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ReleasesSOLTEQ PLC STOCK EXCHANGE RELEASE 4.4.2012 at 3:00PM
Not to be published or distributed in the United States of America, Canada, Australia, Hong Kong or Japan, or in any other state in which distribution or publication would be illegal.
Solteq Plc will today publish a prospectus in Finnish, which concerns the company's directed issue of shares, published with a stock exchange release on 20.3.2012 ("Issue"). The Financial Supervisory Authority has accepted the prospectus today.
The prospectus is available from 4.4.2012 electronically on the Company's website in Finnish at the address www.solteq.com. The prospectus is also available free of charge in paper form from the Company's head office at: Solteq Plc, Eteläpuisto 2 C, FI-33200 Tampere, tel. 020 14444, during normal business hours and from NASDAQ OMX Helsinki Oy's service point at Fabianinkatu 14, FI-00130 Helsinki.
Solteq has compiled the prospectus with the sole purpose of listing the new shares subscribed in the Issue for trade. The prospectus is neither an offer nor tender offer to subscribe or purchase the company's shares in the Issue or otherwise.
The new shares subscribed in the directed issue of Solteq Plc – a total of 2.849.632 shares – will be admitted into public trading in Nasdaq OMX Helsinki Oy as of April 5, 2012, together with the old shares. The Financial Supervisory Authority has given its authority to publish the prospectus later than two bank days before public trading is started. As of April 5, 2012, a total of 14.998.061 shares will be in public trading.
The prospectus contains following previously unpublished and unaudited pro forma information.
Some unaudited Solteq Plc Concern statement of accounts information.
The following, unaudited pro forma group statement of accounts information is presented with the purpose of illustrating the effects of the acquisition of Aldata Solution Finland Ltd.
On 20.3.2012, Solteq Plc announced it was to buy the entire share capital of Aldata Solution Finland Ltd for EUR 8.300 thousand EUR, and on 22.3.2012 it announced that the transaction had been executed on that day. The pro forma adjustments illustrate:
The acquisition of Aldata Solution Finland Ltd and
The financial arrangements implemented by Solteq Plc to carry out the acquisition.
The presented, unaudited pro forma Group income statement from 1.1.–31.12.2011 has been compiled as if the acquisition of Aldata Solution Finland Ltd and its funding had taken place on 1.1.2011. The unaudited pro forma Group balance sheet has been compiled as if these transactions had taken place on 31.12.2011.
According to the IFRS 3 Business Combination standard, the combination of businesses refers to a business transaction or other event, in which the procuring party receives authority in one or more business operations. One combining corporation is deemed to have received authority in another combining corporation once it has more than half of the rights to vote in another corporation. The standard in question has been applied when compiling the pro forma information and Solteq is considered to be the procuring party.
The acquisition of Aldata Solution Finland Ltd is presented following the acquisition method. In the pro forma information, the acquisition cost is preliminarily allocated to acquired assets and liabilities based on market prices. The final bookkeeping processing of the combination of Solteq's and Aldata Solution Finland Ltd will be compiled in accordance with IFRS based on the final acquisition price and the market prices of Aldata Solution Finland Ltd's itemised assets and liabilities on the date when authority was transferred.
Solteq's management has compiled pro forma corrections based on available information and various assumptions which the management believe to be well-founded. The pro forma corrections and assumptions are explained in the pro forma notes. Other information contained in the pro forma information is presented to give additional information for analysis.
Solteq's management has compiled the unaudited pro forma Group information presented solely for illustrative purposes. The pro forma information concerns an assumed situation and does not therefore give any indication as to the nature of the actual result of operations or what the financial position would have been if the depicted arrangements had taken place during the times set above. In the future, results may fundamentally deviate from the unaudited pro forma Group information given below and do not necessarily indicate Solteq's future financial position or result. In no part has the unaudited pro forma Group information taken into account coming costs, charges or expected savings in costs.
