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Jun 3, 2014 12:00 AM CET

Com Hem publishes prospectus and announces price range for its initial public offering on NASDAQ OMX Stockholm

Following the announcement of its intention to float on May 23, 2014, Com Hem Holding AB (publ) (“Com Hem” or “the Company”), a leading provider of TV, broadband and fixed telephony services in Sweden, today publishes its prospectus and announces the price range for its initial public offering (“the Offering”) of its shares and listing on NASDAQ OMX Stockholm.

  • The Company is raising gross proceeds of SEK 5,670 million (assuming the over-allotment option is not exercised) and the Offering values the equity of Com Hem at SEK 10,070 – 11,870 million
  • The price in the Offering is expected to be set between SEK 44 – 62 per share (the “Price Range”) and given the gross proceeds being raised, this translates to the offering of between 91.4 – 128.9 million newly issued shares (the “New Shares”)[1]
  • The Company has also granted the joint global coordinators an over-allotment option to purchase additional newly issued shares of the Company (the “Additional Shares”) amounting to 10% of the number of shares sold in the Offering. The over-allotment option is exercisable for a period of 30 days from the first day of listing of the shares on the NASDAQ OMX Stockholm
  • Based on the Price Range in the Offering, and assuming that the over-allotment option is exercised in full, the Offering will amount to SEK 6,237 million, valuing the equity of Com Hem after the Offering at SEK 10,637 – 12,437 million
  • NorCell S.à r.l. (the “Principal Shareholder”), a holding company through which Com Hem’s principal beneficial shareholders, funds advised by BC Partners Limited, hold their interests, will not sell any existing shares as part of the Offering
  • The Offering consists of: (i) a public offering to investors in Sweden, and (ii) private placements to institutional investors in various jurisdictions, including a private placement in the United States to qualified institutional buyers
  • The application period for the offering to the public in Sweden is expected to start on June 4, 2014 and close on June 13, 2014
  • The application period for the institutional offering is expected to start on June 4, 2014 and close on June 16, 2014
  • Trading is expected to begin on June 17, 2014 and the trading symbol of the Company’s share on NASDAQ OMX Stockholm will be “COMH”

Anders Nilsson, CEO of Com Hem said:

“Significant investments have been made in order to strengthen our business and I am convinced we have a compelling value proposition to customers. Together with the management team and all our employees we are ready to embark on this exciting journey. We have created a solid platform, now it’s about execution. We welcome new shareholders to take part in Com Hem’s future as a listed company”

Nikos Stathopoulos, Managing Partner at BC Partners said:

“Broadening the shareholder base marks a new and exciting phase in the history of Com Hem. Additional financial flexibility coupled with the enhanced public profile will provide the appropriate platform for Com Hem’s future development” 

Reasons for the Offering and Use of Proceeds

On September 29, 2011, funds advised by BC Partners Limited acquired Com Hem from The Carlyle Group and Providence Equity Partners, who had owned the Company since 2006. After many years under private ownership, Com Hem’s shareholders and Board of Directors believe that now is an appropriate time to broaden the shareholder base and apply for a listing of the Company’s shares on NASDAQ OMX Stockholm. The Offering is expected to support Com Hem’s future growth and operational strategy, provide financial flexibility by reducing leverage through the repayment of certain outstanding indebtedness and provide the Company with improved access to public capital markets and a diversified base of new Swedish and international shareholders.

The listing of Com Hem’s shares on NASDAQ OMX Stockholm is also expected to increase the public profile of the Company and the business. These factors will further enhance Com Hem’s position in the Swedish market and provide the appropriate platform for future development.

The number of issued New Shares is determined to allow the Company to achieve a net leverage of approximately 4.15x net debt / LTM Underlying EBITDA (pro forma for the acquisition of Phonera Företag) as of June 30, 2014, assuming the over-allotment option is not exercised. If the over-allotment option is exercised in full, leverage would be approximately 3.9x net debt / LTM Underlying EBITDA (pro forma for the acquisition of Phonera Företag).

Com Hem will use the net proceeds of the Offering (gross proceeds after deducting underwriting commissions and estimated offering expenses), together with drawdowns under the 2014 Senior Facilities Agreement[2], to refinance certain indebtedness and thereby reduce the Company’s leverage. Com Hem intends to:

  • use a portion of the net proceeds of the Offering to redeem the Senior PIK Notes in full shortly following the completion of the Offering. As of March 31, 2014 the outstanding amount under the Senior PIK Notes was SEK 2,636 million (SEK 2,763 million (including accrued interest) expected as of June 30, 2014);
  • use a portion of the net proceeds of the Offering to redeem up to 35% of the amount outstanding under the Senior Notes within 180 days of the completion of the Offering as permitted by the indenture governing such notes. As of March 31, 2014 the outstanding amount under the Senior Notes was SEK 2,569 million (SEK 2,613 million (excluding interest) as of June 30, 2014); and
  • use the remainder of the net proceeds of the Offering, together with drawdowns under the 2014 Senior Facilities Agreement, to repay the Senior Credit Facilities on or shortly following the completion of the Offering and to pay any fees associated with the 2014 Senior Facilities or costs that may arise from unwinding certain hedging contracts. As of March 31, 2014 the outstanding amount under the Senior Credit Facilities was SEK 5,882 million (SEK 6,229 million expected as of June 30, 2014).
  • use net proceeds from the exercise of the Over-allotment Option for general corporate purposes

In addition, Com Hem may from time to time consider making an offer to purchase or refinance the Senior Secured Notes and the Senior Notes once such notes are callable in November 2014 and November 2015, respectively.

