INSIDE INFORMATION: Duell Corporation is planning a fully guaranteed rights offering of approximately EUR 20 million to strengthen its balance sheet and support its strategy execution
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Transaction Highlights
- Offering (as defined below) of approximately EUR 20 million.
- Support from the largest shareholders holding a total of 33.7 percent of the shares in Duell Corporation (“Duell” or the “Company”), with the remainder of the Offering being fully guaranteed by HC DL Holding Ltd (a wholly-owned subsidiary of Hartwall Capital Ltd) (“Hartwall Capital”), subject to certain conditions.
- The Offering is subject to an authorization by the extraordinary general meeting on November 30, 2023, and the resolution by the Board of Directors of Duell.
Duell announced on October 9, 2023, that the Company is considering a rights offering and reviewing its financing alternatives. The Board of Directors of Duell has today published a notice to the extraordinary general meeting to authorize the Board of Directors to resolve on the rights offering of approximately EUR 20 million (the “Offering”). The largest shareholders of Duell support the Offering and Hartwall Capital has given an advance guarantee undertaking of up to EUR 13.6 million for the remaining share of the Offering. Preliminarily and depending on the market conditions, the subscription period of the Offering is estimated to commence during the fourth quarter of calendar year 2023.
Background of the Offering
Duell’s operating environment has recently changed significantly due to an increased inflation, decreased customer demand and lower market activity in general. As a result, the Company’s profitability has decreased and subsequently its net debt to adjusted EBITDA ratio has increased. The Company would use the net proceeds from the Offering to strengthen its balance sheet, to pay out the deferred purchase price relating to the acquisition of TranAm Ltd, and to enable further execution of the Company’s strategy aiming to expand its footprint in Europe, improve its position in the online business and develop its brand portfolio. The Company’s intention is to prioritize current internal efficiency measures to ensure improved profitability and efficient net working capital, and it will not prioritize larger acquisition opportunities until the operating environment is more supportive for them.
Extraordinary General Meeting
Duell seeks an authorization for the Offering in the extraordinary general meeting of Duell, which is to be held on November 30, 2023. In addition, to enable advance guarantee undertaking from Hartwall Capital, the Board of Directors of Duell has proposed to the extraordinary general meeting that sections regarding obligations to notify changes of holdings and to make a tender offer, would be removed from the articles of association.
Support from the Shareholders
Duell has received irrevocable advance subscription undertakings from Hartwall Capital, Sponsor Fund IV Ky (a fund managed by Sponsor Capital Oy) and certain companies controlled by persons involved in the operations of Sponsor Capital Oy, whose holdings in Duell represent a total of 33.7 percent of the existing shares in Duell, each separately, to vote in favor of the rights offering authorization and of the amendments of the articles of association in the general meeting of the shareholders, and to subscribe for the pro rata amount of the offer shares based on the subscription rights allocated in the Offering, and to pay the subscription price for such offer shares (either by itself and/or on behalf of its controlled entity) under certain customary conditions. In addition, Hartwall Capital has entered into an advance guarantee undertaking with Duell, according to which it has committed to subscribe for a maximum of EUR 13.6 million of the offer shares that may remain unsubscribed in the Offering. Hartwall Capital’s advance guarantee undertaking is, in addition to certain customary conditions, conditional upon the extraordinary general meeting approving the proposal of the Board of Directors regarding the removal of section 12 (Notification on the Change of Holdings) and section 13 (Obligation to Make a Tender Offer) from the articles of association of Duell.
Advisors
Carnegie Investment Bank AB, Finland Branch is acting as the sole global coordinator and bookrunner for the Offering (the “Global Coordinator”). White & Case LLP is acting as legal advisor to the Company in connection with the Offering. Roschier, Attorneys Ltd. is acting as legal advisor to the Global Coordinator in connection with the Offering. Miltton Ltd is acting as communications advisor to the Company.
Further information:
Pellervo Hämäläinen, Communications and IR Manager
Duell Corporation
+358 40 674 5257
pellervo.hamalainen@duell.eu
Certified advisor
Oaklins Merasco Oy
+358 9 612 9670
Duell Corporation (Duell) is an import and wholesale company based in Mustasaari, Finland, established in 1983. Duell imports, manufactures, and sells products through an extensive distribution network in Europe covering 8,500 dealers. The range of products includes 150,000 items under 550 brands. The assortment covers spare parts and accessories for motorcycling, bicycling, ATVs/UTVs, mopeds and scooters, snowmobiling, and boating. Logistics centres are in Finland, Sweden, Netherlands, France, and the UK. Duell’s net sales in 2023 was EUR 119 million and it employs over 200 people. Duell’s shares are listed on the First North Marketplace. www.duell.eu
Important Information
This release is not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Duell Corporation (the “Company”) does not intend to register any part of the share issue in the United States or to conduct a public offering of securities in the United States.
The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such relevant legal restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore or South Africa. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such aforementioned jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen, resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would violate law or regulation or which would require any registration or licensing within such jurisdiction.
This release is only being distributed to and is only directed at: (i) persons who are outside the United Kingdom; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (iii) high net worth companies, and other persons to whom it 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”). Any securities mentioned herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this release or any of its contents.
This release does not constitute a prospectus as defined in the Prospectus Regulation (EU) 2017/1129 and, as such, it does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity in relation to any securities.
No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The Company or any of its respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss, however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of the Company, its subsidiaries, its securities and the transactions, including the merits and risks involved.
The Global Coordinator is acting exclusively for the Company and no one else in connection with the rights issue. It will not regard any other person as its respective client in relation to the rights issue. The Global Coordinator will not be responsible to anyone other than the Company for providing the duties afforded to its respective clients, nor for giving advice in relation to the rights issue or any transaction or arrangement referred to herein.
Forward-looking Statements
This release includes “forward-looking statements.” These statements may not be based on historical facts, but are statements about future expectations. When used in this release, the words “aims,” “anticipates,” “assumes,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,” “would” and similar expressions as they relate to the Company and the transaction identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Readers should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied in the forward-looking statements. The Company or any of its affiliates, advisors, representatives or any other person undertakes no obligation to review, confirm or to publicly release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise following the date of this release.