Virala Acquisition Company Plc announces further information about the initial public offering of its class C shares; the Finnish language prospectus has been approved

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Virala Acquisition Company Plc (”VAC” or the ”Company”), whose founding shareholder and largest owner is Virala Corporation (“Virala”), announced on 3 June 2021 its intention to launch an initial public offering (the ”Offering”) and the listing of its class C shares on the SPAC segment of the regulated market of Nasdaq Helsinki Ltd (“Nasdaq Helsinki”). The Company today announces the subscription price for the Offering and further information about the listing of its class C shares.

The Finnish Financial Supervisory Authority has on 14 June 2021 approved VAC’s Finnish language prospectus that will be published today, on 15 June 2021.

According to Virala, VAC complements the Finnish capital markets and offers a first-time opportunity for investors to invest in an acquisition company in Finland. For its target companies with strong ties to Finland, VAC offers a unique possibility to join forces and get access to VAC’s management capabilities and global networks as well as a large amount of growth capital.

The Offering in brief

• The Company preliminarily aims to raise gross proceeds of EUR 90 million by preliminarily offering a maximum of 9,000,000 new class C shares in the Company (the “Offer Shares”) for subscription.
• The subscription price in the Offering has been set to EUR 10.00 per Offer Share.
• In addition to the preliminary number of the Offer Shares, the Board of Directors of the Company has the right to increase the number of the Offer Shares by a maximum of 2,000,000 class C shares, in addition to which the Offer Shares will be increased by another 500,000 class C shares as part of Virala’s subscription undertaking, in case the number of Offer Shares reach at least 10,000,000 class C shares as a result of the upsizing shares (together the “Upsizing Shares”).
• If the Upsizing Shares are also offered in full, a maximum of 11,500,000 new class C shares in total may be issued in the Offering.
• The founding shareholder Virala has undertaken to subscribe for Offer Shares in the Offering in the amount of EUR 30 million, which corresponds to approximately 33.2 per cent of the class C shares after the completion of the Offering, assuming that the Offering is subscribed for in full and that no Upsizing Shares are offered. In case the number of Offer Shares reach at least 10,000,000 class C shares as a result of the offering of Upsizing Shares, Virala has undertaken to subscribe for Offer Shares in the Offering in the amount of EUR 35 million in total, which corresponds to approximately 30.4 per cent of class C shares after the completion of the Offering, if the Upsizing Shares are also offered in full.
• Ahead of the Offering, certain cornerstone investors have, subject to certain conditions, undertaken to subscribe for Offer Shares for EUR 26.5 million in total as follows: Ahlstrom Invest B.V. for EUR 9.0 million, Jussi Capital Oy for EUR 9.0 million, Julius Tallberg Corp. for EUR 4.0 million, G.W. Sohlberg Corporation for EUR 1.5 million, Oy Hammarén & Co Ab for EUR 1.5 million, and Visio Varainhoito Oy for EUR 1.5 million (together the “Cornerstone Investors”). The subscription undertakings of the Cornerstone Investors correspond to a total of approximately 29.3 per cent of the class C shares after the completion of the Offering, assuming that the Offering is subscribed for in full and that no Upsizing Shares are offered, and approximately 23.0 per cent if the Upsizing Shares are also offered in full.
• In addition, more than 30 investors have informed the Company in writing of their intention to subscribe for Offer Shares in the Offering in the total amount of approximately EUR 25 million. In addition, the Company’s CEO has informed the Company of his intention to subscribe for Offer Shares in the Offering in the amount of EUR 0.3 million.
• The above-mentioned subscription undertakings of Virala and the Cornerstone Investors as well as the subscription notifications by certain other above-mentioned investors correspond to a total of approximately 90 per cent of the class C shares after the completion of the Offering, assuming that the Offering is subscribed for in full and that no Upsizing Shares are offered, and approximately 75 per cent if the Upsizing Shares are also offered in full.
• Virala has undertaken to not transfer the class C shares it subscribes for in the Offering for three years after the completion of the Offering (i.e. until on or about 29 June 2024).
• The class C shares subscribed by Virala and the Board of Directors and management of the Company in the Offering will be subject to a lock-up, with certain exceptions, until 180 days have passed since the first day of trading of the class C shares.
• The subscription period for the Offering will commence on 15 June 2021 at 10:00 a.m. Finnish time.
• The subscription period for the Public Offering (as defined below) ends on 23 June 2021 at 4:00 p.m. Finnish time.
• The subscription period for the Institutional Offering (as defined below) ends on 24 June 2021 at 12:00 noon Finnish time, at the latest.
• Trading in the class C shares on the SPAC segment of the regulated market of Nasdaq Helsinki is expected to commence on or about 29 June 2021 and the trading code for the listed shares will be “VACSPAC”.
• Pursuant to the rules of Nasdaq Helsinki, a minimum of 90 per cent of the gross proceeds of the Offering must be deposited in blocked bank accounts maintained by a financial institution independent from the Company until the Company has completed an acquisition as set out in the rules of Nasdaq Helsinki.

