SIEVI CAPITAL PLC AND BOREO PLC HAVE SIGNED A COMBINATION AGREEMENT
SIEVI CAPITAL PLC AND
BOREO PLC HAVE SIGNED A COMBINATION
AGREEMENT
SIEVI CAPITAL PLCINSIDE INFORMATION29 September
2021 at 9:00 am EEST
NOT FOR DISCLOSURE OR DISTRIBUTION IN OR INTO
THE UNITED STATES, OR IN ANY OTHER JURISDICTION WHERE DISCLOSURE OR
DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.
The Boards of Directors of Sievi Capital Plc
(“Sievi Capital”) and Boreo Plc
(“Boreo”) have today signed a combination
agreement (the “Combination Agreement”) and a
merger plan to combine the companies through a merger (the
“Future Company”). The name of
the Future Company will be Boreo Plc.
The Future Company will be one of the leading
growth platforms of Nasdaq Helsinki Ltd (“Nasdaq
Helsinki”) Stock Exchange for small and medium-sized
companies that, with its strong financial position and strong
independent business operations, will have good preconditions for
growth in Northern Europe in the long term. In 2020, the Future
Company's preliminary illustrative combined net sales were
approximately EUR 474 million and adjusted EBITDA approximately EUR
59 million, of which the illustrative minority share is EUR 21
million. The Future Company will employ approximately 1,700
people.
Transaction Highlights
- The proposed combination will be
implemented as a statutory absorption merger pursuant to the
Finnish Limited Liability Companies Act whereby Sievi Capital will
merge into Boreo. The Board of Directors of Boreo proposes to the
Extraordinary General Meeting of Boreo to be held prior to the
completion of the combination that the Extraordinary General
Meeting authorises the Board of Directors of Boreo to decide on a
share issue without payment in which Boreo's shareholders are
issued new shares without payment in proportion to their holdings
so that fourteen (14) new Boreo shares are issued for each share
(share split). Similarly, new shares will be issued without payment
to Boreo on the basis of its treasury shares. The new shares will
be issued immediately before the registration of the completion of
the combination.
- Upon completion, Sievi Capital's
shareholders will receive 0.4492 new shares in Boreo for each share
they held in Sievi Capital on the record date as merger
consideration. This implies that the shareholders of Sievi Capital
would then hold approximately 40 per cent and the shareholders of
Boreo approximately 60 per cent of the shares and votes in the
Future Company. The merger consideration shares will be listed on
Nasdaq Helsinki Stock Exchange in connection with the merger.
- This conversion rate included a
42.1 per cent premium for Sievi Capital’s shareholders compared to
the closing price of Sievi Capital’s share on 17 August 2021 before
the disclosure of the letter of intent. Using the one (1) month
volume-weighted average prices of the companies up to 17 August
2021, the premium was 24.0 per cent and with three (3) month
volume-weighted average prices up to 17 August, it was 16.8 per
cent.
- Before the Effective Date, Boreo
has the right to distribute to its shareholders the second
instalment of the dividend decided by its Annual General Meeting on
15 April 2021, which is EUR 0.20 per share.
- The Future Company’s strategy will
be based on the basis of Boreo's current strategy, acknowledging
the business and strengths of the new combined entity. The details
of the strategy and the strategic financial objectives of the
Future Company will be disclosed after the completion of the
combination.
- As a result of the combination,
Sievi Capital's target companies will become part of the operations
of the Future Company. The Future Company will develop its
businesses in the long term and without an intention of divesting
them.
- Sievi Capital and Boreo have
obtained necessary commitments for the financing of the completion
of the merger.
- The combination requires, among
other things, approval by a majority of two-thirds of votes casts
and shares represented at the Extraordinary General Meetings of
Boreo and Sievi Capital and the obtaining of merger control
approvals. Completion is expected to take place in the first half
of 2022, provided that all the conditions for completion are
met.
- Preato Capital AB, the majority
shareholder of Sievi Capital and Boreo, representing approximately
23.23 per cent of the shares of Sievi Capital and approximately
72.91 per cent of the shares of Boreo, has undertaken, under
certain normal terms and conditions, to vote irrevocably in favour
of the combination. The representatives of Preato Capital AB have
not participated in the decision-making on the combination of the
Boards of Directors of Sievi Capital and Boreo.
- The combination is unanimously
recommended by the Board of Directors of Sievi Capital and Boreo to
their respective shareholders.
- It is proposed that the Board of
Directors of the Future Company is composed of four (4) Sievi
Capital's current Board members (Juha Karttunen, Kati Kivimäki,
Taru Narvanmaa, Lennart Simonsen), four (4) Boreo’s current Board
members (Camilla Grönholm, Jouni Grönroos, Ralf Holmlund, Michaela
von Wendt) and Simon Hallqvist who is acting in the board of
directors of both companies. It is proposed that the Future
Company’s Chairman will be Simon Hallqvist. The Boards of Directors
of Boreo and Sievi Capital have agreed that Kari Nerg, Boreo's
current CEO, will be the CEO of the Future Company.
Lennart Simonsen, Chairman of the Board of
Directors of Sievi Capital: “During the spring and summer, the
Board of Directors of Sievi Capital assessed the company's
strategic options for creating shareholder value. After a
comprehensive review, the Board of Directors settled on that a
combination with Boreo would be the most proprietary solution to
create shareholder value in the opinion of the Board of Directors.
With the planned combination, the shareholders of Sievi Capital
will be able to continue as owners of the Future Company.”
Jouni Grönroos, member of the Board of Directors
of Boreo and chairman of the committee that is independent of the
main owner: “Together, Boreo and Sievi Capital will form one of the
leading growth platforms for small and medium-sized companies in
Finland. The transaction is a logical next step on Boreo's strategy
path, which started in 2019 with the change of the main owner and
has progressed with determination with the implementation of the
company's new strategy. The proposed combination will create strong
financial conditions for growth and for increasing the Future
Company’s shareholder value.”
Jussi Majamaa, CEO of Sievi Capital: “As the new
CEO of Sievi Capital, I am enthusiastic about the possibility of
implementing a significant transaction, as a result of which Sievi
Capital and Boreo will together create a strong and growth-oriented
listed company with a well-diversified portfolio of interesting
group companies. This benefits Sievi Capital's shareholders and
customers as well as employees of the target companies.”
Kari Nerg, CEO of Boreo: “The Future Company
will be well placed to create growth through a decentralised
entrepreneurial operating model, and the proposed combination
strengthens the value proposition of being a best-in-class home for
its companies and people. The Future Company will be an even more
competitive partner for its customers and clients, and the
company's ability to attract talented experts will be further
increased.”
The Key
Rationale of the Combination
The proposed combination between Sievi Capital
and Boreo will create the following value-creating strengths:
- The proposed combination will
create one of the leading growth platforms for small and
medium-sized companies on the Nasdaq Helsinki Stock Exchange: a
decentralised entrepreneurial operating model will enable
scalability and the combination will significantly increase the
size of the companies. The Future Company's business operations
will be diversified among various industries, and its dependency on
individual client and customer relationships is low.
Geographically, the Future Company will also be more strongly
diversified in Northern Europe. The Future Company will have
business operations inter alia in Finland, Sweden, Baltics and
Russia.
- Even stronger financial position
and conditions for the Future Company's acquisition-driven growth:
a strong financial position provides a basis for the implementation
of an acquisition-driven strategy and significant growth.
- Even better and stronger conditions
for the growth and development of independent businesses and
personnel: The Future Company will create even better conditions
for the improvement of operational efficiency, the utilisation of
best practices, synergies between businesses and a stronger
offering to its customers, suppliers and other stakeholders. For
personnel, the Future Company offers even better opportunities for
development and growth.
Future Company
Overview
In 2020, the Future Company's preliminary
illustrative combined net sales were approximately EUR 474 million
and adjusted EBITDA approximately EUR 59 million, of which the
illustrative minority share is EUR 21 million. On 30 June 2021,
Sievi Capital and Boreo had a total of 1,712 employees.
The name of the Future Company will be Boreo
Plc. The head office of the Future Company will be located in
Vantaa.
Strategy and Value Creation Model
The Future Company’s strategy will be based on
Boreo's current strategy, acknowledging the business operations and
strengths of the new combined entity. The Future Company will serve
as a growth platform for its companies and employees, create growth
through acquisitions and organically, and focus on creating
operative efficiencies and shareholder value in the long term. The
main focus areas of the Future Company's strategy will be in
accordance with Boreo’s current strategy:
- Acquisitions - The Future Company
will generate growth through acquisitions and be expanded to new
areas and industries through platform acquisitions. The business
operations of the Future Company will be increased by acquiring
independent – strengthening – companies, in addition to which the
current business operations will be strengthened by add-on
acquisitions.
- Operative efficiency - The Future
Company will develop a systematic way to improve operative
efficiency and give a better basis for improving organic growth and
profitability
- People & Culture - Developing
employees and providing opportunities for people is at the heart of
the Future Company's value creation model. The entrepreneurial
approach of Sievi Capital and Boreo creates a strong foundation for
the development of culture in the combined company.
In Boreo's decentralised entrepreneurial model,
companies are developed independently and in the long term, without
an intention of divesting them. In order to enable the development
of operative efficiency and to ensure the commitment and
encouragement of the key personnel, the combination will explore
the possibilities of harmonising the ownership structures of Sievi
Capital portfolio companies.
The objective of the Future Company is to own
companies that are profitable, predictable, have strong cash flow
and use capital efficiently. The Future Company offers an
attractive operating model for owners of small and medium-sized
companies and support in the strategy planning and implementation
for its companies, and encourages acquisitions, investments and
growth. The Future Company will enable the use of best practices
and achieves synergies between the group companies. In order to
achieve synergies in financing, the aim is to organise the
financing of the business operations mainly at the group level.
The Future Company’s strategy and optimal
structure of business operations will be planned after the
completion of the combination. In accordance with Boreo's current
operating model, the Future Company's business operations would
remain as independent units.
Board of Directors and the Management
It is proposed that the Board of Directors of
the Future Company is composed of four (4) Sievi Capital's current
Board members (Juha Karttunen, Kati Kivimäki, Taru Narvanmaa,
Lennart Simonsen), four (4) Boreo’s current Board members (Camilla
Grönholm, Jouni Grönroos, Ralf Holmlund, Michaela von Wendt) and
Simon Hallqvist who is a member of the board of directors in both
companies. It is proposed that the Future Company’s Chairman will
be Simon Hallqvist.
The Boards of Directors of Sievi Capital and
Boreo have agreed that Kari Nerg will become the CEO of the Future
Company.
Ownership Structure and Governance
The Board of Directors of Boreo proposes to the
Extraordinary General Meeting of Boreo to be held before the
Effective Date that the Extraordinary General Meeting authorises
the Board of Directors of Boreo to decide on a share issue without
payment in which Boreo's shareholders are issued new shares without
payment in proportion to their holdings so that fourteen (14) new
Boreo shares are given for each share (share split). Similarly, new
shares will be issued without payment to Boreo on the basis of its
treasury shares. Based on the number of shares on the date of this
stock exchange release, a total of 36,642,508 new shares would be
issued. The total number of shares in Boreo would thus be
39,259,830. The new shares will be issued immediately before the
registration of the completion of the merger.
The Board of Directors of Boreo may propose to
the Extraordinary General Meeting to be held before the Effective
Date of the combination that the Extraordinary General Meeting
agrees to replace the share issue authorisation decided by the
Annual General Meeting on 15 April 2021 with a new authorisation,
in which the maximum number of shares to be issued under the
authorisation increases in proportion to the share split. It is
proposed that the authorisation takes effect on the Effective Date
of the combination and remains in effect until the closing of the
first Annual General Meeting following the Effective Date of the
combination.
In connection with the completion of the merger,
Sievi Capital’s shareholders will receive as merger consideration
0.4492 new Boreo shares for each Sievi Capital share held on the
record date, in which case after the completion Sievi Capital’s
shareholders will own approximately 40 per cent and Boreo’s
shareholders approximately 60 per cent of the shares of the Future
Company, assuming that no Sievi Capital’s shareholder demands
redemption of his/her/its shares at the Extraordinary General
Meeting of Sievi Capital resolving on the merger.
The following table illustrates the ten (10)
largest registered shareholders of the Future Company as per 15
September 2021, assuming all current shareholders of Sievi Capital
and Boreo are shareholders with unchanged holding also at the
completion of the combination.
