Elos Medtech AB (publ) ("Elos Medtech" or the "Company"), today announces that the board of directors has decided to carry out a new issue of shares of class B of up to approximately SEK 4,337 million[1] with preferential rights for the Company's existing shareholders (the "Rights Issue"), subject to approval by an extraordinary general meeting. The purpose of the Rights Issue is to finance the acquisition of Klingel Holding GmbH ("Klingel"). The Rights Issue is fully guaranteed through a subscription and guarantee undertaking from Elos Medtech's principal shareholder, TA Associates, through EM Intressenter AB.

• The Rights Issue is carried out to finance the acquisition of Klingel, a leading contract development and manufacturing organization (CDMO) headquartered in Germany, announced on 28 July 2023.
• The subscription price in the Rights Issue is SEK 215 per new share of class B, which corresponds to total issue proceeds of up to approximately SEK 4,337 million before deduction of transaction costs of approximately SEK 8.2 million.
• The record date for receipt of subscription rights and the right to participate in the new share issue with preferential rights is 17 October 2023. The last day of trading in the Elos Medtech share including the right to obtain subscription rights in the Rights Issue is 13 October 2023. Subscription rights will be traded on Nasdaq Stockholm from and including 20 October 2023 up to and including 31 October 2023. The board of directors is authorized to change the record date and thereby all related dates to enable receipt of the Klingel Regulatory Approvals (as defined below) for the acquisition of Klingel prior to the record date. See further "Terms of the Rights Issue".
• The Rights Issue is fully guaranteed through a subscription and guarantee undertaking from Elos Medtech's principal shareholder, TA Associates, through EM Intressenter AB. No compensation is paid for these commitments. Neither the subscription commitment nor the guarantee commitment is secured by bank guarantee, blocking funds, pledging or similar arrangements.
• The Rights Issue is subject to approval by the extraordinary general meeting to be held on 15 September 2023 and is conditional on merger clearance and FDI approval for the acquisition of Klingel pursuant to applicable merger control and trade laws (the "Klingel Regulatory Approvals").
• TA Associates, through EM Intressenter AB, which as of 12 August 2023 owns 6,550,966 shares in Elos Medtech, representing approximately 81.2 per cent of the total number of shares and 65.8 per cent of the total number of votes, has undertaken to vote in favor of the Rights Issue at the forthcoming extraordinary general meeting.

Background and reasons

On 28 July 2023, Elos Medtech announced that it had entered into an agreement to acquire Klingel, a leading contract development and manufacturing organization (CDMO) headquartered in Germany. The acquisition will strengthen Elos Medtech's position with extraordinary R&D capabilities and new 

technology expertise. Further, the acquisition will broaden the product offering and add new high profile global customers, contributing to a strong footprint in the DACH region. The purchase price corresponds to an enterprise value of EUR 370 million. The completion of the transaction is subject to customary regulatory approvals, as well as the acceptance at the extraordinary general meeting and registration with the Swedish Companies Registration Office of the Rights Issue carried out to finance the acquisition.

The purpose of the Rights Issue is to finance the acquisition of Klingel from IK Partners and management. Closing of the acquisition is expected to take place during the fourth quarter of 2023.

Terms of the Rights Issue

Those who are registered as holders of shares in the Company (regardless of whether these are of class A or B) in the CSD register maintained by Euroclear Sweden AB on the record date are entitled to subscribe for the new shares of class B with preferential right. The new shares of class B are issued at a subscription price of SEK 215 per share, which corresponds to a discount of approximately 2.5 per cent compared to the volume-weighted average price of Elos Medtech's share of class B on Nasdaq Stockholm since the announcement of the acquisition of Klingel on 28 July 2023.

The record date for receipt of subscription rights and the right to participate in the Rights Issue with preferential right is 17 October 2023. The board of directors is authorized to postpone the record date to a date not earlier than one week from the date of such postponement.

Each existing share in the Company (regardless of whether it is of class A or B) entitles to 1 subscription right and 2 subscription rights entitle to subscription of 5 new shares of class B. In addition, investors are offered the possibility to subscribe for new shares of class B without subscription rights.