Alexander Ehrnrooth, Chairman of the Board of Directors, comments:

We are proud to be very close to successfully launching Virala Acquisition Company, a pool of founder, institutional as well as retail investor capital, the like of which has not previously existed in the Finnish capital markets. In our view, VAC is an efficient and new way to raise a significant amount of capital from all of our owners, which will be used to grow and develop the acquired target company over the long term. Our goal is to support the profitable growth of a Finnish company or a company with strong ties to Finland, which has good growth and profitability potential. We are happy and humbled to have already secured an impressive group of committed value-add investors on board. Through VAC, it is possible to be part of a community of owners that has a very experienced founder in Virala as well as in VAC management team and board of directors. Our ultimate success is measured by the shareholder value we create.”

Johannes Schulman, CEO, comments:

“Until now, many Finnish companies with great potential have had to look abroad to acquire necessary growth and development capital. In VAC, our potential target companies now have a unique opportunity to fund profitable growth and reach their full value potential – together with a committed long-term partner. We believe that our extensive network in Finland, as well as abroad, gives us a crucial competitive advantage in finding the right target company, and to develop it further. Therefore, we believe that we can generate significant returns to shareholders, create long-term value for the acquired company and diversify the Finnish capital markets.”

Further information about the Offering

The Offering consists of (i) a public offering of preliminarily a maximum of 750,000 Offer Shares to private individuals and entities in Finland (the “Public Offering”), and (ii) private placements of preliminary a maximum of 8,250,000 Offer Shares to institutional investors in Finland and, in accordance with applicable legislation, internationally (the “Institutional Offering”). The Company may, based on demand, reallocate Offer Shares between the Institutional Offering and the Public Offering in deviation from the preliminary number of Offer Shares without limitation. However, the minimum number of Offer Shares to be offered in the Public Offering will be 750,000 Offer Shares or, if the aggregate number of Offer Shares covered by the commitments submitted in the Public Offering is smaller than this, such aggregate number of Offer Shares as covered by the commitments.

In addition to the preliminary number of the Offer Shares, the Board of Directors of the Company has the right to increase the number of the Offer Shares in the Institutional Offering by a maximum of 1,250,000 new class C shares and, additionally, the number of the Offer Shares to be offered in the Public Offering may be increased by a maximum of 750,000 new class C shares, in addition to which the Offer Shares will be increased by another 500,000 class C shares as part of Virala’s subscription undertaking, in case the number of Offer Shares reach at least 10,000,000 class C shares as a result of the Upsizing Shares. The final number of the Upsizing Shares is defined on the basis of overall demand. The number of the Offer Shares will be increased within the amount of the Upsizing Shares in the case of a potential oversubscription to prevent significant cutting of subscriptions.

If the Upsizing Shares are also offered in full, a maximum of 11,500,000 new class C shares in total may be issued in the Offering, thus increasing the total number of the Company’s shares to a maximum of 13,095,217 shares as a consequence of the Offering (taking into account all the share classes in the Company). After the Offering, the Offer Shares correspond to approximately 84.9 per cent of all the shares in Company and approximately 91.7 per cent of the shares with voting rights, assuming that the maximum number of Offer Shares is subscribed for in the Offering and that no Upsizing Shares are offered, and to approximately 87.8 per cent of all the shares in the Company and approximately 91.8 per cent of the shares with voting rights if the Upsizing Shares are also offered and subscribed for in full.

