Ambea has resolved on previously announced rights issue of approximately SEK 1.2 billion
SUMMARY
The complete terms and conditions of the issue, including the subscription price, are expected to be published around 10 May 2019. Provided that the Rights Issue is approved by the Annual General Meeting, the record date for the Rights Issue is expected to be 20 May 2019 and the subscription period to run from 22 May 2019 through 5 June 2019.
Fredrik Gren, President and CEO of Ambea:
"Through the acquisition of Aleris' care operations, Ambea becomes the largest care provider in Scandinavia. In Sweden, we have developed an efficient care model that successfully has improved both quality and profitability in existing operations. We are now looking forward to implement this model in Aleris Care's operations in Sweden, Norway and Denmark."
BACKGROUND AND RATIONALE
Ambea announced that the Company had entered into an agreement to acquire Aleris Care on October 16, 2018. The acquisition was completed on January 21, 2019, after the Company received approvals from relevant competition authorities, with a purchase price of approximately SEK 2.6 billion on a debt-free basis per the closing date of the acquisition. The acquisition makes Ambea the largest provider of care services in Scandinavia[1] (http://connect.ne.cision.com#_ftn1). Through the brands Vardaga, Nytida, Stendi, Altiden and Klara, Ambea provides care services for people with disabilities, individual and family care, elderly care including home services and staffing services. Operations are conducted both through own management as well as on a contract basis.
The acquisition of Aleris Care created a robust platform for future organic growth and significant opportunities for both direct cost synergies and operational improvements. In addition to direct cost synergies and identified operational improvements, Ambea estimates that there are additional efficiency improvements that are expected to be realized in the coming two to three years.
The expected direct cost synergies amount to a total of SEK 90 million per year, half of which is expected to be achieved in 2019 and the remainder in 2020. Identified operational improvements are expected to amount to SEK 30 million per year, which is expected to be realized during 2020. Integration costs related to the acquisition are estimated to a total of SEK 100 million, of which the majority is expected to be reported in 2019.
The acquisition was financed with bank financing of a total of SEK 2.6 billion, of which SEK 1.2 billion consisted of bridge financing which is intended to be repaid through the current Rights Issue. The Rights Issue is thus a step towards reducing Ambea's leverage ratio (net debt / adjusted EBITDA) in order to reach the Company's long term financial target of a leverage ratio that does not exceed 3.25 times adjusted EBITDA. The proceeds from the Rights Issue will in its entirety be used to repay part of the bank financing described above.
RIGHTS ISSUE
Ambea's Board of Directors resolved on 15 April 2019, subject to approval from the Annual General Meeting on 16 May 2019, to carry out a Rights Issue of approximately SEK 1.2 billion after deduction of issue costs.
Those who are registered as shareholders on the record date of 20 May 2019 have preferential rights to subscribe for new shares in proportion to their existing shareholdings. Subscription of shares may also take place without subscription rights.
Full terms and conditions of the Rights Issue, including the amount by which the share capital is to be increased, the number of new shares to be issued and the amount to be paid for each new share, are expected to be published around 10 May 2019 (however, no later than five working days before the record date).
The subscription period is expected to run from 22 May 2019 through 5 June 2019. Trading in subscription rights is expected to take place on Nasdaq Stockholm during the period from 22 May 2019 to 3 June 2019 and the trading in paid-up subscribed shares (Sw: Betald tecknad aktie) during the period from 22 May 2019 through 18 June 2019.
The Board of Directors' resolution on the Rights Issue is conditional on approval by the Annual General Meeting on 16 May 2019. For further information, please see separate press release regarding the Annual General Meeting.
SUPPORT FROM LAGER SHAREHOLDERS
The company's larger shareholders, ACTR Holding AB and ACTOR SCA, who are jointly controlled by KKR and Triton and who together represent approximately 50.1 percent of the total number of shares and votes in the Company, support the Rights Issue resolution and have undertaken to vote in favor of the Rights Issue at the Annual General Meeting and to subscribe for their respective pro rata shares in the Rights Issue.
In addition, Catella Fonder, Didner & Gerge Fonder, Lannebo Fonder and RAM One, who together represent approximately 22.7 percent of the total number of shares and votes in Ambea, have expressed their intention to subscribe for their pro rata shares in the Rights Issue.
Thus, shareholders representing approximately 72.9 percent of the shares and votes in the Company have expressed their support for the Rights Issue through subscription commitments or intentions to subscribe.
PRELIMINARY TIMETABLE
The below timetable for the Rights Issue is preliminary and may be adjusted
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|10 May 2019 |Estimated date for publication of full terms and conditions for |
| |the Rights Issue, including subscription price, number of new |
| |shares issued and subscription ratio |
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|16 May 2019 |Annual General Meeting for i.a. approval of the Board of |
| |Directors' resolution on the Rights Issue |
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|16 May 2019 |Last day of trading in the share including right to participate |
| |in the Rights Issue |
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|17 May 2019 |First day of trading in the share excluding right to participate|
| |in the Rights Issue |
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|20 May 2019 |Record date for participation in the Rights Issue, i.e. holders |
| |of shares who are registered in the share register on this date |
| |will receive subscription rights for participation in the Rights|
| |Issue |
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|21 May 2019 |Estimated date for publication of the prospectus |
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|22 May 2019 -|Trading in subscription rights |
|3 June 2019 | |
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|22 May 2019 -|Subscription period |
|5 June 2019 | |
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|22 May 2019 -|Trading in paid-up subscribed shares (Sw: Betald tecknad aktie) |
|18 June 2019 | |
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|11 June 2019 |Estimated date for publication of preliminary results of the |
| |Rights Issue |
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|12 June 2019 |Estimated date for publication of final results of the Rights |
| |Issue |
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ADVISORS
In connection with the Rights Issue, Ambea has appointed Danske Bank and DNB Markets as financial advisors, Joint Global Coordinators and Joint Bookrunners, Nordea as financial advisor and Joint Bookrunner as well as Vinge as legal advisor.
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[1] (http://connect.ne.cision.com#_ftnref1) Based on the combined turnover of Ambea and Aleris Care.