Shareholder |
Amount of
shares |
% of shares
1) |
PREATO CAPITAL AB |
34 683 623 |
53.2% |
LAAKKONEN MIKKO KALERVO |
1 633 622 |
2.5% |
TAKANEN MARTTI TAPIO |
877 834 |
1.3% |
AK CAPITAL OY |
525 000 |
0.8% |
SULIN ARI W |
408 000 |
0.6% |
MOILANEN MIKKO PETTERI |
384 375 |
0.6% |
SIRVIÖ KARI SIMO TAPANI |
332 415 |
0.5% |
MÄÄTTÄ MIKKO OLAVI |
317 655 |
0.5% |
SILVENNOINEN JANNE |
315 863 |
0.5% |
RUMPUNEN AKU VÄINÄMÖ |
300 000 |
0.5% |
Top 10 total |
39 778 387 |
61.0% |
Other |
25 444 767 |
39.0% |
Total |
65 223 154 |
100.0% |
1) The table shows the ten (10) largest
shareholders in the Future Company (15 September 2021), assuming
that all shareholders of Sievi Capital and Boreo are shareholders
with the same shareholdings at the time of the merger (excluding
treasury shares and after the share split in Boreo prior to or in
connection with completion in which 1 share is split to 15
shares).
As part of the combination, it is also proposed
that the Extraordinary General Meeting of Boreo to be held prior to
the completion of the merger should conditionally decide on the
establishment of a Shareholders' Nomination Board for the Future
Company and conditionally approve its Charter entering into force
upon the completion of the merger. The Nomination Board shall have
four (4) members. One of the members is the Chairman of the Board
of Directors of the Future Company or another member who is elected
by the Board of Directors of the Future Company from among its
members. The other members of the Nomination Board shall be
nominated by the three (3) largest shareholders, each of whom shall
have the right to nominate one (1) member. The Charter is appended
to the merger plan, included as Annex 1 to this stock exchange
release.
Articles of Association
Pursuant to the merger plan, the Board of
Directors of Boreo shall propose to the Extraordinary General
Meeting of Boreo to be held prior to the completion of the merger
to amend the articles of association of Boreo in connection with
the registration of the implementation of the merger, The articles
of association are proposed to be amended with regard to the
company’s line of business and the number of members of the board
of directors and a new section regarding a redemption obligation of
the company’s shares when a shareholder’s holdings exceeds 60 % of
the shares or votes and a notification obligation of shareholdings
when a shareholder’s holdings exceeds 60 % of the company’s shares
or votes. The proposed new articles of association is appended to
the merger plan, included as Annex 1 to this stock exchange
release.
Illustrative combined
financial information
The Future Company’s illustrative combined
net sales, adjusted EBITA, adjusted EBITDA and interest-bearing net
debt presented below have been formed by aggregating Sievi
Capital’s preliminary consolidated financial and Boreo’s financial
information information for the financial year ended 31
December 2020 and for the six-months period ended 30 June
2021. The financial information takes into account the effect
of certain acquisitions described later as if they had taken place
at the beginning of each period. In addition, preliminary
calculation takes into account adjustments estimated by
management related to significant differences in accounting
policies between Sievi Capital and Boreo. The illustrative combined
financial information is presented as if the business had been
conducted in the Future Company from the beginning of each year in
case of revenue, adjusted EBITA and adjusted EBITDA and
interest-bearing net debt as if the combination would have taken
place on 30 June 2021.
The Future Company intends to continue to
operate in accordance with Boreo's current business model as a
group, and include to its consolidated financial statements its
subsidiaries. Currently, Sievi Capital is an IFRS investment
company that has applied an exemption from the consolidation of
subsidiaries to its consolidated financial statements. This means a
change in Sievi Capital's investment entity operating model and the
consolidation of its portfolio companies into the Future Company in
financial reporting. Sievi Capital's current basis of preparation
of the investment entity's consolidated financial statements and
the key differences in the consolidation of subsidiaries in the
consolidated financial statements are described in Appendix 2,
Sievi Capital's financial information.
In this illustrative combined financial
information, Sievi Capital's financial information is presented as
if Sievi Capital had consolidated the the subsidiaries line by line
in its financial statements. Only Indoor Group of Sievi Capital’s
subsidiaries has prepared financial information in accordance with
IFRS standards for the periods presented. For Sievi Capital's other
subsidiaries, the illustrative financial information is based on
the companies' Finnish Accounting Standards (“FAS”) figures for the
subgroups, which have been adjusted by management estimates for
significant differences in accounting policies. The most
significant differences between the accounting policies used by
Sievi Capital's subsidiaries and IFRS are expected to arise from
the treatment of leasing and rental agreements as assets and
liabilities and from the allocation of rental expenses to
depreciation and interest expenses. This illustrative combined
financial information takes into account as an adjustment to the
accounting principles for Sievi Capital’s subsidiaries reporting
under FAS the preliminary managements estimates for leasing and
rental agreement related adjustment. Sievi Capital's final
financial information in accordance with IFRS, including the
application of IFRS 16 to the lease portfolio of Sievi Capital's
subsidiaries, will only be confirmed in connection with the IFRS
transition to be implemented in connection with the Merger. The
final IFRS financial information, including the IFRS lease
liability, may differ materially from the preliminary illustrative
financial information presented here.
Sievi Capital's subsidiaries have significant
minority interest, for which the share of Sievi Capital's
subsidiaries' profit for the financial year and equity is
attributable. An illustrative minority interest has been calculated
from the Future Company’s adjusted EBITDA based on minority
ownership in Sievi Capital's and Boreo’s subsidiaries in September
2021.
The illustrative combined financial information
presented herein is based on a hypothetical situation and should
not be viewed as pro forma financial information as any impacts of
purchase price allocation, potential accounting policy differences
that will occur later in connection with the transition to IFRS,
adjustments related to transaction costs, tax impacts and impacts
of the potential refinancing have not been taken into account. The
illustrative combined financial information does not reflect any
cost savings, synergy benefits or future integration costs that are
expected to be generated as a result of the merger.
The actual consolidated financial information
for the Future Company will be prepared based on the final merger
consideration and the fair values of Sievi Capital’s identifiable
assets and liabilities at the merger completion date, including the
impacts of the potential refinancing. The Future Company’s
consolidated financial information that will be published following
the completion of the combination could therefore differ
significantly from the illustrative combined financial information
presented herein. Accordingly, this information is not indicative
of what the Future Company’s actual financial position, results of
operations or key figures would have been had the combination been
completed on the dates indicated.
In the merger prospectus to be published during
the last quarter of 2021, Boreo will publish pro forma financial
information for the Future Company, which will also include Sievi
Capital's consolidated income statement and balance sheet
information prepared for that purpose in accordance with IFRS.
|
|
1-12/2020 |
|
EUR million |
Sievi Capital |
Boreo |
Future Company |
Net sales |
370 |
104 |
474 |
Adjusted EBITA 1) |
23 |
6 |
29 |
Adjusted EBITDA 2) |
51 |
8 |
59 |
Illustrative minority share of adjusted EBITDA |
21 |
0 |
21 |
|
|
1-6/2021 |
|
EUR million |
Sievi Capital |
Boreo |
Future Company |
Net sales |
195 |
65 |
260 |
Adjusted EBITA 1) |
9 |
4 |
13 |
Adjusted EBITDA 2) |
24 |
6 |
30 |
Illustrative minority share of adjusted EBITDA |
10 |
0 |
10 |
|
|
|
|
|
|
30 June
2021 |
|
EUR million |
Sievi Capital |
Boreo |
Future Company |
Interest-bearing debt |
185 |
40 |
224 |
Cash and cash equivalent |
-37 |
-7 |
-44 |
Interest-bearing net debt 3) |
148 |
33 |
181 |
- of which lease liability |
115 |
5 |
120 |
|
|
|
|
Employees |
1341 |
371 |
1712 |
1) Adjusted EBITA = Operating profit +
items affecting comparability + amortization and impairment of
intangible assets
2) Adjusted EBITDA = Operating profit +
items affecting comparability + depreciation, amortization and
impairment of tangible and intangible assets
3) Interest-bearing net debt = Financial
debt + purchase price liabilities + lease liabilities - cash and
cash equivalents
The illustrative combined financial information
described above was prepared by combining the financial information
of Boreo and Sievi Capital's parent company and subsidiary
subgroups for the financial year ended 31 December 2020 and the
six-month period ended 30 June 2021 with the following
adjustments:
-
Machinery Group’s income statement for January to February 2020 has
been added to Boreo’s income statement information for the
financial year ended 31 December 2020. The acquisition of the
Machinery Group was completed on 2 March 2020.
-
Sievi Capital's financial information has been combined by
aggregating the financial information of the parent company Sievi
Capital Plc and Sievi Capital's subgroups (Indoor Group Holding Oy,
KH-Koneet Group Oy, Logistikas Oy and Nordic Rescue Group Oy) and
adjusting them for the estimated effects of leasing liability and
leasing costs, excluding Indoor Group Holding -group that reports
IFRS figures. The income statement of Nordic Rescue Group Oy for
January 2020 (acquired on 6 February 2020) and the income statement
of Logistikas Oy for January to November 2020 (acquired on 4
December 2020) have been added to this financial information.
- The
figures for Muottikolmio Oy (acquired on 1 October 2020), Milcon Oy
(acquired 1 on June 2021), PM Nordic AB, Sany Nordic AB (acquired
on 5 January 2021), Etelä-Suomen Kuriiripalvelu & Teitteam Oy
(acquired on 1 April 2021) acquired by Boreo have been combined
from the date of their acquisition.
- The
figures for Sala Brand AB (acquired on 18 June 2021) and S-Rental
Ab (acquired on 17 June 2020) acquired by Sievi Capital have been
combined from the date of their acquisition
-
Sievi Capital’s acquisition of Piccolo Packing Oy and Piccolo
Solutions Oy and Boreo’s acquisition of Floby Nya Bilverkstad AB
after 30 June 2021 have not been taken into account in this
combined preliminary illustrative financial information.
- The
acquisition of Rakennuttajatoimisto HTJ Oy, announced by Sievi
Capital Plc on 20 September 2021, has not been included in the
above illustrative combined financial information. The transaction
is expected to be completed in October 2021.
-
When calculating adjusted EBITA and adjusted EBITDA, Sievi
Capital's preliminary combined data have not been adjusted for
items affecting comparability; Boreo's figures have been adjusted
for the items affecting comparability described more detail in
Appendix 2.
The Merger
Statutory Merger
The proposed merger between Sievi Capital and
Boreo will be executed through a absorption merger pursuant to the
Finnish Limited Liability Companies Act, whereby all of Sievi
Capital's assets and liabilities will be transferred to Boreo
without liquidation proceedings. As a result of the completion of
the merger, Sievi Capital is automatically dissolved.
Board of Directors of Boreo proposes to the
Extraordinary General Meeting of Boreo held before the Effective
Date that the Extraordinary General Meeting authorises the Board of
Directors of Boreo to decide on a share issue without payment in
which Boreo's shareholders are issued new shares without payment in
proportion to their holdings so that fourteen (14) new Boreo shares
are issued for each share. Similarly, new shares will be issued
without payment to Boreo on the basis of its treasury shares. Based
on the number of shares on the date of this stock exchange release,
a total of 36,642,508 new shares would be issued. The total number
of shares in Boreo would thus be 39,259,830. The new shares will be
issued immediately before the registration of the completion of the
merger.
Upon the completion of the merger, Sievi
Capital's shareholders will receive as merger consideration 0.4492
new shares of Boreo for each Sievi Capital share held on the record
date. The total number of new shares in Boreo to be issued to the
shareholders of Sievi Capital as merger consideration is expected
to be 26,089,039 shares, assuming that no shareholder of Sievi
Capital demands redemption of his/her/its shares in Sievi Capital
at the Extraordinary General Meeting of Shareholders resolving on
the merger.
As part of the proposed combination, the Boards
of Directors of Sievi Capital and Boreo have agreed not to propose
to respective Annual General Meetings to be held in 2022 the
distribution of the companies' assets prior to the completion of
the merger. Boreo has the right to distribute to its shareholders
the second instalment of the dividend decided by its Annual General
Meeting on 15 April 2021, EUR 0.20 per share.
Sievi Capital and Boreo will convene
Extraordinary General Meetings to decide on the proposed merger.
