EQT VII ANNOUNCES A MANDATORY CASH OFFER TO THE SHAREHOLDERS IN IFS

Mon, Dec 07, 2015 07:30 CET

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, Canada, Hong Kong, Japan, New Zealand, South Africa or 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 actions in addition to those required under Swedish law.

Press release

7 December 2015

EQT VII[1] (”EQT”), through IGT Holding IV AB[2] (”IGT Holding”), on 30 November 2015 announced that IGT Holding had acquired shares in Industrial and Financial Systems, IFS Aktiebolag (publ) (”IFS” or the “Company”) to an extent that IGT Holding passed the mandatory bid threshold of 30 per cent of the votes in IFS. IGT Holding hereby announces a mandatory cash offer (the “Offer”) to the shareholders in IFS to acquire all outstanding A- and B-shares in IFS at a price of SEK 362.50 per share. The A- and B-shares in IFS are listed on Nasdaq Stockholm, Mid Cap.

The Offer in brief

IGT Holding offers SEK 362.50 in cash per A-share and B-share in IFS, which is the highest price that IGT Holding has paid for any shares acquired in IFS. The total value for all shares in IFS amounts to approximately SEK 9.05 billion.[3]

IGT Holding holds shares in IFS corresponding to 76 per cent of the total number of votes and 74 per cent of the total number of shares in IFS.[4]

There are no conditions for completion of the Offer.

The acceptance period for the Offer is expected to commence on 10 December 2015 and end on 4 January 2016. Settlement is expected to commence around 23 December 2015 for those who have accepted the Offer no later than 18 December 2015, and around 11 January 2016 for those who have accepted the Offer after 18 December 2015 but no later than 4 January 2016.

The Offer is fully financed through equity from EQT.

The offered price represents a premium of:

- approximately -0.7 per cent and -0.3 per cent, respectively, compared to IFS’s share price for the A-shares and B-shares of SEK 365.0 and SEK 363.5, respectively, on Nasdaq Stockholm on 4 December 2015 (being the last day of trading prior of the announcement of the Offer); and

- approximately 0 per cent and 0 per cent, respectively, compared to IFS’s volume-weighted average share price for the A-shares and B-shares of SEK 362.5 and SEK 362.6, respectively, on Nasdaq Stockholm during the last ten days of trading up to and including 4 December 2015; and

- approximately 21.3 per cent and 19.9 per cent, respectively, compared to IFS’s volume-weighted average share price for the A-shares and B-shares of SEK 298.9 and 302.4, respectively, on Nasdaq Stockholm during the last six months up to and including 27 November 2015 (the last day of trading prior to the announcement of that IGT Holding had passed the mandatory bid threshold of 30 per cent of the votes in IFS); and

- approximately 26 per cent and 27.2 per cent, respectively, compared to IFS’s volume-weighted average share price for the A-shares and B-shares of SEK 287.7 and 285.0 respectively, on Nasdaq Stockholm during the last twelve months up to and including 27 November 2015.

IFS has issued warrants as part of its employee incentive programs. The Offer does not include these warrants. IGT Holding will ensure that the holders of the warrants will be treated fairly.

Per Franzén, Partner at EQT Partners AB comments:

“It is a great validation of the attractiveness of our offer that so far 14 of the Company’s largest shareholders have sold their shares to IGT Holding. Remaining shareholders will now receive a mandatory offer at the same level,” says Per Franzén, Investment Advisor at EQT Partners AB which acts as investment advisor to EQT funds.

Background and reasons for the Offer

Background to IFS and EQT

IFS is active in the development, sale and implementation of enterprise software for enterprise resource planning (ERP). The Company was founded in 1983 and currently has over 2,700 employees, supporting more than 2,400 customers worldwide from its network of local offices and through a growing ecosystem of partners. IFS has approximately 1 million users in businesses all over the world, who rely on the IFS’s software for mission critical business processes. IFS is listed on Nasdaq Stockholm, Mid Cap.

EQT is a growth focused investor and owner with vast experience from developing companies in various industries across the globe. During ownership, EQT’s portfolio companies have on average increased number of employees by 11 per cent, sales by 8 per cent and EBITDA by 11 per cent each year.