The depositing of proceeds to blocked bank accounts

Pursuant to the rules of Nasdaq Helsinki, a minimum of 90 per cent of the gross proceeds of the Offering must be deposited in blocked bank accounts maintained by a financial institution independent from the Company until the Company has completed an acquisition as set out in the rules of Nasdaq Helsinki.

Thus, in connection with the listing, the Company will deposit approximately EUR 81.0 million in the blocked bank accounts if the Offering is subscribed for in full and no Upsizing Shares are offered (and approximately EUR 103.5 million if the Offering is subscribed for in full and the Upsizing Shares are offered and subscribed for in full). VAC will not have unrestricted access to the proceeds deposited in the blocked accounts until certain conditions have been met. Appointed by VAC, Nordic Trustee Oy will act as an escrow agent for the blocked accounts. The remaining funds are deposited in the Company’s transaction account and will remain as the Company’s working capital.

The publication of the Finnish language prospectus and the listing of shares

The class C shares have not been subject to trading on a regulated market prior to the completion of the Offering. The Company will submit a listing application to Nasdaq Helsinki to list the class C shares on the SPAC segment of the regulated market of Nasdaq Helsinki under the share trading code “VACSPAC”.

The Finnish language prospectus will be available no later than 15 June 2021 on the Company’s website at www.virala.fi/en/ipo and registered office at Unioninkatu 7 B 15, FI-00130 Helsinki, Finland. Furthermore, the Finnish language prospectus will be available on or about 15 June 2021 at Nordea Bank Abp’s (“Nordea”) website at www.nordea.fi/vac-en, Skandinaviska Enskilda Banken AB (publ) Helsinki Branch’s (“SEB”) website at www.seb.fi/en, and Nordnet Bank AB’s (“Nordnet”) website at www.nordnet.fi/fi/vac, and at Nasdaq Helsinki at Fabianinkatu 14, FI-00100 Helsinki, Finland. The English language offering circular will be available on or about 15 June 2021 on the Company’s website at www.virala.fi/en/ipo and on Nordea’s website at www.nordea.fi/vac-en.

The terms and conditions of the Offering are attached to this announcement.

Important dates

• The subscription period for the Offering will commence on 15 June 2021 at 10:00 a.m. Finnish time.
• The option to discontinue the Offering will commence on 22 June 2021 at 4:00 p.m. Finnish time.
• The subscription period for the Public Offering ends on 23 June 2021 at 4:00 p.m. Finnish time.
• The subscription period for the Institutional Offering ends on 24 June 2021 at 12:00 noon Finnish time, at the latest.
• Announcement of the final results of the Offering on or about 28 June 2021.
• The Offer Shares offered in the Public Offering are entered in the investors’ book-entry accounts on or about 29 June 2021.
• The Offer Shares offered in the Institutional Offering are ready to be delivered upon payment through Euroclear Finland Oy on or about 29 June 2021.
• Trading in the class C shares on the SPAC segment of the regulated market of Nasdaq Helsinki is expected to commence on or about 29 June 2021.

Company presentation

VAC will host a company presentation (webcast) in Finnish on 16 June 2021 at 6:00 p.m. Finnish time. The event, introducing the Company and the Offering, will be hosted by VAC’s Chairman of the Board of Directors Alexander Ehrnrooth, CEO Johannes Schulman and CFO Mia Alholm. Attendees will be given the possibility to present questions to the representatives of the Company after the presentation. The conference can be followed as a webcast-broadcast at http://worksup.com/viralaacquisitioncompany.

Background to the Offering and information about VAC

Virala Acquisition Company Plc (VAC) is a Finnish company, the purpose of which is to complete one or more acquisitions. VAC’s founding shareholder is Alexander and Albert Ehrnrooth’s family-owned industrial enterprise Virala Corporation. VAC’s goal is to acquire one or more companies and/or businesses and generate significant returns to its shareholders and create long-term value to the target company as well as diversify the Finnish capital markets.

