The Board of Directors of Clavister Proposes New Issues of Shares of Approximately SEK 234 Million.

Tue, Sep 22, 2020 08:00 CET

The board of directors of Clavister proposes new issues of shares of approximately SEK 234 million by way of a fully guaranteed rights issue amounting to approximately SEK 149.7 million, an oversubscription option of approximately SEK 30 million and a directed issue of approximately SEK 54 million to institutional and qualified investors

The board of directors of Clavister Holding AB ("Clavister" or the “Company") proposes an extraordinary general meeting to resolve on a rights issue for existing shareholders amounting to approximately SEK 149.7 million (the "Rights Issue") and a directed issue amounting to approximately SEK 54 million (the “Directed Issue”). The Rights Issue is fully covered by subscription and guarantee commitments from existing shareholders and external investors. If the Rights Issue is oversubscribed, the board of directors may decide on an over subscription option (“Oversubscription Option”) which, on full subscription, contributes approximately SEK 30 million to the Company. If the Rights Issue is fully subscribed for, there is full utilisation of the Oversubscription Option and the Directed Issue is fully subscribed for, the Company will be provided with approximately SEK 234 million, before deduction of costs related to the issues. The board of directors’ proposals, including amendments to the articles of association to enable the share issues, will be dealt with at an extraordinary general meeting held on 22 October 2020. Notice to the extraordinary general meeting will be published in a separate press release.

Örnsköldsvik, Sweden, September 22, 2020. Clavister is a leading vendor of cybersecurity solutions with over 20 years of experience. Up until 2017, the Company was mainly focused on research and development of the technical platform that today forms the basis of Clavister's offering. From 2017 and onwards, the Company has initiated a commercial growth journey focusing on its sales and marketing. To accelerate growth and capture current business opportunities, as well as strengthen the balance sheet, the Company intends to carry out these issues.

Summary of the Rights Issue

Issue volume: The Rights Issue comprises a maximum of 21,382,958^[1] shares. If the Rights Issue is fully subscribed, Clavister will receive proceeds of approximately SEK 149.7 million before deduction of costs related to the Rights Issue. The Oversubscription Option comprises of a maximum of 4,285,720 shares. If fully subscribed for, the Oversubscription Option will provide the Company with approximately SEK 30 million before deduction of costs related to the issues.
Subscription price: SEK 7.00 per share. No brokerage fee will be paid.
Record date: The record date to determine which shareholders that have the right to receive subscription rights is 29 October 2020. The last day of trading in the Company’s share including the right to participate in the Rights Issue is 27 October 2020. The first day of trading in the Company’s share excluding the right to receive subscription rights is 28 October 2020.
Subscription rights: Existing shareholders in the Company will receive five (5) subscription rights for each share held on the record date. Six (6) subscription rights entitles the holder to subscribe for one (1) new share in the Company.
Trading in subscription rights: 3–13 November 2020.
Subscription period: 3–17 November 2020. The board of directors retains the right to extend the subscription period and the settlement period.
Subscription and guarantee undertakings: Clavister has received subscription undertakings of approximately SEK 22.3 million and guarantee commitments of approximately SEK 130.5 million, which together cover the Rights Issue. The guarantee part consists of one so called bottom guarantee of approximately SEK 108 million which covers the amount from SEK 22.3 million to SEK 130.5 million in the Rights Issue, and one so-called top guarantee for an amount of approximately SEK 22.5 million, which covers the rest of the amount in the Rights Issue.
Use of proceeds: The Company intends to use the proceeds from the Rights Issue mainly for sales and marketing to accelerate growth combined with increased working capital, as well as to strengthen the balance sheet.

The Board's proposals are included in the notice of the extraordinary general meeting, which will be announced through a separate press release today.

^[1]The maximum number of shares in the Rights Issue may increase as a result of outstanding warrants that can be exercised for subscription of shares before the record date of the Rights Issue. In case of subscription of the Company's warrants 2017/2020 (Series 2), the resolution may increase the Company's share capital by no more than an additional SEK 2,354 through a new issue of no more than 23,540 additional shares. The total number of shares that can be issued is no more than 21,406,498 shares and the share capital can increase with no more than SEK 2,140,649.80 if the outstanding warrants are exercised for subscription before the record date.