The Extraordinary General Meetings are expected to be held in
December 2021. The companies will publish the invitations to the
Extraordinary General Meetings in separate stock exchange
releases.
The merger plan which is included in Annex 1 to
this stock exchange release contains information on certain
conditions of the proposed merger, such as the merger consideration
to be paid to Sievi Capital's shareholders. Further information on
the proposed combination, merger and Future Company can also be
found in the merger and listing prospectus, which Boreo is expected
to publish in November 2021 before the Extraordinary General
Meetings of Sievi Capital and Boreo.
Approvals and the schedule
The completion of the contemplated merger is
subject, among other things, approval by a majority of of the votes
cast and shares represented at the Extraordinary General Meetings
of Sievi Capital and Boreo, obtaining of necessary merger control
approvals, the availability of the financing for the purpose of the
merger and that no materially adverse effects have taken place
before the completion of the merger. As the transaction is proposed
to be implemented by way of a statutory merger of Sievi Capital
into Boreo, it is also subject to a statutory creditor hearing
process of Sievi Capital’s creditors. All conditions for the
completion of the merger are set out in the merger plan, which is
included as Annex 1 to this stock exchange release.
Subject to all conditions for completion being
fulfilled, the completion of the merger is expected to occur in the
first half of 2022. Trading in the new shares of Boreo to be issued
to Sievi Capital's shareholders is expected to begin on or about
first trading day following the completion of the merger.
Combination Agreement
Sievi Capital and Boreo have entered into a
Combination Agreement on 29 September 2021, pursuant to which Sievi
Capital and Boreo have agreed to combine their business operations
through a statutory absorption merger pursuant to the Finnish
Limited Liability Companies Act. As a result of the combination,
Sievi Capital's target companies will become part of the operations
of the Future Company. The Future Company will develop its
businesses in the long term and without an intention of divesting
them.
The Combination Agreement contains customary
representations and warranties as well as undertakings, such as,
inter alia, each party conducting its business in the ordinary
course of business before the completion of the merger, keeping the
other party informed of any and all matters that may be of material
relevance for the purposes of effecting the completion of the
merger, preparing the necessary regulatory filings and
notifications in cooperation with the other party, and cooperating
with the other party in relation to the financing of the Future
Company.
In addition, Sievi Capital and Sievi Capital
each undertake not to solicit proposals competing with the
transaction agreed in the Combination Agreement.
Moreover, Sievi Capital and Boreo have given
each other certain customary representations and warranties related
to, inter alia, authority to enter into the Combination Agreement,
due incorporation, status of the shares in the respective company,
preparation of financial statements and interim reports, the
compliance with applicable licences, laws and agreements, legal
proceedings, ownership of intellectual property, taxes, employees
and the due diligence material provided to the other party.
With the exception of certain jointly incurred
costs, Sievi Capital and Boreo shall bear their own fees, costs and
expenses incurred in connection with the merger.
The Combination Agreement may be terminated by
mutual written consent duly authorised by the Boards of Directors
of Sievi Capital and Boreo. Each of Sievi Capital and Boreo may
terminate the Combination Agreement inter alia if, (i) the merger
has not been completed by 31 December 2022 (or it becomes evident
that completion cannot take place by that time); (ii) in case of a
material adverse effect after the signing date that is incapable of
being cured, all as defined, and following the consultation and
other procedures described, in the Combination Agreement; (iii) the
Extraordinary General Meetings of Sievi Capital and Boreo have not
considered the merger in accordance with the Combination Agreement,
or upon consideration by the relevant Extraordinary General
Meeting, they shall have failed to duly approve the merger; (iv) if
any governmental entity (including any competition authority) gives
an order or takes any regulatory action that is non-appealable and
conclusively prohibits the completion of the merger; or (v) in case
of a material breach by the other party of any of the
representations, warranties, covenants or undertakings under the
Combination Agreement if such breach has resulted, or could
reasonably be expected to result, in a materially adverse effect as
described in the Combination Agreement. In the event of the
Combination Agreement is terminated due to certain reasons
specified in the Combination Agreement, the parties have agreed to
cover certain costs associated with the preparation of the
merger.
Fairness opinions
The Board of Directors of Sievi Capital
considers that the consideration paid in connection with the
arrangement is reasonable from the financial point of view of Sievi
Capital's shareholders. The Board of Directors of Sievi Capital
made its assessment after taking into account a number of factors,
including the fairness opinion of Handelsbanken Capital Markets,
which was submitted to Sievi Capital’s Board of Directors on 29
September 2021. The fairness opinion of Handelsbanken is included
as an appendix to this stock exchange release.
The Board of Directors of Boreo considers that
the consideration paid in the in connection with the arrangement is
reasonable from the financial point of view of Boreo’s
shareholders. The Board of Directors of Boreo made its assessment
after taking into account various factors, such as OP Corporate
Bank plc's fairness opinion, which was submitted to the Board of
Directors of Boreo on 29 September 2021. The fairness opinion of OP
is included as an appendix to this stock exchange release.
Financing
With regard to its existing loan facilities,
Boreo has obtained consents under which the combination has been
approved by its main financier OP Corporate Bank Plc. Sievi Capital
has also obtained consent for the existing loan facilities of the
group by its main financiers Nordea Bank Plc and OP Corporate Bank
Plc. In addition, Boreo has entered into loan and guarantee
arrangements with OP Corporate Bank Plc and Preato Capital AB to
finance possible cash redemptions of Sievi Capital shares.
Shareholder support
Preato Capital AB, the majority shareholder of
Sievi Capital and Boreo, representing approximately 23.23 per cent
of Sievi Capital's shares and approximately 72.91 per cent of
Boreo's shares, has undertaken, subject to certain customary terms
and conditions, to vote irrevocably in favour of the
combination.
Preliminary timeline
Sievi Capital and Boreo will convene
Extraordinary General Meetings to decide on the proposed
combination. The Extraordinary General Meetings are expected to be
held in November or December 2021. The companies will publish
invitations to the Extraordinary General Meetings with separate
stock exchange releases. The other key dates related to the
combination are as follows:
- September 2021 - Submission of the
merger plan for the registration
- November 2021 - Merger prospectus
will be published
- December 2021 - Extraordinary
General Meetings of Sievi Capital and Boreo
- First half of 2022 - Completion of
the merger, provided that all regulatory authorisations have been
obtained and all other conditions for completion have been
fulfilled or waived
All times are preliminary and subject to change.
The proposed merger is subject to the authorisation of the
competition authorities in Finland, Sweden, Russia and Baltics,
and, therefore, the preliminary timeline will depend on these
processes.
Advisors
Sievi Capital's financial advisor is
Handelsbanken Capital Markets and its legal advisor is Hannes
Snellman Attorneys Ltd.Boreo's financial advisor is MCF Corporate
Finance Oy and its legal advisor is Castrén & Snellman
Attorneys Ltd.
SIEVI CAPITAL PLCBoard of Directors
BOREO PLCBoard of Directors
Analyst and Investor Webcast and Media
Conference
A joint presentation of the merger between Sievi
Capital and Boreo will take place today, 29 September 2021,
starting at 10:00 a.m. The event will be hosted by Lennart Simonsen
(Chairman of the Board of Directors of Sievi Capital), Jouni
Grönroos (Board Member of Boreo and Chairman of the Independent
Committee), Jussi Majamaa (CEO of Sievi Capital) and Kari Nerg (CEO
of Boreo).
The event will be held in Finnish and can be
followed live by webcasting from the following link:
https://boreo.videosync.fi/boreon-ja-sievi-capitalin-yhdistyminen
Questions can be asked via the chat function and
by phone.
Media representatives, analysts and investors
are welcome to follow the presentation in person at Kämp hotel’s
Symposion hall at Kluuvikatu 2, 00100 Helsinki. The number of
participants in the event is limited to 30 people in accordance
with applicable Covid-19 restrictions. Participants are requested
to register in advance by email: aku.rumpunen@boreo.com.
The presentation material will be published on
the merger website at www.platformforgrowth.fi and on the
companies' websites www.sievicapital.com and www.boreo.com.
The event can also be attended by phone. Please
call five to ten minutes before the start of the event. Phone
numbers:
Finland Toll: +358 981710310 Sweden Toll: +46
856642651 United Kingdom Toll: +44 3333000804 United States Toll:
+1 6319131422
Call code: PIN: 48564357#
DISTRIBUTION:Nasdaq Helsinki, FinlandMajor
mediawww.sievicapital.fi
Sievi Capital
and Boreo in
brief
Sievi Capital is a partner for Finnish
entrepreneurs. We support the growth, performance and value
creation of small and medium-sized companies and concurrently build
national competitiveness. We believe that we succeed together as
co-entrepreneurs. Sievi Capital’s share is listed on Nasdaq
Helsinki.
In 2020, Sievi Capital group’s illustrative net
sales pursuant to IFRS was EUR 370 million and it employed
approximately 1340 people. The company’s domicile is in Sievi and
its head office is located in Helsinki.
Boreo, a company listed on the Helsinki Stock
Exchange, creates value by owning, acquiring and developing B2B
businesses in Northern Europe. Boreo's operations are organised
into three Business Areas: Electronics, Technical Trade and Heavy
Machines. Boreo’s main objective is to create shareholder value in
the long-term by growing via acquisitions, creating optimal
conditions for its businesses to grow sales and earnings and by
being a best-in-class home for its companies and people.
In 2020, the group's pro forma net sales
amounted to EUR 103.6 million, and it employed approximately 350
people in Finland, Sweden, Russia and the Baltics. The company's
head office is located in Vantaa, Finland.
Important notice
This release is not an offer of merger
consideration shares in the United States, and it is not intended
for distribution in or into the United States or in any other
jurisdiction in which such distribution of this release would be
prohibited by applicable law. The merger consideration shares have
not been registered and will not be registered under the U.S.
Securities Act of 1933 (the “Securities
Act”), and may not be offered, sold or delivered within or
into the United States, except pursuant to an applicable exemption
of, or in a transaction not subject to, the Securities Act.
This release does not constitute an offer of or
an invitation by or on behalf of, Sievi Capital or Boreo, or any
other person, to purchase any securities.
This release does not constitute a notice to an
Extraordinary General Meeting or a merger and listing prospectus.
Any decision with respect the proposed statutory absorption merger
of Sievi Capital into Boreo should be made solely on the basis of
information contained to be contained in the actual notices to the
Extraordinary General Meetings of Sievi Capital and Boreo, as
applicable, and the merger and listing prospectus related to the
merger as well as on the independent analysis of the information
contained therein. Investors are encouraged to familiarise
themselves with the merger and listing prospectus for more complete
information about Sievi Capital, Boreo, their subsidiaries, as well
as on Sievi Capital's and Boreo’s securities and the merger.
This release includes “forward-looking
statements” that are based on present plans, estimates, projections
and expectations and are not guarantees of future performance. They
are based on certain expectations and assumptions, which, even
though they seem to be reasonable at present, may turn out to be
incorrect. Shareholders should not rely on these forward-looking
statements. Numerous factors may cause the actual results of
operations or financial condition of the combined entity to differ
materially from those expressed or implied in the forward-looking
statements. Neither Sievi Capital nor Boreo, nor any of their
respective affiliates, advisors or representatives, or any other
person undertake any 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
benefits expected to arise from the potential combination of the
business operations of Sievi Capital and Boreo as well as the
related integration costs, which have been prepared by Sievi
Capital and Boreo and are based on a number of assumptions and
judgments. Such estimates present the expected future impact of the
potential combination of the business operations of Sievi Capital
and Boreo on the combined company’s business, financial condition
and results of operations. The assumptions relating to the
estimated 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 benefits from the potential combination of
the business operations of Sievi Capital and Boreo, if any, and
related integration costs to differ materially from the estimates
in this release. Further, there can be no certainty that the merger
will be completed in the manner and timeframe described in this
release, or at all.
ANNEX 1 MERGER PLAN
MERGER PLAN
1 PARTIES
1.1 Merging
Company
Corporate name: |
Sievi Capital Oyj (”Sievi” or “Merging
Company”) |
Business ID: |
0190457-0 |
Address: |
Pohjoisesplanadi 33, 00100 Helsinki |
Domicile: |
Helsinki, Finland |
The Merging Company is a public limited
liability company, the shares of which are publicly traded on stock
exchange list of Nasdaq Helsinki Oy (“Nasdaq
Helsinki”).
