HMS Networks explores the conditions to carry out a directed share issue of approximately SEK 1,400 million - Seite 2

As previously communicated, the purpose of the Share Issue is to repay the bridge loan facility of approximately USD 120 million used as part of the financing of the acquisition of Red Lion Controls and to secure an efficient capital structure. 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 are in the best interest of the Company and all shareholders, and thereby the most suitable alternative. Since the subscription price in the Share Issue will be determined through a bookbuilding procedure, the Board of Directors assess that the subscription price will reflect current market conditions and demand.

HMS’ largest shareholder, Investment AB Latour, has committed to, and the third largest shareholder, AMF Fonder, has declared its intention to invest in the above-mentioned share issue up to an amount corresponding to their respective ownership levels. This support has provided important conditions for enabling a successful completion of the acquisition of Red Lion Controls and the Share Issue.

In connection with the Share Issue, the Company has agreed to a so called lock-up undertaking, subject to customary exceptions and under the condition that the Share Issue is carried out, whereby the Company’s Board of Directors may not propose or resolve on any new share issuances for a period of 90 calendar days from the settlement date of the Share Issue. In addition, CEO Staffan Dahlström, CFO Joakim Nideborn, and all members of the Board of Directors of HMS¹, have undertaken, with certain exceptions and under the condition that the Share Issue is carried out, not to sell or otherwise dispose of their shares in HMS for a period of 90 calendar days after the settlement date of the Share Issue.