G2 Acquisition Inc. announces a recommended cash offer to the shareholders and holders of warrants of series TO1 of ZignSec AB (publ)

The Offer is not being made, and this press release may not be distributed, directly or indirectly in or into, nor will any tender of shares be accepted from or on behalf of holders in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa, the United States of America or any other jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish law.

G2 Acquisition Inc. ("G2RS"), hereby announces a recommended public offer to the shareholders and holders of warrants of series TO1 of ZignSec AB (publ) ("ZignSec" or "Company") to acquire all outstanding shares in ZignSec at a price of SEK 1.38 in cash per share and SEK 1.13 in cash per warrant of series TO1 ("Offer"). The shares in ZignSec are listed on Nasdaq First North Growth Market.

Summary of the Offer

• The shareholders of ZignSec are offered SEK 1.38 in cash per share and SEK 1.13 in cash per warrant of series TO1 in ZignSec ("Offer Price").
• The total value of the Offer amounts to approximately SEK 302.9 million.
• The price offered for the shares represents a premium of approximately:
   
  • 116 percent compared to the closing share price of SEK 0.640 on 3 September 2024;
  • 98 percent compared to the volume-weighted average trading price of SEK 0.696 during the last 30 trading days ended on 3 September 2024; and
  • 127 percent compared to the volume-weighted average trading price of SEK 0.607 during the last 90 trading days ended on 3 September 2024.
• The board of directors of ZignSec unanimously recommends that ZignSec's shareholders and warrant holders accept the Offer.
• An offer document regarding the Offer is expected to be made public on or around 4 September 2024. The acceptance period for the Offer is expected to commence on or around 5 September 2024 and expire on or around 17 October 2024.
• The completion of the Offer is conditional upon, inter alia, that G2RS becomes the owner of more than 90 percent of the shares in ZignSec and that the acquisition is approved by relevant authorities.
• G2RS has received irrevocable undertakings to accept the Offer from Alexander Albedj, Johan Svensson, Abdalla Kablan, Sandante Invest AB, NFT Ventures and Investment AB Stentulpanen in total representing approximately 26.7 percent of the outstanding shares in ZignSec.

Background and reasons for the Offer

G2RS and its affiliates (collectively, "G2 Risk Solutions") view the acquisition of ZignSec to be highly strategic in creating a global leader in risk and compliance business intelligence.

Over the last few years, ZignSec has built a robust product offering in merchant onboarding, continuous merchant monitoring, and other KYB- and KYC-related risk and compliance services for its customers around the world, and has developed a strong brand reputation in the customer due diligence and onboarding market.

By leveraging the scalable offerings that G2 Risk Solutions has launched over the last year, the combination of G2 Risk Solutions and ZignSec will enable the businesses to become a clear market leader with a growing product set.

The acquisition represents a unique opportunity to combine two strong companies, bringing global scale, accelerated innovation, and enhanced service offerings. Also it is expected that the acquisition will create significant benefits for the customers of G2 Risk Solutions and ZignSec.

No decisions have been made regarding any changes to ZignSec's or G2 Risk Solutions’ employees, management, their current activities, including terms and conditions of employment and the locations in which the companies conduct their business.

The Offer

The shareholders of ZignSec are offered SEK 1.38 in cash per share and the warrant holders are offered SEK 1.13 in cash per warrant of series TO1 in ZignSec. The Offer values all outstanding shares and warrants of series TO1 in ZignSec at approximately SEK 302.9 million (based on 206,636,035 shares in ZignSec and 15,718,000 warrants of series TO1 in ZignSec).

The Offer Price represents a premium of approximately:

• 116 percent compared to the closing price of the ZignSec share on Nasdaq First North Growth Market on 3 September 2024 (which was the last trading day prior to the announcement of the Offer) of SEK 0.640;
   
• 98 percent compared to the volume weighted average price of the ZignSec share on Nasdaq First North Growth Market during the latest 30 trading days up to and including 3 September 2024 of SEK 0.696; and
   
• 127 percent compared to the volume weighted average price of the ZignSec share on Nasdaq First North Growth Market during the latest 90 trading days up to and including 3 September 2024 of SEK 0.607.

No commission will be charged in connection with the Offer.

Statement from the board of directors of ZignSec

The board of directors of ZignSec has evaluated the Offer and informed G2RS that they have resolved to unanimously recommend the holders of shares and warrants of series TO1 of ZignSec to accept the Offer.

