GARO announces initial public offering on Nasdaq Stockholm and publishes prospectus

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN, AUSTRALIA, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE SUBJECT TO LEGAL RESTRICTIONS

GARO in brief

GARO develops and manufactures innovative turnkey solutions for the electric installation market under its own brand. GARO has since its inception, 75-years ago, developed strong customer relationships and a well-developed network of suppliers that in combination with the Company's own production and sales units constitutes a platform to supply innovative electrical installation solutions. The business is conducted in Sweden, Norway, Finland, Ireland and Poland, and the group is organised in two business segments: GARO Sweden and GARO Other markets. The Company has evolved from a local production focused company to a development driven and market oriented company with, according to the Company, a leading position within its selected product areas: Electrical distribution products, Project business, Temporary electric installations and EV-charging. GARO's main customers are electrical wholesalers but the Company also has strong relationships with its end customers comprising of installers, OEMs and industrial companies.

The Offering

• The price per share in the Offering has been set to SEK 73, corresponding to a value of the total number of outstanding shares in GARO of SEK 730 million.
• The Offering comprises 4,000,000 existing shares which will be offered by the Owners.
• In order to cover any potential over-allotment in relation to the Offering, the Owners has, on request from Global Coordinator, undertaken to offer up to 600,000 additional shares (the "Over-Allotment Option"), corresponding to up to 15.0 per cent of the number of shares in the Offering.
• Assuming the Offering is fully subscribed and the Over-Allotment Option is fully exercised, the value of the Offering will amount to SEK 335.8 million and correspond to 46 per cent of the total number of outstanding shares in GARO.
• Svolder AB and Vätterledens Invest AB ("Cornerstone Investors") have committed (subject to the fulfilment of certain customary conditions) to acquire shares in the Offering corresponding to 30.4 per cent of the total number of shares in the Offering assuming the Over-Allotment Option is fully exercised and 14.0 percent of the total number of shares in the Company, corresponding to SEK 102.2 million.

  Subscription undertaking (SEK million)

  Number of shares*

  Percent in the Offering*

  Svolder AB

  51.1

  700 000

  15.2%

  Vätterledens Invest AB

  51.1

  700 000

  15.2%

  Summa

  102.2

  1 400 000

  30.4%

  * Based on full subscription in the Offering and that the Over-Allotment Option is exercised in full
• In addition to Cornerstone Investors, members of the Board of directors of the Company have committed to, on the same terms as other investors, acquire 217,000 shares in the Offering.
• The Offering consists of an offering to institutional investors as well as an offering to the general public in Sweden.
• A Swedish prospectus with full terms and conditions is published today March 7, 2016, on GARO's website and Carnegie's website for on-going offerings.
• The bookbuilding period for institutional investors starts on March 8, 2016 and is expected to close on March 15, 2016.
• The application period for the Offering to the general public in Sweden starts on March 8, 2016 and is expected to close on March 15, 2016.
• Resolution on allotment of shares will be made by the Owners in their sole discretion in consultation with the Bookrunner, whereby the goal is to achieve a wide distribution of shares to the general public. However, Cornerstone Investors are guaranteed allotment in accordance with their undertaking and certain allotment to GARO employees is intended to be prioritized.
• Trading in the GARO shares on Nasdaq Stockholm is expected to begin on March 16, 2016 and settlement is expected to take place on March 18, 2016.
• The shares will trade under the ticker "GARO".
• Carnegie Investment Bank ("Carnegie") is acting as Global Coordinator and Bookrunner in the Offering.

Stefan Jonsson, CEO, board member and one of GARO's Owners, comments

"The interest from investors has been great, we are happy and of course very proud of GARO. We welcome our new shareholders and are very positive about the growth opportunities that the planned listing of the Company will enable. Members of the management team and the Board of directors look forward to continue our journey as a listed company and continue to create value for both existing and new shareholders."