The intention of VAC is to raise capital through the Offering and within 36 months thereafter acquire one or more companies and/or businesses that will be listed through VAC on the official list of Nasdaq Helsinki or the Nasdaq First North Growth Market following a Nasdaq Helsinki listing process. VAC’s investment strategy is to identify and acquire one or more companies and/or businesses with strong ties to Finland and a preliminary enterprise value of EUR 50–500 million. The target companies should have good growth and profitability potential, which can be developed in a sustainable way by utilizing the expertise of VAC and Virala as well as the capital raised in the Offering. VAC’s initial intention is to invest the proceeds from the Offering to the development and growth of the target company. VAC considers that this type of sizable and committed growth and development capital, coupled with Virala, a highly committed and long-term owner, forms a combination that will develop and complement the Finnish capital markets.

Virala is the founding shareholder of VAC and will invest in the class C shares of VAC in the Offering on the same terms as other investors. Following the completion of the Offering, Virala will own in the aggregate no more than 43.1 per cent of all shares in the Company (38.6 per cent of the shares with voting rights) provided that the Offering is subscribed for in full and that no Upsizing Shares are offered, and no more than 38.7 per cent of all shares in the Company (35.9 per cent of the shares with voting rights) if also all the Upsizing Shares are offered in full. Virala has committed not to transfer its class C shares subscribed in the Offering for a period of three years after the completion of the Offering.

As the founding shareholder and an early-stage financier of VAC, Virala has also subscribed for class F and class E shares in VAC, which together form the founder shares in VAC. The class F shares may be converted to class C shares, if certain pre-defined class C share price hurdles are met through the increase in the market price of the class C share. As such, the conversion right is tied to the long-term success of the Company and value creation to all shareholders. The founder shares are subject to transfer restrictions and the conversion of class F shares can happen three years after the Offering, at the earliest, and seven years after the Offering, at the latest. Class F shares represent eight (8) per cent of all class C and class F shares after the Offering, and the right to convert the class F shares to class C shares is reached if one or more of the pre-determined share price hurdles entitling to the conversion between EUR 12.00 and EUR 24.00 is reached. Class E shares do not entitle to dividend or other distribution of assets and they do not carry voting rights, but they can be converted to class F shares in certain situations where class C shares are issued in a directed issue.

VAC believes that it offers investors a transparent, simple and all shareholders’ interests securing unique investment alternative in Finland. All VAC’s shareholders, excluding certain closely related parties of the Company, have, under certain conditions, the right to demand the redemption of their class C shares in the event that the General Meeting of VAC approves the acquisition against which the shareholders in question have voted. The shareholders’ right to have their class C shares redeemed is, however, limited in total to a maximum of ten (10) per cent of the total amount of issued and outstanding class C shares on the record date of the General Meeting that has been convened to approve the acquisition. The redemption will occur at a cash amount equal to the shareholder’s class C shares’ pro rata share of the aggregate amount in the Company’s restricted bank accounts.

Advisors

Nordea and SEB have been appointed to act as joint global coordinators and bookrunners for the Offering (jointly referred to as the "Managers"). Hannes Snellman Attorneys Ltd acts as the legal advisor to the Company whereas White & Case LLP acts as a legal advisor to the Managers. Nordnet, together with Nordea, acts as a subscription place for the public offering in connection with the contemplated Offering. Miltton Ltd acts as a communications advisor to the Company.

Further enquiries and interview requests

Charlotta Palm, Project Assistant, Virala Oy Ab, +358 50 357 5566

About VAC

Virala Acquisition Company Plc (VAC) is a Finnish acquisition company, tailored to the Finnish capital markets. The goal of VAC is to identify and execute one or more acquisitions that aim to create significant value for both the shareholders and the target company, as well as diversify the Finnish capital markets. VAC seeks one or more companies and/or businesses with an estimated enterprise value ranging from approximately EUR 50 to EUR 500 million. The founding shareholder of VAC is the industrial enterprise Virala which has committed to act as a long-term anchor owner and developer of the companies to be acquired. www.virala.fi/en/