The unaudited pro forma Group statement of account information presented in the Offering Circular published on 4.4.2012 is to be checked together with Solteq Plc's and Aldata Solution Finland Ltd's historic statement of accounts information and their appendices and with the information contained in the offering circular.
Pro Forma
Comprehensive result
(thousand EUR) Solteq Plc IFRS (1) Aldata Solution Finland Ltd FAS (2) Aldata Solution Finland Ltd IFRS corrections (3) Aldata Solution Finland Ltd eliminations (4) Acquisition (5) Financial arrangements (6) Pro forma total
REVENUE 27 144 13 344 -1 229 39 259
Other income 15 165 897 1 077
Materials and services
Materials and supplies
-3 757
-2 377
587
-5 547
External services -2 625 -2 181 -4 806
Costs arising from employee benefits
Salaries -11 530 -4 106 -15 637
Social security expenses, pensions
-1 985
-703
-2 688
Social security expenses, other
-650
-206
-856
Amortisation -750 -230 96 -357 36 -1 206
Other income -4 408 -2 302 40 15 -483 -229 -7 367
OPERATING RESULT 1 453 1 239 135 -462 -840 704 2 230
Financial income and expenses
Interest income and other financial income
24
14
39
Interest expenses and other financial expenses
-198
-39
-1
-142
-380
PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS
1 280
1 214
134
-462
-840
563
1 889
Extraordinary income and expenses 0 -1 270 1 270 0
PROFIT BEFORE APPROPRIATIONS AND TAXES
1 280
-56
1 404
-462
-840
563
1 889
Deferred taxes -383 -330 66 219 -146 -575
RESULT FOR THE FINANCIAL PERIOD 897 -56 1 074 -396 -621 417 1 314
Other comprehensive income:
Cash flow hedges 8 0 8
Taxes related to cash flow hedge -2 0 -2
Other comprehensive income, net of tax 6 0 6
COMPREHENSIVE INCOME 903 -56 1 074 -396 -621 417 1 320
Pro Forma
Balance sheet
(thousands EUR) Solteq Plc IFRS (1) Aldata Solution Finland Ltd FAS (2) Aldata Solution Finland Ltd IFRS corrections (3) Aldata Solution Finland Ltd eliminations (4) Acquisition (5) Financial arrangements (6) Pro forma total
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 74 27 2 344 2 445
Goodwill 6 199 134 534 -668 6 127 12 326
Other intangible assets 1 707 0 168 -168 1 707
Tangible assets
Land and water 151 0 -151 0
Buildings 1 402 0 -1 402 0
Machinery and equipment 689 96 57 843
Other tangible assets
21
26
47
Investments
Other shares
524
0
524
Total non-current assets
10 767
283
759
-835
8 471
-1 553
17 892
CURRENT ASSETS
Inventories
Ready products 0 110 110
Receivables
Trade receivables 4 183 1 496 5 679
Other receivables 72 4 76
Internal receivables 2 644 -2 644 0
Prepayments and accrued income 2 075 230 372 2 677
Cash in hand and at banks 277 0 750 -8 300 9 085 1 811
Current assets total
6 607
4 484
0
-1 522
-8 300
9 085
10 353
TOTAL ASSETS 17 374 4 767 759 -2 358 171 7 532 28 245
LIABILITIES
EQUITY
Share capital 1 009 400 -400 1 009
Reserve for own shares -834 0 -834
Share premium reserve 74 375 -375 74
Hedging reserve -14 0 -14
Translation difference 0 0 0
Distributable equity reserve 3 801 1 616 -1 616 2 985 6 785
Retained earnings 1 909 -2 134 609 -463 1 724 677 2 322
Total equity 5 946 257 609 -463 -667 3 662 9 343
LIABILITIES
Long-term liabilities
Financial liabilities 1 950 0 33 2 772 4 755
Short-term liabilities
Financial liabilities 2 218 0 25 685 2 929
Trade payables 1 438 696 2 133
Advances (net) 0 0 0
Intra-group debts 0 1 894 -1 894 0
Other debts 1 039 333 1 372
Deferred tax liabilities 0 0 25 66 488 220 799
Accruals and deferred income 4 046 1 587 67 -67 350 193 6 176
Provisions 737 0 737
Total liabilities 11 429 4 510 150 -1 895 838 3 870 18 902
TOTAL LIABILITIES
17 374
4 767
759
-2 358
171
7 532
28 245
Pro forma notes:
(1) This column shows Solteq Plc's Group result and balance sheet from 1.1.–31.12.2011 (audited), which is compiled and presented in accordance with IFRS.