Background to the Offer

On 30 November 2015, EQT, through IGT Holding, announced that it had acquired shares in IFS corresponding to 68 per cent of the total number of votes and 63 per cent of the total number of shares in IFS.[5] The acquisitions were made during the period 27-29 November 2015 from IFS’s main shareholders including Förvaltnings AB Wasatornet, Gustaf Douglas, Catella Fondförvaltning AB, Lannebo Fonder AB, SEB, AP4, Anders Böös AB, Greenfield AB (Bengt Nilsson), Heinz Kopfinger, DNB and others, at a price of SEK 362.50 per share, regardless of share class. Through the acquisitions, IGT Holding passed the mandatory bid threshold of 30 per cent of the votes in IFS. During the period 30 November – 4 December 2015, IGT Holding has acquired additional shares in IFS and at the date hereof holds in total 823,148 A-shares and 17,296,060 B-shares in IFS, corresponding to 76 per cent of the total number of votes and 74 per cent of the total number of shares in the Company5.

Reasons for the Offer

EQT is impressed by the development and direction of the Company. IFS has established an attractive position in specific areas of the manufacturing and engineering ERP market including the Enterprise Asset Management segment. In addition, IFS is focused on certain selected customer verticals where the Company is able to exert market leadership with its domain knowledge on a global scale, such as Oil & Gas, Aerospace & Defence and Field Service Management.

EQT supports IFS’s strategy of:

continuing to invest into the further development of the industry-specific product suite to maintain and enhance the strong customer satisfaction that IFS enjoys in the market;
leveraging its deep domain knowledge to deliver differentiated solutions to customers in certain industry sectors which other competitors cannot deliver; and
leveraging its heritage and the current strong position in the Enterprise Asset Management segment and focusing on “Internet of Things” applications; and
focusing on M&A to complement its product offering and capabilities and accelerate the execution upon the objectives listed above.

EQT supports IFS’s strategic objectives and believes that IFS is well positioned to successfully execute. However, EQT also believes IFS would benefit from further investments into its sales and marketing, partner network and product development in order to fully achieve its strategic objectives. These investments are typically strategic and long term oriented and even though it may lead to benefits in the longer term it will have an adverse impact on short to mid-term financial performance.

EQT believes it can assist IFS in a private setting, among other things, through:

long-term investments into the customer offering and the organization to further strengthen the market position in selected customer verticals; and
supporting IFS in developing its global partner ecosystem so that it can continue to improve its ability to offer cost effective global solutions; and
providing financial and strategic resources to IFS to accelerate its M&A strategy.

EQT is convinced that, with its funds available as well as its long-term perspective as investor, it is very well positioned to support IFS upon the execution of this strategy in a private setting. By leveraging its unique global network, EQT is able to support IFS to increase its global brand awareness and get access to new customers.

EQT places great value on IFS’s management team and employees, and expects that the Offer will support growth and create long-term positive effects for employees and other stakeholders. EQT does not expect the Offer to have any negative impact on employees, including conditions of employment or office locations.

The Offer

IGT Holding offers SEK 362.50 in cash per A- and B-share in IFS. The total value for all shares in IFS amounts to approximately SEK 9.05 billion.[6]

The offered price represents a premium of:

The acceptance period for the Offer is expected to commence on 10 December 2015 and end on 4 January 2016. Settlement is expected to commence around 23 December 2015 for those who have accepted the Offer no later than 18 December 2015, and around 11 January 2016 for those who have accepted the Offer after 18 December 2015 but no later than 4 January 2016.

Shareholders in IFS will not be entitled to withdraw submitted acceptances.

No commission will be charged in connection with the Offer.

IFS has issued warrants as part of its employee incentive programs. The Offer does not include these warrants. IGT Holding will ensure that the holders of the warrants will be treated fairly.

IGT Holding’s shareholding in IFS

IGT Holding holds in total 823,148 A-shares and 17,296,060 B-shares in IFS, corresponding to 76 per cent of the total number of votes and 74 per cent of the total number of shares in the Company[7].

IGT Holding has acquired all shares in the Company at a price of SEK 362.50 per share, regardless of share class.

IGT Holding may acquire, or enter into arrangements to acquire, additional shares in IFS outside the Offer. Any purchases made or arranged shall be in accordance with Swedish law and disclosed in accordance with applicable rules

Conditions to the Offer

There are no conditions for completion of the Offer.