About Virala

Virala Group is a long-established industrial owner. The group includes family-owned and co-controlled private and publicly traded companies, in which Virala acts as an active owner with significant shareholdings. In addition, Virala actively manages a global portfolio including private equity, venture capital and real estate investments. In 2020 Virala was the leading investor in three listed companies in Finland and Sweden, which in aggregate generated EUR 4.6 billion in revenue and had more than 13,000 employees around the world in 2020. Virala Group’s average annual return on equity was 24.7 per cent during 2014–2020. The parent company of Virala Group, Virala Corporation, is owned by Alexander and Albert Ehrnrooth.
Important information
It may be unlawful to distribute this announcement in certain jurisdictions. This announcement is not for distribution in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or any other jurisdiction where such distribution would be unlawful. The information in this announcement does not constitute an offer of securities for sale in such jurisdictions.
The issue of securities in connection with the Offering is subject to specific legal or regulatory restrictions in certain jurisdictions. The Company and the Managers assume no responsibility in the event there is a violation by any person of such restrictions.
This announcement is not a prospectus for the purposes of the Prospectus Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and underlying legislation. A prospectus prepared pursuant to the Prospectus Regulation and approved by the Finnish Financial Supervisory Authority will be published, and when published can be obtained from the Company and other places indicated in the prospectus. Investors should not subscribe any securities referred to in this announcement except on the basis of information contained in the prospectus.
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This announcement has been prepared on the basis that any offer of securities in any Member State of the European Economic Area, other than Finland, where the Prospectus Regulation is applicable (each, a “Relevant Member State”), will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of securities. As a result, the securities may only be offered in Relevant Member States (a) to “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation; or (b) in any other circumstances falling within Article 1(4) of the Prospectus Regulation. Neither the Company nor any of the Managers have authorised, nor do they authorise, the making of any offer of the securities through any financial intermediary, other than offers made by the Managers which constitute the final placement of the securities contemplated in this announcement. Neither the Company nor any of the Managers have authorised, nor do they authorise, the making of any offer of securities in circumstances in which an obligation arises for the Company or any Managers to publish or supplement a prospectus for such offer.
The information contained in this announcement is for informational purposes only and does not purport to be full or completed. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or any other securities nor shall it (or any part of it) or its distribution, form the basis of, or be relied on in connection with, any contract therefor. The information in this announcement is subject to change. Investors must neither accept any offer for, nor acquire, any securities to which this announcement refers, unless they do so on the basis of the information contained in the prospectus published or offering circular distributed by the Company.
This announcement includes forward-looking statements, which include statements regarding the Company’s business strategy, financial condition, profitability, results of operations, market data, and perceptions and objectives of the management of future operations and goals, as well as other statements that are not historical facts. Words such as “believe,” “anticipate,” “plan,” “expect,”, “intend”, “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should,” “aim,” “continue,” “could,” “guidance,” “may,” “potential,” “will,” as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, the Company does not have any intention or obligation to publicly update or revise any forward-looking statements after it distributes this announcement, whether to reflect any future events or circumstances or otherwise.
The Offering timetable, including the date of admission of the shares to the SPAC segment of the official list of the Nasdaq Helsinki Ltd, may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Offering will proceed and that the Offering will occur and you should not base your financial decisions on the Company’s intentions in relation to the Offering. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Offering. The value of shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the Offering for the person concerned.
The Managers are acting exclusively for the Company and for no-one else in connection with any transaction mentioned in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to any such transaction and will not be responsible to any other person for providing the protections afforded to their clients, or for advising any such person on the contents of this announcement or in connection with any transaction referred to in this announcement. The contents of this announcement have not been verified by the Managers and neither of the Managers accept liability for this information included in this announcement.
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares have been subject to a product approval process, which has determined that the shares are (i) compatible with an end target market of retail investor and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II (the “Target Market Assessment”); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II. Notwithstanding the Target Market Assessment, distributors should note that: the price of the shares may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares. Each distributor is responsible for undertaking its own Target Market Assessment in respect of the shares and determining appropriate distribution channels.