(2) This column shows Aldata Solution Finland Ltd's result and balance sheet from 1.1.–31.12.2011 (audited), which is compiled and presented in accordance with FAS.
(3) This column contains the changes which relate to bringing the presentation of information, which is presented in accordance with FAS by Aldata Solution Finland Ltd, into line with IFRS guidelines. Income statement items are taken into account in the column with the assumption that the acquisition would have taken place on 1.1.2011. The balance sheet regards the acquisition as having taken place on 31.12.2011.
The depreciation of goodwill recorded in the separate company, in ASF, 134 thousand EUR, will be annulled. The awarded group contribution, 1.270 thousand EUR, will be adjusted from the income statement and instead recorded against earnings of previous financial periods. The column takes note of the effect on taxes of the group contribution, 330 thousand EUR. The depreciations of goodwill made in the SPV, 534 thousand EUR, will be re-recognised on the balance sheet. In accordance with the IFRS regulations, the product development to be capitalised, 168 thousand EUR, will be recognised on the balance sheet. The product development costs in question in the separate company, in ASF are presented as annual costs. The product development costs recorded in the in the separate company, in ASF for the financial period in 2011 do not meet IFRS capitalisation criteria. Financial leasing is presented as depreciations and interest expenses by adjusting the operation's other expenses. Financial leasing equipment, 57 thousand EUR, will be capitalised and the corresponding long-term liability, 33 thousand EUR and short-term liability, 25 thousand EUR, will be recognised on the balance sheet. In accordance with IFRS, the subsidies received for capitalised product development expenses, 67 thousand EUR, will be presented in accruals and deferred income. The tax effect of IFRS corrections has been taken into account.
(4) Items remaining outside of the Corporate acquisition are taken into account in this column. In addition, in this column the selling Group's internal assets and liabilities have been eliminated, and the net position after elimination has been presented in the balance sheet's cash and cash equivalents. The customer relationship of a single, overseas customer is left outside of the acquisition, so the related revenue 1.229 thousand EUR and expenses 1.092 thousand EUR have been eliminated. Royalties to the Aldata Group, 505 thousand EUR, have been recognised in variable costs. The sales profit, 165 thousand EUR relating to intangible rights outside of the corporate acquisition, has been recognised in other income. The capitalised product development costs related to these, 168 thousand EUR, have been eliminated. At the same time, the subsidy entry corresponding to product development costs, 67 thousand EUR, has been eliminated. For the aforementioned items, the column takes into account the positive net influence of tax, 66 thousand EUR. Goodwill, 668 thousand EUR, has been eliminated, as the goodwill will be re-allocated in the acquisition calculations. In connection with the corporate acquisition, of the 77 individuals employed by Aldata Solution Finland Ltd, three will transfer to Aldata Solution Plc, after which 74 individuals will work at Aldata Solution Finland Ltd. In the pro forma calculations, the share of the three individuals transferring to work for Aldata Solution Plc has not been eliminated from the personnel expenses, as the item in question is of low significance.
Internal receivables and debts of Aldata Solution Finland Ltd
Receivables
Thousand EUR
Receivables from companies in the same Group
Trade receivables 312
Loans receivables 2 332
Other receivables 0
Prepayments and accrued income 0
Total 2 644
Internal receivables have been entirely eliminated.
Debts
Thousand EUR Debts to companies in the same Group
Trade payables 945
Other debts 915
Accruals and deferred income 34
Total 1 894
Internal debts have been entirely eliminated.