Background and motives

Clavister is a technology company founded in 1997 that develops and sells solutions for cyber security, an area of growing importance in today’s society.

Up until 2017, the Company was mainly focused on research and development of the technical platform that today forms the basis of Clavister's offering. As of 2017, the Company is on a commercial growth journey with more focus on developing its sales and marketing. The result of this change can be seen in e.g. the increased order intake, which has doubled since mid-2017.

Clavister's current customer base includes well-known brands such as Nokia, Ericsson, IWG, BAE Systems, NTTBP and E.ON. However, no single end customer or reseller today accounts for more than 15% of the total sales i.e. the Company has a healthy mix of large customers and thousands of smaller customers. Customer loyalty is high, illustrated by the fact that more than 90% of all customer contracts have been renewed during the last three years.

A more well-defined focus on the development of sales and marketing means that the Company now attracts larger customers and projects, even though the total customer base is still diversified. During June 2020, the Company entered into an agreement with BAE Systems stipulating that Clavister's products will be used in BAE Systems' vehicles in several end customer projects. Another example is the Company's agreement with Nokia, where Clavister's technology is sold under the Nokia brand to mobile operators worldwide.

Clavister now intends to further exploit this trend which the Company is experiencing with new types of customers and larger projects, to increase sales growth. Through sales and market development combined with increased working capital, the Company intends to carry out a verticalization and specialization around selected customer segments.

Use of proceeds

The proceeds from the Rights Issue is intended to be allocated as set out below, and, if not all parts can be carried out, according to the following prioritization:

Development of sales and marketing including increased working capital (approximately 67 percent of the proceeds)
- Implementation of verticalization for specific customer groups and associable development of the technology platform.
- Working capital to enable the implementation of larger customer projects.
Strengthen the balance sheet (approximately 33 percent of the proceeds)
- Reduction of relative debt levels to reduce operational and financial risks.

To enable further capital injections, the board of directors may, if the Rights Issue is oversubscribed for, decide on the Oversubscription Option, which will provide the Company with a maximum of approximately another SEK 30 million in proceeds. The proceeds from the Oversubscription Option and the the Directed Issue are intended to further support the above-mentioned measures.

Comment from the CEO of Clavister, John Vestberg

“For a few years now, Clavister has been on a very exciting growth journey. The cyber security market is without a doubt one of the most interesting areas to operate in. Within that market we have the privilege of commercializing the technology platform that we have developed during several years. Our commercial venture has so far yielded good results, visible e.g. in our order intake which has doubled since mid-2017. We have also increased our customer portfolio with progressively larger and more strategic customers, and as a result we see an increasing orderbook, improved margins and a larger allocation of recurring revenue.

We see no signs that this trend is slowing down. On the contrary, our business opportunities are increasing at an ever-faster pace and we therefore need to ensure that the company has the resources necessary to be able to take advantage of these opportunities in the best possible way. We also have a balance sheet that, for historical reasons, contains a high relative debt level, which on the one hand complicates larger customer engagement, and on the other hand has a preventing effect on value creation for the company's shareholders.

For these reasons, the company makes the assessment that the proposed capitalization is both necessary and beneficial for Clavister's business development and thus for the development of the shareholders' value.” – John Vestberg, CEO

Terms for the Rights Issue

The board of directors has proposed the extraordinary general meeting, planned to be held on 22 October 2020, to offer existing shareholders to subscribe for shares in Clavister at a subscription price of SEK 7.00 per share, in the Rights Issue. The Rights Issue comprises a maximum of 21,382,958¹ shares, resulting in an increase of the share capital with a maximum of SEK 2,138,295,80. The total issue amount is SEK 149,680,706 before deduction of costs related to the Rights Issue.

Those who, on the record date 29 October 2020, are registered in the share register kept by Euroclear Sweden AB have pre-emption right to subscribe for new shares in the Rights Issue in relation to their existing holdings. One (1) existing share entitles the holder to five (5) subscription rights, and six (6) subscription rights entitles the holder to subscribe for one (1) new share.