Description of IGT Holding and the financing of the Offer

IGT Holding is a newly formed company indirectly wholly owned by EQT. IGT Holding, with corporate number 559033-9635, is domiciled in Stockholm with registered address c/o Hannes Snellman Advokatbyrå, Box 7801, 103 96 Stockholm, Sweden.

IGT Holding was founded on 20 October 2015 and registered with the Swedish Companies Registration Office (Sw. Bolagsverket) on 6 November 2015. The company has never conducted and at present does not conduct any business, and its sole business purpose is to make the Offer and take all actions to finance and complete the Offer and operate as the parent company of IFS.

The Offer is fully financed through equity from EQT.

Statement from the Board of Directors of IFS

The Board of Directors of IFS will, in accordance with Nasdaq Stockholm’s takeover rules (the “Takeover Rules”), announce its opinion of the Offer no later than two weeks prior to the expiry of the acceptance period.

Due diligence

EQT has in conjunction with the preparations for the Offer conducted a limited, confirmatory due diligence consisting of meetings with the management of the Company and a limited document review in connection therewith. IFS has informed EQT that no information has been disclosed during this process to EQT that has not already been made public and that can reasonably be expected to affect the price of IFS’s shares.

Statement from the Swedish Securities Council (Sw. Aktiemarknadsnämnden)

Information made available to EQT indicates that shareholders in the United States of America hold approximately 3.3 per cent of the total number of votes and 4.4 per cent of the total number of shares in IFS and one shareholder in Japan holds approximately 5.3 per cent of the total number of votes and 3.2 per cent of the total number of shares in IFS. Given cost and time considerations EQT decided to exclude shareholders in the United States of America, Japan and certain other jurisdictions from the Offer and on 12 November 2015 EQT applied for permission to exclude shareholders in the United States of America and Japan from the Offer. The Swedish Securities Council stated on 14 November 2015 that the exclusion is permitted due to the circumstances in the present case.[8]

On 4 December 2015 EQT submitted a request for statement from the Swedish Securities Council regarding the right for the shareholders in a target company who have accepted an unconditional mandatory offer to withdraw their acceptances in the event that there is an obligation for the bidder to prepare an addendum to the offer document. The Swedish Securities Council issued a statement on 6 December 2015 which mainly states that as the offer is considered to be unconditional and a binding purchase agreement consequently exists as soon as a shareholder has accepted the offer, any right for the shareholders to withdraw their acceptances does not arise.[9]

Preliminary timetable

Preliminary date for publication of the offer document: 9 December 2015

Preliminary dates for the acceptance period: 10 December 2015 – 4 January 2016

Preliminary dates for commencement of settlement: Around 23 December 2015 for those who have accepted the Offer no later than 18 December 2015, and around 11 January 2016 for those who have accepted the Offer after 18 December 2015 but no later than 4 January 2016

IGT Holding reserves the right to extend the acceptance period.

Applicable law and disputes

The Offer, as well as the agreements entered into between IGT Holding and the IFS shareholders 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 exclusively settled by Swedish courts, and the City Court of Stockholm (Sw. Stockholms tingsrätt) shall be the court of first instance.

Takeover Rules and the Swedish Securities Council’s rulings and statements on the interpretation and application of the Takeover Rules, including, where applicable, the Swedish Securities Council’s rulings and statements on the interpretation and application of the formerly applicable Rules on Public Offers for the Acquisition of Shares issued by the Swedish Industry and Commerce Stock Exchange Committee (Sw. Näringslivets Börskommitté), are applicable to the Offer. Furthermore, IGT Holding has, in accordance with the Swedish Takeover Act (Sw. lag (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden), on 13 November 2015 contractually undertaken towards Nasdaq Stockholm to comply with said rules, rulings and statements and to submit to any sanctions that can be imposed on IGT Holding by Nasdaq Stockholm in the event of a breach of the Takeover Rules. On 7 December 2015, IGT Holding informed the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) of the Offer and the abovementioned undertakings towards Nasdaq Stockholm.

Advisers

Nordea is acting as financial adviser and Hannes Snellman Attorneys as legal adviser to EQT and IGT Holding in connection with the Offer.

IGT Holding IV AB

The Board of Directors

IGT Holding discloses the information provided herein pursuant to the Takeover Rules. The information was submitted for publication on 7 December 2015 at 07.30 (CET).

