EVOLUTION AB THIS PRESS RELEASE
The Offer in brief
· Evolution offers 0.1306 Evolution shares for each share in NetEnt. Evolution will not increase the offered consideration.
· The Offer values each share in NetEnt to
· The offered consideration represents a premium of 43 per cent compared to the closing price of the NetEnt share of series B on Nasdaq Stockholm on
· The board of directors of NetEnt unanimously recommends the shareholders of NetEnt to accept the Offer.
· Shareholders who in total directly or indirectly control 21.02 per cent of all shares and 45.02 per cent of all votes in NetEnt have undertaken to accept the Offer. In addition, certain board members of NetEnt who in total directly or indirectly control 8.48 per cent of all shares and 23.20 per cent of all votes in NetEnt have expressed that they intend to undertake to accept the Offer.
· The completion of the Offer is conditional upon, among other things, the Offer being accepted by shareholders to such an extent that Evolution becomes the owner of more than 90 per cent of the shares in NetEnt (on a fully diluted basis) and that an extraordinary general meeting in Evolution resolves to authorise the board of directors to resolve on the issuance of the number of shares in Evolution that Evolution shall pay as consideration to the shareholders of NetEnt that accept the Offer. Shareholders who in total control approximately 32.53 per cent of all shares and votes in Evolution have expressed that they are positive to the Offer and that they intend to vote in favour of the board of directors' proposal for an authorisation to issue shares.
· Evolution will publish an offer document regarding the Offer on or around
Background and reasons for the Offer
· This is a landmark deal which will accelerate Evolution's move towards becoming the world leader in the online gaming industry.
· The merger of Evolution's leading position in
· The US market has a potential to become Evolution's largest market over time as individual states regulate. The merger of Evolution's existing
· The combined product portfolio will include some of the world's most popular
· The combination is expected to result in annual cost savings of approximately
· The combined company will become a leading online gaming provider with a strong platform for international growth and expansion, both organic and through additional acquisitions.
The Offer
The offered consideration and the value of the Offer
Evolution offers 0.1306 Evolution shares for each share in NetEnt. Evolution will not increase the offered consideration.
The Offer includes both the unlisted shares of series A and the shares of series B that are admitted to trading on Nasdaq Stockholm. The Offer values each share in NetEnt to
Evolution will only pay full (and not fractions of) Evolution shares to shareholders of NetEnt that accept the Offer. If a shareholder of NetEnt tenders such a number of shares in the Offer that the share consideration that is to be paid by Evolution for such NetEnt shares does not amount to an even number of new Evolution shares, consideration for excess fractions of shares will be paid in cash.
No commission will be charged in connection with the Offer.
Premium
The offered consideration represents a premium of:
· 43 per cent compared to the closing price of the NetEnt share of series B on Nasdaq Stockholm on
· 72 per cent compared to the volume weighted average price per NetEnt share of series B on Nasdaq Stockholm during the 30 latest trading days up to and including
· 173 per cent compared to the volume weighted average price per NetEnt share of series B on Nasdaq Stockholm during the 180 latest trading days up to and including
Potential adjustment of the offered consideration
If NetEnt pays any dividend or makes any other value transfer prior to the settlement of the Offer, Evolution will reduce the offered consideration accordingly.
Rights under NetEnt's incentive programs
The Offer does not include any rights granted by NetEnt to its employees under any incentive programs. Accordingly, the Offer does not include the warrants of series 2017/2020, series 2019/2022 or series 2020/2023 that certain employees of NetEnt hold under the long-term share-related incentive programs that were established by the annual general meetings of the company in 2017, 2019 and 2020, respectively. Evolution intends to procure that the holders of the warrants are afforded a reasonable treatment in connection with the Offer.
Recommendation by the board of directors of NetEnt
The board of directors of NetEnt unanimously recommends that the shareholders of NetEnt accept the Offer.
Undertakings to accept the Offer
Certain members of the Hamberg, Knutsson, Lindwall, Kling and Wattin families, who in total directly or indirectly control 21,727,000 shares of series A and 30,087,360 shares of series B in NetEnt (corresponding to 21.02 per cent of all shares and 45,02 per cent of all votes in NetEnt), have undertaken to accept the Offer.[3]
The undertakings to accept the Offer terminate if (i) Evolution withdraws the Offer, (ii) Evolution does not declare the Offer unconditional by
Shareholding board members in NetEnt that intend to accept the Offer
Conditions to completion of the Offer
The completion of the Offer is conditional upon:
1. the Offer being accepted to such an extent that Evolution becomes the owner of more than 90 per cent of the shares in NetEnt (on a fully diluted basis);
2. with respect to the Offer and the acquisition of NetEnt, the receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions (including from competition authorities), in each case on terms that are acceptable to Evolution;
3. no other party announcing an offer to acquire shares in NetEnt on terms that are more favourable to the shareholders of NetEnt than the terms of the Offer;
4. neither the Offer nor the acquisition of NetEnt being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of a court or public authority, or any similar circumstance;
5. no circumstances having occurred that have a material adverse effect, or could reasonably be expected to have a material adverse effect, on NetEnt's sales, results, liquidity, equity ratio, equity or assets;
6. no information made public by NetEnt, or disclosed by NetEnt to Evolution, being inaccurate, incomplete or misleading, and NetEnt having made public all information that should have been made public by NetEnt;
7. NetEnt not taking any action that typically is intended to impair the prerequisites for making or completing the Offer; and
8. an extraordinary general meeting in Evolution resolving, with requisite majority, to authorise the board of directors to resolve on the issuance of the number of shares in Evolution that Evolution shall pay as consideration to the shareholders of NetEnt that accept the Offer.
