NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Eltel publishes its prospectus and announces the price range for its initial public offering and listing on Nasdaq Stockholm

Following the announcement of its intention to float on 12 January 2015, Eltel AB (publ) (“Eltel” or the “Company”) publishes its prospectus and hereby announces the price range for the initial public offering (the “Offering”) of its shares and listing on Nasdaq Stockholm. Eltel is a leading European provider of technical services to companies that own and operate critical infrastructure networks in the areas of Power, Communication and Transport & Defence. Eltel mainly operates throughout the Nordic and Baltic regions and Poland, but also has operations in Germany, the United Kingdom and Africa.

The Offering in Brief

  • The Offering consists of an offering to the general public in Sweden and an offering to institutional investors in Sweden and internationally.
  • The Offering comprises a total of up to 37.6 million shares of Eltel (56% of the total shares outstanding) including up to 13.5 million existing shares offered by 3i (and funds managed by 3i) and BNP Paribas (the “Principal Shareholders”), as well as current and former employees of the Company (the “Management Shareholders”), acting through three limited liability companies.
  • The total number of shares sold by the Principal Shareholders in the Offering may be increased by up to 7.5 million existing shares (the “Upsizing Option”).
  • In order to cover over-allotments, if any, the Principal Shareholders have undertaken to sell up to 6.8 million additional shares, corresponding to up to 15% of the number of shares in the Offering (the “Over-allotment Option”). Assuming full exercise of the Upsizing Option and the Over-allotment Option, the Offering corresponds to 77% of the total shares outstanding.
  • The final price in the Offering (the “Offer Price”) is expected to be set within a range of SEK 55-70 per share (the “Offer Price Range”), resulting in a market capitalisation of the Company of approximately SEK 3.7-4.3 billion.
  • Provided that the Offer is increased in full and the Over-allotment option is exercised in full, the value of the Offer amounts to approximately SEK 2.8–3.1 billion and will provide the Company with gross proceeds of approximately SEK 1.3 billion before issue costs.
  • Leading institutional investors Zeres Capital, The Fourth Swedish National Pension Fund, Swedbank Robur Fonder and Lannebo Fonder have committed, under certain conditions, to subscribe in the Offering throughout the Offer Price Range for 10.5%, 7.5%, 6.0% and 5.0% of the Company’s share capital following the Offering, respectively.

Axel Hjärne, CEO of Eltel comments:

As a result of more than a decade of hard work, Eltel has grown into a leading European player in the Infranet industry today, and we will continue to build on this position. With a specialized service offering, a strong customer base and a dedicated workforce in place, we are focused on achieving further growth in both our core and new markets, as well as maintaining our trend of increased profitability. As a management team, we are determined to take Eltel to the next level of its development. The listing on Nasdaq Stockholm brings multiple benefits and is a natural step in the evolution of the Company. 

Gérard Mohr chairman of Eltel’s Board of Directors comments:

With a history of solid and profitable growth, Eltel is in an excellent position to continue to benefit from the non-cyclical and long-term favorable industry drivers of the Infranet market. On behalf of the Board, I welcome new shareholders to take part in the Company’s development going forward.

Background and reasons

Eltel is a leading European provider of technical services to the Infranet industry, which consists of companies that own and operate critical infrastructure networks in the areas of Power, Communication and Transport & Defence. The Infranet industry is at the centre of significant investment needs. The scope of these investments is going beyond modernisation and capacity expansion, further increasing society’s reliance on emerging intelligent infrastructure networks, which aim to be more efficient, cheaper to operate and maintain and environmentally-friendly. Eltel offers services related to construction, installation, maintenance and operation of critical infrastructure to its blue-chip customer base. Eltel mainly operates throughout the Nordic and Baltic regions, Poland, Germany, the United Kingdom and Africa.

The Company was established in 2001, during a period when de-regulation and privatisation, combined with needs of efficiency improvements among electricity utilities and telecom operators, started to shape the industry. Since 2001, Eltel has grown rapidly and for the financial year ended 31 December 2013, the Company generated net sales of EUR 1,153.7 million and reported an EBITA of EUR 52.4 million.

With a solid platform in place, Eltel’s strategy for continued profitable growth is based on driving organic growth through capitalising on structural trends and pursuing selective acquisitions, thereby maintaining leadership in the Company’s core markets: Finland, Sweden, Norway, Denmark, the Baltic region and Poland; as well as strengthening its position in markets which the Company has only recently entered: mainly Germany and the United Kingdom. Eltel also aims to continue improving its operating performance and efficiency. A key factor in achieving this is the Company’s business service model, the “Eltel Way”, which is implemented throughout the organisation. Eltel believes that this uniform model allows the Company to differentiate itself from its competitors in the Infranet technical services industry, by enabling growth as well as profitability.

As of the date of the prospectus, Eltel’s ownership structure includes the two key groups of Principal Shareholders, 3i and BNP Paribas, who hold approximately 62.6% and 29.5% of the Company’s shares, respectively, and the Management Shareholders, who hold approximately 7.9% of the Company’s shares.

In order to further support Eltel’s strategy and future development of its business, Eltel’s Board of Directors and the Principal Shareholders consider that a listing of Eltel is the logical next step for the Company, enabling access to capital through the Swedish and international capital markets.

