Optomed, a Finnish medical technology company, is planning an initial public offering and listing on Nasdaq Helsinki Ltd

OPTOMED OY PRESS RELEASE 8 NOVEMBER 2019, 8.00 AM EET

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Optomed Ltd (which will be renamed Optomed Plc, “Optomed” or the “Company”), one of the leading providers of handheld fundus cameras, announces today that it is planning an initial public offering (“IPO”) and a listing of its shares on the official list of Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) (the “Listing”).

Optomed is a Finnish medical technology company and one of the leading providers of non-mydriatic handheld fundus cameras.[1] Optomed develops and commercializes modern, handheld and easy-to-use fundus cameras that are suitable for any clinic for diagnosing and tracking the progression of ocular diseases affecting the fundus, such as diabetic retinopathy, the leading cause of vision loss in working-age adults[2]. The Company comprises two complementary and synergistic business segments: Devices and Software. Optomed combines handheld devices with screening software and automated grading capabilities through Artificial Intelligence with the aim to transform the diagnostic process of blinding eye-diseases. Optomed’s proprietary optical technology is protected by the Company’s 52 international patents. Optomed’s products are sold in more than 60 countries and its customers include international healthcare organizations, hospitals and global medical technology companies (OEMs) and distributors. The Company employs 105 professionals as at 30 September 2019, is headquartered in Finland and has a subsidiary in China. In 2018, Optomed’s revenue amounted to EUR 12.7 million and pro forma revenue, including the acquisition of Commit; Oy amounted to EUR 14.5 million of which the Devices segment represented 52 percent and the Software segment represented 48 percent.

The planned IPO is expected to consist of both a primary offering by the Company and a secondary offering by certain shareholders in the Company.

Seppo Kopsala, CEO and the founder of Optomed:

“I am very proud that, as a result of our long-term and hard work Optomed has developed into one of the leading equipment suppliers in the fast growing handheld fundus camera segment[3]. In addition to current opportunities, we can expand to a much larger market as we combine our devices with software and artificial intelligence in a way that enables also non-specialist staff to perform screenings at local healthcare centers.

Our target is to provide innovative and affordable screening solutions to reach all patients in need of such solutions globally. The planned offering would support our targets by enhancing our competitiveness and increasing the awareness of handheld fundus cameras and their potential in preventing avoidable blindness caused by diabetes.”

Petri Salonen, Chairman of Optomed’s Board of Directors:

“In addition to the aging population growth and rising life expectancy, the number of diabetics and people with blinding eye diseases is increasing worldwide. However, most vision problems could be avoided if detected early enough. Optomed’s high-quality products and innovative screening solutions can already now improve the efficiency of the screening process and reduce the societal costs of blinding diseases.

We believe one of the most exciting and significant changes in healthcare is the breakthrough of artificial intelligence. That is why we aim to be one of the pioneering companies bringing artificial intelligence to eye disease screenings worldwide. Optomed’s target is to deliver an average annual organic revenue growth above 20% in the long-term. The planned IPO would improve Optomed’s ability in pursuing its growth strategy and broadening its ownership base.”

Optomed’s business

Optomed comprises two synergistic business segments: Devices segment and Software segment, offering a complete solution for managing, screening and diagnosing diabetic retinopathy. By offering handheld devices, software solutions and automated Artificial Intelligence grading, Optomed has built up a complete system suitable for all types of healthcare professionals and units in different markets to be able to perform diabetic retinopathy screenings. The Devices segment’s customer offering comprises both Optomed-branded handheld fundus cameras and fundus cameras sold under the OEM customers’ brands. The Optomed Software segment develops and sells special healthcare software solutions to healthcare organizations. These software solutions include systems for workflow, chronic disease screening, and resource and quality management within radiological or surgical departments. In addition, the segment also distributes off-the-shelf products from selected partners to supplement its own solutions.

Optomed’s key strengths and competitive advantages

The Company believes that it benefits from the following key strengths and competitive advantages:

• Optomed is one of the leading players in the growing and transforming handheld fundus camera market.
• Provider of proprietary technology with targeted value propositions for different markets and healthcare systems.
• Asset-light organisation through outsourced production and distribution, with a well-defined sales strategy and extensive distribution network.
• Experienced management to promote the transformation of the fundus screening market.
• Future growth potential from expansion into new markets and end-customer segments.