Evolution reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions is not satisfied or cannot be satisfied. However, with regard to the conditions set out in items
2-8, the Offer may only be withdrawn where the non-satisfaction of such condition is of material importance to Evolution's acquisition of NetEnt or if otherwise approved by the
Evolution reserves the right to waive, in whole or in part, one or more of the conditions set out above, including, with respect to the condition set out in item 1, to complete the Offer at a lower acceptance level.
Approvals from authorities
Pursuant to applicable rules and regulations, in particular regarding so-called merger control, Evolution's acquisition of NetEnt requires clearance from certain authorities, including competition authorities. Evolution will submit the required notifications of the acquisition to the relevant authorities as soon as practicably possible. In case the competition authorities, or other relevant authorities, need more time for their respective analyses than Evolution expected when Evolution determined the initial acceptance period, Evolution may extend the acceptance period (see "Indicative timetable" below).
Financing of the Offer
The consideration in the Offer consists of new shares in Evolution (see "the Offer" above). Payment of the share consideration requires that an extraordinary general meeting in Evolution resolves to authorise the board of directors to resolve on the issuance of the number of shares in Evolution that Evolution shall pay as consideration to the shareholders in NetEnt that accept the Offer. Accordingly, Evolution's completion of the Offer is conditional upon such a resolution being passed by the extraordinary general meeting.
If a shareholder of NetEnt tenders such a number of shares in the Offer that the share consideration that is to be paid by Evolution for such NetEnt shares does not amount to an even number of new Evolution shares, consideration for excess fractions of shares will be paid in cash. Evolution will finance any such cash consideration through own funds and available credit facilities.
Extraordinary general meeting in Evolution
The board of directors of Evolution will convene an extraordinary general meeting and propose that the meeting resolves to authorise the board of directors to resolve on the issuance of the number of shares in Evolution that Evolution shall pay as consideration to the shareholders of NetEnt that accept the Offer. Evolution will publish the notice of the extraordinary general meeting by way of a separate press release.
Evolution in brief
Evolution develops, produces, markets and licenses fully-integrated
NetEnt in brief
NetEnt is a supplier within digital entertainment, which develops games and system solutions to the world's most successful gaming operators. Since its inception in 1996, NetEnt has been a pioneer in driving the market by providing thrilling games powered by a cutting-edge platform. The company employs around 1,100 people in
The combined group
A combination of Evolution and NetEnt, through Evolution acquiring NetEnt, forms an attractive opportunity to combine the companies' respective offerings. The combination creates a larger customer base, a more comprehensive product portfolio and stronger operational capabilities, which enable an accelerated growth, a stronger and more service oriented offering and higher profitability.
Synergies
The combination is expected to result in annual cost savings of approximately
Complementary abilities
Evolution offers a leading product portfolio of
· accelerated international expansion
· wider offer on growth markets
· decreased dependence on individual markets
· economies of scale in development and IT/operating costs
Senior management and employees
Evolution is confident that it will be able to build a strong group together with NetEnt's senior management and employees. Evolution recognises the value of NetEnt's senior management and other employees and appreciates that their talent and dedication have been, and will continue to be, integral to NetEnt's and the combined group's success. Evolution does not currently foresee that the combination of the companies will have any material impact on Evolution's or NetEnt's respective employees, including their terms of employment or the locations where the companies currently operate. Following the completion of the Offer, Evolution intends to carry out a careful review of the combined business in order to evaluate how Evolution can organise and develop the group in the best possible way.
Financial effects for Evolution
This section contains preliminary combined financial information for Evolution and NetEnt for the purpose of providing an illustration of the combined group's earnings and financial position as if Evolution and NetEnt had been operating within the same group during the periods presented. The information is based on Evolution's and NetEnt's published financial reports and has not been audited or otherwise reviewed by any of the companies' respective auditors. The information has not been prepared in accordance with IFRS and does not constitute pro forma financial information. Evolution has not made any adjustments for differences in accounting principles, effects of the Offer or transaction costs. Accordingly, the information does not necessarily reflect the result or financial position which Evolution and NetEnt together would have had if they had conducted their operations within the same group. Further, the information is not indicative of the combined group's future result or financial position.
