Trio places bid for Netwise

This document may not be made public, published or distributed in the United States of America, Canada or Japan. The offer is not addressed to those persons whose participation requires prospectuses, registration or measures other than those prescribed by Swedish law. Trio places bid for Netwise Summary · Trio is creating a well-positioned player within the rapidly growing market for call monitoring, combined with the integration of fixed, mobile and IP telephony. · Trio will, through this acquisition, build a platform for expansion in Europe, with the emphasis on northern Europe. · Coordinating existing product development will enable new product concepts to reach the market quickly and efficiently. · The offer entails the receipt of 2.5 shares in Trio AB for every class A share in Netwise AB, and the receipt of 2.5 shares in Trio AB for every class B share in Netwise AB. SEK 0.50 in cash will be paid for every Warrant issued by Netwise AB. · The offer entails a premium of approximately 117 per cent in relation to the average latest bid price for the class B Netwise AB share on the O-list over the past 30 trading days. · It is calculated that the offer period will run from 19th November. up to and including 10th December 2001. The offer The Board of Directors of Trio has decided today to make a public offer to the shareholders in Netwise and holders of Subscription Warrants ("Warrants") issued by that company to acquire all outstanding shares and Warrants ("the Offer"). · Holders of class A shares in Netwise are offered, for every class A share: - 2.5 newly issued shares in Trio · Holders of class B shares in Netwise are offered, for every class B share: - 2.5 newly issued shares in Trio · SEK 0.50 in cash for every Warrant to subscribe · Brokerage will not be payable for shares and Warrants in Netwise handed in during the Offer period. Trio's offer entails, based on a bid price on 24th October 2001 - the final trading day before the offer was made public (SEK 4 per share in Trio), a premium of approximately 117% for Netwise's class B share, which is quoted on the O-list, based on the average bid price for Netwise over the last 30 trading days. Based on the average bid price for Netwise for the last 10 trading days, Trio's bid entails a premium of 65.1% for Netwise's class B shares. Netwise's class A shares are not quoted, but at the same price as that at which Netwise's class B shares are quoted, Trio's bid entails the same premium as for the class B share. Given full acceptance of the Offer, the Offer will entail a new share issue of 11,308,750 shares in Trio, corresponding to a voting and proprietary share of approximately 16% in the new corporate group, and a cash payment of approximately SEK 230,000 as remuneration for outstanding Warrants. The total value of the Offer, including payment for outstanding Warrants, is approximately SEK 45.5 million. Trio currently holds no shares in Netwise. Background to and motivation for the Offer Trio is a telecommunications company that develops software and system solutions specialises in offering companies efficient call monitoring, coupled with the integration of fixed, mobile and IP telephony. Trio reached its current form in 1997 through the merger of Trio Information Systems AB, Preseco Informationssystem AB and Objecta Elektronik & Data AB. In June 1997, the company's share was quoted on the Stockholm Stock Market Information list of shares, and in December 1998, the share was quoted on the O-list of the Stockholm Stock Exchange. Abacus Solutions Oy was acquired from Sonera at the end of 1999, and it was this acquisition that laid the foundations for Trio's Operator Solutions Division. Trio's System Products Division provides exchange-independent systems for call monitoring, primarily for major companies and organisations. Trio is the only provider in this segment that can integrate both mobile telephony and IP telephony with traditional, fixed telephony. Trio's Operator Solutions Division provides systems that enable a complete transition from fixed to mobile telephony, and the integration of fixed telephony with mobile telephony. The systems are installed in mobile operators' networks and subscription to the functionality is available from the operators in the form of a service. Trio's Customized Systems Division offers voice response systems and Call and Contact Centre solutions. Netwise, in common with Trio's System Products Division, develops and supplies exchange-independent call forwarding systems. Call forwarding systems comprise a key part of call monitoring systems. Netwise is also the only exchange-independent supplier who, alongside Trio, can offer the integration of IP telephony with fixed telephony and out-and-out IP telephony solutions. Netwise has complementary retailer channels throughout the Nordic region and has concluded IP solution-related agreements in the Nordic region, the Benelux countries and Germany. Interest in integrated telephony systems that include mobile extensions and IP telephony has increased in the call forwarding and message handling systems market. Trio has evaluated alternative structural deals to improve its ability to meet this demand. Trio's company management team, Board of Directors and the principal group of owners, have, after comprehensive discussions with Netwise's founders and major owners, and Netwise's Board of Directors, established that the companies share a common attitude with regard to the industrial aspects of System Products' and Netwise's operations. It was felt, in this light of this background, that a merger of these operations would be of benefit to both parties. Trio and Netwise complement each other well. The two corporate groups have both employees with cutting edge and complementary product ranges. Both Trio and Netwise have high aspirations with regard to developing the value of their customer offerings and hence to improving their competitiveness. These are just some of the considerations that have laid the foundations for the Offer presented below. The new Group · Will enjoy a leading position in the Nordic region and excellent potential for building a successful European operation. · Will have a product portfolio and skill profile that constitutes a sound basis for future competitive