NOT FOR DISTRIBUTION IN OR INTO
EVLI AND EAB HAVE SIGNED A COMBINATION AGREEMENT
The Merger in brief
- The proposed combination will be carried out as a statutory absorption merger in accordance with the Finnish Companies Act (the "Merger") whereby EAB will merge into Evli. In the same connection,
EAB Asset Management Ltd , a subsidiary of EAB, which offers asset management activities, would merge into Evli through an absorption merger. -
Upon completion, the shareholders of EAB will receive as merger consideration 0.172725 new series B shares in Evli for each share they own in EAB and a cash consideration for a total amount of
EUR three (3) million, which shall be equally distributed between the outstanding shares of EAB on the last trading day before the completion date of the Merger. Based on the current amount of out-standing shares the cast consideration would amount toEUR 0.217196 per share (the "Merger Consideration"). In such case, the shareholders of EAB would own approximately 9 percent of the shares and one (1) percent of the votes in the Combined Company and the shareholders of Evli would own approximately 91 percent of the shares and 99 percent of the votes in the Combined Company. The admission of the Merger Consideration shares to trading onNasdaq Helsinki Ltd's ("Helsinki Stock Exchange ") official list will be applied for in connection with the Merger. -
EAB has the right to distribute funds to its shareholders up to a maximum of amount of
EUR 2.35 million before the completion date of the Merger, yet no more than such an amount that can be distributed by EAB without resulting in a failure to meet the statutory requirements on capital adequacy applicable to it. - The combination is subject to, among other items, approval of the Merger by a majority of two-thirds of votes cast and shares represented at the respective Extraordinary General Meetings of Evli and EAB. The Extraordinary General Meetings will be convened as soon as possible after the registration of the Merger Plan.
- Holders of Evli's series A shares representing approximately 85 percent of series A shares in Evli and approximately 82 percent of the votes produced by all Evli shares and shareholders representing approximately 65 percent of the shares and votes in EAB have through irrevocable undertakings undertaken to vote in favour of the Merger at the General Meetings of Evli and EAB. In addition, a shareholder representing approximately 18 percent of all votes in EAB has committed to vote in favour of the Merger in EAB's Extraordinary General Meeting subject certain customary conditions. (Aforementioned undertakings jointly "Voting Commitments").
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The completion of the Merger (the "Completion") is intended to be implemented during the second half of 2022 subject to, inter alia, that Evli has received the approval from the
Financial Supervisory Authority for the change of ownership. Pursuant to the Merger Plan, the Completion would take place on or aboutOctober 1, 2022 .
RATIONALE OF THE COMBINATION
The objective of the Combination is to create a Combined Company that would be one of the leading companies on the
Evli and EAB share a strong commitment and dedication to responsible investing and providing sustainable investment solutions. In addition to a strong offering of traditional wealth management services, the Combined Company would achieve a stronger position in the offering of alternative investment products, as well as in compensation consulting and the management of personnel funds. The combination would also strengthen expertise, sales, and customer service resources in
Strategy, commercial and operational benefits
The combination of Evli and EAB is the next step for Evli in its strategic path to become a leader in Nordic wealth management services.
For EAB and its customers and shareholders, the combination is a natural step in EAB's strategy, which aims for substantial growth of business and profitability in the medium term.
Financial benefits - Considerable synergy potential
The contemplated combination of Evli and EAB is expected to create value for the shareholders of the Combined Company through complementary expertise, a broad customer base, superior operational efficiency, and potential synergies. The synergies expected from the combination are estimated to be around
The companies seek to further the integration planning with the aim of achieving readiness for a common future directly from the Completion, but continuing their business in the ordinary course as separate companies until the Completion.
"We are very pleased to announce the merger of Evli and EAB. The merger is a logical next step in Evli's strategic goal to become a leading Nordic wealth manager building a sustainable future. Among other things, the merger will add new asset classes to Evli's service offering of alternative investment products and expand the incentive and reward business offering. With a broader range of services and new expertise, we will be even better equipped to serve our current and future clients according to their individual needs", says Maunu Lehtimäki, CEO of Evli.