Optomed’s financial targets, dividend policy and future outlook

The Company’s Board of Directors has adopted the following financial targets for Optomed:

• Revenue growth: Optomed’s medium-term, from 2020 onwards, target is to deliver a double digit annual organic revenue growth. In the long-term Optomed’s target is to deliver an average annual organic revenue growth above 20 percent
• Adjusted EBITDA-margin: Optomed’s target in the medium-term is to prioritise investments in the organisation to support growth and achieve an adjusted EBITDA-margin above 30 percent in the long-term
• Dividend policy: Optomed is in expansion phase and will therefore prioritise growth over dividends in coming years

The Company expects the global market for handheld fundus cameras to develop favourably and believes that the increase in awareness of diabetic retinopathy supports the Devices and Software businesses. The Company’s growth for the full year 2019 is expected to be low single digit growth, compared to 2018.

The statements set forth above include forward-looking statements and are not guarantees of Optomed’s financial performance in the future. Optomed’s actual results and financial position could differ materially from those expressed or implied by these forward-looking statements as a result of numerous factors.

Optomed’s financial highlights

In 2018, Optomed’s revenue reached EUR 12.7 million increasing by 84.6% compared to 2017. The growth was mainly related to the acquisition of the software company Commit; Oy and organic growth of device sales. Unaudited pro forma revenue for 2018, giving effect to the Commit; Oy acquisition, was EUR 14.5 million. Pro forma net sales are presented giving effect to the acquisition, as if it had been effected on 1 January 2018, instead of the actual acquisition date of 26 March 2018. Optomed’s gross profit amounted to EUR 9.1 million in 2018, representing 71.1% of revenue. Optomed’s EBITDA amounted to EUR 1.1 million and the adjusted EBITDA amounted to EUR 1.4 million corresponding to 10.9% of revenue in 2018.

Optomed’s revenue increased by EUR 2.6 million, or 32.4 percent in the nine months ended 30 September 2019 from EUR 8.0 million in the nine months ended 30 September 2018 to 10.6 million in the nine months ended 30 September 2019. The increase was primarily due to growth in the Devices segment and the Software segment included for the whole period, compared to the nine months period ended 30 September 2018 when the Software segment was included as of April 2018. The growth in the Devices segment was primarily due to increased sales from the OEM and distributor sales channels, driven by Optomed’s expansion of new distributors in Russia, the Asia-Pacific region and in the Middle East. The growth from the OEM and distributor sales channels was to some extent offset by the decrease in sales in China.

Key Figures

Information on the IPO

The contemplated IPO is expected to consist of both a primary offering by the Company and a secondary offering by certain shareholders in the Company. The Company and its current shareholders would be subject to customary lock-up arrangements. Optomed’s shareholders include inter alia Cenova Capital (China), a subsidiary of Halma Plc, Robert Bosch Venture Capital GmbH, Aura Capital group, Suomen Teollisuussijoitus Oy, Seppo Kopsala, Mankato Capital Ltd, Cliff Swallow Investment Ltd, Uppland Kapital AB, Markku Virta and David Oak.

The objective of the contemplated IPO and Listing is to improve the Company’s ability to successfully pursue its growth strategy and invest in its business in order to remain at the forefront of developing complete screening solutions against blinding eye diseases and expand into new markets. The contemplated IPO and Listing on Nasdaq Helsinki will also allow Optomed to obtain access to capital markets and broaden its ownership base with both domestic and foreign investors, which would increase the liquidity of the shares. Furthermore, the IPO is expected to strengthen Optomed’s recognition and brand awareness among customers, business partners and investors, and thus enhance Optomed’s competitiveness and the awareness of handheld fundus cameras. The increased liquidity would also enable Optomed to use the shares more effectively as a means of consideration in potential acquisitions and remuneration of personnel.

In connection with the IPO, the objective would be to raise gross proceeds of approximately EUR 20 million before fees and expenses in relation to the share issue.

Carnegie Investment Bank AB is acting as the sole global coordinator and bookrunner in the contemplated IPO, and Swedbank AB (publ) in co-operation with Kepler Cheuvreux as the joint bookrunner (together with the sole global coordinator, the “Managers”). Hannes Snellman Attorneys Ltd is acting as the legal advisor to the Company. White & Case LLP is acting as the legal adviser to the Managers.

