Sinch AB (publ) (“Sinch” or the “Company”) carries out a directed new share issue through the issuance of 21 million new shares for a total consideration of approximately SEK 3,469 million.
The new share issue constitutes the second part of the SEK 6.6 billion new share issue of in total 40,077,841 shares (the “Shares”) announced on 30 September 2021, the proceeds of which are used to partially fund the acquisition of Pathwire.
The subscribers consisted of institutional investors, among others the Canada Pension Plan Investment Board (“CPP Investments”), Temasek, SeaTown Master Fund (“SeaTown”), and SB Northstar LP, a fund managed by SB Management, a wholly owned direct subsidiary of SoftBank Group Corp, alongside certain existing shareholders (the “Investors”) committed on 30 September 2021 to subscribe for the Shares at a price of SEK 164.60 per share.
As disclosed in connection with the announcement of the acquisition of Pathwire on 30 September 2021, the Investors undertook to subscribe for shares equivalent to SEK 6.6 billion at a price of SEK 164.60 per share (the “Subscription Price”).
The Company’s board of directors has, based on the authorization granted by the annual general meeting on 18 May 2021, resolved to issue 21,077,847 new shares, equivalent to SEK 3,469 million, to the Investors at the Subscription Price. The initial 18,999,994 new shares were issued on 30 September 2021 (at the Subscription Price). The Subscription Price was determined through a negotiation with the Investors.
The proceeds from the directed new share issue are used to partially finance the acquisition of Pathwire. Sinch has a strong track record of successful acquisitions, and this acquisition continues to build on this successful track record.
The acquisition of Pathwire means that Sinch becomes one the very few, global CPaaS providers that can deliver leading quality at scale across all the main digital communications channels which businesses use to engage with their customers.
A prerequisite for the agreement regarding the acquisition of Pathwire was that the Company had secured funds through a capital raising. Therefore, the Company considered the possibilities of raising capital through a rights issue, but concluded that such an alternative was not possible (as it would not have met the timeline to conclude the agreement to acquire Pathwire).
Further, the Company required that shares were issued at two different dates (in September and December) and negotiated with the Investors to secure their commitments to subscribe and pay for shares both in September and December.
The reason for deviating from the shareholders’ pre-emptive rights is therefore to be able to finance the acquisition of Pathwire on the terms required to carry out the transaction. The board’s overall assessment is therefore that the reasons for carrying out the share issue with deviation from the shareholders’ pre-emptive rights are clear and sufficiently strong and hence the share issue lies in the best interest of the Company and all shareholders.
Through the completion of the directed share issue the number of shares and votes in the Company will increase by 21,077,847 from 747,480,901 to 768,558,748 shares and votes, equivalent to a dilution of approximately 2.74%. The share capital will increase by SEK 0.21 million from SEK 7.47 million to SEK 7.69 million.
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