Conditions for completion of the Offer

The completion of the Offer is conditional upon that:

1. the Offer is accepted to the extent that G2RS becomes the owner of more than 90 percent of the shares in ZignSec (on a fully diluted basis);
2. with respect to the Offer and the acquisition of ZignSec, all necessary regulatory, governmental or similar clearances, approvals and decisions, including approvals from competition authorities, have been obtained, in each case on terms which, in G2RS’s opinion, are acceptable;
3. another public offer to acquire shares in ZignSec is not published on terms that are more favourable to ZignSec's shareholders than the terms of the Offer;
4. neither the Offer nor the acquisition of ZignSec, wholly or partly, is prevented or significantly impeded due to legislation or other regulations, court ruling or order, authority decisions, or any similar circumstance which is present or can reasonably be expected, that is outside of G2RS’s control and which G2RS could not reasonably have foreseen at the time of the announcement of the Offer;
5. no circumstances having occurred which could have a material adverse effect or could reasonably be expected to have a material adverse effect on ZignSec's financial position, business or operation, including ZignSec's sales, results, liquidity, equity ratio, equity or assets;
6. no information published by ZignSec or provided by ZignSec to G2RS is materially incorrect, incomplete or misleading, and that ZignSec has published all information that is due to have been published; and
7. ZignSec does not take any measures which are likely to impair the prerequisites for making or completing the Offer.

G2RS reserves the right to withdraw the Offer in the event it becomes clear that any or all of the above conditions are not satisfied or cannot be satisfied. However, with regard to condition 2-7 the Offer may only be withdrawn provided that the non-satisfaction of such condition is of material importance to G2RS’s acquisition of the shares in ZignSec or if it is accepted by the Swedish Securities Council (Sw. Aktiemarknadsnämnden).

If ZignSec distributes dividends or makes any other value transfer prior to the settlement of the Offer, G2RS reserves the right to adjust the Offer Price accordingly or invoke completion condition 7 above.

G2RS reserves the right to fully or partially waive one or more or all of the above conditions and, with respect to condition 1, to complete the Offer at a lower level of acceptance.

Warrants

The Offer does not include warrants issued by ZignSec under ZignSec's incentive program. G2RS intends to ensure that the holders of the warrants are afforded reasonable treatment in connection with the Offer.

G2RS in brief

G2RS is a US corporation with its headquarters in Burlingame, California, USA. The company is wholly owned by LFG Data Services Group LP, whose ultimate parent is LFG Data Services Holdings LP and whose beneficial owner is an affiliated private fund managed by Stellex Capital Management LLC ("Stellex Capital"). G2RS is part of the group known as G2 Risk Solutions.

G2 Risk Solutions is an expert in risk and compliance business intelligence for financial institutions and online platforms. G2 Risk Solutions is an industry pioneer that provides market-leading solutions for merchant risk, digital commerce risk, bankruptcy risk, and credit risk and regulatory reporting. G2 Risk Solutions primarily operates in the United States of America, Europe, India and other APAC countries. G2 Risk Solutions focuses on continuing to leverage its strong market position for both organic and inorganic growth in order to develop the value that its companies deliver to their customers and offer more opportunities to its employees.

G2RS is owned by an affiliated private fund managed by Stellex Capital. With offices in New York, Pittsburgh, Detroit, and London, Stellex Capital is a private equity firm with over $2.8 billion in AUM. Stellex seeks to identify and deploy capital in opportunities that stand to benefit from its operationally focused and hands-on approach to investing. Portfolio companies are supported by Stellex’s industry knowledge, operating capabilities, network of senior executives, strategic insights, and access to capital. Sectors of particular focus include aerospace, defense and government services, transportation & logistics, manufacturing, real economy and business services, food processing and tech-enabled services.

The offer is an all-cash compensation commitment of funds by an affiliated private fund managed by Stellex Capital.

More information about G2 Risk Solutions and Stellex Capital can be found on their respective websites at www.g2risksolutions.com and www.stellexcapital.com.

G2RS's shareholding in ZignSec

Neither G2RS nor any closely related companies or closely related parties own any shares or other financial instruments in ZignSec that give financial exposure to ZignSec's shares at the time of this announcement, nor has G2RS or any closely related companies or closely related parties acquired or taken measures to acquire any shares in ZignSec or any financial instruments that give financial exposure to ZignSec's shares during the six months preceding this announcement.

To the extent permissible under applicable law or regulations, G2RS and its affiliates may acquire, or take measures to acquire, shares in ZignSec in other ways than through the Offer. Information about such acquisitions of shares, or measures to acquire shares, will be disclosed in accordance with applicable laws and regulations.

