Elektrobit Group Oyj - JOT AUTOMATION GROUP AND PMJ AUTOMEC TO MERGE
February 21, 2000
JOT AUTOMATION GROUP AND PMJ AUTOMEC TO MERGE
The boards of directors of JOT Automation Group Plc and PMJ automec Corporation, both companies specialised in production automation for the electronics industry, have decided to propose to the general meetings of shareholders of the companies that the companies be combined through a merger. The proposed name of the new company is JOT Automation Group Plc. The combination of the companies' resources and technological know-how into one publicly listed company will create a global industry leader. The combination will support the strong growth of the business and boost the global activities. The management of the companies believes the combination to be in the interest of the companies' customers, personnel and shareholders.
The combined net sales of the merging companies during the financial year ended December 31, 1999 amounted to approximately 140 million euros and the combined result of the operations to a profit of 17.4 million euros. The combined growth of net sales amounted to 58 per cent compared with the previous year. The combined equity amounted to 59.5 million euros. The combined market capitalisation of the companies' publicly listed shares as of February 18, 2000 was 2416 million euros. The companies employ approximately 1000 people.
BENEFITS OF THE COMBINATION TO CUSTOMERS AND SHAREHOLDERS
Customers require their automation suppliers to provide more extensive know-how and services than before. By combining the sales and marketing, R&D, production and service resources internationally the new company will be able to meet customers' increasing requirements for increased production efficiency in a unique way. The new company will be able to better meet the requirements of customers' growth and production in the global markets and to influence the development of the industry. The companies' product and service concepts complete each other in an optimal way and will create a stronger international systems supplier within the industry.
The combination will create a global company with a geographically balanced customer base within the growing telecommunications industry. The wide product range and strong personnel resources of the new company will enable the fast and profitable growth to continue. Specialisation by plants and increased production series will add to cost-efficiency.
The competitive edge of the new company will also be based upon a stronger R&D, larger integrated systems deliveries and on the ability to develop the customers' production process. The new company will be able to ensure the required production capacity in the market where short delivery times are a critical key to success.
CONSIDERABLE SYNERGY BENEFITS
The combination of JOT Automation Group Plc and PMJ automec Corporation will create significant annual synergy benefits. The combination will enable the more efficient use of resources within the different market areas. Overlapping functions will be decreased, releasing resources for quick growth. Also the centralisation of the materials purchasing function will create significant cost savings.
The combination of R&D resources will make R&D processes more efficient and enable quicker launch of new products than previously. This will ensure market leadership also in the future. The combination will also create one strong brand.
The synergy benefits are estimated to be about 4-5 per cent of turnover annually from the year 2001 onwards.
THE COMPANIES TO BE COMBINED THROUGH A COMBINATION MERGER
The boards of directors of JOT Automation Group Plc and PMJ automec Corporation have on February 20, 2000 agreed a merger plan between the companies that shall be presented for approval by the annual general meetings of the companies. The annual general meetings shall be held on April 12, 2000. The companies shall be combined through a combination merger where the assets and liabilities of the merging companies are transferred at book-value to the new company. The combination shall be booked in the consolidated accounts of the new company based upon the values used in the separate accounts. In the separate accounts the net assets according to the balance sheet of the new company shall equal the net book assets of the combined companies. Thus no goodwill will be created. The personnel of the merging companies shall be transferred to the new company as so called old employees. In accordance with the current plan the permission to finalise the merger shall be registered in the trade register on September 29, 2000 at which date the merger will become effective.
Application shall be made for the share of the new company to be listed on the Main List of the Helsinki Exchanges commencing October 2, 2000. Shares of JOT Automation Group Plc and PMJ automec Corporation will continue to be listed as previously until the commencement of the listing of the shares of the new company.
EXCHANGE RATIO AND MERGER CONSIDERATION
In the merger the portion of the shareholders of JOT Automation Group Plc of the shares of the new company shall be 83.85 per cent and the portion of the shareholders of PMJ automec Corporation 16.15 per cent. The basis for the merger consideration has been the value of the merging companies based upon the trade volume weighted average share prices of the companies on the Helsinki Exchanges. Share prices have been considered for various terms ranging from ten (10) days to twelve (12) months.
