Incap planning to combine its business with Inission AB
Incap Corporation Stock Exchange Release
22 July 2013 at 9 am
INCAP PLANNING TO COMBINE ITS BUSINESS WITH INISSION AB
Following the financing arrangement published today by Incap Corporation and the directed share issue related to that arrangement, the Swedish contract manufacturer Inission AB becomes the company's largest shareholder. After registration of the new shares subscribed in the directed share issue, Inission AB will hold 28,500,000 shares in Incap Corporation, corresponding to approximately 26% of the total share capital.
The comprehensive arrangement agreed between Inission AB and Incap Corporation on 21 July 2013 includes an option for Inission AB to combine and unite Inission AB's business operations with Incap Corporation. The use of this option shall be notified by Inission AB by the end of the year 2013. The consummation of the option is conditional to the approval of the shareholders' meeting of Incap Corporation and the granting of the below-mentioned exemption by Financial Supervisory Authority. Inission's financial partners shall also approve the deal. If the option is used, the uniting of Incap and Inission will be carried out by Incap Corporation acquiring Inission AB's subsidiaries' shares and business operations. The purchase price is based on the actual result of Inission AB for the years 2011 and 2012 and for January-June 2013.
If the transaction is consummated in accordance with the agreement conditions, Incap will pay the purchase price by directing a new share issue to Inission in two phases. In the first phase, the value of the new shares issued will correspond to 70 per cent of the total purchase price with the new shares being issued in connection with the consummation of the agreement. The remaining 30 per cent of the purchase price will be paid through a second directed share issue two weeks after Incap has published its financial statements for 2013.
Incap will convene an extraordinary general meeting to decide on the transaction regarding the two companies. As Inission AB's share ownership in Incap Corporation will exceed the limit set for the obligation to make a takeover bid in case the transaction is consummated, Inission will apply the Financial Supervisory Authority for an exemption from the obligation to bid.
Inission AB is a contract manufacturer that has a total revenue of approximately SEK 268 million in 2012 (approximately EUR 30.8 million) and an operating profit (EBIT) of approximately SEK 16.1 million (approximately EUR 1.9 million). The company has some 190 employees in Sweden and in Estonia. The company is located in Stockholm, Gothenburg, Munkfors, Pajala and Tallinn. Inission provides tailored manufacturing and logistics services in the field of industrial electronics, specialising in medical technology, the automotive and marine industries, and measurement and control technology. The company began operations in the 1970s and is privately held.
Inission AB has a comprehensive sales network and an effective operating model that has been applied to accomplish a return to profitability in the operations of electronics contract manufacturing companies acquired by Inission. Combining these strengths with Incap Corporation's established customer base and global volume production capacity will create a new entity that has a strong competitive position in the global market and can be a significant player in the consolidation of the northern European EMS industry.
According to the estimates of the two companies, post-merger Incap-Inission will be able to achieve annual revenue in excess of EUR 100 million while earning a profit within the next two years.
Lassi Noponen, Chairman of the Board of Incap Corporation: "We welcome Inission as a new shareholder. The Finnish-Swedish cross border element of this arrangement will enhance our competitiveness in the future. During this process we learned about Inission's novel operational model in the EMS industry and we believe that together with Inission Incap will be a strong player in the EMS business and in future consolidation of the industry."
Fredrik Berghel, CEO of Inission AB: "The EMS industry is under consolidation and Inission wants to be proactive within the consolidation. The merger of Incap and Inission will result in a very attractive new structure in the business, and the new company will have strong presence in addition to Sweden and Finland also in the global market. The combined customer portfolio is complementary and very attractive. The synergies will be found within marketing, production and sourcing. Access to production from Incap's factory in India will give new possibilities in the Swedish market. The merger also enables enhanced mechanical production within the Vaasa factory."
President and CEO
Lassi Noponen, Chairman of the Board of Directors, tel. +358 40 501 5127
Sami Mykkänen, President and CEO, tel. +358 40 559 9047 or +372 555 379 05
Kirsti Parvi, CFO, tel. +358 50 517 4569 or +372 555 620 35
Hannele Pöllä, Director, Communications and Investor Relations, tel. +358 40 504 8296
NASDAQ OMX Helsinki Ltd
The company's home page www.incap.fi
INCAP IN BRIEF
Incap Corporation is an internationally operating contract manufacturer whose comprehensive services cover the entire life cycle of electromechanical products from design and manufacture to repair and maintenance services. Incap's customers include leading equipment suppliers in energy-efficiency and well-being technologies, for which the company produces competitiveness as a strategic partner. Incap has operations in Finland, Estonia, India and China. The Group's revenue in 2012 amounted to approximately EUR 64.1 million, and the company currently employs approximately 600 people. Incap's share has been listed on the NASDAQ OMX Helsinki Ltd since 1997. Additional information: www.incap.fi.