(5) This column describes the acquisition of Aldata Solution Finland Ltd and, for illustrative purposes, the acqusition cost calculation compiled on the situation as on 31.12.2011. The acquisition cost is around EUR 8.300 thousand. Costs relating to the acquisition, 350 thousand EUR, as well as 133 thousand EUR of transfer tax have been expensed in accordance with IFRS 3 at the time of their creation. The depreciations calculated from the intangible rights, allocated during acquisition, 357 thousand EUR, are presented in the income statement. The allocation of purchasing price for the situation on 31.12.2011 is preliminary. The final allocation of the purchasing price will be compiled by the date of transfer of authority, 22.3.2012, in accordance with IFRS 3, based on the market value of Aldata Solution Finland Ltd's itemised assets and liabilities. Because of this, the final allocation of purchasing price may deviate from the preliminary allocation presented in this combined, unaudited pro forma information.
In the pro forma information, the purchasing price is allocated as follows according to the view of Solteq's management (thousand EUR):
Acquisition price 8 300
Aldata Solution Finland Ltd's net assets based on book value 403
Customer relations 608
Technology 1 736
Deferred taxes – 574
Goodwill 6 127
Corrections of market value for other intangible rights reflect the value of Solution Finland Ltd's customer base and the technology in use. The depreciation periods for allocated intangible rights are as follows: customer relations 8 years, technology 5 or 10 years.
The deferred tax debt, 574 thousand EUR, is calculated from the difference between the market value and taxation value of intangible rights. Goodwill, 6.127 thousand EUR, will be tested for reduction in value on a yearly basis.
Costs of 350 thousand EUR relating to the acquisition will be presented in accruals and deferred income, and their effect on tax in deferred taxes. Costs (taking into account tax effect) relating to acquisition have been taken into account in equity.
The final acquisition calculations, including the definition of market values, will be compiled within 12 months of the acquisition. Amounts dealt with as preliminary may be corrected to take into account such new information which concerns facts and conditions prevailing at the time of acquisition.
(6) This column illustrates the financial arrangements for the funding of the acquisition of Aldata Solution Finland Ltd. The funding is organised with the help of three different instruments. Assets received through the arrangement, by which commercial property shares are sold to Mutual Insurance Company Fennia and the premises are leased back over a ten year fixed-term tenancy agreement, are around 2.450 thousand EUR in calculations (transfer tax deducted). A share of the acquisition is funded by loans amounting to around 3.500 thousand EUR. The first, 2.000 thousand EUR loan's loan period is five years. The second, 1.500 thousand EUR loan's loan period is five years. The loans' financial expenses are calculated based on the terms of the signed loan agreements. The directed issue's share of the funding is around 3.135 thousand EUR.
The sales profit relating to the sale of commercial property shares, 897 thousand EUR, is presented in other income for the financial period 2011. The increase in lease expenses after the sale of commercial property shares, 214 thousand EUR, and the share of the first year of loan costs, 15 thousand EUR, are presented in other income. The interest expense of the loan relating to the acquisition, calculated with the IRR method, is presented in the financial expenses group. A depreciation focusing on owned buildings in the balance sheet, 36 thousand EUR, has been annulled due to the sale. Deferred tax on the income statement items has been recognised.
Land, 151 thousand EUR, and buildings, 1.402 thousand EUR, have been deducted from the balance sheet as sold items. The financial arrangement for funding has, in its entirety, 9.085 thousand EUR, been added to cash in hand and at banks. The effect of the directed issue, 2.985 thousand EUR, has been added to the distributable equity fund. The sales profit's effect on result taking into account effect on tax, 677 thousand EUR, has been taken into account as an addition in equity. The expert costs relating to the directed issue, 150 thousand EUR, have been presented in the distributable equity fund and in accruals and deferred income. The share of the financial funding arrangement funded with liabilities have been added to long-term financial liabilities, 2.800 thousand EUR, and the instalment share for the next year has been presented in short-term financial liabilities, 700 thousand EUR. Loan arrangement fees, 43 thousand EUR, have been presented as a reduction in long- and short-term financial liabilities, and as an addition to accruals and deferred income. The expert costs relating to the directed issue and loan arrangement costs calculated with the IRR method are presented in accruals and deferred income. The deferred tax effect is presented in short-term liabilities, 220 thousand EUR.
