F-Secure Corporation’s Board of Directors has decided to pursue towards the separation of the company’s Consumer Security business into a new listed company and has approved a demerger plan
NOT FOR DISCLOSURE OR DISTRIBUTION IN OR INTO
The Board of Directors of
Highlights
- The Board of Directors has completed a review and evaluation of strategic options, resulting in the decision to pursue a separation of the Company’s Consumer Security business into a new independent company to be named
F-Secure Corporation . The existing Company will retain its Corporate Security business, which is planned to be renamedWithSecure Corporation . - In the view of the Board of Directors, the Demerger has, among other things, potential for shareholder value creation for both companies and it would enable them to better serve and meet the specific needs of their respective customers and partners.
- The transaction will be implemented through a partial demerger of the Company, in which shares in the newly established
F-Secure will be delivered to the Company’s shareholders. Upon completion, the Company’s shareholders will receive as demerger consideration one (1) share inF-Secure for each share they hold in the Company. - The Demerger is subject to approval by an Extraordinary General Meeting of the Company, expected to be held in
May 2022 . The completion of the Demerger is expected to become effective as ofJune 30, 2022 . - The intention is that
Pertti Ervi be appointed as the Chairman of the Board of the new Consumer Security companyF-Secure andTimo Laaksonen as the President and CEO ofF-Secure . - The intention is that
Risto Siilasmaa will continue as the Chairman of the Board of the Company and thatJuhani Hintikka will continue as the President and CEO of the Company. - Certain
F-Secure shareholders, includingRisto Siilasmaa ,Mandatum Life Insurance Company Limited ,Ilmarinen Mutual Pension Insurance Company ,Elo Mutual Pension Insurance Company ,Varma Mutual Pension Insurance Company andKaleva Mutual Insurance Company , holding in the aggregate approximately 50.6 percent of the shares and votes in the Company, have, subject to certain customary conditions, irrevocably undertaken to attend the Company’s Extraordinary General Meeting and vote in favor of the Demerger with all the shares they hold on the date of record. - In conjunction with the preparations for the Demerger, the Company is investigating alternatives for an optimal capital structure, one possible alternative being to raise funding by way of a share issue to finance the implementation of the growth strategy relating to its Corporate Security business.
“The optimal business structure for
“I am really pleased to be able to announce the contemplated demerger of our consumer security business. I believe this would be the right time to pursue this change in our business to create two great companies, which would benefit from their current strong momentum. The demerger would enable us to serve our end customers even better from two separate companies, which would be more focused on the differing needs of our customers. These companies would also have different financial profiles, which would support shareholder value creation in the long term. I believe that the planned demerger would create two even more successful companies and offer new, exciting opportunities also for our employees.”
Transaction overview
The Board of Directors of the Company has decided to pursue the separation of the Company’s Consumer Security business and has today on
According to the demerger plan, the Company will retain the assets and liabilities related to its corporate business and is planned to be renamed as
Upon the completion of the Demerger, shareholders of the Company will receive as demerger consideration one (1) share in
The Demerger is subject to, among other things, approval by a majority of two-thirds of votes cast and shares represented in the Company’s Extraordinary General Meeting. The Company will publish a notice to the Extraordinary General Meeting separately at a later stage. The Demerger is expected to become effective as of
The demerger plan is attached in its entirety to this stock exchange release and contains information on, among other things, the demerger consideration to the Company’s shareholders, the planned time for the completion of the Demerger and the allocation of the Company’s assets and liabilities between
Background and strategic rationale for the Demerger
During the past few years, the Company has successfully transformed its operations and today comprises two strong businesses, Consumer Security and Corporate Security, which have good opportunities to grow in their respective main markets. The Board of Directors of the Company expects that the Demerger will strengthen the preconditions for shareholder value creation both in WithSecure as well as in
- The Demerger will enable WithSecure and
F-Secure to better serve and meet the specific needs of their respective customers and partners - The Demerger will clarify the strategic focus of
F-Secure and WithSecure to capture the growth potential of consumer and corporate security markets - The Demerger will accelerate the speed of execution and increase competitiveness of
F-Secure and WithSecure - The Demerger will allow for optimal capital allocation
- The Demerger will clarify the equity stories with different value creation profiles
Exploring strategic alternatives for optimal capital structure
In conjunction with the preparations for the Demerger, the Company is investigating strategic alternatives for an optimal capital structure, one potential alternative being to raise funding by way of a share issue. The proceeds from the potential share issue would remain with the Company and finance the implementation of the Company’s growth strategy relating to its Corporate Security business.
