On June 11, 2024 Flerie AB[1] ("Flerie" or the "Company") reported the completion of the acquisition of all shares in Flerie Invest AB through an issue in kind (the "Acquisition") (Press release, InDex Pharmaceuticals, JUN 11, 2024, View Source [SID1234644256]). Through the Acquisition, Flerie Invest AB will become a wholly-owned subsidiary of Flerie. As previously announced, Flerie intends to raise capital through a directed share issue and have therefore appointed Carnegie Investment Bank AB (publ) ("Carnegie") and DNB Markets, a part of DNB Bank ASA, Sweden branch ("DNB Markets)" as joint bookrunners (the "Joint Bookrunners") to investigate the conditions for carrying out a directed issue of ordinary shares of up to approximately SEK 600 million through a bookbuilding procedure (the "Capital Raise"), of which approximately SEK 520 million is pre-committed. The Capital Raise is intended to be primarily directed to Swedish and international institutional investors.

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Summary

As separately announced yesterday, on 10 June 2024, Flerie’s acquisition of all shares in Flerie Invest AB has been completed. The Acquisition was approved by an Extraordinary General Meeting held earlier on the same date (the "EGM"). The EGM also approved the issue in-kind of consideration shares for the Acquisition (the "Consideration Shares"), the authorization to issue shares for the Capital Raise, the election of new Board members and new auditor, as well as other matters that follow from the Acquisition.
Through the Capital Raise, the Company will raise at least approximately SEK 520 million as per pre-commitments from a number of institutional investors (see further below), prior to transaction costs. The total number of newly issued ordinary shares in the Capital Raise will be determined through a bookbuilding procedure, which will commence immediately following the announcement of this press release and is expected to end before trading commences on Nasdaq First North Growth Market on 14 June 2024.
The subscription price in the Capital Raise will be the same as for the Consideration Shares, i.e. SEK 0.506 per ordinary share. Flerie intends to use the net proceeds from the Capital Raise to fulfil its capital commitments, make add-on investments in current portfolio companies to accelerate their development and to improve the liquidity.
As per 31 May 2024, the net asset value (NAV) per share of Flerie Invest AB was SEK 32.37[2], and hence, the net asset value (NAV) per share of Flerie was approximately SEK 0.60[3].
A number of institutional investors, including the Company’s existing shareholders the Fourth Swedish National Pension Fund, HBM Healthcare Investments, Linc AB and SEB Stiftelsen, have undertaken to subscribe for new shares in the Capital Raise, and the aggregate pre-commitments received from investors amount to approximately SEK 520 million (the "Pre-Commitments"). Those investors who have provided the Pre-Commitments will receive full allocation.

Background

As previously announced, on 20 May 2024, InDex Pharmaceuticals Holding AB (publ) ("InDex Pharmaceuticals"), whose name will be changed to Flerie AB, entered into an agreement to acquire all shares in Flerie Invest AB. The consideration was to be made through an issue in kind of 6,073,952,948 new shares in the Company, following which Flerie Invest AB’s shareholders will initially hold approximately 91.9 per cent of the shares and the existing shareholders will initially hold approximately 8.1 per cent of the shares in InDex Pharmaceuticals.

Flerie Invest AB was valued at approximately SEK 3,073 million in the Acquisition, based on reported net asset value as of 31 March 2024 with a discount of 10 per cent, and InDex Pharmaceuticals was valued at approximately SEK 269 million, which corresponded to InDex Pharmaceuticals estimated cash position after closing costs with a premium of 20 per cent. These valuations entailed a subscription price in the Acquisition of approximately SEK 0.506 per Consideration Share. As further announced on 10 June 2024, the EGM approved the Acquisition and the Acquisition was completed. As per 31 May 2024, the net asset value (NAV) per share of Flerie Invest AB was SEK 32.37, and hence, the net asset value (NAV) per share of Flerie was approximately SEK 0.60.

Capital Raise

Flerie’s intention is to carry out the Capital Raise with deviation from the shareholders’ preferential rights, based on the authorization granted by the EGM. The subscription price in the Capital Raise will be SEK 0.506, which is the same as the subscription price of the Consideration Shares.

The total number of newly issued shares in the Capital Raise will be determined through a bookbuilding procedure, which will commence immediately following the announcement of this press release and is expected to end before trading commences on Nasdaq First North Growth Market on 14 June 2024. The bookbuilding procedure may close earlier or later and may be cancelled at any point in time without prior notification. Flerie will announce the outcome of the Capital Raise through a press release after the closing of the bookbuilding procedure.