1.2 Receiving
Company
Corporate name: |
Boreo Oyj (”Boreo” or ”Receiving
Company”) |
Business ID: |
0116173-8 |
Address: |
Ansatie 5, 01740 Vantaa |
Domicile: |
Vantaa, Finland |
The Receiving Company is a public limited
liability company, the shares of which are publicly traded on
Nasdaq Helsinki.
The Merging Company and the Receiving Company
are hereinafter jointly referred to as the
“Parties” or the “Companies Participating
in the Merger” and, each individually, a
“Party” or a “Company
Participating in the Merger”.
2 MERGER
The board of directors of Sievi Capital Plc and
the board of directors of Boreo Plc propose to the extraordinary
general meetings of the respective companies that the general
meetings would resolve upon the merger of Sievi into Boreo through
a statutory absorption merger, whereby all assets and liabilities
of Sievi shall be transferred without a liquidation procedure to
Boreo, as set forth in this merger plan (including its appendices,
the “Merger Plan”) (the
“Merger”).
Immediately prior to the registration of the
implementation of the Merger, Boreo will effect a 1 for 14 share
split. The share split has been described in more detail in Section
6 of the Merger Plan.
The shareholders of Sievi shall, after the share
split, receive as merger consideration [0.4492] new shares in Boreo
for each share they hold in Sievi. In case the number of shares in
Boreo received by a shareholder of Sievi as merger consideration is
a fractional number, the fractions shall be rounded down to the
nearest whole number, and fractional entitlements shall be
aggregated and sold in public trading on the official list of
Nasdaq Helsinki for the benefit of the shareholders of Sievi
entitled to such fractions. The merger consideration has been
described in more detail in Section 7 of the Merger Plan.
Sievi shall automatically dissolve as a result
of the Merger.
The Merger shall be carried out in accordance
with the provisions of Chapter 16 of the Finnish Limited Liability
Companies Act (624/2006, as amended) (the “Finnish
Companies Act”) and Section 52 a of the Finnish Business
Income Tax Act (360/1968, as amended).
3 REASONS
FOR THE MERGER
The Companies Participating in the Merger have
on 18 August 2021 entered into a letter of intent concerning the
assessment of the combination of the business operations of the
Companies Participating in the Merger (“Letter of
Intent”). In the combination agreement which has been
signed simultaneously with the Merger Plan on 29.9.2021 it has been
agreed on the combination of the business operations of the
Companies Participating in the Merger (the “Combination
Agreement”).
The Merger is expected to create one of the
leading growth platforms on the Nasdaq Helsinki stock exchange for
small and medium-sized companies. The business operations of the
Companies Participating in the Merger are decentralized to several
different industries and there is small reliance on individual
client and customer relationships. Geographically, after the
Merger, the Receiving Company would have become even more
decentralized in Northern Europe. The merger of Boreo and Sievi is
expected to significantly increase the size of the companies and
enable even better conditions to increase operative efficiency.
The Merger is also expected to create better and
stronger conditions for the growth and development of independent
businesses, as well as for the utilization of best practices,
synergies between the businesses and a stronger offering to
customers, clients and other stakeholders.
4 AMENTDMENTS
TO THE RECEIVING COMPANY’S ARTICLES OF ASSOCIATION
articles of association of the Receiving Company
are proposed to be amended in connection with the registration of,
and subject to, the implementation of the Merger.
The most significant amendments to the articles
of association of the Receiving Company are:
1) the company’s line of
business shall be specified;
2) the maximum number of
members of the board of directors shall be amended to a maximum of
nine (9) members;
3) a new Section 11 on the
shareholder's redemption obligation, which applies in case of the
shareholder's holding exceeds 60 %, shall be added;
4) a new Section 12 on the
shareholders notice obligation, which applies in case of the
shareholder’s holdings exceeds of 60 %, shall be added.
The articles of association of the Receiving
Company, including the above amendments, as well as other technical
amendments, are attached in their entirety to this Merger Plan as
Appendix 1.
5 ADMINISTRATIVE
BODIES OF THE RECEIVING COMPANY
5.1 Board
of directors and Auditor of the Receiving Company and Their
Remuneration
According to the articles of association of the
Receiving Company, the Receiving Company shall have a board of
directors consisting of a minimum of three (3) and a maximum of
seven (7) members. In accordance with Section 4, the maximum number
of members of the board is proposed to be amended to nine (9)
members. The number of the members of the board of directors of the
Receiving Company shall be conditionally confirmed and the members
of the board of directors shall be conditionally elected by a
general meeting of the Receiving Company to be held prior to the
implementation date. Both decisions shall be conditional upon the
implementation of the Merger. The decisions shall be subject to the
implementation of the Merger. The term of such members of the board
of directors shall commence on the implementation date and shall
expire at the end of the first general meeting of the Receiving
Company following the implementation date.
The board of directors of the Receiving Company
shall propose to a general meeting of the Receiving Company to be
held prior to the implementation date that the number of the
members of the board of directors of the Receiving Company shall be
nine (9) and that Camilla Grönholm, Jouni Grönroos, Simon
Hallqvist, Ralf Holmlund, Juha Karttunen, Kati Kivimäki, Taru
Narvanmaa, Lennart Simonsen and Michaela von Wendt be conditionally
elected to the board of directors of the Receiving Company for the
term commencing on the implementation date and expiring at the end
of the first annual general meeting of the Receiving Company
following the implementation date.
The board of directors of the Receiving Company,
shall also propose to an extraordinary general meeting of the
Receiving Company the remuneration of the members of the board of
directors of the Receiving Company, including the remuneration of
the members of relevant Board committees to be established, for the
term commencing on the implementation date. The annual remuneration
of the members to be elected shall be paid in proportion to the
length of their term of office.
The term of the members of the board of
directors of the Merging Company shall end on the implementation
date. The members of the board of directors of the Merging Company
shall be paid a reasonable remuneration for the preparation of the
final accounts of the Merging Company.
The board of directors of the Receiving Company
may, after consultation with the board of directors of the Merging
Company, amend the above-mentioned proposal concerning the election
of members of the board of directors of the Receiving Company, if
one or more of the persons proposed would not be available for
election at the relevant general meeting of the Receiving Company
to be held prior to the implementation date due to his or her
resignation or otherwise.
The auditor of the Receiving Company will
continue in its position and the Merger will not impact the
resolution previously adopted in respect of the auditor’s
remuneration.
5.2 Shareholders’
Nomination Board
The board of directors of the Receiving Company
shall propose to a general meeting of the Receiving Company to be
held prior to the implementation date the establishment of a
shareholders’ nomination board and the adoption of the charter of
the shareholders’ nomination board as set out in Appendix
2, subject to the implementation of the Merger.
In the event that the Merger is implemented
before the 2022 annual general meeting of the Receiving Company, it
is proposed that the shareholders’ nomination board be elected by
in deviation from the charter so that three largest shareholders
are determined on the basis of the Receiving Company’s shareholder
register as of the implementation date of the merger, the members
of the nomination board will be elected as soon as possible after
the implementation date and the nomination board shall submit its
proposals to the annual general meeting in time for the proposal to
be submitted in sufficient time to the 2022 annual general
meeting.
5.3 CEO
of the Receiving
Company
The boards of directors of the Receiving Company
and the board of directors of the Merging Company has agreed that
Kari Nerg shall continue to serve as the CEO of the Receiving
Company.
If the person appointed resigns or otherwise
must be replaced by another person prior to the implementation
date, the boards of directors of the Receiving Company and the
Merging Company shall mutually agree on the appointment of a new
CEO.
6 RECEIVING
COMPANY’S SHARE SPLIT
The board of directors of the Receiving Company
shall propose to the General Meeting of the Receiving Company to be
held prior to the implementation date that the general meeting
would authorize the board of directors of the Receiving Company to
issue new shares without payment to the shareholders of the
Receiving Company in proportion to their existing shareholding by
issuing fourteen (14) new shares for each share held. New shares
will be similarly issued without payment to the Receiving Company
for its treasury shares. Based on the number of shares on the date
of this Merger Plan (2,617,322), a total of 36,642,508 new shares
would be issued. The total number of shares in the Receiving
Company would thus be 39,259,830 shares. The new shares will be
issued immediately prior to the registration of the implementation
of the Merger.
The board of directors of the Receiving Company
may propose to a General Meeting to be convened prior to the
implementation date that the general meeting replaces the share
issue authorisation decided by the annual general meeting on 15
April 2021 with a new authorisation where the maximum amount of
shares that may be issued by virtue of such authorisation will be
increased in proportion to the share split. The authorisation is
proposed to enter into force on the implementation date and remain
in force until the expiry of the first annual general meeting
following the implementation date.
7 MERGER
CONSIDERATION AND GROUNDS FOR ITS DETERMINATION
7.1 Merger
Consideration
The shareholders of the Merging Company shall,
after the share split referred to in Section 6, receive as merger
consideration 0.4492 new shares in the Receiving Company for each
share they hold in the Merging Company (the “Merger
Consideration”). In accordance with Chapter 16, Section
16, Subsection 3 of the Finnish Companies Act, shares in the
Merging Company held by the Merging Company or the Receiving
Company do not carry a right to the Merger Consideration.
In case the number of shares received by a
shareholder of the Merging Company as Merger Consideration is a
fractional number, the fractions shall be rounded down to the
nearest whole number. Fractional entitlements to new shares of the
Receiving Company shall be aggregated and sold in public trading on
Nasdaq Helsinki and the proceeds shall be distributed to
shareholders of the Merging Company entitled to receive such
fractional entitlements in proportion to holding of such fractional
entitlements. Any costs related to the sale and distribution of
fractional entitlements shall be borne by the Receiving
Company.
There is one (1) share class in the Receiving
Company. The shares of the Receiving Company do not have a nominal
value. The total number of shares in the Receiving Company is at
the date of Merger Plan 2,617,322 shares.
The allocation of the Merger Consideration is
based on the shareholding in the Merging Company at the end of the
last trading day preceding the implementation date. The final total
number of shares in the Receiving Company issued as Merger
Consideration shall be determined based on the number of shares in
the Merging Company held by shareholders (other than the Merging
Company itself) at the end of the day preceding the implementation
date. Such total number of shares issued shall be rounded down to
the nearest full share. The total number of shares in the Merging
Company is at the date of the Merger Plan 58,078,895 shares. The
Merging Company holds no treasury shares, and the Receiving Company
holds no shares in the Merging Company. On the date of this Merger
Plan, the total number of shares in the Receiving Company to be
issued as Merger Consideration would therefore be a maximum of
26,089,040 shares.
Apart from the Merger Consideration to be issued
in the form of new shares of the Receiving Company and proceeds
from the sale of fractional entitlements, no other consideration
shall be distributed to the shareholders of the Merging
Company.
7.2 Grounds
for Determination of Merger Consideration
The Merger Consideration has been determined
based on the relation of valuations of the Merging Company and the
Receiving Company. The value determination has been made by
applying generally used valuation methods. The value determination
has been based on the stand-alone valuations of the Companies
Participating in the Merger including market-based valuation
adjusted for company specific factors.
Based on their respective relative value
determination, which is supported by a fairness opinion received by
the Merging Company and the Receiving Company, the board of
directors of the Merging Company and the board of directors of the
Receiving Company have concluded that the consideration to be paid
in connection with the Merger is fair from a financial point of
view to the shareholders of the Merging Company and the
shareholders of the Receiving Company, respectively.
8 DISTRIBUTION
OF THE MERGER CONSIDERATION
The Merger Consideration shall be distributed to
the shareholders of the Merging Company on the implementation date
or as soon as reasonably possible thereafter.
The Merger Consideration shall be distributed in
the book-entry system maintained by Euroclear Finland Oy. The
Merger Consideration payable to each shareholder of the Merging
Company shall be calculated, using the exchange ratio set forth in
Section 7.1 above, based on the number of shares in the Merging
Company registered in each separate book-entry account of each such
shareholder at the end of the last trading day preceding the
implementation date.
The Merger Consideration shall be distributed
automatically, and no actions are required from the shareholders of
the Merging Company in order to receive it. The new shares of the
Receiving Company distributed as Merger Consideration shall carry
full shareholder rights as from the date of their registration.
9 OPTION
RIGHTS AND OTHER SPECIAL RIGHTS ENTITLING TO SHARES
Neither the Merging Company nor the Receiving
Company have issued any option rights or other special rights
entitling to shares referred to in Chapter 10, Section 1 of the
Finnish Companies Act.
