HMS Networks completes a placement of 3,500,000 shares, raising proceeds of SEK 1,400 million

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HMS Networks AB (publ) (“HMS” or the "Company") has, based on authorisation from the extraordinary general meeting on January 26, 2024, resolved to carry out a placement of 3,500,000 newly issued shares at a subscription price of SEK 400 per share (the “Share Issue”). The subscription price has been determined through an accelerated bookbuilding procedure performed by Skandinaviska Enskilda Banken AB (“SEB”). After the Share Issue, the total number of shares in HMS will amount to 50,318,868 shares. The Share Issue was oversubscribed and a large number of Swedish and international institutional investors, as well as certain existing shareholders, participated in the Share Issue.

The bookbuilding procedure that was announced by the Company earlier today has been completed and HMS’ Board of Directors has resolved to carry out a placement of a total of 3,500,000 shares at a subscription price of SEK 400 per share, consequently raising proceeds of SEK 1,400 million before transaction costs. A large number of institutional investors have subscribed for shares in the Share Issue, among these the existing shareholders Investment AB Latour and AMF Fonder.

As previously communicated, the Board of Directors of HMS has carefully considered the option to raise capital through a rights issue and makes the assessment that it is more beneficial for the shareholders to raise capital through a directed issue which enables HMS to execute on its successful acquisition strategy in a timely and cost-effective manner, in combination with limiting market exposure. Considering (i) the Share Issue’s close connection with the closing of the Red Lion Controls acquisition, (ii) the limited size of the Share Issue in relation to the market capitalisation of HMS, (iii) the cost savings associated with a prompt repayment of the bridge loan facility, (iv) that a directed share issue can be carried out at a lower cost and with less complexity than a rights issue, and (v) HMS’ desire to diversify its shareholder base with institutional investors in order to enhance the liquidity of HMS’ share, the Board of Directors of HMS overall assessment is that the reasons for carrying out the Share issue in this manner were in the best interest of the Company and all shareholders, and thereby the most suitable alternative. Since the subscription price in the Share Issue was determined through a bookbuilding procedure, the Board of Directors assessment is that the subscription price reflects current market conditions and demand. The subscription price in the Share Issue corresponds to a discount of approximately 1 percent relative to the closing price on April 17, 2024. HMS will use the proceeds of the Share Issue to repay the bridge loan facility of USD 120 million used as part of the financing of the acquisition of Red Lion Controls and to secure an efficient capital structure.