential relating to product development, procurement, fixed cost leverage and best practice sharing. The Company estimates that earnings impacting transaction costs for the year 2019, including the first quarter, are approximately EUR 4 million out of which finance costs will be approximately EUR 1 million. The Company recorded earnings impacting transaction costs of EUR 0.8 million for the three months ended 31 March 2019. As a consequence of the acquisition, the net debt of the Company will increase but remain moderate as the majority of the acquisition will be financed by equity.
The Board of Directors of the Company resolved on 29 May 2019, based on the authorization granted by the Extraordinary General Meeting of Glaston held on 26 February 2019, to carry out the Offering. Assuming that all the Offer Shares are subscribed for in the Offering, the gross proceeds received by the Company from the Offering will be approximately EUR 34 million (before taking into account any transaction costs in relation to the Offering). The Company estimates to pay approximately EUR 3 million in fees and other expenses in connection with the Offering, resulting in total net proceeds of approximately EUR 31 million. The fees and expenses will not be earnings impacting as the Company will record expenses related to the Offering to equity. The proceeds received by the Company as a result of the Offering will be used for the repayment of an outstanding bridge facility related to the Bystronic glass Acquisition.
Terms of the Offering
Shareholders will receive one (1) Subscription Right for each share in the Company owned on the Record Date 31 May 2019. Each six (6) Subscription Rights entitles to subscribe for five (5) Offer Shares at the Subscription Price (“Primary Subscription Right”). No fractions of the Offer Shares will be allotted, and a Subscription Right cannot be exercised partially. As a result of the Offering, the total number of shares in the Company may increase from 45,976,316 shares to a maximum of 84,289,911 shares.
The Subscription Price is EUR 0.89 per Offer Share.
Subscription for Offer Shares without Subscription Rights may also be made (“Secondary Subscription Right”). Allotment of the Offer Shares subscribed for without Subscription will be allotted first to those that subscribed for Offer Shares pursuant to Subscription Rights and second to those that have subscribed for Offer Shares without Subscription Rights only.
The Record Date for determining which holders of existing shares in the Company are entitled to receive Subscription Rights is 31 May 2019. The shares are traded including the right to participate in the Offering up to and including 29 May 2019. The subscription period for the Offer Shares commences on 5 June 2019 at 9:30 a.m. Finnish time and ends on 19 June 2019 at 4:30 p.m. Finnish time. The Subscription Rights are freely transferable, and they are expected to be subject to trading on Nasdaq Helsinki commencing on 5 June 2019 at 10:00 Finnish time and expiring on 13 June 2019 at 6:25 p.m. Finnish time. Subscription Rights that remain unexercised at the end of the Subscription Period on 19 June 2019 at 4:30 p.m. Finnish time will expire without compensation and will be deleted from the book-entry accounts on which they have been registered without separate notice.
The interim shares are freely transferable and expected to be subject to trading on Nasdaq Helsinki as a separate class of securities beginning from the first trading day following the end of the Subscription Period, i.e. on or about 20 June 2019.
Glaston will publish the final results of the Offering in a stock exchange release on or about 26 June 2019.
Participation of the cornerstone investors in the Offering, the junior loan financing and the Joint Bookrunner Agreement
AC Invest Eight B.V., Hymy Lahtinen Oy, Varma Mutual Pension Insurance Company, and Ilmarinen Mutual Pension Insurance Company, together representing approximately 52.64 per cent of the issued and outstanding shares and votes in the Company have each separately and irrevocably committed to subscribe in full for the Offer Shares on the basis of Subscription Rights allocated to them, apart from Hymy Lahtinen Oy’s undertaking, subject to certain specified limits for investment or shareholding not being exceeded. In addition, Ahlstrom Capital B.V. has agreed to provide necessary junior loan financing to refinance the bridge facility related to the Bystronic glass Acquisition, in the event the Offering would not be fully subscribed for.
Nordea Bank Abp and OP Corporate Bank plc have entered into the Joint Bookrunner Agreement with the Company pursuant to which they have severally agreed, subject to certain terms and conditions, to arrange the Offering. The Offering is not underwritten. Roschier, Attorneys Ltd. acts as the legal adviser to the Joint Bookrunners in the Offering.