The new company will have one class of shares. Merger consideration shall consist of shares in the new company as follows:
- For each share of JOT Automation Group Plc there will be given one (1) share of the new company; and
- For each share of PMJ automec Corporation there will be given 1.153042 share of the new company.
The number of the shares of the new company corresponding to the current number of shares of JOT Automation Group Plc and PMJ automec Corporation can be 210,974,591 shares maximum. It is proposed in the merger plan that options granted to certain key employees of JOT Automation Group Plc and PMJ automec Corporation would entitle their holders to subscribe for shares in the merging companies during the period August 15, 2000 through September 15, 2000. After such period there will be no right to subscribe pursuant to the option terms and conditions.
OWNERSHIP STRUCTURE
Based upon current ownership structure and assuming full exercise of rights based upon options issued by the companies and excluding international nominee register shareholders the largest shareholders of the new company shall be as follows:
Shareholders Percentage of shares and voting rights
Markku Jokela 4.4 %
Jorma Terentjeff 4.3 %
Tapiola Mutual Insurance Company 2.7 %
Mutual Pension Insurance Company Tapiola 2.1 %
Conventum Oyj 1.9 %
Varma-Sampo 1.8 %
Mutual Pension Insurance Company Ilmarinen 1.5 %
Mika Kettula 1.1 %
Evatec Oy 1.0 %
Royal Scandia Life Assurance 0.8 %
In total, 10 largest shareholders 21.5 %
The members of board of directors and management of the new company will own approximately 10 % of the shares of the new company. International nominee registered shareholders will hold approximately 35 %.
COMPANY MANAGEMENT
It is proposed in the merger plan that as the chairman of the board of directors of the new company shall be elected Juha Sipilä and other members of the board of directors Jorma Terentjeff, Mika Kettula, Markku Jokela and Niilo Pellonmaa. It is proposed that Jorma Terentjeff, President and CEO of JOT Automation Group Plc be elected the President and CEO of the new company.
'This alliance will create an excellent basis for strong growth and provide the necessary resources to manage such growth' concludes President, CEO Jorma Terentjeff.
THE COMBINED COMPANIES - JOT AUTOMATION GROUP PLC AND PMJ AUTOMEC CORPORATION
JOT Automation Group Plc
JOT Automation Group Plc specialises in manufacturing and marketing production automation for the electronics industry. The group has subsidiaries in eight countries. As of December 31, 1999 the group employed 600 people and its net sales in 1999 was 99.4 million euros. The company's shares are listed on the Helsinki Exchanges.
PMJ automec Corporation
PMJ automec Corporation specialises in manufacturing and marketing production automation for the electronics industry. The group has subsidiaries in six countries. As of December 31, 1999 the group employed 392 people and its net sales in 1999 was 40.6 million euros. The company's shares are listed on the Helsinki Exchanges.
ADVISORS
Financial advisor to JOT Automation Group Plc in the combination is Alfred Berg and financial advisor to PMJ automec Corporation is Evli Corporate Finance Ltd.
PRESS CONFERENCE
The companies shall hold a conference to the press and analysts regarding the merger today Monday, February 21, 2000 at 10 am in Kansallissali, Aleksanterinkatu 44.
A telephone conference in English for investors will be held on Monday, February 21, 2000 from 4.00 pm through 5.30 pm (GMT+2) (telephone number +358 800 176 476). Telephone conference will be held by JOT Automation Group Plc and IR Manager Irma-Liisa Korhonen will act as chairman in such conference.