If all the new shares are not subscribed for with subscription rights, the board of directors will decide on allotment of new shares subscribed for without subscription rights. Firstly, shares will be allotted to those parties who have registered for subscription without subscription rights and have subscribed for new shares with subscription rights, regardless of whether the subscriber was a shareholder on the record date or not. In the event of oversubscription, shares will be allocated in relation to the number of subscription rights exercised; if this is not possible, shares will be allotted by way of lottery. Secondly, shares will be allotted to other parties who registered for subscription without subscription rights and, in the event of oversubscription, in relation to the number of new shares indicated in the respective subscription applications; if this is not possible, shares will be allotted by way of lottery.

Finally, the remaining shares will be allotted to investors participating in the Rights Issue as guarantors in accordance with the terms and conditions set out in respective guarantee undertaking.

The last day of trading in the Company’s share including the right to receive subscription rights is 27 October 2020. The first day of trading in the Company’s share excluding the to receive subscription rights is 28 October 2020.

Trading in subscription rights will take place on Nasdaq First North Growth Market during the period from 3 November 2020 up to and including 13 November 2020.

Subscription for new shares will take place during the period from 3 November 2020 up to and including 17 November 2020. Subscription of shares with support of subscription rights shall be made through simultaneous cash payment. Subscription of shares without the support of subscription rights shall be made on a separate subscription list, and payment for allotted shares shall be made no later than three banking days after the notice of allotment has been sent to the subscriber. The board of directors retains the right to extend the subscription period and the period for settlement.

Trading in paid subscription share (BTA) will commence on Nasdaq First North Growth Market from 3 November 2020 until the Rights Issue has been registered with the Swedish Companies Registration Office and the BTAs have been converted to shares.

If the Rights Issue is fully subscribed, the Company’s share capital – through the issue of 21,382,958 shares – will increase with SEK 2,138,295.80 to a total of SEK 4,704,250.80, and the number of shares will increase from 25,659,550 shares to a total of 47,042,508 shares.¹ For shareholders not participating in the Rights Issue, a dilution of a maximum of approximately 45 percent of the capital and votes will occur, calculated after the fulfillment of the Rights Issue. Shareholders who choose not to participate in the Rights Issue will have the opportunity to receive compensation for the financial dilution by selling their subscription rights.

Subscription undertakings and guarantee commitments

Clavister has received subscription undertakings of approximately SEK 22.3 million and guarantee commitments of approximately SEK 130.5 million, which together fully cover the Rights Issue. The subscription undertakings and guarantee commitments have been provided by existing shareholders and a consortium of external investors. The guarantee part consists of one so-called bottom guarantee of approximately SEK 108 million which covers the amount from SEK 22.3 million to SEK 130.5 million in the Rights Issue and one so-called top guarantee for an amount of approximately SEK 22.5 million which covers the rest of the amount in the Rights Issue.

The Oversubscription Option

In order for the Company to meet any demand in the case of oversubscription of the Rights Issue, and thereby raise additional proceeds to the Company, the board of directors has proposed to the general meeting on 22 October 2020 to authorise the board of directors to, with deviation from existing shareholders’ pre-emption rights, resolve on a so-called Oversubscription Option of maximum 4,285,720 new shares, which will be issued at a subscription price of SEK 7.00 per share. The reason for the Oversubscription Option and the deviation from shareholders’ pre-emption rights is to, in the case of oversubscription of the Rights Issue, be able to satisfy a higher demand than anticipated as well as broaden the shareholder base with strategic investors. The Oversubscription Option is conditioned by the Rights Issue being oversubscribed. The subscription price for shares subscribed for in the Oversubscription Option is the same as in the Rights Issue. If the Oversubscription Option is fully subscribed for, the Company will receive additional proceeds of SEK 30 million, before deduction for transaction costs. At full utilisation of the Oversubscription Option, the number of shares will increase by a maximum of 4,285,720 new shares to 51,328,228 shares, and the Company’s share capital will increase by a maximum of SEK 428,572.00 to SEK 5,132,822.80.

Allocation of shares in the Oversubscription Option will be determined based on demand and with the intention to achieve a strong shareholder base, with strategic investors and large shareholders with a long-term ownership interest in the Company, as well as to attain an adequate distribution of the Company’s shares. Allocation is decided by the board of directors.

Existing shareholders that refrain from participating in the Right Issue, and under the assumption that the Oversubscription Option is fully subscribed for, the dilution amounts to approximately 50 percent of the number of shares and votes in the Company.