The purpose of the Capital Raise, and the reasons for the deviation from the shareholders’ preferential right, is to diversify the shareholder base of the Company in order to meet the liquidity requirements for a listing on, initially, Nasdaq First North Growth Market and, subsequently, Nasdaq Stockholm (for more information, please see section "Admission to trading on Nasdaq Stockholm"), to ensure continued financing of Flerie in immediate connection to the implementation of the Acquisition, and to have flexibility to make add-on investments in current portfolio companies to accelerate their development and to improve the liquidity, as well as, strengthen the shareholder base with Swedish and international institutional investors. With the above considered, the Board of Directors of Flerie has made the assessment that a directed issue of ordinary shares with deviation from the shareholders’ preferential rights is the most favourable alternative for the Company to carry out the capital raising and is in the best interest of the Company’s shareholders. The Board of Directors thus considers that the reasons outweigh the main rule that new share issues are to be carried out with preferential rights for the shareholders.

Since the subscription price in the Capital Raise corresponds to the subscription price for the Consideration Shares, which was based on a valuation of InDex Pharmaceuticals as standalone listed entity (i.e. prior to the Acquisition) that has been subject to arm’s-length negotiations with the sellers of Flerie Invest AB, the Board of Directors of Flerie considers that the subscription price in the Capital Raise is market-based.

Through the Capital Raise, the Company will raise at least approximately SEK 520 million as per the Pre-Commitments, prior to transaction costs. Flerie intends to use the net proceeds from the Capital Raise to fulfil its capital commitments, make add-on investments in current portfolio companies to accelerate their development and to improve the liquidity.

A number of institutional investors, including the Company’s existing shareholders the Fourth Swedish National Pension Fund, HBM Healthcare Investments, Linc AB and SEB Stiftelsen, have undertaken to subscribe for new shares in the Capital Raise, and the aggregate pre-commitments received from investors amount to approximately SEK 520 million. Those investors who have provided the Pre-Commitments will receive full allocation.

Investors in the Capital Raise are required to undertake not to utilise the right as a shareholder in the Company to request conversion of ordinary shares into shares of series C in the Company under the redemption program until 2026 (for more information, please see section "Voluntary share redemption program" below).

Lock-up

Flerie will undertake towards the Joint Bookrunners, for a period of 360 days from and including today, 11 June 2024, not to, without Carnegie’s approval, propose or take measures that entail an increase in the share capital, new share issues and similar measures, with certain exceptions, for example in connection with acquisitions or establishment of incentive programs. Thomas Eldered’s directly and indirectly wholly-owned companies T&M Förvaltning AB and T&M Participation AB (the "Major Shareholders"), as well as Flerie’s Board and management will undertake towards the Joint Bookrunners not to, without Carnegie’s approval, sell or otherwise transfer or dispose of their shares in Flerie, subject to certain exceptions. This lock-up period will last for 360 days from completion of the Acquisition for the Major Shareholders, and 180 days from completion of the Acquisition for Flerie’s Board and management.

Admission to trading on Nasdaq Stockholm

The Company intends to carry out an uplisting from Nasdaq First North Growth Market to Nasdaq Stockholm. Provided that Nasdaq Stockholm approves the Company’s application for admission to trading, the first day of trading on Nasdaq Stockholm is planned to take place around 27 June 2024.

Voluntary share redemption program

The Company has established an annual voluntary share redemption program from and including 2025 in order to increase the liquidity of the shares of Flerie. Through the redemption program, shareholders are proposed to have the right during an annual conversion period, to occur during the last week of March, to request the conversion of their ordinary shares into a new class of shares, convertible and redeemable class C shares. Conversion can take place of up to five (5) per cent of the total number of outstanding shares. If the number of ordinary shares notified for conversion exceeds this limit, distribution shall be made in proportion to the number of ordinary shares that each shareholder has requested for conversion.

As soon as possible following announcement of the interim report for the first quarter, Flerie shall redeem all outstanding class C shares at a redemption amount per share corresponding to the net asset value (NAV) per share as of 31 March. During 2025, certain different time periods will apply for the redemption program.

The Major Shareholders and investors that have provided Pre-Commitments have undertaken not to exercise the redemption program prior to 2029 and 2026, respectively, and any additional investors in the Capital Raise will, by subscribing for shares in the Company, undertake not to exercise the redemption program prior to 2026.

Advisors

Carnegie is Sole Global Coordinator and Joint Bookrunner and DNB Markets is Joint Bookrunner in connection with the Capital Raise. Setterwalls Advokatbyrå is legal advisor to Flerie in connection with the Capital Raise. White & Case is legal advisor to Carnegie and DNB Markets in connection with the Capital Raise.