10 SHARE-BASED
INCENTIVE PLANS
10.1 Incentive
Plans of the Receiving Company
The Receiving Company has no share-based
incentive plans.
10.2 Incentive
Plans of the Merging Company
The Merging Company has share-based incentive
plans under which share rewards have not been paid in their
entirety by the date of this Merger Plan as follows: (i)
Performance-based share plan LTI 2020-2022, and (ii)
Performance-based share plan LTI 2021-2023.
The board of directors of the Merging Company
shall, subject to the Combination Agreement and the Merger Plan,
resolve on the impact of the Merger on such incentive plans in
accordance with their terms and conditions prior to the
implementation date.
11 SHARE
CAPITAL AND OTHER EQUITY OF THE RECEIVING COMPANY
The share capital of the Receiving Company is
EUR 2,483,836.05.
The share capital of the Receiving Company shall
be increased, as specified in Section 12 below, by EUR 3,016,163.95
in connection with the registration of the implementation of the
Merger, after which the share capital of the Receiving Company
shall be EUR 5,500,000. The equity increase of Receiving Company
shall, to the extent it exceeds the amount to be recorded into the
share capital, be recorded as an increase of the reserve for
invested non-restricted equity in accordance with Section 12
below.
12 DESCRIPTION
OF THE ASSETS, LIABILITIES AND EQUITY OF THE MERGING COMPANY AND
THE CIRCUMSTANCES RELEVANT TO THEIR VALUATION, OF THE EFFECT OF THE
MERGER ON THE BALBANCE SHEET OF THE RECEIVING COMPANY AND OF THE
ACCOUNTING TREATMENT TO BE APPLIED IN THE MERGER
In the Merger, all (including known, unknown and
conditional) assets, liabilities and responsibilities as well as
agreements and commitments and the rights and obligations relating
thereto of the Merging Company, and any items that replace or
substitute any such item, shall be transferred to the Receiving
Company.
The Merger is to be carried out by applying the
acquisition method using book values. The assets and the
liabilities on the balance sheet of the Merging Company are
recognised at book value in appropriate asset and liability line
items on the balance sheet of the Receiving Company in accordance
with the Finnish Accounting Act (1336/1997, as amended) and the
Finnish Accounting Decree (1339/1997, as amended), except for the
possible items relating to receivables and liabilities between the
Receiving Company and the Merging Company; these receivables and
liabilities will be set-off in the Merger.
The equity in the Receiving Company shall be
formed in the Merger by applying the acquisition method so that the
amount corresponding the book value of the net assets of the
Merging Company shall be recorded into reserve for invested
non-restricted equity of the Receiving Company with the exception
of the increase in share capital as described in Section 11.
A description of the assets, liabilities and
equity of the Merging Company and an illustration of the
post-Merger balance sheet of the Receiving Company is attached to
the Merger Plan as Appendix 3.
The final effects of the Merger on the Receiving
Company’s balance sheet will be determined according to the
circumstances and the laws and regulations governing the
preparation of the financial statements in Finland at the
implementation date of the Merger
13 MATTERS
OUTSIDE ORDINARY COURSE OF BUSINESS
As of the date of this Merger Plan, each of the
Parties shall continue to conduct their operations in the ordinary
course of business and in a manner consistent with past practice of
the relevant Party, unless the Parties specifically agree
otherwise.
Except as set forth in this Merger Plan or the
Combination Agreement or as otherwise specifically agreed by the
Parties, the Merging Company and the Receiving Company shall during
the Merger process not resolve on any matters (regardless of
whether such matters are ordinary or extraordinary) which would
affect the shareholders’ equity or number of outstanding shares in
the relevant company, including but not limited to corporate
acquisitions and divestments, share issues, issue of special rights
entitling to shares, acquisition or disposal of treasury shares,
dividend distributions, changes in share capital, or any comparable
actions, or take or commit to take any such actions.
The Receiving Company has the right to
distribute to its shareholders the second instalment of the
dividend, EUR 0.20 per share, decided by its general meeting on 15
April 2021.
For the sake of clarity, the Receiving Company
may, subject to a prior written consent by the Merging Company,
amend its articles of Association in other respects as set out in
Section 4 above.
14 CAPITAL
LOANS
Neither the Merging Company nor the Receiving
Company has issued any capital loans, as defined in Chapter 12,
Section 1 of the Finnish Companies Act.
15 SHAREHOLDINGS
BETWEEN THE MERGING COMPANY AND THE RECEIVING COMPANY
On the date of this Merger Plan, the Merging
Company or its subsidiaries do not hold, and the Merging Company
agrees not to acquire and shall cause its subsidiaries not to
acquire any shares in the Receiving Company or its parent company
and the Receiving Company does not hold and agrees not to acquire
any shares in the Merging Company, unless the Parties specifically
agree otherwise in writing.
On the date of the Merger Plan, the Merging
Company holds no treasury shares.
16 BUSINESS
MORTGAGES
On the date of this Merger Plan, the business
mortgages as defined in the Finnish Act on Business Mortgages
(634/1984, as amended), listed in Appendix 4,
pertain to the assets of the Merging Company.
On the date of this Merger Plan, the business
mortgages as defined in the Finnish Act on Business Mortgages
(634/1984, as amended), listed in Appendix 4,
pertain to the assets of the Receiving Company.
17 SPECIAL
BENEFITS OR RIGHTS IN CONNECTION WITH THE MERGER
No special benefits or rights, each within the
meaning of the Finnish Companies Act, shall be granted in
connection with the Merger to any members of the board of
directors, the CEOs or the auditors of either the Merging Company
or the Receiving Company, or to the auditors issuing statements on
this Merger Plan.
The remuneration of the auditors issuing their
statement on the Merger Plan is proposed to be paid in accordance
with an invoice approved by the Receiving Company in the case of
the auditor of the Receiving Company and by the Merging Company in
the case of the auditor of the Merging Company. The Merging
Company’s auditor shall issue a statement referred to in Chapter
16, Section 4, Subsection 1 of the Finnish Companies Act to the
Merging Company and the Receiving Company’s auditor will issue the
said statement to the Receiving Company.
18 PLANNED
REGISTRATION OF THE IMPLEMENTATION OF THE MERGER
The planned implementation date, meaning the
planned date of registration of the implementation of the Merger,
is 1 April 2022 (effective registration time approximately at
[00:01]) subject to the fulfilment of the preconditions in
accordance with the Finnish Companies Act and the conditions for
implementing the Merger set forth below in Section 21.
The implementation date may change if, among
other things, the implementation of measures described in Merger
Plan takes a shorter or longer time than currently estimated, or if
circumstances related to the Merger otherwise necessitate a change
in the time schedule or if the boards of directors of the Companies
Participating in the Merger jointly resolve to file the Merger to
be registered prior to, or after, the planned registration
date.
19 LISTING
OF THE NEW SHARES IN THE RECEIVING COMPANY AND DELISTING OF THE
SHARES IN THE MERGING COMPANY
The Receiving Company shall apply for the
listing of the new shares to be issued by the Receiving Company as
Merger Consideration to public trading on Nasdaq Helsinki. For the
purposes of the Merger and the listing of the new shares to be
issued by the Receiving Company as Merger Consideration, a merger
prospectus will be published by the Receiving Company before the
extraordinary general meetings of the Receiving Company and the
Merging Company, respectively, resolving on the Merger. The trading
of the new shares shall begin on the implementation date or as soon
as reasonably possible thereafter.
The trading of the shares of the Merging Company
on Nasdaq Helsinki is expected to end at the end of the last
trading day preceding the implementation date and the shares in the
Merging Company are expected to be de-listed as of the
implementation date, at the latest.
20 LANGUAGE
VERSIONS
This Merger Plan (including its appendices) has
been prepared and executed in Finnish and translated into English.
Should any discrepancies exist between the Finnish version and the
unofficial English translation, the Finnish version shall
prevail.
21 CONDITIONS
FOR IMPLEMENTATING THE MERGER
The implementation of the Merger is conditional
upon the satisfaction or, to the extent permitted by applicable
law, waiver of each of the conditions set forth below:
(i) the
Merger having been duly approved by the extraordinary general
meeting of the Merging Company;
(ii) shareholders of the
Merging Company representing no more than ten (10 per cent) of all
shares and votes in the Merging Company having demanded the
redemption of their shares in the Merging Company pursuant to
Chapter 16, Section 13 of the Finnish Companies Act, unless
otherwise provided in the Combination Agreement;
(iii) the general meeting
of the Receiving Company having approved the authorisation
concerning the split of shares in accordance with Section [6] and
the split being pending for registration, at the latest, on the
implementation date, or the split having been registered with the
Trade Register;
(iv) the Merger, the
articles of association of the Receiving Company as set forth in
section 4 above and the adoption of the charter of the
shareholders’ nomination board, as set forth in Sections 5.2 above,
as well as the issuance of new shares of the Receiving Company as
merger consideration to the shareholders of the Merging Company,
having been duly approved by a general meeting of the Receiving
Company;
(v) the
competition approvals, as defined in the Combination Agreement,
having been obtained and being valid in accordance with the
Combination Agreement, and, in the event the competition approvals
are subject to any such commitments, undertakings or remedies,
which a Party or the Parties are obliged to execute prior to the
completion, all such commitments, undertakings or remedies being
duly executed and effected;
(vi) the regulatory
approvals and consents, as defined in the Combination Agreement,
having been obtained in accordance with the Combination
Agreement;
(vii) the Receiving
Company having obtained from Nasdaq Helsinki written confirmations
that the listing of the Merger Consideration on the official list
of said stock exchange will take place as at or promptly after the
implementation date;
(viii) The financing of
the parties shall be valid as agreed in the Combination
Agreement;
(ix) no
event, circumstance or change having occurred on or after the date
of the Combination Agreement that would have a material adverse
effect, as defined in the Combination Agreement, provided that in
the event of a material adverse effect regarding the Receiving
Company, this condition precedent shall not have been satisfied for
the Merging Company, and in the event of a material adverse effect
regarding the Merging Company, this condition precedent shall not
have been satisfied for the Receiving Company;
(x) there being no
material breach of the representations given by each of the Parties
in the Combination Agreement, the direct consequence of which is,
in the opinion of the board of directors of the non-breaching Party
acting in good faith and after consultation with board of directors
of the other Party and reputable financial and legal advisers, a
material adverse effect, as defined in the Combination Agreement,
provided that in the event of a material breach of a representation
made by the Receiving Company, this condition precedent shall not
have been satisfied for the Merging Company, and in the event of a
material breach of a representation made by the Merging Company,
this condition precedent shall not have been satisfied for the
Receiving Company. For the purposes of this sub-Section (x), the
determination as to whether there has been any breach of any of the
representations given by each of the Parties, as the case may be,
shall be made without regard to any references to material adverse
effect, as defined in the Combination Agreement, and, for the
purposes of this sub-Section (x), each such representation by a
Party, as the case may be, shall be read as if such reference to
material adverse effect were deleted from the relevant
representation; and
(xi) the Combination
Agreement remaining in force and not having been terminated in
accordance with its provisions.
22 AUXILIARY
TRADE NAMES
In connection with the implementation of the
Merger, the auxiliary trade names set forth in Appendix
5 are registered for the Receiving Company as auxiliary
trade names.
23 TRANSFER
OF EMPLOYEES
All the employees of the Merging Company shall
be transferred to the Receiving Company in connection with the
implementation of the Merger by operation of law as so-called old
employees.
24 DISPUTE
RESOLUTION
Any controversy arising out of or relating to
Merger Plan shall be settled by arbitration in accordance with the
Arbitration Rules of the Finland Chamber of Commerce. The number of
arbitrators shall be three (3). Boreo shall appoint one (1)
arbitrator and Sievi shall appoint one (1) arbitrator. In the event
of a failure by any Party to appoint such party-appointed
arbitrator, the Arbitration Institute of the Finland Chamber of
Commerce will make the appointment upon the request of the other
Party. The third arbitrator, who will act as chairman of the
arbitral tribunal, will be appointed by the Arbitration Institute
of the Finland Chamber of Commerce unless the two party-appointed
arbitrators reach an agreement on the arbitrator to be appointed as
chairman within fourteen (14) days of the appointment of the latter
party-appointed arbitrator. The seat of arbitration shall be
Helsinki, Finland. The language of the arbitration shall be
English, but evidence may be submitted in Finnish and in
English.