• Firstly, allotment of shares of class B that have been subscribed for without subscription rights is to be made to those who have subscribed for shares of class B by exercise of subscription rights, irrespective of whether the subscriber was a holder of shares on the record date or not and, in the event of oversubscription, pro rata in relation to the number of subscription rights that have been exercised for subscription of shares of class B and, to the extent not possible, by drawing of lots.

• Secondly, allotment of shares of class B that have been subscribed for without subscription rights is to be made to those who have subscribed for shares of class B without exercise of subscription rights, irrespective of whether the subscriber was a holder of shares on the record date or not and, in the event of oversubscription, pro rata in relation to the number of shares of class B for which each of them have applied for subscription and, to the extent not possible, by drawing of lots.

• Thirdly and lastly, allotment of shares of class B is to be made to TA Associates, through EM Intressenter AB, in accordance with their guarantee commitment.

Elos Medtech's share capital will increase by a maximum of SEK 126,062,500, from SEK 50,425,000 to SEK 176,487,500, through the issue of a maximum of 20,170,000 new shares of class B pursuant to the Rights Issue. After the Rights Issue, the number of shares in Elos Medtech will amount to not more than 28,238,000 shares, of which not more than 1,099,740 shares of class A and not more than 27,138,260 shares of class B.

Subscription of shares of class B, with or without subscription rights, is to take place from and including 20 October 2023 up to and including 3 November 2023. If the board of directors resolves to postpone the record date, the subscription of shares of class B is to take place during the period from and including 3 banking days after the new record date up to and including 13 banking days after the record date. The board of directors has the right to prolong the time period for subscription and payment.

Trading in subscription rights is estimated to take place on Nasdaq Stockholm during the period from 20 October 2023 until 31 October 2023 and trading in BTAs (paid subscription shares) is estimated to take place on Nasdaq Stockholm during the period from 20 October 2023 until 14 November 2023. If the board of directors resolves to postpone the record date, trading in subscription rights is estimated to take place on Nasdaq Stockholm during the period from and including the first day of the subscription period to the day falling 3 banking days before the last day of the subscription period.

The Rights Issue resolution is conditional upon the following conditions precedent for the acquisition of Klingel being satisfied no later than 6 banking days before the record date of 17 October 2023 or, if applicable, 6 banking days before the later date to which the board of directors has resolved to postpone the record date as set out above and in no event later than 9 February 2024 ("Condition Fulfillment"):

i. The merger control approval or clearance required under German merger control laws has been obtained or is deemed, by applicable law, to have been obtained, e.g. because of the lapse, expiration or termination of the applicable waiting periods or because jurisdiction has been declined; and
ii. The German Federal Ministry of Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz) ("BMWK") has cleared the Transaction or such clearance is deemed, by the provisions of the German Foreign Trade Act (Außenwirtschaftsgesetz) and the German Foreign Trade Ordinance (Außenwirtschaftsverordnung) to have been obtained, e.g. because of lapse, expiration or termination of the applicable waiting periods or because jurisdiction has been declined by the BMWK.

The resolution is also subject to approval by the extraordinary general meeting to be held on 15 September 2023 and requires an amendment to the Company's articles of association.

Shareholders who choose not to participate in the Rights Issue by subscribing for shares of class B will be diluted by up to 71.4 per cent of the number of shares, and up to 52.9 per cent of the number of votes, but may financially compensate for this dilution by selling their subscription rights.

Support by major shareholders

The Company's largest shareholder TA Associates, through EM Intressenter AB, which as of 12 August 2023 owns 6,550,966 shares in Elos Medtech, representing approximately 81.2 per cent of the total number of shares and 65.8 per cent of the total number of votes in the Company, has undertaken to vote in favor of the Rights Issue at the forthcoming extraordinary general meeting.

TA Associates, through EM Intressenter AB, has also undertaken to fully guarantee the Rights Issue through a subscription and guarantee undertaking. No compensation is paid for these commitments Neither the subscription commitment nor the guarantee commitment is secured by bank guarantee, blocking funds, pledging or similar arrangements.

Prospectus

Complete information regarding the Rights Issue and information about the Company will be disclosed in the prospectus that is expected to be published around 17 October 2023, or at a later date to be announced if the board of directors resolves to postpone the record date of the Rights Issue (see further "Terms of the Rights Issue").

