SMART WIRES INTENDS TO CARRY OUT A PRIVATE PLACEMENT AND SUBSEQUENT LISTING OF SDRS ON NASDAQ FIRST NORTH GROWTH MARKET

NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, HONG KONG, CANADA, NEW ZEALAND, JAPAN, SINGAPORE, SOUTH KOREA OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR REQUIRE FURTHER REGISTRATION MEASURES. PLEASE SEE IMPORTANT INFORMATION AT THE END OF THE PRESS RELEASE.

Smart Wires Technology Ltd (“Smart Wires” or the “Company”), a grid technology company that utilises advanced power electronics hardware and software to enhance and optimize grid capacity to meet the demands and opportunities of the energy transition, hereby announces its intention to carry out a private placement of Swedish Depository Receipts (“SDRs”) representing shares in the Company directed to Swedish and international qualified investors (the “Private Placement”). Following the Private Placement, the Company intends to list the SDRs on Nasdaq First North Growth Market Sweden (the “Listing”). The Listing is expected to support Smart Wires’ future growth and operational strategy, among other things, through improved access to the capital markets, including the possibility to reach new Swedish and international shareholders.

The Company has retained Pareto Securities AB as Global Coordinator and Bookrunner (the “Manager”) to advice on and effect the Private Placement.

The Private Placement in brief:

• Through the Private Placement, the Company intends to issue up to 30,400,000 new shares represented by SDRs to raise gross proceeds of approx. SEK 1,262 million

• In addition, up to 4,540,000 new shares in the Company represented by SDRs are intended to be over-allotted by the Manager, which is equivalent to up to 15% of the Private Placement or up to approx. SEK 188 million (the “Additional SDRs”).[1]
• The price per SDR in the Private Placement is fixed at SEK 41.5, equivalent to a pre-money valuation of SEK 2,861 million.[2]

• Certain existing shareholders have collectively pre-committed to subscribe for SDRs corresponding to approx. SEK 85 million in the Private Placement and will receive 100% allocation.
• Certain cornerstone investors, comprising AP4 (The Fourth Swedish National Pension Fund), Erste Asset Management GmbH, Goldman Sachs Asset Management LP, Handelsbanken Fonder AB on behalf of investment funds under management, and funds advised by UBS Asset Management (UK) Ltd, have pre-committed to subscribe for approx. SEK 570 million in the Private Placement. They will receive 100% allocation. Certain other new investors have indicated that they will subscribe for approx. SEK 295 million in the Private Placement.
• The Company has received pre-commitments and indications to subscribe for SDRs totalling more than SEK 950 million which equals approx. 66% of the Private Placement.
• The Private Placement will be directed to Swedish and international investors in each case subject to, and in compliance with, applicable exemptions from relevant prospectus, filing or registration requirements in the relevant jurisdictions. Further selling restrictions and transaction terms will apply.
• The Private Placement will be executed through a bookbuilding procedure.
• Subject to receiving relevant approvals from Nasdaq Stockholm AB, as well as prevailing equity capital market conditions, the Listing is expected to be completed on or about the week commencing 17 May 2021.
• In connection with the Listing, the Company, the major shareholders and members of the Company’s board of directors and management have entered into customary lock-up agreements.
• Further announcements relating to the Private Placement and the Listing will be made in due course. 

Peter G. Wells, CEO of Smart Wires, comments:

“For the past decade, Smart Wires has been developing our core technology and iterating on product platforms and applications. In parallel with this journey, global commitments to achieve the energy transition have grown significantly in their ambition, putting massive pressure on electricity network companies to transform the way they plan and operate their electric grids.

Our listing on Nasdaq First North Growth Market will enable us to deliver on the growth potential that is achievable given the convergence of the market demands and our core capabilities. This is a testament to the maturity of the electric grid technologies market as a whole. I am pleased to be able to offer new shareholders the opportunity to join our journey and contribute meaningfully to a rapid, low-cost energy transition.”

About Smart Wires

Smart Wires conducts grid technology business that helps utilise, modernise, optimise and monetise grid capacity to meet the demands and opportunities of the energy transition. The Company operates in the global transmission grid technology market and is a leader in modular power flow control technology. Power flow control technology controls and directs power flow on high voltage electric transmission systems. Smart Wires serves transmission owners, primarily electric utilities. Transmission owners use power flow controllers to eliminate line overloads by redirecting power to other lines, to reduce transmission congestion, and to enable renewable energy connection and dispatch. Currently, Smart Wires’ main projects are localised in Europe, the United States and Australia with upcoming projects in South America and Canada. The Company has a large customer base comprised of utilities globally. For more information, please visit www.smartwires.com.