For additional information, please contact:

For more information about the Offer, please see: www.eqtinfo.se

For media enquiries, please contact:

Kerstin Danasten, EQT

Telephone: +46 8 506 55 34

Mobile: +46 766 414290

Email: kerstin.danasten@eqt.se

For urgent enquiries: press@eqt.se

EQT in brief

EQT is the manager of a leading group of private equity funds with operations in Northern Europe, Eastern Europe, US and China. EQT manages funds active within buy-outs, growth financing and infrastructure. EQT has a unique industrial approach and a strong record of successful investments. EQT was founded in 1994 by Investor AB, Scandinavia’s largest industrial holding group and part of the Wallenberg group, and has since the foundation raised approximately EUR 29 billion from over 300 global institutional and professional investors. Close to EUR 17 billion has been invested in around 140 companies and today, EQT funds own around 60 companies in a variety of industries across the world with some 140,000 employees and revenues of approximately EUR 17 billion in total. EQT have offices in 15 countries on three continents with in total around 335 employees.

In the management of a portfolio company, EQT focuses on introducing a sense of urgency and an entrepreneurial mindset to motivate management to continuously seek growth and develop initiatives. Key components in EQT’s business model are a jointly established business plan as well as a common mindset established through co-ownership and a transparent communication of goals and objectives.

IFS in brief

IFS is a globally recognized leader in developing and delivering enterprise software for enterprise resource planning (ERP), enterprise asset management (EAM) and enterprise service management (ESM). IFS brings customers in targeted sectors closer to their business, helps them be more agile and enables them to profit from change. IFS is a public company founded in 1983 and currently has over 2,700 employees. IFS supports more than 2,400 customers worldwide from its network of local offices and through a growing ecosystem of partners.

Important information

The Offer is not being made to persons whose participation in the Offer requires that any 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 documentation relating to the Offer 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 IGT Holding. 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, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States of America by use of mail or any other means or instrumentality (including, without limitation, facsimile transmission, electronic mail, telex, telephone and the Internet) of interstate or foreign commerce, or of any facility of national security exchange, of Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States of America, and the Offer cannot be accepted by any such use, means, instrumentality or facility of, or from within, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States of America. Accordingly, this press release and any documentation relating to the Offer are not being and should not be mailed or otherwise distributed, forwarded or sent into Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States of America. IGT Holding will not deliver any consideration from the Offer into Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States of America.

Statements in this press release relating to future status or circumstances, including statements regarding future performance, growth and other trend projections and the other 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”, “intends”, “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. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of IGT Holding and IFS.

[1] EQT VII comprises EQT VII (No.1) Limited Partnership, EQT VII (No.2) Limited Partnership (together the “Partnerships”) as well as certain co-investment schemes established to invest alongside the Partnerships. EQT Services (UK) Limited acts as the manager of the Partnerships and certain of the schemes, and is authorized and regulated by the United Kingdom Financial Conduct Authority.

[2] A newly formed company indirectly wholly owned by EQT.

[3] Based on 1,029,341 A-shares and 23,942,489 B-shares, which is the total number of outstanding shares in IFS, of which 426,600 B-shares are held by the Company. The Company also has a total of 585,227 warrants outstanding, entitling to subscription of 585,227 B-shares in the Company. The offered price for the shares is subject to adjustment should IFS pay any dividend or make any other value distribution to its shareholders prior to settlement of the Offer, and will accordingly be reduced by the amount of any such dividend or value distribution per share.

[4] Based on the total number of shares in the Company, excluding the 426,600 B-shares held by the Company.

[5] Based on the total number of shares in the Company, excluding the 426,600 B-shares held by the Company.

[6] Based on 1,029,341 A-shares and 23,942,489 B-shares, which is the total number of outstanding shares in IFS, of which 426,600 B-shares are held by the Company. The Company also has a total of 585,227 warrants outstanding, entitling to subscription of 585,227 B-shares in the Company. The offered price for the shares is subject to adjustment should IFS pay any dividend or make any other value distribution to its shareholders prior to settlement of the Offer, and will accordingly be reduced by the amount of any such dividend or value distribution per share.

[7] Based on the total number of shares in the Company, excluding the 426,600 B-shares held by the Company

[8] AMN 2015:36

[9] AMN 2015:41

EQT VII ANNOUNCES A MANDATORY CASH OFFER TO THE SHAREHOLDERS IN IFS

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