Evolution's accounting currency is EUR and NetEnt's accounting currency is SEK. For the purpose of comparability, all amounts relating to Evolution have been converted to SEK and all amounts relating to NetEnt have been converted to EUR based on an exchange rate EUR/SEK of 10.5892 for the financial year 2019 and 10.6647 for the period January-
[]
Financial year Evolution NetEnt The
2019(millions, unless combined
otherwise stated) group
EUR SEK EUR SEK EUR SEK
Operating revenues 365.8 3,873.0 169.3 1,792.9 535.1 5,665.9
EBITDA 182.9 1,937.3 80.7 855.1 263.7 2,792.4
% margin 50.0% 50.0% 47.7% 47.7% 49.3% 49.3%
Operating profit (EBIT) 157.5 1,667.5 49.9 528.7 207.4 2,196.2
% margin 43.1% 43.1% 29.5% 29.5% 38.8% 38.8%
Cash flows from operating 175.8 1,861.4 54.3 574.9 230.1 2,436.3
activities
Number of employees at the 5,554 1,062 6,616
end of the period[4]
January-
(millions, unless otherwise combined
stated) group
EUR SEK EUR SEK EUR SEK
Operating revenues 115.1 1,228.0 48.5 517.5 163.7 1,745.6
EBITDA 64.1 683.9 21.4 228.6 85.6 912.5
% margin 55.7% 55.7% 44.2% 44.2% 52.3% 52.3%
Operating profit (EBIT) 57.1 609.2 11.2 119.1 68.3 728.3
% margin 49.6% 49.6% 23.0% 23.0% 41.7% 41.7%
Cash flows from operating 38.1 406.1 19.3 205.4 57.3 611.5
activities
Number of employees at the 5,865 1,092 6,957
end of the period[4]
Pro forma financial information will be included in the offer document relating to the Offer. Such information may deviate significantly from the above information.
Evolution's ownership in NetEnt
Neither Evolution nor any party closely related to Evolution holds or controls any shares in NetEnt or any other financial instruments which give a financial exposure equivalent to a holding of shares in NetEnt. Neither Evolution nor any party closely related to Evolution has acquired any shares in NetEnt on more favourable terms than the terms of the Offer during the last six months prior to the announcement of the Offer.
To the extent permissible under applicable laws, rules and regulations (including Rule 14e-5 under the
Statement from the
Due diligence review
Evolution has, in connection with the preparations of the Offer, conducted a limited due diligence review of NetEnt (and NetEnt has conducted a limited due diligence review of Evolution). NetEnt has confirmed that Evolution has not obtained any inside information regarding NetEnt in connection with the due diligence review.
Indicative timetable
· Estimated date for publication of the offer document:
· Estimated acceptance period: 17 August-
· Estimated settlement date:
Evolution reserves the right to extend the acceptance period as well as to postpone the settlement date. Evolution will announce any extensions of the acceptance period or postponements of the settlement date by way of a press release in accordance with applicable laws and regulations (including Nasdaq Stockholm's Takeover Rules).
Compulsory buy-out and delisting of NetEnt
In the event Evolution, whether in connection with the Offer or otherwise, obtains more than 90 per cent of the shares in NetEnt, Evolution intends to initiate a compulsory buy-out procedure with respect to the remaining shares in NetEnt in accordance with the Swedish Companies Act. In connection with such a compulsory buy-out procedure, Evolution intends to promote a delisting of the shares of series B in NetEnt from Nasdaq Stockholm.
Applicable law and disputes
The Offer is governed by and construed in accordance with the laws of
Evolution has, today on
Advisers
Evolution has engaged SEB Corporate Finance as financial adviser and Gernandt & Danielsson Advokatbyrå as legal adviser in connection with the Offer.
For further information, please contact:
For more information about the Offer, please visit www.evolutiongaming.com.
This press release contains inside information that
Important information
An offer document will be approved and registered by the
This press release and any other documentation related to the Offer (including copies thereof) must not be mailed or otherwise distributed, forwarded or sent in or into any jurisdiction (including without limitation
Statements in this press release relating to any future status or circumstances, including statements regarding future performance, growth and other trend projections and other effects of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as "anticipate", "believe", "expect", "intend", "plan", "seek", "will", "would" or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that could occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to several factors, many of which are outside Evolution's control. Any forward-looking statements in this press release speak only as of the date on which the statements are made and Evolution has no obligation (and undertakes no obligation) to update or revise any of them, whether as a result of new information, future events or otherwise.
This press release has been published in English and Swedish. In the event of any discrepancy between the two language versions, the Swedish version shall prevail.
Notice for US shareholders
The Offer is not capable of being accepted by persons who are located or resident in
This press release does not constitute an offer of securities for sale in
Evolution and NetEnt are public limited liability companies incorporated in
[1] The value per NetEnt share of
[2] The value per NetEnt share of
[3] Hamberg family: 7,291,000 shares of series A and 3,660,628 shares of series
[4] Number of full-time employees. For NetEnt, external resources such as dedicated staff with contract suppliers and subcontractors are included.
https://news.cision.com/evolution-gaming/r/evolution-gaming-announces-a-recommended-public-offer-to-the-shareholders-of-netent,c3140624
https://mb.cision.com/Main/12069/3140624/1268841.pdf
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