"I am delighted that we have taken this next step in our merger with Evli. The merger will give us a particularly strong position in institutional asset management and the incentive and rewards businesses. I believe that EAB's expertise and range of services will be an excellent complement to the broad offering of Evli and will benefit the clients of both companies",
THE COMBINED COMPANY
Overview
The employees of EAB will transfer to the service of Evli in connection with the completion of the Merger by operation of law as "old employees". The Combination does not have direct effects on EAB's existing clients.
Due to reasons related to the licences of the Combined Company and the arrangement of its management, it is also proposed to Evli's Extraordinary General Meeting deciding on the Merger that
Board of Directors and management
The Merger would not result in any changes to the composition of the Board of Directors or management of Evli, and Maunu Lehtimäki would continue to serve as the CEO of the Combined Company.
Ownership structure and governance
After the completion of the Merger, the shareholders of EAB will own approximately 9 percent of the shares and one (1) percent of the votes in the Combined Company and the shareholders of Evli will own approximately 91 percent of the shares and 99 percent of the votes in the Combined Company assuming that none of EAB's shareholders will demand redemption of his/her shares at the EAB Extraordinary General Meeting resolving on the Merger and that neither company issues new shares.
The table below illustrates the ten (10) largest shareholders of the Combined Company (as per
Shareholder | Number of shares | % of shares | % votes |
Oy Prandium Ab | 4,754,100 | 18.12% | 25.53% |
Oy Scripo Ab | 4,754,100 | 18.12% | 25.53% |
Oy Fincorp Ab | 2,654,921 | 10.12% | 15.49% |
2,510,000 | 9.56% | 12.55% | |
Lehtimäki | 704,759 | 2.69% | 3.60% |
* | 433,039 | 1.65% | 0.14% |
411,235 | 1.57% | 0.14% | |
Tallberg Claes | 402,344 | 1.53% | 2.46% |
Hollfast John Erik | 400,000 | 1.52% | 2.20% |
Joensuun Kauppa ja | 262,265 | 1.00% | 0.09% |
Ten largest total | 17,286,763 | 65.87% | 87.74% |
|
|
|
|
Others | 8,956,417 | 34.13% | 12.26% |
|
|
|
|
Total | 26,243,180 | 100.00% | 100.00% |
ILLUSTRATIVE COMBINED FINANCIAL INFORMATION
The financial information presented below are preliminary unaudited estimates based on the carve-out financial statements of Evli for the financial year 2021 and on the financial statements of EAB for the financial year 2021. The combined financial information has been presented for illustrative purposes and is unaudited.
The future financial information of the Combined Company to be published following the Completion may differ materially from the illustrative financial information set out below. Accordingly, the information presented is not necessarily indicative of what the financial position, results of operations or performance of the Combined Company would have been had the contemplated combination occurred earlier.
|
| Total | ||
Net revenue for the financial year ending |
| 116.2 | 22.2 | 138.4 |
Operating profit for the financial year |
| 56.6 | 2.9 | 59.4 |
Assets under management on |
| 17.5 | 2.5 | 20.0 |
No. of employees on |
| 244 | 89 | 333 |
1 As |
FINANCIAL TARGETS
To enable an improvement of operative efficiencies, in connection with the combination, the parties intend to assess the possibility of harmonising the group structure of the Combined Company by combining certain current Evli's and EAB's group companies and overlapping functions either in connection with the Completion or as soon as possible thereafter. Evli will disclose any plans from employee changes and, where appropriate, discuss them with employees as required by employment legislation prior to the Completion or as soon as possible thereafter.
THE MERGER
Merger in accordance with the Finnish Companies Act
The proposed combination of Evli and EAB will be executed through a statutory absorption merger in accordance with the Finnish Companies Act whereby all assets and liabilities of EAB are transferred without a liquidation procedure to Evli. EAB shall automatically dissolve as a result of the Completion.