The Parties agree that the arbitral tribunal
may, at the request of either Party, decide by an interim arbitral
award a separate issue in dispute if the rendering of an award on
other matters in dispute is dependent on the rendering of such an
interim arbitral award.
25 OTHER
ISSUES
The boards of directors of the Companies
Participating in the Merger are jointly authorised to decide on
technical amendments to this Merger Plan or its appendices as may
be required by authorities or otherwise considered appropriate by
the boards of directors.
______________________________
[signature pages follow]
This Merger Plan has been prepared in two (2)
identical counterparts, one (1) for the Merging Company and one (1)
for the Receiving Company.
In Helsinki, 29 September 2021
BOREO OYJ |
|
|
______________________ |
|
_______________________ |
Name: Jouni GrönroosTitle: Board member |
|
Name: Kari NergTitle: CEO |
|
|
|
SIEVI CAPITAL OYJ |
|
|
______________________ |
|
_______________________ |
Name: Lennart SimonsenTitle: Chair of the Board |
|
Name: Jussi MajamaaTitle: CEO |
Appendices to
Merger Plan
Appendix 1 |
Amended Articles of Association of the Receiving Company |
Appendix 2 |
Charter of Shareholders’ Nomination Board |
Appendix 3 |
Description of assets, liabilities and shareholders’ equity and
valuation of the Merging Company and the preliminary presentation
of the balance sheet of the Receiving Company |
Appendix 4 |
Business Mortgages |
Appendix 5 |
Auxiliary trade names |
APPENDIX 1
Amended Articles of Association of the
Receiving Company
ARTICLES OF ASSOCIATION
1. Company name
and domicile
The company’s trade name is Boreo Oyj. The
Company’s parallel trade name in English is Boreo Plc and in
Swedish Boreo Abp.
The company’s domicile is Vantaa, Finland.
2. Line of
Business
The company’s line of business is supervision
and management of operations, arrangement of financing and
strategic planning, and planning and implementing financially
functional new investments of its subsidiaries and other operating
units. The company may trade in products of the electronics
industry and the company may buy, sell, hold and manage shares in
companies involved in industrial business as well as buy, sell,
hold and manage real estate and securities.
3. Board of
Directors
The board of directors, which is composed of a
minimum of three (3) and a maximum of nine (9) members, shall see
to the administration of the company and the appropriate
organisation of its operations. The board of directors elects a
chair from among its members.
The term of the members of the board of
directors ends at the closing of the next annual general meeting
following the election.
4. Managing
Director
The company’s managing director is elected by
the board of directors.
5. Representation of
the Company
The company is represented by the chair of the
board and by the managing director, each alone, and by two (2)
members of the board jointly.
The right to represent the company and granting
the power of procuration is decided by the board of directors.
6. Auditor
The company has one (1) auditor, who shall be a
firm of Authorized Public Accountants certified by the Central
Chamber of Commerce. The term of the auditor elected covers the
current financial year at the time of election and ends upon the
closing of the next annual general meeting following such
election.
7. Financial
year
The company’s financial year is the calendar
year.
8. Notice to
Convene
Notice of the general meeting and other
bulletins to the shareholders shall be delivered no earlier than
three (3) months and no later than three (3) weeks before the
general meeting, provided that the date of the stock release
publication shall be at least nine (9) days before the record date
of the general meeting. In order to be authorised to participate in
the shareholders’ meeting, a shareholder shall notify the Company
no later than the date stated in the notice of the general meeting,
which may be no earlier than ten (10) days prior to the
meeting.
9. Annual General
Meeting
The annual general meeting shall be held
annually by the end of June, on the date specified by the board of
directors. The annual general meeting shall:
present
- the financial
statements, including the profits and losses, the balance sheet,
the cash flow statements, the attached files, the annual report,
the consolidated financial statements; and
- the auditors’
report;
resolve on
- the adoption of
the financial statements and consolidated financial
statements;
- the use of the
profit shown on the balance sheet;
- the discharge
from liability of the members of the board of directors and the
managing director;
- the number,
remunerations and reimbursement of travel expenses of the members
of the board of directors;
- the remuneration
of the auditors;
elect
- the members of
the board of directors;
- the
auditors;
and address
- any other
matters mentioned in the notice of the meeting.
10. Shares
Shares of the company belong to the book-entry
system.
11. Redemption
obligation regarding shares
11.1 Redemption obligation
If the provisions of the Securities Markets Act
apply to the redemption obligation, the Securities Markets Act
shall apply. Otherwise, the provisions of this section shall apply
to the redemption obligation.
A shareholder whose share of all the company's
shares or the number of votes conferred by the shares, either alone
or together with other shareholders, as a result of a transfer
other than an inheritance, will or gift, exceeds 60 % (shareholder
obligated to redeem) is obligated if a claim is made by other
shareholders (shareholders entitled to redemption) to redeem the
shares of these shareholders and the securities entitling to shares
as set out in this section.
When calculating the shareholder's share of all
the company's shares and the votes the shares confer, the following
shall be included when calculating the share of votes:
- shares held by
the shareholder as well as persons acting in concert with the
shareholder;
- shares held
jointly by the shareholder or by the persons acting in concert with
the shareholder together with a third party; and
- shares, the
voting rights attached to which the shareholder is entitled to use
or direct under an agreement or other arrangement.
The shares owned by the company itself or by a
party under its control shall not be taken into account when
calculating the total number of votes in the company.
If a redemption obligation is based on an
aggregate shareholding or aggregate number of votes, the
shareholders subject to redemption shall jointly and severally be
obligated to redeem shares vis-à-vis shareholders entitled to
redemption. In such a situation, a claim to redeem shares shall be
considered to be made to all the shareholders obligated to redeem
without a separate demand.
If the redemption obligation limit has been
exceeded solely due to an action of the company or another
shareholder, the redemption obligation set out in this section
shall not arise until the shareholder who has exceeded the
redemption obligation limit acquires or subscribes for more shares
in the company or otherwise increases its voting rights in the
company.
In case of the shareholder obligated to redeem
or another person acting in concert with such shareholder, within
one month of the occurrence of the redemption obligation,
relinquishes the voting rights exceeding the redemption obligation
limit by transferring the company's shares or otherwise reducing
their shareholding and voting rights in the company, the redemption
obligation shall no longer exist. In order to be released from the
redemption obligation, the shareholder obligated to redeem and/or
another person acting in concert with such shareholder may not
exercise voting rights exceeding the redemption obligation limit in
the company during such time period. In addition, the shareholder
obligated to redeem shall announce their intention to relinquish
the shareholding and voting rights exceeding the redemption limit
in connection with the notification on the occurrence of the
redemption obligation. Information on the reduction of shareholding
and voting rights below the redemption obligation limit shall be
notified to the company immediately and the company shall inform
the shareholders thereof as soon as possible.
11.2 Redemption price
If the company's share is subject to public
trading in Finland at the beginning of the redemption obligation,
the redemption price is determined pursuant to the provisions of
the Securities Markets Act regarding the consideration applicable
in a mandatory bid. Otherwise, the redemption price shall be the
price applied in the transfer that exceeded the 60% limit, unless,
the shareholder obligated to redeem has been made share
transactions during the last 12 months, in which case the
redemption price shall determined by the highest purchase
price.
In the event the shareholder obligated to redeem
or a person acting in concert with the shareholder redeems shares
in the company on better terms than what has been paid to those
shareholders entitled to redemption at the beginning of the
redemption obligation and such redemption takes place between the
date on which the redemption obligation has arisen and the due date
by which redemption claims shall be made, the shareholder shall be
obligated to amend the redemption price to correspond to such
acquisition.
In the event the shareholder obligated to redeem
or a person acting in concert with the shareholder obligated to
redeem redeems shares in the company on better terms than what has
been originally informed to those entitled to redemption as the
redemption price and such acquisition takes place within nine (9)
months of the due date of the redemption procedure, the shareholder
obligated to redeem shall be obligated to compensate the difference
between the redemption price paid to the shareholders entitled to
redemption and the price paid on that redemption. However, the
above does not apply in a situation where the price to be paid for
a company's security is higher in an arbitration award based on the
Finnish Company Act than the redemption price paid to the
shareholders entitled to redemption, if the shareholder obligated
to redeem or a person acting in concert with such shareholder has
not offered to acquire the company's securities on better terms
than those originally announced to the shareholders entitled to
redemption before or during the arbitration proceedings.
If an acquisition which affects on the
redemption price is denominated in foreign currency, the euro
conversion value shall be calculated according to the official rate
of the European Central Bank for the currency in question seven (7)
days prior to date on which the redemption obligation arises.
11.3 Other equity securities
If a redemption obligation arises with regard to
other securities which entitle to shares in the company, the
redemption, the redemption obligation and the applicable redemption
price shall be determined according to the terms and conditions
applicable to the security in question. In the absence of such
provisions, the redemption price shall be determined by the
company’s board of directors based on the redemption price
applicable to the corresponding shares of the company.
11.4 Redemption procedure
If the provisions of the Securities Market Act
apply to the redemption obligation, the provisions of the
Securities Market Act shall apply. Otherwise, the provisions of
this Section 11.4 shall apply to the redemption procedure.
A shareholder obligated to redeem shall notify
the company's board of directors in writing within seven (7) days
from the day the redemption obligation has arisen. This
notification shall contain information concerning the number of
shares of the shareholder obligated to redeem owns and the number
of and purchase prices paid for shares that the shareholder
obligated to redeem has acquired or otherwise received during the
preceding twelve (12) months. The address at which the shareholder
obligated to redeem can be contacted shall be included in the
notification.
The company’s board of directors shall notify
the shareholders of the redemption obligation within 30 days of
receiving the notification referred to above, or, in the absence of
such notification or if it fails to arrive in time, within 30 days
of the date when the board of directors became aware of the
redemption obligation in some other way. The notification shall
contain information on when the redemption obligation arose and the
grounds for determining the redemption price as far as they are
known by the board of directors as well as the latest date by which
a claim for redemption shall be made. The notification to the
shareholders shall be made in accordance with section 8 of the
Articles of Association on the publication of the notice of a
general meeting.
A shareholder entitled to redemption shall make
a redemption claim in writing within 30 days of the board of
directors making the redemption obligation public. The redemption
claim, which shall be submitted to the company, shall contain the
amount of shares and other securities to which the claim applies.
The shareholder entitled to redemption shall at the same time
deliver the possible share certificates or other documents
entitling to receive shares to be assigned to the shareholder
obligated to redeem against the settlement of the redemption price.
If the claim has not been presented within the prescribed time
period and in the manner described above, the right of the
shareholder entitled to redemption to make a redemption claim in
the said situation shall expire. The shareholder entitled to
redemption has the right to cancel their claim as long as the
redemption has not taken place.
After the prescribed time period reserved for
the shareholder entitled to redemption has expired, the company's
board of directors shall notify the shareholder obligated to redeem
of the redemption claims made and instructions for paying the
redemption price.
The shareholder obligated to redeem shall within
fourteen (14) days of receiving notification of the redemption
claim pay the redemption price as determined by the company against
handing over of the shares and the securities entitling to the
shares or, if the redeemable shares have been entered into the
book-entry accounts of the shareholders in question, against a
receipt issued by the company. In this case, the company shall make
sure that the redeemed shares shall without delay be entered into
the book-entry account of the shareholder obligated to redeem. The
redemption price which has not been paid in due time shall bear
annual penalty interest from the date on which the redemption price
should have been executed at the latest at the higher rate of: the
rate in accordance with the Interest Act, or 10%. Additionally, if
the shareholder obligated to redeem obligation has failed to
observe the above provision concerning a redemption obligation,
penalty interest shall be calculated from the date on which the
communication on the redemption obligation should have been
made.
The company shall make all releases relating to
the notices and information published to the shareholders of the
company set forth in this section 11 in Finnish and in English.
11.5 Other provisions
The decision of the general meeting to amend or
delete the provisions of this section 11 of the Articles of
Association is valid only if it has been supported by shareholders
that have at least five-sixths (5/6) of the votes cast and the
shares represented at the general meeting.
11.6 Dispute Resolution
Any disputes arising from the redemption process
set out in this Section 11, the related right to claim redemption
and the redemption price shall be settled by arbitration governed
by the Arbitration Act in Helsinki. The Arbitrators shall be
appointed by the Arbitration Board of the Finland Chamber of
Commerce. The arbitration shall be governed by Finnish law.