Financing of the Offer

The consideration to be paid in connection with the Offer is fully committed by an affiliated private fund managed by Stellex Capital, and G2RS will be provided with immediately available funds in order to pay the Offer consideration. G2RS has obtained a funding agreement from one of the funds managed by Stellex Capital, which indicates that the fund is prepared to provide cash funding to G2RS to execute the transaction. Thus, the completion of the Offer is not subject to any financing condition.

Undertakings from shareholders in ZignSec

G2RS has received undertakings to accept the Offer from the following shareholders:

• Alexander Albedj representing 23,981,575 shares, corresponding to approximately 11.6 percent of the shares and votes in ZignSec;
• Johan Svensson representing 14,853,331 shares, corresponding to approximately 7.2 percent of the shares and votes in ZignSec;
   
• Abdalla Kablan representing 8,745,214 shares, corresponding to approximately 4.2 percent of the shares and votes in ZignSec;
   
• Sandante Invest AB representing 4,080,643 shares, corresponding to approximately 2.0 percent of the shares and votes in ZignSec;  
   
• NFT Ventures representing 2,676,293 shares, corresponding to approximately 1.3 percent of the shares and votes in ZignSec; and  
   
• Investment AB Stentulpanen representing 783,411 shares, corresponding to approximately 0.4 percent of the shares and votes in ZignSec.

Consequently, undertakings to accept the Offer have been obtained from shareholders representing a total of 55,120,467 shares, which corresponds to approximately 26.7 percent of the shares and votes in ZignSec.

 Indicative time plan

Payment of the Offer consideration will begin as soon as G2RS has announced that the conditions for the Offer are satisfied or otherwise have decided to complete the Offer. G2RS reserves the right to extend the acceptance period, and to postpone payment of the consideration. Notice of any such extension or postponement will be published by G2RS by way of press release.

Approval from authorities, etc.

The Offer and the acquisition of ZignSec are conditioned upon that all necessary regulatory, governmental or similar clearances, approvals and decisions have been obtained, in each case on terms which, in G2RS’s opinion, are acceptable.

G2RS reserves the right to withdraw the Offer in the event it becomes clear that the above condition is not satisfied or cannot be satisfied. However, the Offer may only be withdrawn provided that the non-satisfaction of such condition is of material importance to the acquisition.

Due diligence

In connection with the preparations for the Offer, G2RS has conducted limited confirmatory due diligence regarding commercial, financial and legal information about ZignSec. With the exception of information that was subsequently included in ZignSec’s Q2 report for 2024, ZignSec has confirmed that no inside information regarding ZignSec has been disclosed to G2RS during the due diligence review.

Compulsory redemption proceedings and delisting

In the event that G2RS, in connection with the Offer or otherwise, becomes owner of more than 90 percent of the shares in ZignSec, G2RS intends to commence redemption proceedings under the Swedish Companies Act (Sw. aktiebolagslagen 2005:551) to acquire all remaining shares in ZignSec. In connection therewith, G2RS intends to promote delisting of ZignSec’s shares from Nasdaq First North Growth Market.

Important information about LEI and NID upon acceptance

According to MiFID II, all investors are required to have a global identification code in order to complete a securities transaction. These requirements mean that legal persons need to apply for registration of a LEI code (Legal Entity Identifier) and natural persons need to know their NID number (National ID or National Client Identifier) in order to be able to accept the Offer. Note that it is the shareholder’s legal status that determines whether a LEI code or NID number is required and that the issuing institution may be prevented from performing the transaction for the person in question if the LEI code or NID number (as applicable) is not provided.

Legal entities that need to apply for registration of a LEI code can turn to one of the providers available on the market. Via this link you will find approved institutions for the global LEI system: www.gleif.org/en/about-lei/how-to-get-an-lei-find-lei-issuing-organizations.

For natural persons only holding Swedish citizenship, the NID number consists of the designation "SE" followed by the person’s personal identity number. If the person in question has several citizenships or another citizenship than Swedish, the NID number may be another type of number.

Apply for registration of a LEI code (legal persons) or find out the NID number (natural persons) well in time as this information needs to be stated in the application form upon acceptance.

Applicable law and disputes

The Offer, as well as any agreements entered into between G2RS and the shareholders in ZignSec as a result of the Offer, shall be governed and construed in accordance with substantive Swedish law. Any dispute regarding the Offer, or which arises in connection therewith, shall be settled exclusively by Swedish courts, and the Stockholm District Court (Sw. Stockholms tingsrätt) shall be the court of first instance. The Stock Market Self-Regulation Committee's Takeover rules for certain trading platforms and the Swedish Securities Council's statements and rulings regarding the interpretation and application of these rules, including, where applicable, the Swedish Securities Council's interpretation and application of the Swedish Securities Council’s interpretation of the Swedish Industry and Stock Exchange Committee’s (Sw. Näringslivets Börskommitté) former rules of public offers, are applicable to the Offer.