Indicative timetable for the Offering
| 31 May 2019 | The first trading date without Subscription Rights |
| 31 May 2019 | Record Date of the Offering on Euroclear Finland |
| 5 June 2019 | Subscription Period for the Offering commences |
| 5 June 2019 | Trading in the Subscription Rights commences on Nasdaq Helsinki |
| 13June 2019 | Trading in the Subscription Rights expires on Nasdaq Helsinki |
| 19June 2019 | Subscription Period expires and unexercised Subscription Rights expire without compensation |
| 20June 2019 (estimate) | Trading in the interim shares commences on Nasdaq Helsinki |
| 24 June 2019 (estimate) | Stock exchange release regarding the preliminary result of the Offering |
| 26June 2019 (estimate) | Stock exchange release regarding the final result of the Offering |
| 27June 2019 (estimate) | Trading in the interim shares expires on Nasdaq Helsinki |
| 27June 2019 (estimate) | The Offer Shares subscribed for pursuant to the Primary Subscription Rights and the Secondary Subscription Rights in Finland are registered in the Trade Register |
| 28June 2019 (estimate) | The interim shares are combined with the existing shares of the Company on Nasdaq Helsinki |
| 28June 2019 (estimate) | The Offer Shares subscribed for in the Offering are admitted to trading on Nasdaq Helsinki |
The Company has submitted a Finnish language prospectus for approval by the Finnish Financial Supervisory Authority. The Finnish language prospectus is expected to be approved on or about 29 May 2019.
The detailed Terms and Conditions of the Offering are attached to this release as Appendix 1.
Nordea Bank Abp and OP Corporate Bank plc act as the Joint Bookrunners. Hannes Snellman Attorneys Ltd acts as the Company’s legal adviser and Roschier, Attorneys Ltd acts as the Joint Bookrunners’ legal adviser in the Offering.
For further information, please contact:
CFO Päivi Lindqvist , tel. +358 10 500 500
Vice President, IR, Communications and Marketing Joséphine Mickwitz, tel. +358 10 500 5070
Glaston Corporation
Glaston is the glass processing industry’s innovative technology leader supplying equipment, services and solutions to the architectural, automotive, solar and appliance industries. The company also supports the development of emerging technologies integrating intelligence to glass.
As of April 2019, Bystronic glass is part of Glaston Group. Together we are committed to providing our clients with both the best know-how and the latest technologies in glass processing, with the purpose of building a better tomorrow through safer, smarter, and more energy efficient glass solutions. We operate globally with manufacturing, services and sales offices in 12 countries. Glaston’s shares (GLA1V) are listed on Nasdaq Helsinki Ltd.
Distribution: Nasdaq Helsinki Ltd, key media, www.glaston.net
IMPORTANT NOTICE
These materials are not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Glaston does not intend to register any part of the rights offering in the United States or to conduct a public offering of securities in the United States.
The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.
In the European Economic Area, with respect to any Member State, other than Finland, that has implemented Directive 2003/71/EC or Directive 2010/73/EU (together with any applicable implementing measures in any Member State, the ("Prospectus Directive") this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.
This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any securities mentioned herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
This release does not constitute a prospectus as defined in the Prospectus Directive and as such, does not constitute or form part of and should not be construed as, an offer to sell, or the solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity.
No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Glaston, Nordea Bank Abp, OP Corporate Bank plc or any of their respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of Glaston, its subsidiaries, its securities and the transaction, including the merits and risks involved.
This release includes “forward-looking statements.” These statements may not be based on historical facts, but are statements about future expectations. When used in this release, the words “aims,” “anticipates,” “assumes,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,” “would” and similar expressions as they relate to Glaston, Bystronic glass and the transaction identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements are set forth in a number of places in this release, including wherever this release include information on the future results, plans and expectations with regard to the combined company’s business, including its strategic plans and plans on growth and profitability, and the general economic conditions. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the combined company to differ materially from those expressed or implied in the forward-looking statements. Glaston or any of its affiliates, advisors or representatives or any other person undertakes no obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.
This release includes estimates relating to the synergy benefits expected to arise from the transaction and the combination of the business operations of Glaston and Bystronic glass as well as the related integration costs, which have been prepared by Glaston and are based on a number of assumptions and judgments. Such estimates present the expected future impact of the transaction and the combination of the business operations of Glaston and Bystronic glass on the combined company’s business, financial condition and results of operations. The assumptions relating to the estimated synergy benefits and related integration costs are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause the actual synergy benefits from the transaction and the combination of the business operations of Glaston and Bystronic glass, if any, and related integration costs to differ materially from the estimates in this release.
The Joint Bookrunners are each acting exclusively for the Company and for no-one else in connection with any transaction mentioned in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to any such transaction and will not be responsible to any other person for providing the protections afforded to their respective clients, or for advising any such person on the contents of this announcement or in connection with any transaction referred to in this announcement. The contents of this announcement have not been verified by the Joint Bookrunners.
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