Ratos AB announces a recommended cash offer at a price of SEK 157 per share to the shareholders of Semcon AB

THIS ANNOUNCEMENT IS NOT AN OFFER, WHETHER DIRECTLY OR INDIRECTLY, IN AUSTRALIA, HONG KONG, JAPAN, CANADA, NEW ZEALAND, SCHWEIZ, SOUTH AFRICA OR THE UNITED STATES (THE ”RESTRICTED JURISDICTIONS”), OR IN ANY OTHER JURISDICTION WHERE SUCH OFFER PURSUANT TO LEGISLATION AND REGULATIONS IN SUCH RELEVANT JURISDICTION WOULD BE PROHIBITED BY APPLICABLE LAW. SHAREHOLDERS NOT RESIDENT IN SWEDEN WHO WISH TO ACCEPT THE OFFER (AS DEFINED BELOW) MUST MAKE INQUIRIES CONCERNING APPLICABLE LEGISLATION AND POSSIBLE TAX CONSEQUENCES. SHAREHOLDERS SHOULD REFER TO THE OFFER RESTRICTIONS INCLUDED IN THE SECTION TITLED "IMPORTANT INFORMATION" AT THE END OF THIS ANNOUNCEMENT AND IN THE OFFER DOCUMENT WHICH WILL BE PUBLISHED SHORTLY PRIOR TO THE BEGINNING OF THE ACCEPTANCE PERIOD OF THE OFFER.

Hereby, Ratos AB (”Ratos”) announces a recommended public cash offer to the shareholders of Semcon AB ("Semcon" or the “Company”) to tender all their shares in Semcon to Ratos at a price of SEK 157^[1] in cash per share (the “Offer”). The shares in Semcon are admitted to trading on Nasdaq Stockholm, Small Cap, under the ticker SEMC.

Summary

• Ratos offers SEK 157 in cash per share in Semcon, which represents a total value of the Offer, based on all 17,637,992 outstanding shares in Semcon which are not held by Semcon^[2], of approximately SEK 2,769 million. The Offer represents a valuation of Semcon, based on all 18,112,534 outstanding shares in Semcon, corresponding to approximately SEK 2,844 million.
• The Offer exceeds the offer of SEK 149 per share that was announced by Etteplan Oyj (”Etteplan”) on 23 August 2022 by SEK 8 per share.

• The Offer represents a premium of approximately:

• 5.4 per cent compared to the offer of SEK 149 per share which was announced by Etteplan on 23 August 2022,

• 6.2 per cent compared to the closing price of SEK 147.8 for the Semcon share on Nasdaq Stockholm on 23 September 2022 (which was the last trading day prior to the announcement of the Offer),

• 39.1 per cent compared to the volume-weighted average share price of SEK 112.89 for the Semcon share on Nasdaq Stockholm during the last 30 trading days up to and including 22 August 2022 (which was the last trading day prior to the announcement of Etteplan’s offer), and

• 34.4 per cent compared to the volume-weighted average share price of SEK 116.81 for the Semcon share on Nasdaq Stockholm during the last 180 trading days up to and including 22 August 2022 (which was the last trading day prior to the announcement of Etteplan’s offer).

• The Board of Directors of Semcon^[3] has unanimously decided to recommend the shareholders of Semcon to accept the Offer.

• JCE Group AB, Nordea Investment Management AB, SAMSON ROCK CAPITAL LLP, Otus Capital Management LP and Ennismore Fund Management who together hold approximately 52 per cent of the shares and votes in Semcon, have undertaken to, subject to certain conditions, accept the Offer. 

• The Offer contains customary conditions, including that it is accepted to such an extent that Ratos becomes the owner to shares corresponding to more than 90 per cent of the total number of the outstanding shares in Semcon.

• The offer document for the Offer is expected to be made public on or around 26 September 2022. The acceptance period for the Offer is expected to commence on or around 27 September 2022 and end on or around 27 October 2022.

Jonas Wiström, President and CEO of Ratos comments:

“The acquisition of Semcon is another step in Ratos' strategy towards a more homogeneous group, which includes further acquisitions and divestments.

If the shareholders of Semcon accept our offer and the acquisition goes through, Ratos' indebtedness would still be within out financial targets.

Ratos is facing the increasing uncertainty in the world, with high inflation and a deteriorating economy going forward, by maintaining a strong financial position.