customer offerings to corporate clients in Europe. · Will achieve a critical mass for consolidating the existing Nordic market for call forwarding and message handling systems. · Will create a leading market position and a strong supplier's position with regard to the international Value Added Reseller channels, as suppliers of integration solutions between both fixed and mobile telephony, and between fixed and IP-based telephony. · Will, due to its size, be seen as a more attractive supplier and employer. · New development company proposal Trio intends to form a development company on the basis of the technical competence present in Netwise, provided that the proposed offer to Netwise's shareholders is accepted. The development operations within Netwise will be given the opportunity to transfer to the new company, which will focus on IP-telephony, inter alia. The proposal is in line with Trio's development strategy, which is based on conducting aspects of its product development work in partnership with others. This strategy provides access to a wider range of skills than that possessed by Trio alone and reduces the time from idea to commercialised product. The first step in this strategy was the agreement with Technology Nexus AB in June 2001 concerning the development of Trio PresentOffice. The formation of the new company affects all of Trio's divisions due, inter alia, to the fact that the importance of IP telephony in all types of telephony solutions is expected to increase. The agreement with Technology Nexus AB is not affected. The intention, as soon as the Offer has been implemented, is to convene an Extraordinary General Meeting of Trio to present a detailed proposal concerning the formation of the new development company and the chance for key individuals within Netwise to be offered joint ownership of the new development company. Organisational issues Netwise will form part of the Trio Group of companies as a subsidiary company thereof. Terms & Conditions of the Offer The following terms and conditions apply to the Offer: · that the Offer is accepted to such an extent that Trio acquires ownership of shares and Warrants that represent more than 50% of the votes in Netwise, calculated both before and after full redemption of the Warrants issued. Trio reserves the right, however, to fulfil the Offer, even if acceptance levels are lower; · that the Extraordinary General Meeting of Trio passes the requisite resolutions to enable the issue of new shares as payment within the framework of the Offer; · that all requisite official permits are obtained without conditions, or on conditions which, in the opinion of Trio, do not have a significantly negative effect on the Offer or the acquisition of Netwise; · that the acquisition, before the fulfilment of the Offer is made public, is not either wholly or in part rendered impossible or significantly hindered as a result of legislation, court judgements, official rulings or the equivalent, either in Sweden or abroad, and which are either already extant or may be expected, or by other circumstances beyond the control of Trio; · that Trio does not become aware, before the fulfilment of the Offer is made public, that information made public by Netwise in any significant respect is incorrect or misleading, or that any significant circumstance that should have been made public by Netwise has not so been. Trio reserves the right to do away with one or more of the above- mentioned terms and conditions for the Offer. Financing The acquisition will be financed partly through a new issue of shares in Trio and partly through the company's funds for cash payments in respect of the Subscription Warrants. Financial effects A merger between Trio and Netwise under the above-mentioned terms and conditions will generate approximately 70.4 million shares for Trio and a market value of approximately SEK 280 million, based on a price for Trio's share of SEK 4. If fully implemented, a merger between Trio and Netwise is expected to generate substantial synergies. These synergies will arise both on the revenue side, through increased sales, and through the savings potential that exists with regard to administrative costs. It is calculated that the cost synergies will achieve their full impact during the first half of 2002. Integration, restructuring and realisation of synergies is expected to give rise to non-recurring costs totalling approximately SEK 20-25 million. Trio intends, to this end, to establish a restructuring reserve. Goodwill totalling approximately SEK 7 million will arise in conjunction with the acquisition. The pro forma financial position for the new Group, as of 30th September 2001, yielded an equity/assets ratio of approximately 66 per cent and a net cash balance of approximately SEK 96 million, without taking into account the restructuring reserve that Trio intends to set up. Pro forma for the first three quarters of 2001, the merger will yield a deterioration in the EPS from -SEK 0.4 to -SEK 0.7 per share. The merger is, however, expected to have a positive effect on the EPS in Trio during 2002. Ownership structure in the new Group If the Offer is accepted in full, Netwise's current owners will collectively own 16% of the shares and votes in Trio. General timetable The Offer prospectus is scheduled for issue to the shareholders and holders of Warrants in Netwise on or around 14th November 2001. The offer period is scheduled to run from 19th November 2001, inc., up to and including 10th December 2001. Provided that Trio fulfils the Offer by 10th December 2001, it is calculated that an accounting of payments to those shareholders and holders of Warrants who have accepted the Offer can begin on 21st December 2001. Trio reserves the right to extend the acceptance period, and to postpone the date on which payment accounting begins. Advisors Trio has commissioned Bankaktiebolaget JP Nordiska and Mannheimer Swartling Advokatbyrå to act as its financial and legal advisors, respectively, in this matter. Stockholm, 25th October 2001 Trio AB (publ.) For additional information, please contact: Sverker Hannervall, President & CEO Tel: +46 8 457 30 05 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/26/20011026BIT00570/bit0002.doc http://www.waymaker.net/bitonline/2001/10/26/20011026BIT00570/bit0002.pdf