12. Notification of
change in holdings
In addition to the provisions of the Finnish
Securities Markets Act, a shareholder shall notify their holdings
and voting rights to the company in accordance with the provisions
of the Securities Markets Act when the holding reaches or exceeds
60 % of the target company's votes or total number of shares. When
the company receives a such notification, it shall, in accordance
with the provisions of the Securities Markets Act, disclose the
information contained in the notification without undue delay.
APPENDIX 2
Charter of Shareholders’ Nomination
Board
CHARTER OF THE SHAREHOLDERS’ NOMINATION
BOARD OF BOREO PLC
1 Role and
duties of the Nomination Board
The shareholders’ nomination board (the
“Nomination Board”) of Boreo Plc (the
“Company”) is a body appointed by the Company's
shareholders, responsible for preparing proposals concerning the
number, election and remuneration of the members of the board of
directors of the Company to the Company's annual general meeting
and, if necessary, to the extraordinary general meeting.
The primary purpose of the Nomination Board is
to ensure that the Company's board of directors and its members
have sufficient expertise, knowledge and experience to meet the
needs of the Company and that they have the opportunity to spend
sufficient time to perform the duties of a Board member. The
Nomination Board shall pay attention to achieving a good and
balanced gender distribution and balance in the Board, assessing
the Board's competence as a whole. In its work, the Nomination
Board must take into account the Company's diversity
principles.
The Nomination Board shall in its operations
comply with the laws and other applicable regulations (including
the rules of Nasdaq Helsinki Oy and the Finnish Corporate
Governance Code).
The Nomination Board has been established to
operate until further notice, unless otherwise decided by the
Company's annual general meeting.
This Charter contain provisions on the
composition, appointment of members and operation of the Nomination
Board.
2 Composition
of and appointment of the members of the Nomination
Board
Nomination Board shall consist of four (4)
members.
One of the members is the chair of the board of
directors of the Company or another member elected by the board of
directors from among its members.
The other members of the Nomination Board will
be nominated by the three (3) largest shareholders, each of whom
has the right to nominate one (1) member.
The Company’s largest shareholders entitled to
elect members to the Nomination Board shall be determined on the
basis of the registered holdings in the Company’s list of
shareholders held by Euroclear Finland Ltd., on the last working
day of August prior to the annual general meeting.
In addition, the following principles are
followed in determining the shareholders entitled to appoint a
member of the Nomination Board:
(a) If a shareholder who
according to the Securities Market Act has the obligation to take
into account also other entities’/persons’ shareholding in the
Company when notifying the Company of changes in ownership
(flagging obligation), the holdings of such shareholder shall be
calculated together with the holdings of such other
entities/persons, provided that such shareholder presents a written
claim directed to the chair of the board of directors no later than
the last working day of August. The claim shall be accompanied by a
reliable account on of the basis for the flagging obligation.
(b) If a holder of
nominee-registered shares wishes to utilise its nomination right,
the nominee-registered shareholder must submit a written request to
the chair of the board of directors of the Company no later than
the last working day of August. The request shall be accompanied by
a reliable account on the number of shares and votes held by the
holder of the nominee-registered shares.
If two or more shareholders have the same number
of shares and all of the members nominated by such shareholders
cannot be elected members of the Nomination Board, the right to
nominate shall be determined by the drawing of lots among such
shareholders by the chair of the board of directors.
The chair of the board of directors of the
Company shall annually request each of the three (3) shareholders
determined as described above eligible to appoint a representative
to nominate one (1) member to the Nomination Board by the last day
of September. In case a shareholder does not wish to use their
right to appoint a member to the Nomination Board, the right will
pass on to the next largest shareholder who otherwise does not have
the appointment right.
Before accepting a position, a member nominated
to the Nomination Board must carefully consider whether there are
any conflicts of interest in the position.
A member elected by the board of directors from
among its members convenes the first meeting of the Nomination
Board, at which the Nomination Board elects a chair from among its
members by a majority decision. A member of the board of directors
may not chair the Nomination Board.
If a shareholder which has nominated a member to
the Nomination Board transfers its shares before the proposals of
the Board have been disclosed so that such shareholder is no longer
one of the ten largest shareholders of the Company, the member
nominated by such shareholder shall resign her or himself from the
work of the Nomination Board with immediate effect. In that case,
the Nomination Board shall request the largest shareholder, based
on the situation of the day of such request, who has not nominated
a member to the Nomination Board, to nominate a new member to.
A shareholder has the right, for compelling
reasons, to change the member appointed during the term of office
by notifying the chair of the Nomination Board.
The Company announces the composition of the
Nomination Board and possible changes in the composition with a
stock exchange release.
The term of the members of the Nomination Board
ends annually after the new members of the Nomination Board have
been appointed.
Members of the Nomination Board do not receive
remuneration for their Nomination Board membership. Members' travel
expenses are reimbursed in accordance with the Company's travel
rules.
3 Decision
making
The first meeting of the Nomination Board for
each term shall be convened by a member elected by the board of
directors of the Company, and thereafter the meetings shall be
convened by the chair of the Nomination Board.
The Nomination Board has a quorum when more than
half of the members are present. The Nomination Board may not make
a decision unless all its members have been given the opportunity
to examine the matter and participate in the proceedings.
The Nomination Board shall make its decisions
unanimously. If unanimity is not reached, the Nomination Board
shall notify the Company's board of directors thereof without
delay.
Minutes of all decisions of the Nomination Board
shall be prepared. The minutes shall be dated, numbered and
archived in a reliable manner. All members of the Nomination Board
who attended the Nomination Board meeting sign the minutes.
4 Duties
of the
Nomination Board
Duties of the Nomination Board are:
- to prepare and
present a proposal for the general meeting concerning the number of
members of the board of directors;
- to prepare and
present a proposal for the general meeting concerning the
composition of the board of directors;
- to prepare and
present a proposal for the general meeting concerning remuneration
of the members of the board of directors (including chair and vice
chair of the board of directors) in accordance with the organs’
remuneration policy;
- at the general
meeting answer questions from shareholders about the proposals
prepared by the Nomination Board; and
- responsible for seeking prospective
successor candidates for the members of the board of
directors.
5 Duties
of the chair
The duties of the chair of the Nomination Board
are to direct the work of the Nomination Board so that the
Nomination Board achieves its objectives effectively and takes into
account the expectations of shareholders and the interests of the
Company.
The chair of the Nomination Board:
- convenes the
meetings of the Nomination Board and supervises that they are held
on schedule;
- convenes
additional meetings as required by the duties of the Nomination
Board and always within 14 days of a request from a member of the
Nomination Board; and
- prepares the
agenda for the meetings and chairs the meetings.
6 Preparation
of the proposal on the composition of the board of
directors
General information on the preparation
of the proposal
The Nomination Board prepares a proposal for the
composition of the board of directors for the Company's annual
general meeting and, if necessary, for the extraordinary general
meeting. However, each shareholder of the Company may also submit
their own proposal directly to the annual general meeting in
accordance with the Companies Act.
The Nomination Board may consult the Company's
shareholders in the preparation of the proposal and may also use
external advisors to find and evaluate candidates. The Company
shall bear the reasonable costs of using any external
consultants.
When the Nomination Board prepares a proposal
for the composition of the new board of directors, the Nomination
Board has the right to obtain the results of the annual evaluation
of the board of directors' activities, information relevant to
assessing the independence of the board of directors' candidates
and other information reasonably necessary.
Competence of the member of the board of
directors
The board of directors of the Company shall have
sufficient expertise, and, as a collective, sufficient competence
and experience concerning the field of operation and business of
the Company. Each member of the board of directors shall be able to
devote sufficient time to perform their duties.
In order to ensure sufficient expertise, the
Nomination Board must take into account the applicable legislation
and other applicable regulations and, where applicable, the
principles set out in the Finnish Corporate Governance Code.
As a collective, the Board must have sufficient
expertise and experience, in particular:
- concerning the
line of business and the business of the Company;
- corporate and
financial administration;
- strategy and
M&A;
- internal audit
and risk management; and
- corporate
governance.
7 Proposals
to the general
meeting
The Nomination Board shall deliver its proposal,
to the Company’s board of directors by the end of January preceding
the annual general meeting at the latest.
Should a matter that belongs to the duties of
the Nomination Board be on the agenda of an extraordinary general
meeting, the Nomination Board shall submit its proposals to the
board of directors in sufficient time for it to be included in the
notice to the general meeting.
The proposals of the Nomination Board shall be
disclosed by a stock exchange release and included in the notice to
the general meeting. The Nomination Board presents its proposals
and their reasoning to the annual general meeting.
If the Nomination Board has not submitted
proposals on matters to be prepared by the Nomination Board (or any
of them) to the board of directors by the above-mentioned
deadlines, such missing proposals shall be prepared and presented
to the annual general meeting by the board of directors.
8 Confidentiality
The members of the Nomination Board and the
shareholders represented by the members shall keep all information
relating to the proposals to be presented to the general meeting
confidential, until the Nomination Board has resolved to approve
the final proposals and the Company has disclosed the proposals. In
addition, the members of the Nomination Board and the shareholders
represented by them shall keep all other information received in
connection with performing the duties of the Nomination Board
confidential, until the Company has disclosed such information.
The chair of the Nomination Board or the chair
of the board of directors may at its discretion propose to the
board of directors of the Company that the Company signs separate
confidentiality agreements with the shareholders and/or the members
of the Nomination Board appointed by them. Existing and relevant
rules and regulations concerning market abuse shall be applied to
any inside information that the members of the Nomination Board
might receive.
9 Amendments
to the
Charter
The Nomination Board shall review the contents
of this charter annually and, if necessary, propose to the general
meeting decisions to amend this charter. The Nomination Board has
been authorised to make technical updates and amendments to this
charter. Material amendments, such as the number of members and the
nomination process shall always be subject to the resolution of the
general meeting. The resolution of the general meeting requires
that it is supported by shareholders who holds (i) at least half
(1/2) of the votes casted and shares represented at the general
meeting if no shareholder owns more than 30 % of the shares and
votes in the company, and (ii) at least two-thirds (2/3) of the
votes casted and shares represented at the general meeting if any
shareholder holds more than 30 % of the company’s shares and votes
provided, however, that the resolution requires (iii) at least
five-sixths (5/6) of the votes cast and shares represented at the
general meeting if a shareholder owns more than 50 % of the shares
and votes in the company.
10 Language
versions
This Charter has been prepared in Finnish and
English. In the event of any discrepancies, the Finnish version
shall prevail.
APPENDIX 3
Description of assets, liabilities and
shareholders’ equity and valuation of the Merging Company and the
preliminary presentation of the balance sheet of the Receiving
Company
The following Receiving Company’s Illustrative
Merger Balance sheet is based on Boreo’s and Sievi’s balance sheets
as at 30 June 2021 and illustrates the application of the
acquisition method using book values for the recording of the
Merger to Receiving Company’s balance sheet. Sievi’s balance sheet
information has been aligned with Boreo’s accounting principles.
The final effects of the Merger on the balance sheet of the
Receiving Company will be determined according to the balance sheet
position and the Finnish Accounting Standards in force as per the
implementation date thus the illustrative balance sheet information
presented herein is therefore only indicative and subject to
change.
EUR thousand |
Receiving Company, Boreo Plc before Merger |
Merging Company, Sievi Capital Plc before
Merger |
Preliminary Merger adjustments |
Note |
Receiving Company's Merger Balance Sheet |
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Intangible assets |
548 |
- |
- |
|
548 |
Tangible assets |
21 |
48 |
- |
|
69 |
Investments |
35 635 |
46 364 |
5 232 |
3) |
92 464 |
Total non-current assets |
36 204 |
46 411 |
5 232 |
|
93 080 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Inventories |
3 213 |
- |
- |
|
3 213 |
Non-current receivables |
4 550 |
25 |
- |
|
4 575 |
Current receivables |
2 954 |
1 053 |
450 |
2) |
4 458 |
Cash and cash equivalents |
1 083 |
5 199 |
670 |
2), 3), 4) |
7 513 |
Total current assets |
11 800 |
6 278 |
1 120 |
|
19 759 |
Total assets |
48 005 |
52 689 |
6 352 |
|
112 839 |
EQUITY AND LIABILITIES |
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
2 484 |
15 179 |
-12 163 |
1) |
5 500 |
Reserve for invested non-restricted equity |
1 374 |
12 886 |
37 024 |
1), 3) |
51 876 |
Retained earnings |
6 158 |
24 268 |
-23 709 |
1), 2), 4) |
6 717 |
Total equity |
10 016 |
52 332 |
1 152 |
|
64 093 |
Liabilities |
|
|
|
|
|
Non-current liabilities |
26 500 |
- |
5 200 |
3) |
36 900 |
Current liabilities |
11 489 |
357 |
- |
|
11 845 |
Total liabilities |
37 989 |
357 |
5 200 |
|
48 745 |
Total equity and liabilities |
48 005 |
52 689 |
6 352 |
|
112 839 |
1) The equity
of the Receiving Company shall be formed in the Merger by applying
the acquisition method so that the amount corresponding the book
value of the net assets of the Merging Company shall be
recorded into reserve for invested non-restricted equity of the
Receiving Company with the exception of the increase of EUR 3,016
thousand in share capital as described in Section 11.