Ratos is a long-term owner and the acquisition of Semcon is a long-term investment. Ratos has a lot of accumulated experience of consulting companies, including technical consultants. With us as long-term owners Semcon will have, under its own brand and with continued headquarters in Gothenburg, the best conditions to accelerate its positive development.

We have followed Semcon for a long time and are impressed with the employee’s competence and the company's development in recent years. Semcon has undergone significant structural changes and is today a more profitable and diversified company. We are attracted by Semcon's offering and strong brand. The transition to a more sustainable society will mean a continued strong demand for engineers and highly qualified services in Swedish industry.

Semcon is a well-established, high-quality company with great growth potential over time. We will use our expertise, networks and strong financial position to support Semcon in realising its full potential. There are many similarities in our respective corporate cultures, and we are united above all in the conviction of strong decentralization and that it's all about people."

Background and reasons for the Offer

About Ratos
Ratos is a Swedish company listed on Nasdaq Stockholm and it is the parent company of a business group consisting of 15 companies headquartered in the Nordic region. The business group's turnover amounted to SEK 35 billion in 2021. The business idea for Ratos is to be a long-term owner that develops Nordic companies that are or can become market leaders. Everything Ratos does is imbued with our core values; It’s All About People, Speed in Execution and Simplicity.

Background and reasons
Ratos strategy is to create a more homogeneous group where the consulting industry is particularly attractive given the know-how and experience from the industry that Ratos employees have in general and the company management in particular. In recent years, Semcon has shown improved profitability, while growth has been weaker. Ratos has many years of deep experience in driving growth and profitability for companies in the consulting sector. As the owner of Semcon, Ratos will bring sector knowledge and capital to strengthen Semcon's offering and competitiveness with the aim of achieving significant organic growth with improved profitability. Ratos further intends to strengthen Semcon's capacity to carry out additional acquisitions in order to develop Semcon's offer and market position in the Nordic technology consulting market. In the technology consulting sector, the ability to recruit and retain the best employees is a critical success factor. In accordance with Ratos' core values, everything is about people, great focus will be placed on Semcon's attractiveness as an employer to facilitate new recruitment.

With Ratos as the owner of Semcon, significant added value will be created for Semcon's employees and customers as well as for Ratos. Ratos' long-term goal is for Semcon to be a market-leading technology consulting company in the Nordics in terms of both growth and profitability. Our ownership model is based on the fact that we can provide the company with a fast and simple management model with a focus on increased customer value and value creation.

The impact on Semcon
As a member of Ratos' business group Semcon will retain its company name and remain an independent company with its headquarter in Gothenburg.

The Offer will not have an impact on Semcon's employees and management (including their terms of employment) or the organization in general. Ratos ownership of Semcon is not assessed to lead to a reduction in the number of employees. Cost synergies are estimated to arise due to the delisting. The operations of Semcon are intended to continue to be conducted at the same locations as today.

The Offer

Consideration

The shareholders of Semcon are offered SEK 157 in cash per share in Semcon.

In the event that Semcon should pay any dividend or make any other value transfer to the shareholders prior to the settlement of the Offer, the consideration per share will be reduced correspondingly.

No commission will be charged in connection with the settlement of the Semcon shares acquired by Ratos in accordance with the Offer.

Premium

The consideration under the Offer represents a premium of approximately:
 

• 5.4 per cent compared to the offer of SEK 149 per share which was announced by Etteplan on 23 August 2022,
• 6.2 per cent compared to the closing price of SEK 147.8 for the Semcon share on Nasdaq Stockholm on 23 September 2022 (which was the last trading day prior to the announcement of the Offer),
• 39.1 per cent compared to the volume-weighted average share price of SEK 112.89 for the Semcon share on Nasdaq Stockholm during the last 30 trading days up to and including 22 August 2022 (which was the last trading day prior to the announcement of Etteplan’s offer), and
• 34.4 per cent compared to the volume-weighted average share price of SEK 116.81 for the Semcon share on Nasdaq Stockholm during the last 180 trading days up to and including 22 August 2022 (which was the last trading day prior to the announcement of Etteplan’s offer).

The total value of the Offer

The total value of the Offer, based on all 17,637,992 outstanding shares in Semcon that are not held by Semcon^[4], amounts to approximately SEK 2,769 million. The Offer represents a valuation of Semcon, based on all 18,112,534 outstanding shares in Semcon, to approximately SEK 2,844 million.