Background and reasons

GARO was founded in 1939 by three relatives in Gnosjö, Småland. GARO has evolved from a local production focused company to a development driven and market oriented company with a leading position within innovative turnkey solutions for the electrical installation market. Today, GARO is a European company, with local sales offices in five countries, market products under its own brand within the product areas Electrical distribution products, Project business, Temporary electric installations and EV-charging. GARO has own production units in Sweden and Poland. According to GARO, the Company is a leading player within its selected product areas in Sweden, Norway and Ireland.

GARO's strong position and favourable underlying market trends has contributed to a positive development during the past years as the Company's sales and operating profit has increased from SEK 383.1 million and SEK 24.0 million in 2013 to SEK 554.1 million and SEK 62.4 million in 2015 respectively.

Since GARO's incorporation the Company has been family owned with Lars Svensson as a second generation owner. Lars Svensson intends to remain as a long term owner in GARO.

GARO's Board of directors and management team believe the listing of the Company will contribute positively to GARO development going forward and will increase the awareness of GARO and its operations. The listing will expand the shareholder base and enable GARO to access the Swedish and international capital markets to broaden the Company's financing options relating to further growth, both organically and through selective acquisitions.

Prospectus and application forms

The prospectus and application form (in Swedish) are published on GARO's website, www.garo.se and Carnegie's website for on-going offerings www.carnegie.se/om-carnegie/kontakt/pagaende-erbjudanden/. Application can also be made through Nordnet's Internet service, www.nordnet.se.

Preliminary timetable

Application period for institutional investors: March 8-15, 2016
Application period for the general public in Sweden: March 8-15, 2016
First day of trading on Nasdaq Stockholm: March 16, 2016
Settlement day: March 18, 2016

Advisors

Carnegie is Global Coordinator and Bookrunner. Mannheimer Swartling is legal advisor to GARO and the Owners. Baker & McKenzie is legal advisor to Carnegie.

For further information, please contact:

Stefan Jonsson, CEO GARO
Telephone: +46 (0)370 33 28 02
E-mail: [email protected]

Patrik Linzenbold, IR-director GARO
Telephone: +46 (0)708 25 26 30
E-mail: [email protected]

About Svolder AB

Svolder is a dedicated investment trust that invests in the shares of listed small and medium-sized Swedish companies. The company is located in central Stockholm with five employees. The company is since 1993 listed on Nasdaq Stockholm.

About Vätterledens Invest AB

Vätterledens Invest AB is a family-owned industrial conglomerate headquartered in Gothenburg. The company operates within five main areas: listed holdings, trade and industrial operations, real estate, wind power & forestry and other operations. The group was founded 1969 and had a turnover of SEK 1.7 billion in 2015. The group holds significant positions, amongst others, in Gunnebo and Kopparbergs Brewery. 

Important information

This press release is not an offer to sell or a solicitation of any offer to buy any securities issued by GARO Aktiebolag (publ).

This press release may not be distributed in or into the United States, Canada, Japan, Australia or any other jurisdiction where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, registrations or other actions in addition to what follows from Swedish law. Nor may the information in this press release be forwarded, reproduced or disclosed in a manner that contravenes such restrictions or would entail such requirements.

In any EEA Member State, other than Sweden, that has implemented Directive 2003/71/EC as amended (together with any applicable implementing measures in any member State, the "Prospectus Directive"), this press release is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.

This press release and the information contained herein are not for distribution in or into the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States.

In the United Kingdom, this press release and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this press release relates is available only to, and will be engaged in only with, "qualified investors" (as defined in section 86(7) of the Financial Services and Markets Act 2000) and who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

This press release may contain forward-looking statements which reflect GARO's current view on future events and financial and operational development. Words such as "intend", "assess", "expect", "may", "plan", "believe", "estimate" and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

A Swedish prospectus prepared in accordance with the Prospectus Directive will be published today (March 7, 2016) and will, subject to certain restrictions, be available on the websites of GARO (www.garo.se) and Carnegie (www.carnegie.se).

The information in this press release is disclosed by GARO Aktiebolag in accordance with the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 07.20 a.m. on March 7, 2016.