SES-imagotag announces the launch of a capital increase without shareholders’ preferential subscription rights through a placement to institutional investors for an amount of €30 million

SES-imagotag (the “Company”) announces today the launch of a share capital increase without shareholders’ preferential subscription rights for an amount of €30 million through a placement to institutional investors (the “Issuance”) by way of an accelerated bookbuilding process.

SES-imagotag announces the launch of a capital increase without shareholders’ preferential subscription rights through a placement to institutional investors for an amount of €30 million

SES-imagotag (the “Company”) announces today the launch of a share capital increase without shareholders’ preferential subscription rights for an amount of €30 million through a placement to institutional investors (the “Issuance”) by way of an accelerated bookbuilding process. The maximum number of new shares to be issued will represent 10% of the Company’s share capital.

Pursuant to an Investment Agreement entered into between the Company and Qualcomm Incorporated (“Qualcomm”) on December 4, 2019, Qualcomm committed to place a subscription order in the order-book for a total maximum amount of $10 million. The Company and Qualcomm Technologies International, Ltd. have also executed a strategic collaboration agreement in which the parties will be working together on the development of a new solution in support of the digitalization of retail stores.

The proceeds of the Issuance will enable the Company to finance both its international activities and growth.

Thierry Gadou, Chairman and CEO of SES-imagotag declares: « As we anticipate an acceleration in the growth of our market, this increase of our equity will strengthen our means of action, in particular in North America, and will enlarge usefully our international shareholder base and our free float, which is an objective which has been set by the Group for a long time.»

Main terms of the Issuance

This share capital increase will be carried out according to articles L.225-136 of the French commercial code and L.411-2 of the French financial and monetary code through the issuance of new shares without shareholders’ preferential subscription rights to the benefit of qualified investors only, in accordance with the authorizations granted by the Shareholders’ Meeting held on May 24, 2019 (15th and 16th resolutions taken by the extraordinary shareholders’ meeting) and following the approval of the Company’s board of directors held on November 28, 2019.

The Issuance will be conducted via an accelerated bookbuilding process in France and outside France, following which the number and price of the newly-issued shares will be determined, being stated that the maximum number of new shares to be issued will represent 10% of the Company’s share capital. The accelerated bookbuilding will start immediately and is expected to close before the markets open on the regulated market of Euronext Paris tomorrow, subject to any early closing or extension. The Company will announce the result of the placement in a subsequent press release as soon as possible after the end of the bookbuilding process.

The settlement and delivery of the new shares issued in the context of the Issuance as well as their admission to trading on the regulated market of Euronext in Paris should occur on December 9, 2019. The new shares will have full dividend rights and be traded on the regulated market of Euronext Paris (Compartment B) under ISIN code FR0010282822.

Placement agreement

The Issuance is the subject of a placement agreement entered into between the Bookrunner and the Company on December 4, 2019. The placement agreement may be terminated by the Bookrunner at any time and until (and included) the settlement and delivery of the Issuance expected on December 9, 2019, under certain conditions, notably in case of inaccuracies and non-compliance with representations made by the Company.

Natixis acts as sole Bookrunner for the Issuance.

Subscription commitments

The Company is not aware of any intention to subscribe other than Qualcomm’s commitment referred to above.

Lock-up undertakings

As part of the Issuance, the Company has undertaken a lock-up commitment with the Bookrunner for a period ending on 180 days after the settlement and delivery date of the Issuance, subject to certain exceptions.

As part of the Issuance, BOE Smart Retail (Hong Kong) Co. Limited and Yuanhan Materials Inc., a subsidiary of E-Ink Holdings Inc group, which are shareholders of the Company with respectively 74.26% and 5.97% of the share capital, have informed the Company of their intention not to proceed with the sale of SES-imagotag shares during a period ending on 180 days after the settlement and delivery date, subject to certain standard exceptions.

Pursuant to the Investment Agreement, Qualcomm has undertaken a lock-up commitment covering all the Company shares issued for its benefit as part of the Issuance for a period ending on 180 days after the settlement and delivery date, subject to certain standard exceptions.

Free float enlargement and strengthening of the shareholder base

Free float expansion from 20% to approximately 25%, assuming the inclusion of Qualcomm into the free float.

The maximal dilution resulting from the Issuance will not exceed 10% of the Company share capital.

Risks factors

SES-imagotag draws the public’s attention to the fact that pursuant to the provisions of Article L.411-2 of the French monetary and financial code and of the Article 1.5 of the Regulation (EU) 2017/1129 of European Parliament and of the Council dated June 14, 2017, the Issuance will not require a prospectus to be submitted for approval to the French Financial Market Authority (the “AMF”).

Detailed information regarding SES-imagotag, and specifically its business, its results and the corresponding risk factors, are included in the annual report of the Company dated May 3rd, 2019, which may be consulted, along with other regulatory disclosures and all press releases of the Company, on the website of the Company (https://www.ses-imagotag.com). SES-imagotag draws the investors’ attention on risk factors described in section 2 of the annual report; the occurrence of any or all of these risks may have a material adverse effect on the business, the financial position or the results of the group or on its ability to achieve its objectives.

Besides the aforementioned risks linked to the Group’s activity, the main risk factors relating to the Issuance are the following:

  • The market price of the Company’s shares may fluctuate and fall below the subscription price of the new shares;
  • As a result of stock market fluctuations, the volatility and liquidity of the Company’s shares could vary significantly;
  • Company shares could be sold on the secondary market following the capital increase, and this could have an adverse impact on the Company’s share price;
  • No dividend payment policy has been initiated, given the stage of development of the Company;
  • In the event the Company issues new securities, after the capital increase has been carried out, this would result in additional dilution for investors.

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