EQUITY RECONCILLIATION
(thousand EUR)
Solteq Plc IFRS (1) Aldata
Solution Finland Ltd FAS (2) Aldata
Solution
Finland Ltd
IFRS-
corrections (3) Aldata Solution Finland Ltd eliminations (4) Acquisition (5) Financial arrangements (6) Pro forma total
Share capital 1 009 400 -400 1 009
Reserve for own shares -834 0 -834
Share premium reserve 74 375 -375 74
Hedging reserve -14 0 -14
Distributable equity reserve 3 801 1 616 -1 616 2 985 6 785
Retained earnings 1 909 -2 134 609 -463 1 724 677 2 322
Total equity 5 946 257 609 -463 -667 3 662 9 343
Solteq Plc's and Aldata Solution Finland Ltd's equity, according to official statements of accounts, are presented in columns 1 and 2. Solteq's statement of accounts is compiled in accordance with IFRS standards, and Aldata Solution Finland Ltd's statement of accounts is compiled in accordance with the Finnish Accounting Standards (FAS).
Column 3 contains adjustments to be made to Aldata Solution Finland Ltd's statement of accounts in order to bring them in line with IFRS standards. To Aldata's equity item Retained earnings, an IFRS-compliant correction has added 533 thousand EUR of goodwill, as well as 168 thousand EUR of capitalised product development expenses as long-term costs, and deducted 67 thousand EUR product development subsidies and 25 thousand EUR of deferred taxes relating to product development costs and product development subsidies. Therefore, IFRS corrections form a 609 thousand EUR addition to retained earnings.
Column 4 contains the eliminations of items not belonging to the Corporate Acquisition: to the item Retained earnings, the sales price of royalties, 372 thousand EUR, and 67 thousand EUR of product development subsidy item have been added, and goodwill and depreciation of goodwill 668 thousand EUR and capitalised product development costs 168 thousand EUR have been deducted. In the same item of retained earnings, the deferred taxes relating to product development expenses and product development subsidy as well as the deferred taxes relating to the sale of royalties were deducted, 66 thousand EUR. 463 thousand EUR will be eliminated from retained earnings as items not belonging to the corporate acquisition.
Column 5 contains items to be allocated to equity based on the acquisition cost calculation. A 400 thousand EUR deduction is allocated to Share capital, a 375 thousand EUR deduction is allocated to Share premium reserve, a 1 616 thousand EUR deduction is allocated to Distributable equity reserve, and an addition of 1 724 thousand EUR is allocated to Retained earnings. The costs of acquisition arising from the acquisition, with effect on tax deducted, have been taken into account in the item allocated to retained earnings.
Column 6 presents the changes to equity caused by the arrangements implemented to fund the Corporate acquisition. Assets receivable from the directed issue of 3 135 thousand EUR are added to the item Distributable equity reserve and expenses relating to the arrangement of the issue, 150 thousand EUR were deducted. Therefore 2 985 thousand EUR will be added to the distributable equity reserve. Sales profit of 897 thousand EUR from the properties' sale and leaseback arrangement has been added to the item Retained earnings and the same sales profit's deferred taxes of 220 thousand EUR were deducted. Therefore, 677 thousand EUR will be added to retained earnings.
SOLTEQ PLC
Further information available from:
CEO, Repe Harmanen
Telephone +358 (0)400 467 717
E-mail repe.harmanen@solteq.com
CFO, Antti Kärkkäinen
Telephone +358 (0)20 1444 393 or +358 (0) 40 8444 393
E-mail antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
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