Key strengths and competitive advantages

• Smart Wires is a grid technology company that helps utilities maximize the utilization of existing and new grids globally and solves the problem of grid congestion with real-time push-pull power flow control.
• Patented technology solution: Replacing 100-year-old technology with a superior offering, both in terms of cost (capex and opex), lead time and flexibility.
• Proven technology with more than 2,400 device-years of field experience serving many of the most respected utilities in the world.
• Seasoned management team with renewables, utility & technology expertise.
• Positioned for strong growth, with proven demand creation model. Ramp-up is expected in 2021 supported by backlog. The Private Placement is expected to fund the growth going forward.

Financial highlights

• Targeting 2021E revenues of USD 50 million (up from USD 15 million in 2020).
• USD 12 million in preliminary revenues in Q1 2021.
• High visibility from contracted backlog with USD 44 million secured per 31 March 2021.
• Total qualified pipeline of USD 2,025 million per 31 March 2021.
• Significant opportunity for margin expansion.
• As of March 2021, Smart Wires had a cash balance of USD 24 million and total gross debt of USD 49 million.

Financial targets

The Company has adopted the following mid-term financial targets:

• Approx. USD 700 million in revenue
• > 50% gross margin
• > 20% EBITDA margin

Advisors

Pareto Securities AB is acting as Manager in the Private Placement and in the Listing. Advokatfirman Schjødt is acting as legal advisor to the Company. Baker & McKenzie Advokatbyrå is acting as legal advisor to the Manager.

Lazard & Co., Limited, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to the Company and no one else in connection with the Private Placement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Lazard & Co., Limited nor for providing advice in relation to the Private Placement or any other matters referred to in this announcement.  Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard &  Co., Limited in connection with the Private Placement, this announcement, any statement contained herein or otherwise.

CONTACTS
Evan Geisert, CFO
Evan.Geisert@smartwires.com +1 (919) 307 9263

IMPORTANT INFORMATION

This press release does not constitute an offer or a solicitation to sell or acquire securities in the Company in any jurisdiction. The contents of this press release have been prepared by the Company and the Company is solely responsible for the contents hereof.

This announcement does not include any offer to the public to subscribe for SDRs or otherwise acquire SDRs or other financial instruments in Smart Wires, whether in Sweden or other jurisdiction. This press release does not constitute a prospectus in accordance with the Prospectus Regulation. Investors should not subscribe or deal in securities referred to in this press release.

Copies of this press release or the information herein may not, wholly or partly, direct or indirect, be distributed or sent to the United States, Australia, Hong Kong, Canada, New Zealand, Japan, Singapore, Switzerland, South Korea or South Africa or any other jurisdiction where such distribution would be illegal or require registration or other measures.

The shares in the Company have not been registered and will not be registered under the United States Securities Act of 1933 as amended (the “Securities Act”) or under the securities laws of any state or other jurisdiction in the United States and may not be offered, sold or otherwise transferred, directly or indirectly, in or to the United States, except in accordance with an applicable exemption from or through a transaction that is not subject to the registration requirements of the Securities Act and in accordance with the securities laws of the relevant state or other jurisdiction in the United States.

This press release does not constitute an offer to persons in the United Kingdom to acquire securities. No prospectus has been registered, or will be registered, in the United Kingdom regarding the securities mentioned in this press release. In the United Kingdom, this press release and other material concerning the securities mentioned herein may be distributed and directed only to (i) professional investors covered by Article 19 (5) of the Financial Services and Markets Act 2000 (the Financial Promotion) (the “Order”), (ii) high net-worth entities under Article 49 (2) (a) to (d) of the Order, and (iii) other persons to whom the prospectus may be lawfully served (all such persons are collectively referred to as “Relevant Persons“). This press release is addressed only to relevant persons and may not be used or invoked by persons who are not relevant persons. All investments or investment activities to which this press release relates are only available to relevant persons and will only be directed to relevant persons. Persons who are not relevant persons should not take any actions based on this press release, nor rely on it.

