Efore Plc has signed an agreement to acquire Powernet International Oy and continues with preparations of rights offering
EFORE PLC            Stock Exchange Release        21  November, 2018   at 3.45 p.m.
Efore Plc has signed an agreement to acquire Powernet International Oy and continues with preparations of rights offering
Efore Plc has today 21 November 2018 signed an agreement to acquire the entire share capital of Powernet International Oy, a company specialized in development and manufacture of customer specific power supplies and systems. The acquisition further strengthens Efore’s excellent technical know-how and broadens as well as internationalizes Efore’s customer base.
In order to finance the acquisition of Powernet and to strengthen the balance sheet and working capital, Efore continues with preparations of the rights offering, based on the authorization granted by the extraordinary general meeting held on 3 May 2018. Efore intends to execute the rights offering during 2018.
Efore Plc (â€Efore†or the â€Companyâ€) strengthens its business by acquiring the entire share capital of Powernet International Oy
Efore Plc has today 21 November 2018 signed an agreement to acquire the entire share capital of Powernet International Oy from a fund managed by Verdane and minority shareholders. The acquisition broadens as well as internationalizes Efore’s excellent technical know-how and customer base, and further strengthens the product and system offering.
The purchase price on a cash and debt free basis (enterprise value) is EUR 4.5 million and the purchase price for the shares at closing of the transaction is EUR 2.5 million. Additionally, the parties have agreed on an earn-out. The maximum amount of the earn-out is EUR 1.5 million and may be paid based on Powernet Group’s consolidated sales margin for financial year 2019. Efore intends to finance the acquisition by executing a rights offering, which is described later in this stock exchange release.
Powernet was founded in 1992 and is a well-known developer and manufacturer of power supplies and systems in Northern and Central Europe. Powernet has 30 employees and in financial year 2017 its turnover was EUR 9.7 million and EBITDA EUR 0.9 million.
Powernet develops and manufactures customer specific power supplies and systems, of which examples are customised power supply and power distribution packages as well as turnkey project deliveries, e.g. to the train industry. Powernet has also been a forerunner in the development of IoT enabled condition monitoring of power supply and power distribution packages, which is utilized in e.g. smart battery chargers. Excellent understanding of clients’ end products is also one of Powernet’s key strengths.
The solutions of the Systems product line, which is a part of the Industry business area, are power supplies and highly customised power supply and power distribution packages. The solutions of the Systems product line are used in demanding applications, such as monitoring and directing electricity transfer and distribution, the production and refining of oil and gas, automation, rail transport, defense, telecommunications and maritime transport.
After the closing of the transaction Powernet will initially operate as a separate legal entity, but Efore’s current Systems-business and Powernet will be managed as one unit. The unit forms a strong platform based on Finnish know-how dating back years, on which Efore can build new and growing business. The acquisition further shifts Efore’s focus towards higher value-added products and solutions built on high level of expertise and strengthens Efore’s capabilities in solution life cycle management.
The acquisition of Powernet is conditional upon Efore receiving sufficient proceeds from the rights offering.
Financing the acquisition of Powernet and strengthening of Efore’s balance sheet and working capital through rights offering
The extraordinary general meeting held on 3 May 2018 resolved on the proposal of the Board of Directors to authorise the Board of Directors to decide on a share issue according to the pre-emption rights of shareholders. The authorisation entitles the Board to issue a maximum of 390,410,237 shares. The share issue may be implemented by issuing new shares or transferring shares now in possession of the company. The Board can use the authorisation in one or more parts. The Board of directors was authorised to decide on any other conditions of the issuance of shares. The authorisation is valid until 31 December 2018. The authorisation does not revoke any prior authorisations granted to the Board of Directors.
Efore is preparing the execution of a rights offering before the end of 2018, based on the authorization described above. The purpose of the rights offering is to finance the acquisition of Powernet, the repayment of the short-term loans relating to the financing arrangement announced on 10 April 2018 and the strengthening of Efore’s balance sheet and working capital. Efore intends to raise preliminarily approximately EUR 11 million through the rights offering. The Company will announce the terms of the rights offering as well as its time table later, when the final decision regarding the execution of the rights offering has been made. All members of the Board of Directors as well as the Chief Executive Officer Jorma Wiitakorpi and Chief Financial Officer Vesa Leino have preliminarily given their commitments to participate in the rights offering.
Efore announced on 10 April 2018 that it had agreed on a short-term financing arrangement and that it is planning a rights offering. Part of the credit package was granted by Jussi Capital Oy and Rausanne Group, which belong to the related parties of the company. Other lenders belong to the 20 biggest shareholders of the company. At the same time Efore announced that all above mentioned lenders had informed contributing positively to the successful completion of the rights offering.
EFORE PLC
Jorma Wiitakorpi                     Vesa Leino
President and CEOÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â CFO
For further information please contact Jorma Wiitakorpi, President and CEO, tel. +358 40 175 8510 and Vesa Leino, CFO, tel. +358 40Â 759 8956
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Efore Group
Efore is an international Group which develops and produces demanding power products. Efore's head office is based in Finland and its R&D functions are located in Finland, Sweden, Italy and China. Sales and marketing operations are located in Europe, United States and China. In the financial year ending in December 2017, consolidated net sales totalled EUR 69.9 million and the Group's personnel averaged 432. The parent company's share is quoted on the Nasdaq  Helsinki Ltd.
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