Furthermore, a stock exchange listing is expected to contribute to increased recognition and brand awareness of Eltel as a technical services company among current and potential customers. For these reasons, the Board of Directors has applied for a listing on Nasdaq Stockholm.

Eltel is pleased that leading institutional investors Zeres Capital, The Fourth Swedish National Pension Fund, Swedbank Robur Fonder and Lannebo Fonder (the “Cornerstone Investors”) have given their commitment, under certain conditions set out in the prospectus, to subscribe for shares in the Offering, equivalent to the ownership percentages in the Company mentioned below, throughout the Offer Price Range of SEK 55-70. The Company believes this shows strong support for its management and belief in the opportunities that lie ahead.

Key management will remain shareholders in the Company and will acquire shares in connection with the Offering. A long-term incentive program will be proposed at the Company’s next Annual General Meeting. The Principal Shareholders will continue to hold significant stakes in the Company following the Offering, and will thereby continue to contribute to the Company’s future development.

The Offering

In accordance with the conditions of the Offering, which are described in the prospectus, the Board of Directors of Eltel, the Principal Shareholders and the Management Shareholders have decided to offer up to to 37.6 million shares of Eltel (56% of the total shares outstanding), including up to 13.5 million existing shares.

In addition, the Principal Shareholders may exercise an Upsizing Option of up to 7.5 million additional existing shares and BNP Paribas, Morgan Stanley and SEB (the “Joint Global Coordinators”) may exercise an Over-allotment Option of up to 6.8 million additional existing shares, corresponding to a maximum of 15% of the number of shares in the Offering, assuming full exercise of the Upsizing Option.

Assuming full exercise of the Upsizing Option and the Over-allotment Option, the Offering corresponds to 77% of the total shares outstanding.

The allotment of shares for each part of the Offering will be based on demand. The allotment will be determined by the Company’s Board of Directors and the Principal Shareholders in consultation with the Joint Global Coordinators. The shares are being offered to the general public in Sweden, as well as to qualified institutional investors in Sweden and internationally.

The price range is set at SEK 55–70 per share, resulting in a market capitalisation of the Company of approximately SEK 3.7-4.3 billion. Provided that the Offer is increased in full and the Over-allotment option is exercised in full, the value of the Offer amounts to approximately SEK 2.8–3.1 billion and will provide the Company with gross proceeds of approximately SEK 1.3 billion before issue costs.

The Cornerstone Investors have agreed subject to certain conditions to acquire and will be allotted, at the final Offer Price, a number of shares equivalent to the percentages set out below of the Company’s total outstanding shares following completion of the Offering:

  • Zeres Capital 10.5%
  • The Fourth Swedish National Pension Fund 7.5%
  • Swedbank Robur Fonder 6.0%
  • Lannebo Fonder 5.0%

The first day of trading on Nasdaq Stockholm is expected to be 6 February 2015 and the shares will trade under the symbol “ELTEL”.

Prospectus and application forms

The prospectus and application forms will be made available to the public in Sweden on Eltel’s website (www.eltelnetworks.com) and SEB’s website (www.sebgroup.com/prospectuses). The prospectus and application forms can also be obtained from SEB branches and be ordered from Eltel. Applications from the general public in Sweden can also be made through Avanza (www.avanza.se).

Applications from institutional investors in Sweden and from abroad should be submitted to BNP Paribas, Morgan Stanley, SEB or Pohjola Bank.

Indicative timetable

  • Application period for the general public in Sweden:
    26 January – 4 February 2015
  • Bookbuilding period for institutional investors:
    26 January – 5 February 2015
  • Announcement of final Offer Price:   6 February 2015
  • First day of trading on Nasdaq Stockholm:   6 February 2015
  • Settlement date:   10 February 2015

Offering advisors

BNP Paribas, Morgan Stanley and SEB are acting as Joint Global Coordinators and Joint Bookrunners in the Offering and Pohjola Bank is acting as a Co-Lead Manager. Roschier Advokatbyrå AB and Davis Polk & Wardwell London LLP are acting as legal advisors to the Company and Principal Shareholders, Advokatfirman Cederquist and Kirkland & Ellis International LLP are acting as legal advisors to BNP Paribas as Principal Shareholder and Advokatfirman Hammarskiöld & Co and Latham & Watkins (London) LLP are acting as legal advisors to the Joint Global Coordinators and Joint Bookrunners. 

About 3i

3i Group plc is an international investment manager listed on the London Stock Exchange which is focused on mid-market private equity, infrastructure and debt management with operations in nine countries across Europe, Asia and North America.

About BNP Paribas

BNP Paribas has a presence in 75 countries with more than 180,000 employees, including 140,000 in Europe. It ranks highly in its three core activities: Retail Banking, Investment Solutions and Corporate & Institutional Banking.

—-

For more information, please contact

 

This announcement is not and does not form a part of any offer for sale of securities. 

Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States.

Any offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is not a prospectus for the purposes of Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus.

In any EEA Member State other than Sweden that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, i.e., only to investors who can participate the offering without an approved prospectus in such EEA Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” “continue,” “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Eltel believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors, which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.

 

Related documents

Share

Elin Otter +46 72 595 46 92

elin.otter@eltelnetworks.se