STATEMENT BY THE INDEPENDENT BID COMMITTEE OF DIGNITA SYSTEMS AB (PUBL) IN RELATION TO 1A SMART START, LLC’S PUBLIC TAKEOVER OFFER
The Independent Bid Committee of the Board of Directors of Dignita Systems AB (publ) unanimously recommends the shareholders to accept the public takeover offer made by 1A Smart Start, LLC.
Fairness opinionBackground
1A Smart Start, LLC, ("Smart Start"), has today, through a press release, announced a public offer to the shareholders of Dignita Systems AB (publ), ("Dignita Systems"), to tender all shares in Dignita Systems for a consideration of SEK 11.30 in cash per share (the “Offer”). This statement is made by the independent Bid Committee of the Board of Directors[1] (the "Committee") of Dignita Systems pursuant to section II.19 of the Swedish Corporate Governance Board's Takeover rules for certain trading platforms (the “Takeover Rules”).
The Offer represents a premium of approximately 41.3 per cent compared to the last closing price of SEK 8.00 per share on Aktietorget on 9 May 2017, being the last trading day prior to announcement of the Offer. Compared to Dignita Systems volume weighted average share price on Aktietorget during the last thirty (30) trading days up to and including 9 May 2017 the Offer represents a premium of approximately 23.2 per cent. The total value of the Offer amounts to approximately SEK 41.25 million.[2]
The acceptance period for the Offer is expected to run from and including 16 May 2017 to and including 7 June 2017. The Offer is conditional upon e.g. that the Offer being accepted to such extent that Smart Start becomes the owner of shares representing more than 90 percent of the total number of shares in Dignita Systems on a fully diluted basis.
Smart Start has, following a written request, been allowed by Dignita Systems to conduct a limited confirmatory due diligence investigation in connection with the preparations for the Offer and has in connection therewith also met with Dignita System's management. As a part of the due diligence review, Smart Start has received information about Dignita Systems business, result and financial position for the first quarter 2017. This information has been made public today in the form of Dignita System's quarterly report for the period, by separate press release. In addition to this information, Smart Start has not received any insider information in connection with the due diligence investigation.
Björkbron AB, being controlled by Dignita System's board directors Ulf Gejhammar, Anders Eriksson and Pontus Gustafsson, as well as Jumeirah Limited, together representing approximately 76.16 per cent of the total number of outstanding shares and votes in Dignita Systems, have irrevocably and unconditionally undertaken to accept the Offer.[3]
Smart Start has entered into agreements with five members of the senior management of Dignita, Anders Eriksson, Kenneth Eriksson, Pontus Gustafsson, Stefan Nordin and Joakim Berglin, regarding their participation in the management incentive equity program of Smart Start (together with other key members of the management team of Smart Start), conditional upon that the Offer is completed by Smart Start. Smart Start has also entered into agreements with Anders Eriksson, Kenneth Eriksson and Pontus Gustafsson regarding investments by them in Smart Start, conditional upon that the Offer is completed by Smart Start. The purpose of the agreements is to incentivise the members of the senior management to remain employed by Dignita following the Offer and to continue to develop Dignita’s business. The agreements have been approved by the Independent Bid Committee of Dignita.
For further information regarding the Offer, please refer to Smart Start's press release which was made public today and the Offer document which Smart Start will publish and distribute to the shareholders in Dignita Systems.
As part of the Committee’s evaluation of the Offer, and in accordance with sections II.19 and IV.3 of the Takeover Rules, the Committee has retained Skarpa AB to issue a fairness opinion regarding the Offer. In the fairness opinion, which is attached to this press release, Skarpa AB states that the Offer is deemed fair from a financial point of view for the shareholders of Dignita Systems.
Effects of the Offer on the Company’s employees etc.
Under the Takeover Rules, the Committee must, based on what Smart Start has expressed in its announcement of the Offer, present its views on the impact the completion of the Offer may have on Dignita Systems, particularly employment, and its views on Smart Start's strategic plans for Dignita Systems and the impact these could be expected to have on employment and on Dignita System's business locations. Based on what Smart Start has expressed in its Offer announcement, the Committee does not foresee any material changes, due to the completion of the Offer, to the employment and operations on sites where Dignita Systems currently conducts business.
The Committee’s Recommendation
The Committee’s opinion of the Offer is based on a joint assessment of a number of factors that the Committee has considered relevant in relation to the evaluation of the Offer. These factors include, but are not limited to, Dignita System's present position, the traded share volume, the expected future development of the Company and thereto related possibilities and risks.
The Committee has noted that the price in the Offer represents a premium of approximately 41.3 per cent compared to the closing price of Dignita System's shares on Aktietorget of SEK 8.00 on 9 May 2017, being the last trading day prior to announcement of the Offer. Compared to Dignita System's volume weighted average share price on Aktietorget during the last thirty (30) trading days up to and including 9 May 2017 the Offer represents a premium of approximately 23.2 per cent.
The Committee further notices that the Offer is not conditional upon Smart Start securing external financing.
Based on the above, the Committee unanimously recommends Dignita System's shareholders to accept Smart Start's Offer.
This statement shall in all aspects be governed by and interpreted in accordance with Swedish law. Any disputes relating to or arising in connection with this statement shall be settled exclusively by Swedish courts.
Umeå, 10 May 2017
Dignita Systems AB (publ)
The Independent Bid Committee
Advisers
Advokatfirman Lindahl is the legal adviser to Dignita Systems.
For further information, please contact:
Niclas Fröberg, board director and member of the Committee in Dignita Systems, tel +46 735 050505.
About Dignita Systems
Dignita is a Swedish technology and expertise company developing traffic and workplace safety enhancing products and services, for example, alcolocks and breathalyzers.
Our vision is “together, we save lives”, by use of our products we are able to significantly decrease the number of deaths and casualties in traffic and workplaces.
The company's products are a form of quality assurance that gives a company or an individual assurance as to whether a vehicle can be operated, or an activity or a work task can be carried out safely in accordance with applicable legislation for the use of alcohol in traffic and at workplaces.
The company is listed at Aktietorget (DIGS).
The information in this press release shall be disclosed by Dignita Systems pursuant to the EU Market Abuse Regulation as well as the Takeover Rules. The information was submitted by the above contact person for publication on 10 May 2017, 08.15 (CET).
[1] The bid Committee consists of the independent board directors Niclas Fröberg and Joakim Hermansson.
[2] According to the information provided in Smart Start’s Offer announcement.
[3] Ulf Gejhammar, Anders Eriksson and Pontus Gustafsson has, considering these undertakings, not participated in the Committee and the preparation of this recommendation.