Terms for the Directed Issue

The board of directors has proposed the extraordinary general meeting scheduled to be held on 22 October 2020, to resolve on a Directed Issue of 7,732,275 shares at a subscription price of SEK 7.00 per share, increasing the share capital with no more than SEK 773,227.50. The Company will receive SEK 54 million through the Directed Issue before issue costs related to the issue.

Dilution for current shareholders, assuming full subscription in the Rights Issue, will be approximately 14.1 percent from the Directed Issue.

Investors in the Directed Issue comprise of a limited number of institutional and qualified investors, including, among others, Stena Finans, Consensus Asset Management, Adrigo and SPSW Capital as the manager of several German funds (UCITS and AIF).

The reason for deviating from the shareholders’ pre-emption rights is to provide additional capital to the Company, to finance its continued expansion as well as to provide long-term institutional shareholders and thereby promote Clavister’s potential to develop the Company with the purpose of creating added value for all shareholders. Furthermore, the Company's shareholders are given the opportunity to subscribe for shares in the announced Rights Issue.

Preliminary timetable

22 October 2020 – Extraordinary general meeting in the Company
27 October 2020 – Last day of trading incl. subscription rights
28 October 2020 – First day of trading excl. subscription rights
28 October 2020 – Publication of the Company’s interim report for the third quarter of 2020
29 October 2020 – Record date in the Rights Issue
29 October 2020 – Preliminary date for publication of the prospectus
3–13 November 2020 – Trading in subscription rights
3–17 November 2020 – Subscription period
3 November 2020 – Trading in BTA up until the Rights Issue is registered at the Swedish Companies Registration Office
20 November 2020 – Disclosure of the outcome of the Rights Issue

Investor meetings

Investor meetings will be held during the subscription period. Invitation to these will be sent out separately and will also be presented on both Clavister’s and Redeye’s websites (www.clavister.com, www.redeye.se).

Advisers

Redeye AB is acting as financial adviser and Advokatfirman Lindahl KB is acting as legal adviser in connection with the Rights Issue. Hagberg & Aneborn Fondkommission AB is acting as issuing agent.

IMPORTANT INFORMATION

The information in this press release does not constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in Clavister Holding AB. Any invitation to the persons concerned to subscribe for shares in Clavister Holding AB will only be made through the prospectus which Clavister Holding AB will present, which is expected to be announced around 29 October 2020. This press release may not be released, published or distributed, directly or indirectly, in or into Australia, Hong Kong, Canada, Japan, New Zeeland, South Africa, Switzerland, Singapore, the United States or any other jurisdiction where such measures are subject to legal restrictions or participation would require additional prospectuses, registration or measures besides those required by Swedish law. Furthermore, this press release may not be distributed in or into such countries or any other country or jurisdiction in which distribution requires such measures or otherwise would be in conflict with applicable regulations. Any failure to comply with the restrictions described may result in a violation of applicable securities regulations.

No subscription rights, paid subscription shares (Sw. Betalda och tecknade aktier) or shares subscribed for in the offer have been, or will be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered, subscribed for, exercised, pledged, sold, resold, delivered or otherwise transferred, directly or indirectly, in or into the United States, unless in accordance with an applicable exception from the registration requirements of the Securities Act. Furthermore, the offer is not directed to persons resident in Australia, Hong Kong, Canada, Japan, New Zeeland, South Africa, Switzerland, Singapore or any other jurisdiction where participation would require additional prospectuses, registration or measures besides those required by Swedish law.

For additional information regarding this press release, please contact: 
John Vestberg, President and CEO, +46 (0)660-29 92 00 or ir@clavister.com 

About Clavister

Clavister is a leading European cybersecurity vendor with over 20 years of experience. Seated in Sweden, the company has customers—communication service providers, governments, enterprises and managed security service providers (MSSPs)—in more than 150 countries. Clavister provides unique security solutions to protect their digital assets and secure business continuity. The stock, Clavister Holding AB, is listed at Nasdaq First North, Growth Markets. FNCA Sweden AB is the Company’s Certified Advisor (+46 8-528 00 399, e-mail: info@fnca.se).

This information is information that Clavister Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on September 22, 2020.