Upon the Completion, the shareholders of EAB will receive as Merger Consideration 0.172725 new series B shares in Evli for each share they own in EAB and a cash consideration for a total amount of
The aggregate number of the new series B shares in Evli to be issued as Merger Consideration to the shareholders of EAB is expected to be 2,385,743 shares, assuming that none of EAB's shareholders request for the redemption of shares they hold. Evli shall apply for the listing of the new shares to be issued as Merger Consideration to public trading on the
Based on the relative value determination of the merging company, which is supported by a fairness opinion received by EAB's Board of Directors from its financial advisors, the Board of Directors of Evli and the Board of Directors of EAB have concluded that the consideration being paid in connection with the Merger is fair from a financial point of view to the shareholders of Evli and the shareholders of EAB, respectively. The Boards of Directors of Evli and EAB have, taking into account inter alia the Voting Commitments, concluded that making a proposal concerning the Merger to the Extraordinary General Meetings of both companies is in the best interest of their respective shareholders. The Boards of Directors of Evli and EAB have signed the Combination Agreement and the Merger Plan on
Each of Evli and EAB will separately convene an Extraordinary General Meeting to resolve upon the proposed Merger. The Extraordinary General Meetings are expected to be held in
A merger plan concerning the merger of
CONDITIONS FOR EXECUTING THE MERGER
The Completion of the Merger is conditional upon the satisfaction or, to the extent permitted by applicable law, waiver of each of the conditions set forth below as set out in greater detail in the Combination Agreement and the Merger Plan:
- the Merger having been duly approved by the Extraordinary General Meeting of EAB;
- the Merger having been duly approved by the Extraordinary General Meeting of Evli;
- the regulatory approvals and permits, as defined in the Combination Agreement, having been obtained in accordance with the Combination Agreement and remaining in force;
- shareholders of EAB representing no more than fifteen (15) percent of all shares and votes in EAB having demanded the redemption of their shares in EAB pursuant to chapter 16, section 13 of the Finnish Companies Act;
- there being no material breach of the provisions on the ordinary course of business permitted in the Combination Agreement by either Evli or EAB so that a material adverse effect as defined in the Combination Agreement directly results from the breach;
- no event, circumstance or change having occurred on or after the date of the Combination Agreement that would have a material adverse effect, as defined in the Combination Agreement;
- there being no material breach of the representations given by either Evli or EAB in the Combination Agreement, the direct consequence of which is a material adverse effect, as defined in the Combination Agreement;
- the Finnish Tax Authorities not having changed or revoked their assessment of the tax-neutrality of the Merger with respect to Evli, EAB or their shareholders;
- Evli having obtained from Nasdaq Helsinki written confirmations that the listing of the shares issued as Merger Consideration on the official list of said stock exchange can take place as at or promptly after the effective date of the Merger; and
- the Combination Agreement remaining in force and not having been terminated in accordance with its provisions.
Because a statutory absorption merger of EAB into Evli in accordance with the Finnish Companies Act has been proposed as the means of carrying out the arrangement, the arrangement also requires a statutory public notice to the creditors of EAB.
In the parties' assessment, the Completion will result, at least for the regulated companies within the EAB group, in an obligation to file statutory notifications of major holdings with the
COMBINATION AGREEMENT
Evli and EAB signed a Combination Agreement on
The Combination Agreement contains certain customary representations and warranties as well as undertakings, such as each party conducting its business in the ordinary course of business until the Completion, keeping the other party informed of any and all matters that may be of material relevance for the purposes of effecting the Completion, preparing the necessary filings and notifications and convening the Extraordinary General Meeting as well as in relation to any objections by the creditors. The parties will also seek to ensure that their agreements that are material to the Combined Company's operations and that could expire due to the Merger will remain in force or be renegotiated or replaced prior to the completion of the Merger. In addition, Evli and EAB each undertake to not solicit proposals competing with the Merger agreed in the Combination Agreement and to notify each other of any competing proposals and, if not prevented by duty of care and loyalty or mandatory disclosure obligation, to provide the other party with a reasonable opportunity to negotiate matters related to the competing offer with the contacted party's Board of Directors. Regardless of any competing proposal, a party must always convene an Extraordinary General Meeting to decide on the Merger in accordance with the Combination Agreement.
