Ambea has resolved on previously announced rights issue of approximately SEK 1.2 billion

The Board of Directors of Ambea AB (publ) ("Ambea" or "the Company") has on April 15, 2019 resolved on a new issue of shares with preferential rights for existing shareholders of approximately SEK 1.2 billion (the "Rights Issue"), subject to approval by the Annual General Meeting on 16 May 2019. The purpose of the Rights Issue is to repay part of the financing of the acquisition of Aleris’ care operations and is carried out with the support of the Company's larger shareholders.

SUMMARY

• As previously announced, the purpose of the Rights Issue is to repay part of the financing of the acquisition of Aleris’ care operations in Sweden, Norway and Denmark ("Aleris Care") and thus lower Ambea's leverage in line with the company's long-term financial goals.

• Ambea's larger shareholders representing approximately 72.9 percent of the shares and votes in the Company have expressed their support for the Rights Issue through subscription commitments or intentions to subscribe.

• The complete terms and conditions of the issue, including the subscription price, are expected to be published around 10 May 2019. Provided that the Rights Issue is approved by the Annual General Meeting, the record date for the Rights Issue is expected to be 20 May 2019 and the subscription period to run from 22 May 2019 through 5 June 2019.

Fredrik Gren, President and CEO of Ambea:

“Through the acquisition of Aleris’ care operations, Ambea becomes the largest care provider in Scandinavia. In Sweden, we have developed an efficient care model that successfully has improved both quality and profitability in existing operations. We are now looking forward to implement this model in Aleris Care’s operations in Sweden, Norway and Denmark.”

BACKGROUND AND RATIONALE

Ambea announced that the Company had entered into an agreement to acquire Aleris Care on October 16, 2018. The acquisition was completed on January 21, 2019, after the Company received approvals from relevant competition authorities, with a purchase price of approximately SEK 2.6 billion on a debt-free basis per the closing date of the acquisition. The acquisition makes Ambea the largest provider of care services in Scandinavia[1]. Through the brands Vardaga, Nytida, Stendi, Altiden and Klara, Ambea provides care services for people with disabilities, individual and family care, elderly care including home services and staffing services. Operations are conducted both through own management as well as on a contract basis.

The acquisition of Aleris Care created a robust platform for future organic growth and significant opportunities for both direct cost synergies and operational improvements. In addition to direct cost synergies and identified operational improvements, Ambea estimates that there are additional efficiency improvements that are expected to be realized in the coming two to three years.

The expected direct cost synergies amount to a total of SEK 90 million per year, half of which is expected to be achieved in 2019 and the remainder in 2020. Identified operational improvements are expected to amount to SEK 30 million per year, which is expected to be realized during 2020. Integration costs related to the acquisition are estimated to a total of SEK 100 million, of which the majority is expected to be reported in 2019.

The acquisition was financed with bank financing of a total of SEK 2.6 billion, of which SEK 1.2 billion consisted of bridge financing which is intended to be repaid through the current Rights Issue. The Rights Issue is thus a step towards reducing Ambea's leverage ratio (net debt / adjusted EBITDA) in order to reach the Company's long term financial target of a leverage ratio that does not exceed 3.25 times adjusted EBITDA. The proceeds from the Rights Issue will in its entirety be used to repay part of the bank financing described above.

RIGHTS ISSUE

Ambea's Board of Directors resolved on 15 April 2019, subject to approval from the Annual General Meeting on 16 May 2019, to carry out a Rights Issue of approximately SEK 1.2 billion after deduction of issue costs.

Those who are registered as shareholders on the record date of 20 May 2019 have preferential rights to subscribe for new shares in proportion to their existing shareholdings. Subscription of shares may also take place without subscription rights.

Full terms and conditions of the Rights Issue, including the amount by which the share capital is to be increased, the number of new shares to be issued and the amount to be paid for each new share, are expected to be published around 10 May 2019 (however, no later than five working days before the record date).

The subscription period is expected to run from 22 May 2019 through 5 June 2019. Trading in subscription rights is expected to take place on Nasdaq Stockholm during the period from 22 May 2019 to 3 June 2019 and the trading in paid-up subscribed shares (Sw: Betald tecknad aktie) during the period from 22 May 2019 through 18 June 2019.

The Board of Directors' resolution on the Rights Issue is conditional on approval by the Annual General Meeting on 16 May 2019. For further information, please see separate press release regarding the Annual General Meeting.

SUPPORT FROM LAGER SHAREHOLDERS

The company's larger shareholders, ACTR Holding AB and ACTOR SCA, who are jointly controlled by KKR and Triton and who together represent approximately 50.1 percent of the total number of shares and votes in the Company, support the Rights Issue resolution and have undertaken to vote in favor of the Rights Issue at the Annual General Meeting and to subscribe for their respective pro rata shares in the Rights Issue.

In addition, Catella Fonder, Didner & Gerge Fonder, Lannebo Fonder and RAM One, who together represent approximately 22.7 percent of the total number of shares and votes in Ambea, have expressed their intention to subscribe for their pro rata shares in the Rights Issue.

Thus, shareholders representing approximately 72.9 percent of the shares and votes in the Company have expressed their support for the Rights Issue through subscription commitments or intentions to subscribe.

PRELIMINARY TIMETABLE

The below timetable for the Rights Issue is preliminary and may be adjusted

ADVISORS

In connection with the Rights Issue, Ambea has appointed Danske Bank and DNB Markets as financial advisors, Joint Global Coordinators and Joint Bookrunners, Nordea as financial advisor and Joint Bookrunner as well as Vinge as legal advisor.

[1] Based on the combined turnover of Ambea and Aleris Care.

For more information, contact:

Jacob Persson, Head of Investor Relations 
Telephone: +46 (0)708 64 07 52
E-mail: jacob.persson@ambea.se

Ambea press contact
Telephone: +46 (0)10 33 00 501
E-mail: press@ambea.se

This information was submitted for publication on 2019-04-16 at 07.00 CET.

Ambea is the market leading care provider in Sweden, Norway and Denmark respectively, with over 750 care units and around 26,000 employees. We offer services in disabled care, individual and family care, and elderly care with a focus on residential care and own management. We aim to be the quality leader in all that we do and our vision is to make the world a better place, one person at a time. The company was founded in 1996 and its head office is located in Solna, Sweden. Ambea is listed on Nasdaq Stockholm.

IMPORTANT INFORMATION                                                                   

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in Ambea. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Sweden. Any invitation to the persons concerned to subscribe for shares in Ambea will only be made through the prospectus that Ambea estimates to publish on or about 21 May 2019.

The information in this press release may not be released, published or distributed, directly or indirectly, in or into the United States (including its territories and provinces, every state in the United States and the District of Columbia, (“United States”)), Canada, Australia, Japan, Hong Kong, Switzerland, New Zealand, Singapore, South Africa or any other jurisdiction in which such action would be unlawful, is subject to legal restrictions or would require other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws.

No shares or other securities in Ambea have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities legislation of any state or other jurisdiction in the United States and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States, except under an available exemption from, or in a transaction not subject to, the registration requirements under the U.S. Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States.

This press release may contain forward-looking statements which reflect Ambeas’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.