TKH aims to raise € 75 million by offering (depositary receipts of) new ordinary shares to finance further strategic growth

To finance further strategic growth, TKH Group NV (“TKH”) announces an accelerated bookbuild offering (the "Offering") aiming to raise € 75 million. The net proceeds from the issuance of (depositary receipts of) new ordinary shares will be used to finance TKH’s further strategic growth including the finance of the acquisition of Commend group ("Commend"), the squeeze-out of minority shareholders in Augusta Technologie AG ("Augusta"), capital expenditures and general corporate purposes.

Alexander van der Lof, CEO of technology company TKH: "The acquisition of Commend, the squeeze-out of minority shareholders in Augusta and the intended capital expenditure are important steps in the realisation of our strategic agenda. These steps strengthen our technology foundation and support the envisaged growth target in our defined vertical growth markets. To keep flexibility in the execution of our strategic agenda and to maintain our debt leverage objective below 2.0, TKH has opted to finance these steps with the issuance of (depositary receipts of) shares aiming to raise € 75 million. The acquisition, squeeze out and capital expenditures will contribute to future growth of net profit attributable to shareholders and therefore compensates the dilution in earnings per share as a result of the issuance of new shares."

Acquisition of Commend

In today’s press release, TKH announced that it will acquire 74% of the shares of Commend International GmbH (Austria), that holds the production and development activities. In addition, TKH has the option right and intention to acquire in 2015 the international sales organisation of Commend in the USA, UK, France, Spain and Italy, as well as 49% of Commend Australia. TKH will increase its existing shareholding in the subsidiaries Commend Benelux BV and Schneider Intercom GmbH to 100% by acquiring respectively an interest of 25% and 5%.

Commend is a technology and market leader in mission critical intercom systems worldwide. The security- and communication systems of Commend are applied broadly in- and outside buildings and in critical infrastructural projects. TKH and Commend have already been successfully cooperating for over fifteen years, whereby TKH represents Commend in the Benelux, Germany, Poland and South-East Asia. Commend will strengthen TKH's position in communication technology. With more than 300 employees, Commend realises an annual turnover of about € 45 million. The acquisition of Commend International is expected to be finalised in January 2015. The purchase price and the EBIT-multiple are in line with TKH’s strategic acquisitions in the past. As of the closing date, the acquisition will contribute to the earnings per share of TKH.

Squeeze out minority shareholders of Augusta

On 17 November 2014, TKH has confirmed its decision to request the squeeze-out of the minority shareholders of Augusta and set the cash compensation to be offered at € 30.49 per Augusta share. This results in a total cash compensation of € 21.4 million for the minority shareholders of Augusta.

Capital expenditures

To realise further strategic growth, TKH will increase its capital expenditure in the next 12 months. This capital expenditure includes among others the additional production capacity with specific capabilities for subsea cables in order to boost the company’s position in the oil and gas industry, one of the defined vertical growth markets, and wind turbine parks. As mentioned in the Q3 press release, the additional production capacity will be available in the fourth quarter of 2015 and requires a capital expenditure of over € 20 million.

The Offering

TKH is aiming to raise € 75 million by offering (depositary receipts of) new ordinary shares, on a non pre-emptive basis, through an accelerated bookbuild offering to qualified and certain other eligible investors in the European Economic Area (EEA) and to qualified institutional buyers in the United States in reliance on an exemption from the registration requirements under the Securities Act.

TKH and the Joint Bookrunners may decide to increase the Offering up to a total number of 3,896,586 (depositary receipts of) new ordinary shares, resulting in a maximum number of (depositary receipts of) new ordinary shares placed in the Offering equal to 9.99% of TKH’s currently issued ordinary share capital.

The Offering will be launched immediately following this announcement and the closing of the book is expected today at 17.30hrs CET, subject to acceleration. The issue price is expected to be announced today through a separate press release.

The acquisition of Commend and the Offering are supported by existing major shareholders of TKH.

Payment and delivery of the (depositary receipts of) new ordinary shares are scheduled for 24 November 2014, at which date the (depositary receipts of) new ordinary shares are expected to be admitted to listing and trading on Euronext in Amsterdam. Pursuant to section 5:4 sub a of the Dutch Financial Supervision Act, no prospectus is required for the admission to trading and trading of these (depositary receipts of) new ordinary shares on Euronext Amsterdam. The (depositary receipts of) new ordinary shares will rank pari passu in all respects with the outstanding (depositary receipts of) ordinary shares.

On the condition that the issuance of (depositary receipts of) new ordinary shares is completed (the "Offering), TKH Group has agreed with the Joint Bookrunners, subject to exceptions customary in Offerings of this nature, not to issue or offer any (depositary receipts of) new shares or related securities within 90 days of the closing of the Offering.

Rabobank acts as Sole Global Coordinator in the Offering. Rabobank and ABN AMRO act as Joint Bookrunners in the Offering.

Trading update Q3 and outlook

On 6 November 2014, TKH released it's trading update for the third quarter of 2014. TKH announced that, based on the results booked in the first nine months of 2014 and the outlook for the coming months, and barring unforeseen circumstances, the company expects net profit before amortisation and one-off income and expenses attributable to shareholders for the full year 2014 of between € 80 million and € 85 million.

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