Press event

Optomed will host a press event today, 8 November 2019, at Nasdaq Helsinki (Fabianinkatu 14, Helsinki) at 10:00 a.m. EET

Further enquiries

Seppo Kopsala, CEO, Optomed Ltd, tel. +358 40 555 1050, seppo.kopsala@optomed.com

Lars Lindqvist, CFO, Optomed Ltd, lars.lindqvist@optomed.com

Sakari Knuutti, CLO, Optomed Ltd, sakari.knuutti@optomed.com

Optomed in Brief 

Optomed is a Finnish medical technology company and one of the leading providers of handheld fundus cameras. Optomed combines handheld screening devices with software and artificial intelligence with the aim to transform the diagnostic process of blinding eye-diseases such as rapidly increasing diabetic retinopathy. In its business Optomed focuses on eye-screening devices and software solutions related R&D in Finland and sales through different channels in over 60 countries. The company has an extensive portfolio of 52 international patents protecting the technology. In 2018, Optomed’s revenue reached EUR 12.7 million and pro forma net sales with the acquisition of Commit; Oy amounted to EUR 14.5 million. At the end of September 2019, Optomed employed 105 professionals.

[1]Zion Market Research: Global Fundus Cameras Market (2018). The management estimates that the Company’s leading position is based on the share of revenue in the handheld fundus camera market that is generated from sales of cameras manufactured by the Company and sold to end-users by the Company’s OEM customers, distributors and directly by the Company.

[2] International Diabetes Federation. IDF Diabetes Atlas. Eight edition (2017)

[3] Zion Market Research: Global Fundus Cameras Market (2018).

Disclaimer

It may be unlawful to distribute this announcement in certain jurisdictions. This announcement is not for distribution in Australia, Canada, the Hong Kong special administrative region of the People’s Republic of China, Japan, New Zealand, Singapore, South Africa, the United States or to any other jurisdiction where such distribution would be unlawful. The information in this announcement does not constitute an offer of securities for sale in such jurisdictions.

This announcement does not constitute an offer for sale of, or a solicitation of an offer to purchase or subscribe for, any securities in the United States. Securities may not be offered or sold in the United States unless they are registered or are exempt from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. Optomed Plc (the “Company”) does not intend to register any portion of this offering in the United States or to conduct a public offering in the United States. Copies of this announcement are not being, and should not be, distributed in or sent into the United States.

The issue and/or sale of securities in connection with the contemplated listing on the official list of Nasdaq Helsinki Ltd (the “Listing”) are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company, Carnegie Investment Bank AB (publ) (“Carnegie”) and Swedbank AB (publ) (“Swedbank”) assume no responsibility in the event there is a violation by any person of such restrictions.

In the United Kingdom, this announcement is for distribution only to and is directed only at persons who (i) have professional experience in matters relating to investments which fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.

This announcement has been prepared on the basis that any offer of securities in any Member State of the European Economic Area, other than Finland or Sweden, where Regulation (EU) 2017/1129 (the “Prospectus Regulation”) is applicable (each, a “Relevant Member State”), will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of securities. As a result, the securities may only be offered in Relevant Member States (a) to “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation; or (b) in any other circumstances falling within Article 1(4) of the Prospectus Regulation. Neither the Company nor any of the Managers have authorised, nor do they authorise, the making of any offer of the securities through any financial intermediary, other than offers made by the Managers which constitute the final placement of the securities contemplated in this announcement. Neither the Company nor any of the Managers have authorised, nor do they authorise, the making of any offer of securities in circumstances in which an obligation arises for the Company or any Managers to publish or supplement a prospectus for such offer.

The information contained in this announcement is for informational purposes only and does not purport to be full or completed. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The information in this announcement is subject to change. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Company.

This announcement includes forward-looking statements, which include statements regarding the Company’s business strategy, financial condition, profitability, results of operations, market data, and plans and objectives of the management of future operations and goals, as well as other statements that are not historical facts. Words such as “believe,” “anticipate,” “plan,” “expect,”, “intend”, “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should,” “aim,” “continue,” “could,” “guidance,” “may,” “potential,” “will,” as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, the Company does not have any intention or obligation to publicly update or revise any forward-looking statements after it distributes this announcement, whether to reflect any future events or circumstances or otherwise.

The IPO timetable, including the date of admission of the shares to the official list of the Nasdaq Helsinki Ltd, may be influenced by a range of circumstances such as market conditions. There is no guarantee that the IPO will proceed and that the Listing will occur and you should not base your financial decisions on the Company’s intentions in relation to the IPO and Listing at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the IPO. The value of shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the IPO for the person concerned.

Carnegie and Swedbank are acting exclusively for the Company and the Selling Shareholders and for no-one else in connection with any transaction mentioned in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to any such transaction and will not be responsible to any other person for providing the protections afforded to their clients, or for advising any such person on the contents of this announcement or in connection with any transaction referred to in this announcement. The contents of this announcement have not been verified by Carnegie or Swedbank and neither Carnegie nor Swedbank accept liability for this information included in this announcement.