Recommendation from the Board of Directors of Semcon

The Board of Directors of Semcon^[5] unanimously recommends the shareholders of Semcon to accept the Offer.

Undertakings from the shareholders of Semcon

Ratos has received undertakings to accept the Offer from the following shareholders of Semcon:
 

• JCE Group AB, who represents 4,682,991 shares, corresponding to approximately 25.9 per cent of the shares and votes in Semcon.
• Nordea Investment Management AB, who represents 1,716,808 shares, corresponding to approximately 9.5 per cent of the shares and votes in Semcon.
• SAMSON ROCK CAPITAL LLP, who represents 1,589,519 shares, corresponding to approximately 8.8 per cent of the shares and votes in Semcon.
• Otus Capital Management LP, who represents 643,982 shares, corresponding to approximately 3.6 per cent of the shares and votes in Semcon.
• Ennismore Fund Management, who represents 763,784 shares, corresponding to approximately 4.2 per cent of the shares and votes in Semcon.

Consequently, undertakings to accept the Offer have been obtained from shareholders representing a total of 9,397,084 shares, which corresponds to approximately 52 per cent of the shares and votes in Semcon.

The undertaking from JCE Group is unconditional at the consideration in the Offer. The undertaking will cease to apply if the Offer is not completed by 30 December 2022. It is noted that the consideration per share in the Offer exceeds the price per share in Etteplan's offering by more than five per cent, which is why JCE Group is no longer bound by its commitment to tender its shares in Etteplan's Offer. The undertakings from Nordea Investment Management and Otus Capital Management are conditional upon no other party, before the end of the initial acceptance period or any extended acceptance period, announcing a competing offer for all shares in Semcon at a value exceeding the consideration in the Offer by at least seven percent and Ratos deciding not to make a counter-offer to such a competing bid within five business days ("Right to counter-offer"). The Right to counter-offer applies to any competing bid. The undertakings from Ennismore Fund Management and SAMSON ROCK CAPITAL LLP are conditional upon no other party, before the end of the initial acceptance period or any extended acceptance period, announcing a competing offer for all shares in Semcon at a value exceeding the consideration in the Offer by at least five percent and Ratos deciding not to make a counter-offer to such a competing bid within five business days. The Right to counter-offer applies to any competing bid.

Ratos' shareholding in Semcon

Neither Ratos, nor any close party to Ratos owns or controls any shares in Semcon or any financial instruments in Semcon that lead to a financial exposure corresponding to a holding of shares in Semcon. Furthermore, neither Ratos, nor any close party to Ratos, has, during the last six months prior to the Offer was made public, acquired or committed to acquire any shares or financial instruments in Semcon that lead to a financial exposure corresponding to a holding of shares in Semcon on more favorable terms than the terms of the Offer.

Ratos reserves the right to acquire or agree to acquire shares in Semcon, including acquisitions on the market at prevailing prices or acquisitions through private transactions at negotiated prices. If applicable, each such acquisition will be completed and disclosed in accordance with applicable laws and regulations.

Conditions for the completion of the Offer

Completion of the Offer is conditional upon:
 

1. the Offer being accepted to such extent that Ratos becomes the owner of shares representing more than 90 per cent of the total number of the outstanding shares in Semcon,
2. no other party announces an offer to acquire shares in Semcon on terms that are more favourable to the shareholders of Semcon than the terms of the Offer,
3. all regulatory, governmental or similar clearances, approvals and decisions and other measurements taken by authorities or similar to complete the Offer and the acquisition of Semcon, including approvals and clearances from competition authorities, being obtained, in each case on terms that are acceptable for Ratos,
4. neither the Offer nor the acquisition of Semcon being wholly or partially prevented or materially adversely affected by any legislation or other regulation, any decision of court or public authority, or any similar circumstance,
5. that no circumstances have occurred, which objectively could not or should not, been able to foresee considering, but not limited to, current economic and global political situation, that have a material adverse effect, or can be expected to materially adversely affect, Semcon’s financial position or operations, including Semcon's sales, results, liquidity, solidity, equity or assets, which does not include circumstances arising from the Offer,
6. no information made public by Semcon or disclosed in any other way by Semcon to Ratos or its advisors being inaccurate, incomplete or misleading, and Semcon having made public all information which should have been made public by it, and
7. Semcon not taking any measures that are liable to impair the prerequisites for making or implementing the Offer.