This press release does not constitute an offer to persons in Australia to acquire securities. No documentation has been, or will be, lodged with the Australian Securities and Investments Commission as a disclosure document under Chapter 6D of the Australian Corporations Act 2001 (the “Corporations Act”). Such document must only be provided to ‘wholesale clients’ as defined in the Corporations Act in Australia. Such document does not purport to include the information required of a disclosure document under Chapter 6D of the Corporations Act. Accordingly: (a) no New shares or other securities may be offered for issue to any person in Australia except to ‘wholesale clients’ as defined in the Corporations Act and in circumstances where disclosure to investors is not required under Part 6D.2 of the Corporations Act; and (b) no share or other securities may be offered for sale (or transferred, assigned or otherwise alienated) to investors in Australia for at least 12 months after their issue, except in circumstances where disclosure to investors is not required under Part 6D.2 of the Corporations Act.

Furthermore, the securities mentioned in this press release have not been registered and will not be registered under any applicable securities law in Hong Kong, Canada, New Zealand, Japan, Singapore, Switzerland, South Korea or South Africa and may, with certain exceptions, not be offered or sold to or within, or on behalf of a person or for the benefit of a person who is registered, resident or located in, these countries.

In the EEA Member States, this press release and the information contained herein are intended only for and directed to qualified investors as defined in the Prospectus Regulation. The securities mentioned in this press release are not intended to be offered to the public in any EEA Member State and are only available to qualified investors except in accordance with exceptions in the Prospectus Regulation. Any invitation, offer or agreement to subscribe for, purchase or otherwise acquire such securities will only be processed for qualified investors. Persons in any EEA Member State who are not qualified investors should not take any actions based on this press release, nor rely on it.

Financial information

The financial information for 2020 and the first quarter 2021 contained herein is derived from the Company’s unaudited annual report for 2020 and the Company’s unaudited financial report for the first quarter 2021, which have been prepared in accordance with U.S. GAAP. Accordingly, the audited financial information may differ from what is stated herein.

Forward-looking information

This press release contains certain forward-looking information and statements that reflect the Company’s current views on future events as well as financial and operational developments. Words such as “refer”, “assess”, “expect”, “can”, “plan”, “estimate”, “calculate”, “could” and other expressions that indicate indications or assessments regarding future developments or trends, and which does not relate to historical facts, constitutes forward-looking information. Forward-looking information is inherently associated with both known and unknown risks and uncertainties because it is dependent on future events and circumstances. Forward-looking information does not constitute a guarantee regarding future results or development and the actual outcome may differ materially from what is stated in forward-looking information. Neither the Company nor anyone else make any representations about publishing updates or revisions of forward-looking information as a result of new information, future events or similar circumstances other than as provided by applicable mandatory rules and regulations.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II“); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements“), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the SDRs have been subject to a product approval process, which has determined that such SDRs are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “EU Target Market Assessment“). Solely for the purposes of each manufacturer’s product approval process in the United Kingdom, the target market assessment in respect of the SDRs in the Company has led to the conclusion that: (i) the target market for such SDRs is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“UK MiFIR“); and (ii) all channels for distribution of such SDRs to eligible counterparties and professional clients are appropriate (the “UK Target Market Assessment” and, together with the EU Target Market Assessment, the “Target Market Assessment“). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the SDRs may decline and investors could lose all or part of their investment; the SDRs offer no guaranteed income and no capital protection; and an investment in the SDRs is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Private Placement. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Manager will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II or UK MiFIR; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the SDRs.

Each distributor is responsible for undertaking its own target market assessment in respect of the SDRs and determining appropriate distribution channels

[1] The over-allotment of the Additional SDRs will be facilitated by issuing the Additional SDRs on a conditional basis, implying that any SDRs repurchased in stabilization transactions will be cancelled at the end of the stabilization period, to the effect that the number of Additional SDRs finally paid and issued will correspond to the number of SDRs covered by the Manager’s exercise of the greenshoe option by the Company to the Manager

[2] Based on the number of shares in Smart Wires immediately prior to the Listing, disregarding the conversion of remaining shares in the Company’s subsidiary Smart Wires Inc to be exchanged for shares in the Company (the pre-money equity value including such converted shares amounts to approx. SEK 2,954 million).

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