JOT Automation Group Plc
Jorma Terentjeff
President, CEO
ENCLOSURE:
Merger Plan
The press release and merger plan are available after publication in Finnish and English on our web-site www.jotautomation.com and www.pmjautomec.com
For further information, please contact:
Jorma Terentjeff, tel. +358 20 568 2550 / +358 400 682 112
President, CEO
JOT Automation Group Plc
Markku Jokela, tel. +358 400 444 675
President, CEO
PMJ automec Corporation
Irma-Liisa Korhonen, tel. +358 20 568 2703 / +358 40 738 8325
IR Manager
JOT Automation Group Plc
Jarmo Kanervo, tel. +358 40 527 8802
Deputy Managing Director
PMJ automec Corporation
NEITHER THIS PRESS RELEASE NOR ANY COPY OF IT MAY BE TAKEN, TRANSMITTED INTO OR DISTRIBUTED IN THE UNITED STATES OF AMERICA OR ITS TERRITORIES OR POSSESSIONS.
MERGER PLAN
The boards of directors of JOT Automation Group Plc and PMJ automec Corporation have today approved the following Merger Plan:
1. Merger
JOT Automation Group Plc ('JOT') and PMJ automec Corporation ('PMJ') shall merge by forming a new acquiring limited liability company through a combination merger (the merger). The proposed name of the new company (the 'Acquiring company') shall be JOT Automation Group Plc.
All assets and liabilities of JOT and PMJ will be transferred without liquidation proceedings to the Acquiring company and the shareholders of the merging companies will receive the shares of the Acquiring company as merger consideration.
2. Parties to the merger
JOT Automation Group Plc:
Register number: 610.301
Address: P.O. Box 45,
90461 Oulunsalo
Postal address: Automaatiotie 1, 90460 Oulunsalo
Domicile: Oulunsalo
PMJ automec Corporation:
Register number: 433.811
Address: Maksjoentie 11,
08700 Virkkala
Domicile: Lohja
3. The Acquiring Company
Company name: JOT Automation Group Plc
Register number: The Trade Register will issue a register number when the company is registered.
Domicile: Oulunsalo
4. Proposal for the Articles of Association of the Acquiring Company
The proposal for the articles of association of the Acquiring company has been attached to this Merger Plan as Appendix 1.
5. Proposal for the Share Capital of the Acquiring Company
The maximum amount of the Acquiring company's share capital shall be EUR 10,548,729.55. The final amount of the share capital will depend on the number of shareholders of the merging companies who require to have their shares redeemed and on the extent to which the shares of the merging companies can be converted to a round number of shares of the Acquiring company pursuant to the agreed exchange ratio as well as the number of shares that are subscribed for on the basis of the options described below in Paragraph 7 prior to the effectiveness of the merger.
If none of the shareholders of the merging companies require their shares to be redeemed, the shares of the merging companies can be converted to a round number of shares of the Acquiring company by application of the agreed exchange ratio, and no shares are subscribed on the basis of the options described below in Paragraph 7 prior to the effectiveness of the merger, the amount of the Acquiring company's share capital shall be EUR 10,141,532.80. The restricted own equity of the merging companies, which shall not be used to cover the share capital of the Acquiring company, shall be registered in the share premium fund of the Acquiring company.
6. Board of Directors, Managing Director and Auditors of Acquiring Company
The governing bodies and auditors of the Acquiring company shall be elected as part of the approval of the Merger Plan. By approving the Merger Plan, the general meetings of shareholders of the merging companies simultaneously resolve to form the Acquiring company, to approve the proposed articles of association, to set the remuneration for the members of the board of directors and the auditors, to elect the members of the board of directors and the auditors and to instruct the board of directors to elect the managing director as follows:
a. Remuneration
By approving the Merger Plan, the general meetings of shareholders of the merging companies shall resolve that the annual remuneration for the members of the board of directors shall be EUR 7,000.
In addition, the chairman of the board of directors will receive an attendance fee of EUR 500 for each meeting and the other members of the board of directors EUR 300 for each meeting. The fee of the auditors shall be payable against invoice.
b. Board of Directors
By approving the Merger Plan, the general meetings of shareholders shall decide that the first board of directors of the Acquiring company shall have 5 members and shall elect the following persons as the chairman and members of the first board of directors of the Acquiring company:
Chairman Juha Sipilä
Members
Jorma Terentjeff
Mika Kettula
Markku Jokela
Niilo Pellonmaa