Ratos reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions is not satisfied or cannot be satisfied. With regard to conditions 2–7, the Offer may only be withdrawn provided that the non-satisfaction of such condition is of material importance to Ratos’ acquisition of Semcon, or if otherwise approved by the Swedish Securities Council.

Ratos reserves the right to waive, in whole or in part, one, several or all of the conditions set out above, including the right for Ratos to complete the Offer at a acceptance level at 90 per cent or lower.

Information about Ratos

Ratos AB is a public limited liability company with registration number 556008-3585, domiciled in Stockholm and with registered address at Sturegatan 10, 114 11 Stockholm. Ratos shares of class A and B are listed on Nasdaq Stockholm, Large Cap.

Ratos company group consists of 15 companies divided into three business segments, Construction & Services, Consumer and Industry. Net turnover for the companies in Ratos amounted to approximately SEK 35 billion in 2021. Ratos' business concept is to own and develop companies that are or can become market leaders. Ratos' corporate culture and strategy are based on its core values: It’s All About People, Speed in Execution and Simplicity. Ratos enables independent companies to develop faster by being part of something bigger. People, leadership, culture and values are in focus.

Ratos has evolved from being an investment company to a business group, and the focus going forward is to create a more homogeneous group where growth is based on long-term fundamentals such as earnings per share, strong cash flows and return on capital employed. Since the beginning of 2021, Ratos has added three new companies to the group and carried out ten additional acquisitions. Ratos' business model is based on long-term ownership and long-term growth. The focus is on developing the companies that are acquired.

The 15 companies in the group are well positioned in relation to prevailing long-term macro trends, which creates conditions for long-term growth and profitability.

The companies in the Ratos business group per business area:
Construction & Services; Aibel, airteam, HENT, NVBS, Presis Infra, Speed Group, SSEA Group;
Consumer; KVD, Oase Outdoor, Plantasjen
Industry; Diab, HL Display, Knightec, LEDiL, TFS HealthScience

Financing of the Offer

The Offer is not subject to any financing conditions. The Offer will be financed through a combination of cash available to Ratos and funds available to Ratos pursuant to debt financing committed to be provided by Danske Bank A/S, Denmark, Sweden Branch, Skandinaviska Enskilda Banken AB (publ) and Svenska Handelsbanken AB (publ) on terms which are customary for financing of public offers.

The abovementioned financing will provide Ratos with sufficient liquid resources to satisfy the full consideration payable under the Offer and, accordingly, completion of the Offer is not conditional on obtaining financing.

Statement from the Swedish Securities Council

The Swedish Securities Council (Sw: Aktiemarknadsnämnden) has in its statements AMN 2022:37 granted Ratos dispensation from the requirement to direct the Offer to shareholders of Semcon resident in the United States. The statement is held available on the website of the Swedish Securities Council www.aktiemarknadsnamnden.se.

Due Diligence

Ratos has, in connection with the preparations of the Offer, conducted a limited confirmatory due diligence review of Semcon. Semcon has informed Ratos that no information that has not yet been publicly disclosed and that is considered to be inside information has been disclosed to Ratos during the course of the due diligence review.

Approvals from authorities

The completion of the Offer is, inter alia, conditional upon that all required clearances, approvals and decisions and other measurements taken by authorities or similar, including approvals and clearances from competition authorities, being obtained, in each case on terms that are acceptable for Ratos. Ratos has commenced to prepare applications relevant to the transaction and expects that the relevant clearances are obtained prior to the end of the acceptance period.

Indicative timetable^[6]

Publication of the offer document  26 September 2022

Acceptance period  27 September 2022 – 27 October 2022

Settlement date  2 November 2022

Ratos reserves the right to extend the acceptance period, and to postpone the settlement date. Any extensions of the acceptance period or postponements of the settlement date will be announced by Ratos by a press release in accordance with applicable laws and regulations.

Compulsory buy-out and delisting

In the event Ratos, whether in connection with the Offer or otherwise, acquires shares representing more than 90 per cent of the total number of shares of Semcon, Ratos intends to initiate a compulsory buy-out procedure with respect to the remaining shares. In connection therewith, Ratos intends to promote a delisting of Semcon’s shares on Nasdaq Stockholm.