In the Combination Agreement, Evli has undertaken not to acquire EAB's shares or other financial instruments during the validity of the Combination Agreement (this obligation does not concern UCITS funds and alternative investment funds or other common investment undertakings managed by Evli, provided that their acquisitions are conducted in the ordinary course of business without Evli influencing such acquisitions).
Moreover, Evli and EAB have given each other certain customary representations and warranties related to, inter alia, due incorporation, status of the shares in the respective company, preparation of financial statements and interim reports, compliance with applicable licenses, laws and agreements, legal proceedings, ownership of intellectual property, taxes, employees and the due diligence materials provided to the other party.
Pursuant to the Combination Agreement, between the signing of the Combination Agreement and the effective date of the Merger, EAB shall have the right to distribute dividends to its shareholders in the maximum aggregate amount equal to the lower of (a)
According to the Combination Agreement, Evli has the right to issue a maximum of 100,000 series B shares under its current share-based incentive plans without this affecting the Merger's conversion rate.
Evli and EAB shall bear their own fees, costs and expenses incurred in connection with the Merger.
The Combination Agreement may be terminated by mutual written consent of Evli and EAB. Each of Evli and EAB may terminate the Combination Agreement inter alia if (i) the Merger has not been completed by
ADVISERS
Evli Corporate Finance is acting as the financial adviser of Evli and Castrén &
Board of Directors
FURTHER INFORMATION:
Maunu Lehtimäki, CEO,
Requests for interviews via the company's communications:
EVLI AND
Evli in brief
We see wealth as an engine to drive progress. We draw on our heritage, broad expertise and Nordic values to grow and manage wealth for institutions, corporations and private persons in a responsible way.
We are the leading asset manager in
*Kantar Prospera External Asset Management Finland 2015, 2016, 2017, 2018, 2019, 2021, Kantar Prospera Private Banking 2019, 2020 Finland **SFR Scandinavian Financial Research Institutional Investment Services Finland 2021.
EAB in brief
DISTRIBUTION:
The main news media
www.eabgroup.fi
IMPORTANT NOTICE
This release is not an offer of shares in
This release does not constitute an offer of or an invitation by or on behalf of, Evli or EAB, or any other person, to purchase any securities.
This release does not constitute a notice to an Extraordinary General Meeting or an Exemption Document. Any decision with respect to the proposed statutory absorption merger of EAB into Evli in accordance with the Finnish Companies Act should be made solely on the basis of information to be contained in the actual notices to the Extraordinary General Meetings of Evli and EAB, as applicable, and the Exemption Document as well as on an independent analysis of the information contained therein. You should consult the Exemption Document for more complete information about the Combined Company and the Merger.
This release includes 'forward-looking statements' that are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations and assumptions, which, even though they seem to be reasonable at present, may turn out to be incorrect. The shareholders of Evli or EAB should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Combined Company to differ materially from those expressed or implied in the forward-looking statements. Neither Evli nor EAB, nor any of their respective affiliates, advisors or representatives or any other person undertakes any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.
This release includes estimates relating to the benefits expected to arise from the Merger, which have been prepared by Evli and EAB and are based on a number of assumptions and judgments. The assumptions relating to the estimated benefits and related Merger costs are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause the actual benefits and costs arising from the Merger, if any, to differ materially from the estimates in this release. Further, there can be no certainty that the Merger will be completed in the manner and timeframe described in this release, or at all.
APPENDIX 1
MERGER PLAN OF EVLI PLC AND EAB GROUP PLC
APPENDIX 2
MERGER PLAN OF EVLI PLC AND EAB ASSET MANAGEMENT LTD
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