Advisers

G2RS has engaged Evli AB as financial adviser and DLA Piper as legal adviser, as to matters of Swedish and US law, in connection with the Offer. ZignSec has engaged PJT Partners as financial adviser and Eversheds Suntherland Advokatbyrå AB legal adviser in connection with the Offer.

G2RS
The board of directors

For information about the Offer, please visit:

https://g2risksolutions.com/zignsec-public-offer

For further information, please contact:

Irina Krasik, Managing Director

Stellex Capital Management LP

212-710-2325

The information was submitted for publication on 4 September 2024 at 08:00 (CEST).
 

Important information

The Offer, pursuant to the terms and conditions presented in this press release, is not being made to persons whose participation in the Offer requires that an additional offer document is prepared or registration effected or that any other measures are taken in addition to those required under Swedish law.

This press release and any related Offer documentation are not being distributed and must not be mailed or otherwise distributed or sent in or into any country in which the distribution or offering would require any such additional measures to be taken or would be in conflict with any law or regulation in such country – any such action will not be permitted or sanctioned by G2RS. Any purported acceptance of the Offer resulting directly or indirectly from a violation of these restrictions may be disregarded.

The Offer is not being made and will not be made, directly or indirectly, within or into, by mail or any other means or instrumentality of communication, whether interstate or foreign, or through the facilities of national securities exchanges, Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States of America. This includes, but is not limited to, facsimile, e-mail, telex, telephone and internet or other forms of electronic transmission. The Offer cannot be accepted and shares cannot be transferred in the Offer in any such manner or by any such means or instrumentality of communication within or from Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States or by persons in or resident in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States. Accordingly, this press release and any other documentation relating to the Offer will not be and should not be mailed, otherwise transmitted, distributed, forwarded or sent in or into Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States or to any person from, in or resident in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States.

Any attempted transfer of shares in the Offer resulting directly or indirectly from a violation of these restrictions is void and any attempted transfer of shares by a person located in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States or by an agent, nominee or other intermediary acting on a non-discretionary basis for a principal giving instructions within or from Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States is void and will not be accepted. Each person holding shares and participating in the Offer will certify that they are not from, in or participating in the Offer from Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States and that they are not acting on a non-discretionary basis on behalf of a principal who is from, in or giving an instruction to participate in the Offer from Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States. G2RS will not provide any consideration under the Offer to Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States. This press release is not being, and must not be, sent to shareholders with registered addresses in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States. Banks, brokers, dealers and other institutions holding nominee-registered shares for persons in Australia, Belarus, Canada, Hong Kong, India, Japan, New Zealand, Russia, Singapore, South Africa or the United States must not forward this press release, or any other documents relating to the Offer, to such persons. In this section, "United States" means the United States of America (its territories and possessions, all states of the United States and the District of Columbia).

The offer, information and documentation made available by this offer document have not been prepared by, and have not been approved by, an "authorized person" within the meaning of section 21 of the UK Financial Services and Market Act 2000 ("FSMA"). Accordingly, the information and documents made available by this offer document may not be distributed in, or passed on to, the public in the United Kingdom, unless an exemption applies. The dissemination of information and documents made available by this press release is exempt from the financial promotion restrictions in regulation 21 of FSMA on the basis that it is a communication by or on behalf of a body corporate relating to a transaction to acquire day-to-day control of a body corporate's business, or to acquire 50 per cent or more of the voting shares in a body corporate, within the meaning of Article 62 of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

Notwithstanding the foregoing, G2RS reserves the right to permit the Offer to be accepted by persons who are not in or resident in Sweden if G2RS, in its sole discretion, determines that such transaction can be completed in compliance with applicable laws and regulations.

The G2RS or its brokers may acquire or contract to acquire shares in ZignSec, directly or indirectly, in addition to the Offer, before, during or after the acceptance period to the extent permitted by applicable laws and regulations. This also applies to other securities that are directly convertible into, exchangeable for or redeemable for shares in G2RS, such as warrants. Such purchases may be made through a marketplace at market prices or outside a marketplace at negotiated prices. Information on such purchases will be made public in accordance with applicable laws and regulations in Sweden.

This press release has been published in Swedish and English. In the event of any discrepancy in content between the two language versions, the Swedish version shall prevail.

Forward-looking information

Statements in this press release relating to future status and circumstances, including statements regarding future performance, growth and other projections as well as benefits of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as "anticipates", "expects", "believes", or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Actual results may differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of G2RS.  Any such forward-looking statements speak only as of the date on which they were made and G2RS has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.