Applicable laws and disputes

The Offer, and any agreements entered into between Ratos and the shareholders of Semcon in connection with the Offer, shall be governed by and construed in accordance with the substantive laws of Sweden. Any dispute, controversy or claim arising out of or in connection with the Offer shall be exclusively settled by Swedish courts and the City Court of Stockholm (Sw. Stockholms tingsrätt) shall be the court of first instance.

The Takeover Rules and the Swedish Securities Council’s statements and rulings regarding interpretation and application of the Takeover Rules and, where applicable, the Swedish Securities Council’s 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) apply to the Offer. Furthermore, Ratos has in accordance with the Swedish Act (2006:451) on Public Takeovers on the Stock Market (Sw. lagen (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden), contractually in writing on 23 September 2022 undertaken towards Nasdaq Stockholm to comply with the abovementioned rules, rulings and statements, as well as to submit to any sanctions imposed by Nasdaq Stockholm upon breach of the Takeover Rules. On 26 September 2022, Ratos informed the Swedish Financial Supervisory Authority about the Offer and the abovementioned undertaking towards Nasdaq Stockholm.

Advisors

Ratos has engaged Lazard as financial advisor and KANTER as legal advisor in relation to the Offer.

Ratos AB

The Board of Directors.

 

Information regarding the Offer:

Information about the Offer is available at:
www.ratos.com

For inquiries, please contact:

Josefine Uppling, Vice President Communication & Sustainability, Ratos
Tel: +46 76 114 54 21, e-mail: josefine.uppling@ratos.com

For administrative questions regarding the Offer, please contact primarily your bank or nominee where you have your shares registered.

The information in this press release has been published by Ratos and the abovementioned contact person in accordance with the Swedish Act on Public Takeovers on the Stock Market and the Takeover Rules as well as the EU Market Abuse Regulation. This press release was submitted for publication on 26 September 2022 at 7:00 (CEST).


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

Lazard is the financial advisor to Ratos, and no one else, in connection with the Offer. Lazard will not consider any other person as a client in relation to the Offer and is not responsible to anyone else than Ratos for providing the protection that Lazard offers to its clients, or for providing advice in connection with the Offer or any other transaction, matter or arrangement which is referred to in this press release. Lazard has not undertaken any obligation to independently verify the information contained herein and disclaims all liability with respect to such information.

The Offer is not made, either directly or indirectly, in the Restricted Jurisdictions or in any other jurisdiction where such offer would be prohibited under applicable law, by mail or other means of communication (including, but not limited to, telefax, e-mail, telex, telephone and internet) used in domestic or international commerce or at any national exchange or trading facility in the Restricted Jurisdictions, and the Offer cannot be accepted in any such manner or by any such means of communication in or from the Restricted Jurisdictions. Therefore, neither this press release nor other documentation relating to the Offer will be, and shall not, be sent, posted or otherwise disseminated or forwarded in or to the Restricted Jurisdictions.

This press release is not, and may not be, sent to shareholders with registered addresses in the Restricted Jurisdictions. Banks, brokers, traders and other nominees holding shares for persons in the Restricted Jurisdiction may not forward this press release, or any other document received in connection with the Offer, to such persons. “United States” in this section means the United States of America (its territories and possessions, any state of the United States, and the District of Columbia).

The Offer and the information, and documentation made available through this press release have not been prepared by, and not approved by, an "authorized person" as referred to in Section 21 of the UK Financial Services and Markets Act 2000 ("FSMA"). Accordingly, the information and documents made available through this press release may not be distributed to, or forwarded to, the public in the UK. Dissemination of information and documents made available through this press release is exempt from the restrictions on financial marketing in Article 21 of the FSMA on the basis that it is a communication by or on behalf of a legal person relating to a transaction for the acquisition of the day-to-day control of the business of the legal entity, or to acquire 50 per cent or more of the voting shares in a legal entity, in accordance with Article 62 of the FSMA (Financial Promotion) Order 2005.

Statements in this press release relating to future conditions or circumstances, including information 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 that are dependent on circumstances that occur in the future. Due to a number of factors, which to a large extent are beyond the control of Ratos, it cannot be guaranteed that future conditions will not differ materially from those expressed or implied by the forward-looking statements. Any such forward-looking statement speak only as of the date on which they are announced and Ratos 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 in accordance with applicable laws and regulations.

 

Tags: