Plc Uutechnic Group Oyj Stock exchange release
Statement of the Board of Directors of
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO
On
The Board of Directors of UTG (the "UTG Board") has resolved on issuing the below statement regarding the Tender Offer as required by Chapter 11, Section 13, of the Finnish Securities Markets Act (746/2012, as amended).
Tender Offer in brief
UTG and the Offeror have on
The Tender Offer will be made in accordance with the terms and conditions of a tender offer document approved by the
The consideration offered for each Share in UTG validly tendered in the Tender Offer is
The
- 39.5% compared to the closing price of the Share on
Nasdaq Helsinki Ltd ("Nasdaq Helsinki") on4 December 2020 , the last trading day prior to the announcement of the Tender Offer; - 40.1% compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the three-month period preceding the date of the announcement of the Tender Offer; and
- 47.5% compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the six-month period preceding the date of the announcement of the Tender Offer.
The
The Tender Offer was announced by the Offeror pursuant to Chapter 11, Section 9, of the Finnish Securities Markets act on
The offer period under the Tender Offer is expected to commence on or about
Major shareholders of UTG, Timo Lindström, Jouko Peräaho,
The completion of the Tender Offer is subject to certain customary conditions to be fulfilled or waived by the Offeror on or prior to the Offeror's announcement of the final results of the Tender Offer including, among others, the Offeror gaining control of more than 90% of all issued and outstanding Shares and votes in UTG and the obtaining of all necessary regulatory approvals.
Should the Offeror obtain more than 90% of the issued and outstanding Shares and votes attached thereto, the Offeror intends to initiate squeeze-out proceedings under the Finnish Companies Act (624/2006, as amended) to redeem all the remaining Shares, and thereafter cause UTG to apply for the delisting of its Shares from the official list of Nasdaq Helsinki as soon as permitted and reasonably practicable under applicable laws and regulations.
The detailed terms and conditions of the Tender Offer as well as further information on the Tender Offer will be included in the Tender Offer Document.
Background of the statement
Pursuant to the Finnish Securities Market Act, the UTG Board has an obligation to prepare a public statement regarding the Tender Offer. The statement shall include a well-founded assessment of the Tender Offer from the perspective of UTG and its shareholders as well as on the strategic plans presented by the Offeror in the Tender Offer Document and their likely effects on the operations of, and employment at, UTG.
For the purposes of issuing this statement, the Offeror has submitted to the UTG Board a draft version of the Tender Offer Document in the form in which the Offeror has filed it with the
In preparing this statement, the UTG Board has relied on the information provided in the draft Tender Offer Document and has not independently verified the information included therein. Accordingly, the UTG Board's assessments of the consequences of the Tender Offer on UTG's operations and employees should be treated with caution.
Assessment of the strategic plans presented by the Offeror in the Tender Offer Document and their likely effects on the operations of, and employment at, UTG
Information given by the Offeror in the Tender Offer Document
The UTG Board has assessed the Offeror's strategic plans based on the statements made in UTG's and the Offeror's announcement regarding the Tender Offer published on
According to the draft Tender Offer Document:
- SPX FLOW is a corporation incorporated under the laws of the
State of Delaware inthe United States and headquartered inCharlotte, North Carolina . SPX FLOW's product offering is concentrated in rotating, actuating and hydraulic technologies, as well as automated process systems, for the food, beverage, and industrial markets. SPX FLOW had approximatelyUSD 1.5 billion in annual revenues in fiscal year 2019 with operations in more than 30 countries and customers in more than 100 nations. SPX FLOW is listed on theNew York Stock Exchange under the symbol "FLOW", and currently has a market capitalization of approximatelyUSD 2.2 billion . The Offeror is a limited liability company incorporated under the laws ofGermany , and is an indirectly wholly-owned subsidiary of SPX FLOW. - UTG, founded in 1983, is a technology company offering mixing solutions that minimize lifecycle costs by bringing global expertise in the process industries to customers locally. UTG agitators and mixers are designed for the most demanding environments in which reliable performance is essential for achieving a successful process. UTG operates globally and its main customer sectors are the chemical, food, metallurgical and fertilizer industries, as well as environmental technology, water treatment and pharmaceuticals. In 2019, UTG reported revenues of approximately
EUR 16.8 million and an operating result of approximatelyEUR 0.9 million . - SPX FLOW considers UTG an attractive company with a strong product offering and brands within mixing technology. According to SPX FLOW, SPX FLOW and UTG will be uniquely positioned to capture profitable growth through UTG's complementary channels and end markets in Central and
Northern Europe , SPX FLOW's access to North American andAsia-Pacific markets, sale of UTG's products to SPX FLOW's customers inEurope , and cross-selling of key SPX FLOW products to UTG customers (e.g., Lightnin portables), along with the ability to leverage SPX FLOW's scale and practices to improve margins and aftermarket penetration. - The Offeror intends for UTG to continue to operate as a separate entity under SPX FLOW and to retain UTG's office in Uusikaupunki after the completion of the Tender Offer; the completion of the Tender Offer is not expected to have any immediate material effect on the operations, assets or location of offices of UTG, the position of UTG's management or employees, or the relations with UTG's customers and partners.
- The Offeror and SPX FLOW see potential for UTG to continue to grow through its focus on customer satisfaction, strengthening both parties’ core product offerings and leveraging SPX FLOW's global scale and strong position in the mixer market. Over time, the acquisition of UTG is expected to generate synergies via procurement efficiency, sales growth and best practice sharing.
- Furthermore, the acquisition of UTG is consistent with SPX FLOW’s strategic agenda, focused on adding scale and increased presence in key geographic markets for its core mixer business, while continuing to deliver on SPX FLOW’s priorities and shareholder remuneration policy. The acquisition of UTG enables SPX FLOW to improve its position in the Nordics and German speaking countries and expand its global mixer portfolio.
- SPX FLOW's interest in UTG is focused on driving shareholder value from a long-term perspective. According to SPX FLOW, UTG has been successful in building on its recognized brands, products, and customer service, as well as high performing sales and marketing capabilities. SPX FLOW foresees long term potential in UTG’s business, though SPX FLOW also recognizes that strategic efforts may require significant investments in the business and that results from such strategic efforts may take considerable time to materialize.
- In relation to UTG's minority ownership in Japrotek Oy Ab ("Japrotek"), UTG, together with certain other parties, has agreed on an arrangement which is conditional on the Offeror declaring that the conditions for completion of the Tender Offer have been satisfied or waived and which will be completed in connection with the completion of the Tender Offer, comprising (a) the disposal by UTG of all shares in Japrotek owned by UTG, constituting in total approximately 19% of all issued and outstanding shares in Japrotek, and the receivables under certain capital loans granted by UTG to Japrotek, (b) the release by
Uurec Holding Oy of a guarantee granted by UTG in favour ofUurec Holding Oy with respect to Japrotek's obligations under a lease agreement betweenJaprotek and Uurec Holding Oy , and (c) a guarantee granted to UTG by the purchaser of UTG's shares in Japrotek for any liabilities realised under two counter guarantees granted by UTG toTurku District Co-operative Bank . - As is customary, the Offeror intends to change the composition of the Board of Directors of UTG after the completion of the Tender Offer.
The UTG Board's assessment
The UTG Board considers that the information on the strategic plans of the Offeror concerning UTG included in the draft Tender Offer Document is given, as is typical for such a document, on a fairly general level. Based on the Offeror's statement the UTG Board believes that the strategic plans of the Offeror pursuant to the Tender Offer Document would not have any immediate material effects on UTG's operations, assets, the position of UTG's management, employees or its business locations.
The UTG Board notes that the Offeror intends for UTG to continue to operate as a separate entity under SPX FLOW and to retain UTG's office in Uusikaupunki after the completion of the Tender Offer.
The UTG Board shares the view of the Offeror and of SPX FLOW that operating under SPX FLOW would enable UTG to continue to grow through its focus on customer satisfaction, strengthening both parties' core product offerings and leveraging SPX FLOW's global scale and strong position in the mixer market. The UTG Board further considers that over time, the combination would generate synergies via procurement efficiency, sales growth and best practice sharing.
The UTG Board notes, however, that the Tender Offer may have an effect on employment in UTG particularly with regard to overlapping functions. The UTG Board believes that the final and long-term impact of the integration can be assessed only after the completion of the Tender Offer.
On the date of this statement, the UTG Board has not received any formal statements as to the effects of the Tender Offer to the employment at UTG from UTG's employees.
Assessment of the Tender Offer from the perspective of UTG and its shareholders
Introduction
When evaluating the executed Combination Agreement and the Tender Offer, analysing alternative opportunities available to UTG and in preparing this statement, the UTG Board has considered several factors, such as UTG's financial performance, current trading position and future prospects, and the historical performance of the trading price of the Share. Further, the UTG Board has assessed the divestment of UTG's holding of Japrotek, the sale of the subordinated capital loans of Japrotek granted by UTG, the release by
The UTG Board's assessment of continuing the business operations of UTG as an independent company providing mixing solutions, has been based on reasonable forward-looking estimates, which include various uncertainties, whereas the offer price offered by the Offeror in the Tender Offer and the premium included therein is not subject to any uncertainty other than the fulfilment of the conditions to completion of the Tender Offer and the completion of the Tender Offer.
In order to support its assessment of the Tender Offer, the UTG Board has received a fairness opinion, dated
The UTG Board's assessment
The UTG Board believes that the consideration offered by the Offeror in the Tender Offer is fair from the perspective of UTG's shareholders on its assessment of the matters and factors, which the UTG Board has concluded to be material in evaluating the Tender Offer. These matters and factors include, but are not limited to:
- the
Offer Price and premium offered for the Shares; - historical trading prices of the Shares;
- that the Offer Price will be paid fully in cash, providing the shareholders with immediate liquidity;
- information and assumptions on the business operations and financial conditions of UTG as at the date of this statement and their expected future development;
- valuations and analysis made by the UTG Board;
- other terms of the Tender Offer;
- the likelihood of completion of the Tender Offer and that the terms are customary as a whole;
- the strong support by certain major shareholders of UTG and the undertakings provided by such major shareholders to accept the Tender Offer as referred to above; and
- the Fairness Opinion issued by
Aalto Capital Partners Ltd.
The UTG Board has investigated and considered trends in the markets and the industry and certain strategic avenues available to UTG. Such avenues include, but are not limited to, remaining an independent company. The UTG Board has also considered the risks and uncertainties associated with such avenues.
Based on its overall assessment, taking into consideration the factors described above, among other matters, the UTG Board has concluded that the Tender Offer is a more favourable alternative to UTG's shareholders compared to continuing the business operations as an independent company or other potential strategic avenues available to UTG.
Financing of the Tender Offer
Pursuant to the draft Tender Offer Document, the Offeror has sufficient financing for the Tender Offer through access to cash reserves and financing facilities of the SPX FLOW group.
The Tender Offer is not subject to a financing condition.
Recommendation of the UTG Board
UTG Board has carefully assessed the Tender Offer and its terms and conditions based on the draft Tender Offer Document provided by the Offeror, the Fairness Opinion, and other available information.
Based on the foregoing, the UTG Board considers that the Tender Offer and the amount of the Offer Price are, under the prevailing circumstances, fair to shareholders of UTG.
Given the above-mentioned viewpoints, the UTG Board unanimously recommends that the shareholders of UTG accept the Tender Offer.
All members of the UTG Board have participated in the decision-making concerning this statement. The evaluation of independence of the members of the UTG Board is available on UTG's website at www.utgmix.com.
Other matters
The UTG Board notes that the transaction may, as is common in such processes, involve unforeseeable risks.
The UTG Board states that UTG's shareholders should also take into account the potential risks related to non-acceptance of the Tender Offer. If the acceptance condition of more than 90% of the Shares and votes attached thereto is waived, the completion of the Tender Offer would reduce the number of UTG's shareholders and the number of Shares, which would otherwise be available for trading on Nasdaq Helsinki. Depending on the number of Shares validly tendered in the Tender Offer, this could have an adverse effect on the liquidity and price of the Shares in UTG.
Pursuant to the provisions in Chapter 18 of the Finnish Companies Act, a shareholder with more than 90% of all shares and votes in a company shall have the right to acquire, and subject to a demand by the other shareholders, also have an obligation to redeem, the shares owned by the other shareholders. Provided that the Offeror acquires such amount of Shares, the Shares held by UTG's shareholders who have not accepted the Tender Offer may be redeemed through compulsory redemption proceedings under the Finnish Companies Act under the conditions set out therein.
UTG has undertaken to comply with the Helsinki Takeover Code issued by the
This statement does not constitute investment or tax advice, and the UTG Board specifically does not evaluate herein the general price development or the risks relating to the Shares in general. The shareholders of UTG must independently decide whether to accept the Tender Offer, and they should take into account all relevant information available to them, including information presented in the Tender Offer Document and this statement as well as any other factors affecting the value of the Shares.
UTG is advised by
Uusikaupunki,
Board of Directors
Further information:
Jouko Peräaho, CEO,
www.utgmix.com
Our main customer sectors are the chemical, food, metallurgical and fertilizer industries, as well as environmental technology, water treatment and pharmaceuticals.
The parent company of
IMPORTANT INFORMATION
THIS RELEASE MAY NOT BE RELEASED OR OTHERWISE DISTRIBUTED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO,
THIS RELEASE IS NOT A TENDER OFFER DOCUMENT AND AS SUCH DOES NOT CONSTITUTE AN OFFER OR INVITATION TO MAKE A SALES OFFER. IN PARTICULAR, THIS RELEASE IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES DESCRIBED HEREIN, AND IS NOT AN EXTENSION OF THE TENDER OFFER, IN
THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, AND SHARES WILL NOT BE ACCEPTED FOR PURCHASE FROM OR ON BEHALF OF ANY PERSONS, IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES LAWS OR OTHER LAWS OR REGULATIONS OF SUCH JURISDICTION OR WOULD REQUIRE REGISTRATION, APPROVAL, OR FILING WITH ANY REGULATORY AUTHORITY NOT EXPRESSLY CONTEMPLATED BY THE TENDER OFFER DOCUMENT. THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, AND, WHEN PUBLISHED, THE TENDER OFFER DOCUMENT AND RELATED ACCEPTANCE FORMS AND ANY AND ALL OTHER MATERIALS RELATED THERETO WILL NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE IT WOULD BE PROHIBITED BY THE APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, OR BY USE OF THE POSTAL SERVICE OF, OR BY ANY MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, FACSIMILE TRANSMISSION, TELEPHONE OR THE INTERNET) OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF,
THIS STOCK EXCHANGE RELEASE OR ANY OTHER DOCUMENT OR MATERIALS RELATING TO THE TENDER OFFER IS NOT BEING MADE AND HAVE NOT BEEN APPROVED BY AN AUTHORISED PERSON FOR THE PURPOSES OF SECTION 21 OF THE
THIS STOCK EXCHANGE RELEASE HAS BEEN PREPARED IN COMPLIANCE WITH FINNISH LAW, THE RULES OF NASDAQ HELSINKI AND THE
Notice to
The Tender Offer is made for the issued and outstanding shares in UTG, which is domiciled in
It may be difficult for UTG's shareholders to enforce their rights and any claims they may have arising under the
The Tender Offer is made in
To the extent permissible under applicable law or regulations, the Offeror and its affiliates or brokers (acting as agents for the Offeror or its affiliates, as applicable) may from time to time, and other than pursuant to the Tender Offer, directly or indirectly, purchase or arrange to purchase, shares or any securities that are convertible into, exchangeable for or exercisable for such shares. To the extent information about such purchases or arrangements to purchase is made public in
The receipt of cash pursuant to the Tender Offer by a
Neither the
Attachment
- Appendix 1 - Fairness Opinion
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