Preliminary timetable for the Rights Issue[2]

Extraordinary general meeting to approve 15 September 2023
the board's resolution on the Rights
Issue
Last day of trading in shares including 13 October 2023
right to receive subscription rights
First day of trading in shares excluding 16 October 2023
right to receive subscription rights
Publication of the prospectus Around 17 October 2023
Record date to receive subscription 17 October 2023
rights
Trading in subscription rights 20-31 October 2023
Subscription period 20 October 2023 - 3 November 2023
Announcement of the outcome of the Rights Around 6 November 2023
Issue

Legal advisor

White & Case acts as legal adviser to Elos Medtech in connection with the Rights Issue.

For further information, please contact:

Stefano Alfonsi, President and CEO, +44 772 04 98 342, email: stefano.alfonsi@elosmedtech.com
Magnus René, Chairman of the Board, +1 781 266 6957, email: magnus.rene@mareadvisory.com (ewa.linsater@elosmedtech.com)

This is information that Elos Medtech AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 13:45 (CEST), on 12 August 2023.

About Elos Medtech

Elos Medtech is a leading development and production partner for medical devices and components, with a focus on dental and orthopedic implants and instruments. The Company operates from facilities in Sweden, Denmark, China, and the U.S. The customer base comprises international medical technology companies.

Elos Medtech has more than 650 employees and a turnover of approximately SEK 950 million. Elos Medtech has been listed on NASDAQ Stockholm AB since 1989. Elos Medtech's B share is categorized as a Health Care company on the Mid Cap list.

IMPORTANT INFORMATON

The information in this press release does not contain or constitute an offer to acquire, subscribe for or otherwise trade in shares, subscription rights or other securities in Elos Medtech. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not a prospectus for the purpose of Regulation (EU) 2017 /1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (together with any related implementing and delegated regulations, the "Prospectus Regulation"). Investors should not invest in any securities referred to in this announcement except on the basis of information contained in a prospectus. Any invitation to those 

entitled to subscribe for shares in Elos Medtech is made solely through the prospectus which Elos Medtech estimates to be published on or about 17 October 2023.

This press release or information herein may not, in whole or partly, be released, published or distributed, directly or indirectly, in or into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa, Switzerland, Singapore, the United States 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 is required pursuant to 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. Failure to comply with this instruction may result in a violation of applicable securities laws.

No subscription rights, paid subscribed shares (BTA) or new shares have or will be registered under the United States Securities Act of 1933 (the "Securities Act") or securities legislation in any state or other jurisdiction in the United States and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or transferred, directly or indirectly, into or within the United States, other than pursuant to an exemption from, or in a transaction that is subject to, the registration requirements of the Securities Act. Furthermore, the securities mentioned in this press release have not been registered and will not be registered under any applicable securities law in Australia, Hong Kong, Japan, Canada, New Zealand, South Africa, Switzerland or Singapore and may, with certain exceptions, not be offered or sold within, or on behalf of a person or for the benefit of a person who is registered in, these countries. The Company has not made an offer to the public to subscribe for or acquire the securities mentioned in this press release other than in Sweden.

In the EEA Member States, with the exception of Sweden, (each such EEA Member State, a "Relevant State"), this press release and the information contained herein are intended only for and directed to qualified investors as defined in the Prospectus Regulation. The securities mentioned in this press release are not intended to be offered to the public in any Relevant State and are only available to qualified investors except in accordance with exceptions in the Prospectus Regulation. Persons in any Relevant State who are not qualified investors should not take any actions based on this press release, nor rely on it.

In the United Kingdom, this announcement 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 document relates is available only to, and will be engaged in only with, "qualified investors" (within the meaning of the United Kingdom version of the EU Prospectus Regulation (2017/1129/EU) which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) who (i) have professional experience in matters relating to investments which fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intends", "estimate", "will, "may", "continue", "should", and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm or release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this communication.

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[1] Since the purchase price for the acquisition of Klingel is payable in EUR, the Company has entered into currency hedging arrangements to ensure that the proceeds from the Rights Issue can be exchanged from SEK into EUR.

[2] The board of directors is authorized to change the record date and thereby all related dates to enable receipt of the Klingel Regulatory Approvals for the acquisition of Klingel prior to the record date. See further "Terms of the Rights Issue".