Certain preliminary unaudited illustrative carve-out financial information of
The following certain preliminary, unaudited and illustrative carve-out financial information of
(EUR million) | 2021 | 2020 | 2019 |
Revenue | 106.3 | 100.1 | 94.8 |
Adjusted EBITDA | 47.4 | 46.7 | 40.1 |
Adjusted EBITDA margin, % | 44.6% | 46.6% | 42.3% |
Adjusted EBITA | 47.2 | 46.5 | 39.9 |
Adjusted EBITA margin, % | 44.4% | 46.5% | 42.0% |
Adjusted EBIT | 45.9 | 44.7 | 37.7 |
Adjusted EBIT margin, % | 43.2% | 44.6% | 39.8% |
EBIT | 43.5 | 44.7 | 37.0 |
Mid-term financial targets for
Growth Target: High single digit organic revenue growth.
Profitability Target: After initial growth investments, adjusted EBITA margin of above 42%.
Certain preliminary unaudited illustrative financial information of WithSecure
The following certain preliminary unaudited illustrative financial information of WithSecure is derived from the Company’s consolidated financial statements for the years ended
(EUR million) | 2021 | 2020 | 2019 |
Revenue | 130.0 | 120.1 | 122.5 |
Adjusted EBITDA | -10.8 | -10.9 | -16.8 |
Adjusted EBITDA margin, % | -8.3% | -9.1% | -13.7% |
Adjusted EBITA | -17.2 | -18.0 | -23.2 |
Adjusted EBITA margin, % | -13.2% | -15.0% | -18.9% |
Adjusted EBIT | -20.6 | -21.7 | -28.0 |
Adjusted EBIT margin, % | -15.8% | -18.1% | -22.9% |
EBIT | -25.7 | -24.9 | -29.7 |
Mid-term financial targets for WithSecure
Growth Target: To double revenue organically by the end of 2025.
Profitability Target: Adjusted EBITDA breakeven by the end of 2023 and adjusted EBITDA margin of some 20% by 2025.
Financing arrangements
As is customary, the Company has entered into negotiations with its financiers to obtain the necessary consents, confirmations and waivers for its financing agreements in relation to the completion of the Demerger.
Board of Directors and management of WithSecure and
The Annual General Meeting of the Company to be held on
The Extraordinary General Meeting resolving on the Demerger will also elect the members of the Board of Directors of
Shareholder support
Certain major
Advance tax ruling
The Company has received an advance tax ruling, which is legally binding, from the
Risks relating to the Demerger
The Demerger involves risks, many of which will be inherent to the Transaction and the respective businesses of WithSecure and
Risks related to the Demerger and
- There is no certainty that the Demerger will be completed, or the completion may be delayed, and any delay in the completion of the Demerger could result in increased expenses or loss of alternative business opportunities
F-Secure may not be able to implement its business organization and its independent strategy in the manner and timeframe currently anticipated, and it may not be able to realize any or all of the anticipated benefits of the Demerger- F-Secure’s business operations will be dependent on certain functions provided by WithSecure under the transitional services agreement, and WithSecure’s inability to provide these functions would have a material adverse effect on F-Secure’s business operations
WithSecure will provide more detailed information about the risks related to the planned Demerger in its Q1 2022 Interim Report.
Demerger and listing prospectus
The Company will publish a demerger and listing prospectus, which will contain more detailed information on the contemplated Demerger and
Employees
The Company will commence change negotiations in
Subject to the approval of the Extraordinary General Meeting and the completion of the Demerger, all the Company’s employees belonging to the Consumer Security business in
Advisors to the Company
Webcast
Analysts following
The presentation materials and the webcast recording will be available later on the Company’s website at www.f-secure.com.
Contact information:
CFO
+358 40 700 1849
investor-relations@f-secure.com
Demerger website: https://www.f-secure.com/en/investors/demerger
Appendix 1: The demerger plan and its appendices
Appendix 2: Certain preliminary unaudited illustrative financial information of
Important notice
This release is not an offer of demerger consideration shares in
This release does not constitute an offer of or an invitation by or on behalf of,
This release does not constitute a notice to an Extraordinary General Meeting or a demerger and listing prospectus. Any decision with respect the proposed demerger of
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. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the future entity to differ materially from those expressed or implied in the forward-looking statements. Neither
This release includes estimates relating to the benefits expected to arise from the potential separation of the business operations of F-Secure Corporation’s consumer security business, which have been prepared by
Attachments
- Appendix_1_Demerger_Plan_with_Schedules
- Appendix_2_Preliminary_financial_information
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