Tekna Holding AS: Contemplated private placement and listing on Euronext Growth Oslo

NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES"), AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Oslo, 22 March 2021. Tekna Holding AS (“Tekna” or the “Company”) has engaged Arctic Securities AS and Carnegie AS (together the “Managers”) to advise on and effect a contemplated private placement in the Company (the “Private Placement”).

The Private Placement will consist of a primary offering of up to 24,074,074 new shares (the “Primary Shares”) to be issued by the Company to raise gross proceeds of up to NOK 650 million (the "Primary Offering"). There will also be an over-allotment option of up to 3,703,703 additional existing shares (the "Additional Shares"), equivalent to approximately 15% of the Primary Offering, or approximately NOK 100 million (the "Greenshoe Offering"). The Primary Shares and the Additional Shares together constitute the offer shares (the “Offer Shares”). The total number of Offer Shares offered in the Private Placement is up to 27,777,777, equating to approx. NOK 750 million in gross proceeds.

The price per share in the Private Placement has been set to NOK 27.00, equivalent to a pre-money equity value of the Company of NOK 2,700 million based on the 100,000,000 shares currently outstanding in the Company.

The net proceeds from the Private Placement will be used to fund growth investments, repayment of shareholder loans and for general corporate purposes.

The following primary insiders have pre-committed to subscribe for and will be allocated Offer Shares as follows: i) Chair of the Board in Tekna Holding AS and CEO at AFK, Ørjan Svanevik, 50,000 Offer shares; ii) Board member in Tekna Holding AS and CFO at AFK, Lars Peder Fensli, 40,000 Offer shares; iii) Board member in Tekna Holding AS and EVP at AFK, Torkil Mogstad, 40,000 Offer Shares shares and iv) CEO in Tekna Holding AS and EVP at AFK, Morten Henriksen, 40,000 Offer shares.

Five cornerstone investors have, subject to certain terms and conditions, undertaken to subscribe for and be allocated shares for NOK 320 million as follows: (i) Lugard Road Capital (managed by Luxor Capital Group) NOK 100 million; (ii) Norron NOK 80 million; (iii) Andenæsgruppen NOK 50 million; (iv) Blackcrane Capital NOK 50 million and (v) Storebrand and Delphi funds NOK 40 million.

The bookbuilding period in the Private Placement will commence today, 22 March 2021 at 09:00 CET and close on 23 March 2021 at 16:30 CET. The Managers and the Company may, however, at any time resolve to shorten or extend the bookbuilding period. If the bookbuilding period is shortened or extended, any other dates referred to herein may be amended accordingly.

Arendals Fossekompani ASA ("AFK"), currently owning 100% of the shares in the Company, is expected to grant Arctic Securities AS, on behalf of the Managers (the “Stabilisation Manager"), an option to borrow a number of shares equivalent to the Additional Shares in order to enable the Managers to settle any over-allotments made in the Private Placement (the "Over-Allotment Option"). Furthermore, the Company is expected to grant the Stabilisation Manager an option (the “Greenshoe Option”) to subscribe and have issued, at the Offer Price, a number of new shares equal to the number of Additional Shares allocated in the Private Placement less any shares purchased by the Stabilization Manager as part of stabilization activities to cover short positions resulting from any over-allotments made in the Private Placement not covered through such share purchases. The Greenshoe Option is exercisable, in whole or in part, by the Stabilisation Manager within a 30-day period commencing at the time trading in the shares commences on Euronext Growth Oslo. The Company will receive the proceeds from any shares sold under the Over-Allotment Option if, and to the extent, that the Greenshoe Option is exercised. Net profits from stabilisation activities, if any, will be to the benefit of the Company.

Tekna will apply for, and will, subject to successful completion of the Private Placement and the necessary approvals from the Oslo Stock Exchange, list the shares of the Company on Euronext Growth (the “Listing”). The first day of trading on Euronext Growth is expected to be shortly after completion of the Private Placement, and is currently anticipated to be on or about 30 March 2021.

The Private Placement will be directed towards Norwegian and international investors, in each case subject to an exemption being available from prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount have been set to the NOK equivalent of EUR 100,000. The Company may, however, at its sole discretion, allocate shares corresponding to an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and other applicable regulations are available.

Completion of the Private Placement is conditional upon (i) all necessary corporate resolutions being validly made by the Company, including without limitation, the Board resolving to allocate the Offer Shares and an extraordinary general meeting of the Company resolving to issue the Primary Shares, and (ii) the registration of the share capital increase in the Company pertaining to the Primary Shares in the Norwegian Register of Business Enterprises (Nw. Foretaksregisteret) having taken place.

