Acquisition of machinery

ChromoGenics AB (publ), org. 556630-1809 has today signed an agreement to acquire sputtering machines from the German company Hörmann. Sputtering is the main process in the production of the patented electrochromic film, which is the foundation of ChromoGenic's all dynamic products. Sputtering is done in special machines where the foil is coated with nanometer thin metal oxide layers in a roll-to-roll process.

Today, sputtering takes place at subcontractors abroad where ChromoGenics rents machine time and the process contains several steps with input materials from different suppliers. The current structure leads to long lead times, not least because there is often a shortage of capacity among the suppliers. And if there is an error at any point, the time is further affected, which in turn can cause delays in the delivery.

Given the increasingly strong demand for the company's products, the risks of using only external suppliers are perceived to be high.

The acquisition is thus carried out in order to secure long-term deliveries and shorten lead times. The investment not only gives ChromoGenic's expanded production and development capacity but also quality control over the entire company's production process. In addition, significant cost savings are also achieved. Existing manufacturing channels will be retained and developed in parallel with their own production to ensure delivery reliability and capacity throughout the world.

The machines will be placed in Uppsala during autumn of 2019 and will be upgraded to ChromoGenic's specific needs in the following months. A letter of intent has also been signed with the Ångström Laboratory for collaboration and joint operation of one development machine, included in the acquisition. The ambition is to have the production machines in operation early spring 2020.

The purchase price amounts to approximately EUR 5.25. The payment is split up and takes place at different times during the delivery and installation process of the machines. Of the purchase price, EUR 1.45 will be paid through newly issued shares in ChromoGenics, at the average price during 10 trading days before the delivery date of the machines.

"We are extremely pleased to be able to land this deal, which is crucial for our volume growth. Through the acquisition, we will not only be able to develop our products further but also gain control of the sputtering, which is one of the real key processes. This is fully in line with our goal of supplying the world market with electrochromic glass and foils and thereby contributing to more sustainable glass solutions", comments ChromoGenics CEO Jerker Lundgren.

"We are very happy for the deal with ChromoGenics. We believe in ChromoGenics, both as a company and in its technology, and see the great market potential ahead. We have therefore decided to take a significant shareholding in the company in connection with the transaction", says Markus Hörmann, owner of Hörmann-Verwetungen.

Financing the machine acquisition

In order to finance the acquisition, the Board of ChromoGenics has today decided to issue a new share issue with preferential rights for the Company's existing shareholders (the "Issue"). The decision requires approval from an extraordinary general meeting that is scheduled to take place on June 18, 2019. The press release regarding the notice will be published separately. Since the Company's share capital after the Issue's implementation will be relatively high, the Company is considering at a future General Meeting to decide on a more appropriate share capital.

•  Upon full subscription to the rights issue, the company will be added SEK 86.4 million before issue costs.
•  Through the rights issue, the company's share capital will increase by no more than SEK 34,551,197.83 through the issue of a maximum of 172,755,980 shares.
•  The issue is guaranteed at 85 per cent, of which 1 per cent relates to subscription commitments and 84 per cent refers to guarantee commitments. The guarantors receive market compensation for their guarantee commitments.
•  Anyone who is a shareholder of ChromoGenics on the record date on June 21, has preferential rights to subscribe for shares in the issue, whereby one holding of one (1) share entitles one (1) subscription right. One (1) subscription right entitles the holder to subscribe for one (1) new share at the subscription price SEK 0.50.
•  The subscription period runs from June 25, 2019 through Tuesday, July 12, 2019.
•  The proceeds from the Issue will be used to pay the seller the purchase price for the sputtering machines and to cover the costs for upgrading and some adaptation of the machines and transport to and installation in Uppsala. In addition, there is a buffer for unforeseen events in connection with the acquisition
•  Complete terms and instructions for the rights issue and other information about the company will appear from the prospectus published before the beginning of the subscription period.

Indicative timetable

18 June 2019 Extraordinary General Meeting for decision on approval of
the Board's decision on a rights issue
19 June 2019 Last trading day for the ChromoGenics share including the
right to participate in the rights issue
21 June 2019 Record day for the right to participate with preferential
rights in the rights issue
25 June - 10 July Trading in subscription rights
2019              
25 June - 12 July Subscription period
2019
About 16 Juli 2019 Publication of outcome of the rights issue

Advisors
Naventus Corporate Finance AB is a financial advisor in connection with the issue and the law firm Lindahl KB is legal advisor to the Company. Aqurat Fondkommission AB has been appointed as the issuing institution. G&W Fondkommission AB is the Company's Certified Adviser at First North.

About Naventus Corporate Finance AB

Naventus Corporate Finance is an independent, privately-owned financial advisor who offers qualified advice on new introductions, capital acquisitions (equity and debt), change of ownership, acquisitions, mergers and divestments (M&A) to listed and private companies and its owners.