2) The
dividends received by Boreo from its subsidiaries after 30 June
2021 of EUR 1,081 thousand for the year 2020 has been added to cash
and cash equivalents and profit for the period and Boreo’s loan
receivables from its subsidiaries of EUR 450 thousand increase
current receivables and reduce cash and cash equivalents.
3) The
acquisition of Floby Nya Bilverkstad AB, completed by Boreo on 1
September 2021, will increase investments in subsidiaries by EUR
5,232 thousand, long-term liabilities by EUR 5,200 thousand, equity
by EUR 593 thousand and cash and cash equivalents by EUR 561
thousand.
4) In
accordance with the resolution of Boreo's Annual General Meeting on
15 April 2021, the second installment of the dividend of EUR 0.20
per share for the financial year 2020, in total EUR 522 thousand,
will be paid to shareholders in November 2021. Equity and cash and
cash equivalents for the illustrative balance sheet data have been
reduced by this amount.
5) The
acquisition of Rakennuttajatoimisto HTJ Oy, announced by Sievi
Capital Plc on 20 September 2021, has not been adjusted to the
parent company's balance sheet above. The acquisition is estimated
to be completed in October 2021. Sievi Capital’s investment in the
subsidiary shares will be approximately EUR 7.8 million. Sievi
Capital will finance the investment with its cash and cash
equivalents and a new loan of EUR 5.5 million.
The above illustrative balance sheet does not
take into account, group contribution, dividends received or
distributions, except for dividends received and dividends decided
to be distributed referred to in subsections 2 and 4, which may be
paid before the implementation date, the acquisition of
Rakennuttajatoimisto HTJ Oy announced by Sievi Capital Plc on 20
September 2021 as it is described in subsection 5, other potential
acquisitions or restructurings consummated prior to the execution
of the Merger except for the acquisition referred to in subsection
3 or the transaction costs related to the Merger, all of which may
materially affect the Merging Company's balance sheet and the
assets and liabilities of the Merging Company prior to the
implementation of the Merger.
APPENDIX 4
Business Mortgages
APPENDIX 5
Auxiliary trade names
In connection with the registration of the
Merger and subject to the execution of the Merger, the following
auxiliary trade names shall be registered for the Receiving
Company:
Line of business of the auxiliary trade
name
Buying, selling, holding and managing shares in
companies involved in industrial business, as well as Buying,
selling, holding and managing real estate and securities.
Line of business of the auxiliary trade
name
Buying, selling, holding and managing securities
and real estate in Finland and Europe.
ANNEX 2 SUMMARY OF BOREO’S AND
SIEVI CAPITAL’S FINANCIAL
INFORMATION
Boreo’s Key Financial
Information
The following key financial information of Boreo
has been derived from Boreo's unaudited consolidated January – June
2021 half-year financial report and from the audited consolidated
financial statements prepared in accordance with IFRS for the
financial year 2020. Machinery Group’s January-February 2020 income
statement information has been added to Boreo’s 'Combined' income
statement information for the financial year ended 31 December
2020. The acquisition of the Machinery Group was completed on 2
March 2020.
Boreo’s income statement information
EUR million |
1-6/2021 |
1-12/2020 |
Combined 2020 |
Revenue |
65 |
98 |
104 |
Operating profit |
4 |
4 |
4 |
Profit before taxes |
4 |
4 |
4 |
Profit for the financial period |
3 |
3 |
3 |
Boreo’s balance sheet information
EUR million |
30 June
2021 |
31 Dec.
2020 |
Total non-current assets |
39 |
27 |
Total current assets |
48 |
37 |
Total assets |
86 |
65 |
Total equity |
19 |
16 |
Total non-current liabilities |
31 |
22 |
Total current liabilities |
36 |
26 |
Total equity and liabilities |
86 |
65 |
Boreo’s operative operating profit, adjusted
EBITA and adjusted EBITDA reconcilitation to the operating
profit
EUR million |
1-6/2021 |
2020 |
Combined2020 |
Operating profit |
4 |
4 |
4 |
Restructuring |
0 |
1 |
1 |
Acquisition related costs |
0 |
1 |
1 |
Sale of building |
-1 |
0 |
0 |
Operative operating profit |
4 |
6 |
6 |
Amortization of intangible assets |
1 |
0 |
0 |
Adjusted EBITA |
5 |
6 |
6 |
Depreciation of tangible assets |
1 |
2 |
2 |
Adjusted EBITDA |
6 |
8 |
8 |
Sievi Capital Key
Financial Information
The following key financial information of Sievi
Capital is derived from Sievi Capital's unaudited January – June
2021 half year report and from the audited consolidated financial
statements prepared in accordance with IFRS for the financial year
2020.
Historically, Sievi Capital has not prepared
consolidated financial statements or interim reports. Sievi Capital
Capital Plc is an IFRS investment entity and thus in the IFRS
financial statements of Sievi Capital Plc, its investments in
subsidiaries have been treated as financial instruments and
measured at fair value in the balance sheet, and they have not been
consolidated line by line in the consolidated financial statements.
In the IFRS financial statements of an investment entity the
investments in subsidiaries are presented in the balance sheet on a
net basis combined with one line Investments at fair value through
profit or loss. Changes in the fair values of investments are
recognized in profit or loss and are presented in the income
statement under realized gains / losses on investments or
unrealized changes in the value of investments, depending on the
nature of the changes in value. Intra-group items that would be
eliminated using the acquisition method have not been eliminated.
Also, Sievi Capital Plc has not applied IFRS 3 Business
Combinations to business combinations when it has acquired control
of another entity.
Sievi Capital’s reported IFRS income statement
information
EUR million |
1-6/2021 |
1-12/2020 |
Total income |
3 |
3 |
Operating profit |
13 |
12 |
Profit before taxes |
13 |
12 |
Profit for the period |
11 |
10 |
Sievi Capital’s reported IFRS balance sheet
information
EUR million |
30 June
2021 |
31 Dec.
2020 |
Total non-current assets |
89 |
74 |
Total current assets |
6 |
10 |
Total assets |
95 |
83 |
Total equity |
86 |
77 |
Total non-current liabilities |
9 |
6 |
Total current liabilities |
0 |
0 |
Total equity and liabilities |
95 |
83 |
Sievi Capital’s
subgroups and the parent company Sievi Capital Plc’s financial
information
Indoor Group Holding Oy’s key
figures
The following key financial information of
Indoor Group Holding Oy are from Sievi Capital's unaudited January
– June 2021 half year report and from the annual report for the
financial year 2020. The figures presented below are consolidated
figures in accordance with IFRS. The interim financial information
is unaudited.
EUR million |
1-6/2021 |
1-12/2020 |
Net sales |
97 |
200 |
EBITDA (1 |
16 |
35 |
EBIT (2 |
7 |
15 |
Interest-bearing net debt at the end of the period (3 |
70 |
69 |
Sievi Capital’s holding at the end of the period |
58.2 % |
58.2 % |
(1 EBITDA = operating profit + depreciation,
amortisation and impairment charges (2 EBIT = operating profit, (3
Interest-bearing net debt = interest-bearing net debt - cash and
cash equivalents and loan receivables. Interest-bearing debt on 30
June 2021 includes EUR 61.4 and on 31 December 2020 EUR 66.6
million IFRS 16 related liabilities.
KH-Koneet Group Oy’s key
figures
The following key financial information of
KH-Koneet Group Oy are from Sievi Capital's unaudited January –
June 2021 half year report and from the annual report for the
financial year 2020. The figures presented below are consolidated
figures in accordance with Finnish Accounting Standards. The
interim financial information is unaudited.
EUR million |
1-6/2021 |
1-12/2020 |
Net sales |
74 |
120 |
EBITDA (1 |
4 |
6 |
EBITA (2 |
3 |
5 |
Interest-bearing net debt at the end of the period (3) |
18 |
18 |
Sievi Capital’s holding at the end of the period |
66.4 % |
66.4 % |
(1 EBITDA = operating profit + depreciation,
amortisation and impairment charges, (2 EBITA = operating profit +
amortization of intangible assets recognised from acquisitions, (3
Interest-bearing net debt = interest-bearing debt - cash and cash
equivalents and loan receivables
Logistikas Oy’s key figures
The following key financial information of
Logistikas Oy are from Sievi Capital's unaudited January – June
2021 half year report and from the annual report for the financial
year 2020. The figures presented below are consolidated figures
prepared in accordance with Finnish accounting principles. The
figures for 2020 are unaudited as they combine the figures of the
acquired Logistikas Palvelut Oy and Logistikas Hankinta Oy until
the completion of the acquisition (4 December 2020) and the figures
of the Logistikas Group for the period thereafter. The interim
financial information is unaudited.
EUR million |
1-6/2021 |
1-12/2020 |
Net sales |
9 |
20 |
EBITDA (1 |
1 |
2 |
EBITA (2 |
0 |
2 |
Interest-bearing net debt at the end of the period (3) |
2 |
2 |
Sievi Capital’s holding at the end of the period (4) |
69.0 % |
70.0 % |
(1 EBITDA = operating profit + depreciation,
amortisation and impairment charges, (2 EBITA = operating profit +
amortization of intangible assets recognised from acquisitions, (3
Interest-bearing net debt = interest-bearing debt - cash and cash
equivalents and loan receivables, (4 Including also shares for
which registration was pending at the end of the period
Nordic Rescue Group Oy’s key
figures
The following key financial information of
Nordic Rescue Group Oy are from Sievi Capital's unaudited January –
June 2021 half year report and from the annual report for the
financial year 2020. The figures below are consolidated figures in
accordance with the Finnish Accounting Standards. The figures for
2020 are unaudited as they combine the figures of the acquired
Saurus Oy and Vema Lift Oy until the completion of the acquisition
(6 February 2020) and the figures of the Nordic Rescue Group for
the period thereafter. The interim financial information is
unaudited.
EUR million |
1-6/2021 |
1-12/2020 |
Net sales |
15 |
30 |
EBITDA (1 |
-1 |
2 |
EBITA (2 |
-1 |
1 |
Interest-bearing net debt at the end of the period (3 |
9 |
8 |
Sievi Capital’s holding at the end of the period |
67.9 % |
69.9 % |
(1 EBITDA = operating profit + depreciation,
amortisation and impairment charges, (2 EBITA = operating profit +
amortization of intangible assets recognised from acquisitions, (3
Interest-bearing net debt = interest-bearing debt + purchase price
liabilities - cash and cash equivalents and loan receivables.
Key financial information of Sievi
Capital Plc under FAS (parent company)
The following key financial information of Sievi
Capital’s parent company, Sievi Capital Plc, is derived from Sievi
Capital's bookkeeping for January – June 2021 prepared in
accordance with Finnish Accounting Standards and from the audited
financial statements of the parent company prepared in accordance
with Finnish Accounting Standards for the financial year 2020. The
interim financial information is unaudited.
Sievi Capital Plc’s income statement information
(FAS)
EUR million |
1-6/2021 |
1-12/2020 |
Total income |
- |
- |
Operating profit |
-1 |
-2 |
Profit before taxes |
-1 |
-3 |
Net profit for the period |
2 |
-3 |
Sievi Capital Plc’s balance sheet information
(FAS)
EUR million |
30 June
2021 |
31 Dec.
2020 |
Total non-current assets |
46 |
44 |
Total current assets |
6 |
10 |
Total assets |
52 |
54 |
Total equity |
52 |
53 |
Total non-current liabilities |
- |
0 |
Total current liabilities |
0 |
0 |
Total equity and liabilities |
52 |
54 |
- Fairness Opinion Handelsbanken 20210929
- Fairness Opinion OP 20210929
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