The Company reserves the right, at any time and for any reason, to cancel, and/or modify the terms of, the Private Placement. Neither the Company nor the Managers will be liable for any losses incurred by applicants if the Private Placement is cancelled, irrespective of the reason for such cancellation.

“Tekna is a world-leading provider of advanced materials for 3D printing in the aerospace, medical and automotive sectors, and is well positioned in the growing market for advanced nanomaterials within the global electronics and batteries industries. Built on three decades of delivering excellence, the company has a proven and commercialized technology with a global network of over 200 blue-chip customers and an ambitious growth strategy towards 2030. The listing on Euronext Growth is an important part of this growth strategy, and we look forward to continue the Tekna journey as a listed entity” says Morten Henriksen, Chairman of Tekna Canada and Chief Executive Officer of Tekna Holding AS.

“Tekna is targeting a leadership position in three multi-billion-dollar markets: Additive manufacturing, printed electronics and energy storage. Supported by a strong portfolio of plasma-based technologies, we have a proven track-record of scalability, with over 80 per cent recurring sales of advanced materials. Our business model, which has low CAPEX requirements, serves as a solid platform for increased market shares and strong revenue growth. A public listing of the company will accelerate this value creation strategy. I would like to take this opportunity to thank our employees for all their hard work and effort in making Tekna a world-leading advanced materials supplier, which is now ready to IPO,” says Luc Dionne, Chief Executive Officer of Tekna global operations.

“We see significant growth potential in the industry segments which Tekna delivers materials to, with rapidly accelerating interest from a growing number of potential customers that are leaders in their respective markets,” says Ørjan Svanevik, CEO of Arendals Fossekompani ASA. “The listing of Tekna crystallises the underlying values in Arendals Fossekompani and creates a more focused structure for our shareholders. It is also a key component in our strategy of developing green technology companies with global reach and leading market positions. Tekna is truly a company with a unique line of products, and we expect it to follow a very ambitious growth trajectory going forward.”

Company highlights:

Tekna is a world-leading producer of micro and nano sized advanced materials. Based on a proprietary plasma torch technology the company is producing materials which will be used in next-gen technologies such as 3D printing, printed electronics and batteries

• Megatrends are accelerating demand for high-quality materials that Tekna produces:

• Tekna has developed an IP protected plasma technology that can transform materials such as Titanium, Aluminium and Silicon into extremely fine materials (powders) which are used to enable such megatrends. Tekna is currently one of few companies, if not the only company, which can do this at the required size and quality
• The technology has already been commercialized and is validated by the large portfolio of customers with names such as Airbus, Boeing, Samsung, BWM, NASA and approximately 200 other top-tier customers
• The business model is scalable, recurring and sticky due to the long qualification time of the unique high-quality materials Tekna makes. Customers will therefore be inclined to stay with Tekna once they have incorporated the materials into their production. Due to the low CAPEX requirements, Tekna can easily continue to scale up its capacity as it has been doing for the past years.
• Ambition to grow 2020 materials revenues of CAD ~13m to run-rate of CAD ~22m within 2021. Targeting mid- to long-term total revenue CAGR of 40-50% with an EBITDA margin of around 25%, enabling the company to deliver high returns.
            - Revenues are driven by accelerating adoption of technologies driven by megatrends and increasing market share due to uniqueness of materials are driving revenues.
            - Due to scalable business model and high contribution margin protected by long term raw material sourcing, Tekna can protect its high margins.

For more information, including risks associated with the investment, see attached investor presentation.

Advisors:

Arctic Securities AS and Carnegie AS are engaged as financial advisors to the Company and as Joint Global Coordinators and Joint Bookrunners in connection with the Private Placement and Listing. Advokatfirmaet Wiersholm AS is acting as legal advisor to Tekna, while Advokatfirmaet Thommessen AS is acting as legal advisor to the Managers.

For more information, please contact:

Luc Dionne, Chief Executive Officer Tekna Canada
Email: Luc.Dionne@tekna.com
Tel: +1-819-570-1651

Morten Henriksen, Chairman Tekna Canada and CEO Tekna Holding AS
Email: morten.henriksen@arendalsfoss.no
Tel: +47 916 28 871

Important notice:

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any 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 applicable 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 sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any 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 for 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", "strategy", "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 believe 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 their control. Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in public sector investment levels, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. 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 Company does not make any guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.

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 to 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 announcement.

Neither the Managers nor any of their affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility or liability for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of its affiliates accepts any liability arising from the use of this announcement.

The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.