About the Offering

Com Hem is offering such number of New Shares as to raise gross proceeds of SEK 5,670 million. The Company has also granted the joint global coordinators an over-allotment option to purchase up to 12.9 million Additional Shares of the Company, or 10% of the number of shares sold in the Offering.

The Offering consists of: (i) a public offering of shares in Sweden pursuant to a separate Swedish prospectus; and (ii) private placements to international investors in various jurisdictions, including a private placement in the United States to QIBs in reliance on Rule 144A under the U.S. Securities Act. All offers and sales outside the United States will be made in compliance with Regulation S.

The offer price is expected to be between SEK 44 and SEK 62 per share. In no event will the offer price to retail investors in Sweden exceed SEK 62 per share. The offer price will be determined by a book-building process and will be announced on or about June 17, 2014.

Assuming the final offer price is set at the midpoint of the Price Range, the number of shares outstanding after the offering will amount to 207.0 million shares, of which the Principal Shareholder will hold 47.8% (assuming that the over-allotment option is not exercised). If the over-allotment option is exercised, the number of shares outstanding will amount to 217.7 million shares of which the Principal Shareholder will hold 45.4%. Furthermore, the Principal Shareholder will agree not to divest its shares for a period of 180 days, subject to certain exceptions[3], from the date on which the offer price is announced. The Principal Shareholder will not receive any proceeds in the Offering.

In connection with the listing of the Company’s shares on NASDAQ OMX Stockholm, all existing class B ordinary shares and preference shares will be converted into class A ordinary shares such that Com Hem will have only one class of shares following the Offering.

J.P. Morgan, Morgan Stanley and Nordea are acting as joint global coordinators and joint bookrunners and Carnegie is joint bookrunner. Rothschild is financial advisor to the Company and the owners.

Prospectus and application form

Application online

Regarding the retail offering in Sweden, Nordea customers who have access to online services can apply for the purchase of shares through their online services. Individuals who have an account with Avanza can apply for the purchase of shares through Avanza’s online services.

Application form

The application can be made through a specific application form that can be found in Nordea’s local branches and from Com Hem. A prospectus, information brochure in Swedish and a subscription form will be available on the websites of Com Hem (www.comhemgroup.com) and Nordea (www.nordea.se under Sparande – Handla och placera).

The application form can also be handed in to any of Nordea’s local branches or sent to:

Nordea Bank AB (publ)
Issuer Services
R5303
105 71 Stockholm 

Indicative timetable

Application period for the public offering in Sweden                              June 4-June 13, 2014
Application period for the institutional offering                                       June 4-June 16, 2014
Announcement of final offering price                                                     June 17, 2014
Listing on NASDAQ OMX Stockholm                                                     June 17, 2014
Settlement date                                                                                     June 23, 2014

 

For further information, contact:

Fredrik Hallstan, Head of PR, Com Hem
Tel: +46-761 15 38 30
E-mail: fredrik.hallstan@comhem.com

About Com Hem

Com Hem is one of Sweden’s leading suppliers of television, high-speed broadband and fixed-telephony. Approximately 39%, 1.83 million, of Sweden’s households are connected to Com Hem, with access to the market’s broadest range of television services. Com Hem offers attractively priced, high-quality and comprehensive services for television, high-speed broadband and fixed-telephony. The Company was established in 1983 and has approximately 950 employees and its head office in Stockholm. Com Hem’s principal shareholders are funds advised by BC Partners. For more information, visit: www.comhemgroup.com.

About BC Partners

BC Partners is a leading private equity firm with advised funds of EUR 12.6 billion. Established in 1986, BC Partners has played an active role in developing the European buy-out market for 27 years. BC Partners executives operate as an integrated team through the firm’s offices in Europe and North America, acquiring and developing businesses to create value in partnership with management. Since inception, BC Partners has completed 85 investments in companies with a total enterprise value of EUR 88 billion and is currently investing its ninth fund, which was raised in 2011 with total commitments of EUR 6.7 billion. For more information, visit: www.bcpartners.com.

Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws.  The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States.

Any offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is not a prospectus for the purposes of Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”).  Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus.

In any EEA Member State other than Sweden that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”).  This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

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 Com Hem 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. 

 

[1] The Company will have 100 million shares prior to the Offering, see the prospectus for further information

[2] See prospectus for additional details

[3] The lock-up period shall not apply to: (i) the sale of offer shares in the Offering; (ii) the lending of shares under the Underwriting Agreement; (iii) the sale of shares to which the joint global coordinators consent; (iv) the sale or transfer of shares in connection with a take-over offer or an offer by the Company to all shareholders to purchase its own shares or a scheme of arrangement or reconstruction; (v) gifts of shares to certain family members or trustees; (vi) shares acquired following the listing on the NASDAQ OMX Stockholm and (vii) certain other enumerated circumstances,

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