Digital Workforce Services Plc commences its initial public offering on First North and publishes the prospectus approved by the Finnish Financial Supervisory Authority

Digital Workforce Services Plc commences its initial public offering on First North and publishes the prospectus approved by the Finnish Financial Supervisory Authority

Press release 19 November 2021 at 10:00 a.m. EET

NOT TO BE PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, SOUTH AFRICA, HONG KONG, JAPAN, CANADA, SINGAPORE OR NEW ZEALAND OR ANY OTHER JURISDICTION IN WHICH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Digital Workforce Services Plc (“Digital Workforce” or the “Company”) announced on 10 November 2021 that it is planning an initial public offering comprising a Share Issue and a Share Sale (as defined below) (the “Offering”) and on applying for its shares to be admitted to trading on the Nasdaq First North Growth Market Finland market maintained by Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) (“First North”) (the “Listing”). The Company publishes the subscription price of the planned Offering (the “Subscription Price”) and additional information on the Listing. The Finnish Financial Supervisory Authority (the “FIN-FSA”) has yesterday on 18 November 2021 approved the prospectus concerning the Offering (the “Prospectus”). The subscription period for the Offering commences on 22 November 2021 at 10:00.

The Offering in Brief:

• The Subscription Price in the Offering is EUR 6.58 per Offer Share in the Public Offering and Institutional Offering (as defined below). The subscription price in the Personnel Offering (as defined below) is 10 percent lower than the Subscription Price, i.e. EUR 5.93 per New Share (as defined below).
• The Company aims to raise gross proceeds of approximately EUR 22.5 million through the share issue by offering a preliminary maximum of 3,424,451 new shares in the Company (the “New Shares”) for subscription (the “Share Issue”). Assuming that all of the New Shares preliminarily offered in the Share Issue will be fully subscribed, the Company collects gross proceeds of approximately EUR 22.5 million in total.
• In addition, Mika Vainio-Mattila, Jukka Virkkunen ja Heikki Länsisyrjä (together the “Sellers”) will offer for purchase preliminarily a maximum of 448,417 existing shares of the Company (the “Sale Shares”) (the “Share Sale”, and together with the Share Issue, the “Offering”). The Sellers will receive gross proceeds of approximately EUR 3.0 million from the Share Sale assuming that the Sellers sell the maximum number of Sale Shares.
• The Offering consists of (i) a public offering to private individuals and entities in Finland (the “Public Offering”), (ii) private placements to institutional investors in Finland and, in accordance with applicable laws, internationally (the “Institutional Offering”) and (iii) a personnel offering to the Company’s full-time and part-time permanent employees as well as employees with a fixed-term employment with the Company at the commencement of the subscription period 22 November 2021 at 10:00 and to the Company’s Management Team and CEO and to the members of Board of Directors (the “Personnel Offering”). Unless the context indicates otherwise, the New Shares, the Sale Shares and Additional Shares (as defined below) are together referred to herein as the “Offer Shares”.
• Preliminarily a maximum of 607,902 Offer Shares are offered in the Public Offering, preliminarily a maximum of 3,795,306 Offer Shares in the Institutional Offering and preliminarily a maximum of 50,590 (in the event of oversubscription a maximum of 150,000) New Shares in the Personnel Offering for subscription. Depending on the demand, the Company may reallocate Offer Shares between the Public Offering, the Institutional Offering and the Personnel Offering in deviation from the preliminary number of Offer Shares without limitation. However, the minimum number of Offer Shares to be offered in the Public Offering will be 607,902 Offer Shares or, if the aggregate number of shares covered by the Commitments (as defined below) submitted in the Public Offering is smaller than this, such aggregate number of Offer Shares as covered by the Commitments.
• In connection with the Offering, CapMan Growth Equity Fund 2017 Ky is expected to grant an over-allotment option to Danske Bank A/S, Finland Branch acting as the stabilising manager (the “Stabilising Manager”), which would authorise the Stabilising Manager to purchase at the Subscription Price a maximum of 580,930 additional shares (the “Additional Shares”) (assuming that the Company will issue 3,424,451 New Shares and that the Sellers will sell the maximum number of Sale Shares) solely to cover possible over-allotments in connection with the Offering (the “Over-Allotment Option”). The Over-allotment Option is exercisable within 30 days from the commencement of trading in the Shares on First North (i.e., on or about the period between 3 December 2021 and 2 January 2022) (the “Stabilisation Period”). The maximum number of Additional Shares represents approximately 5.3 percent of the Shares after the Offering, assuming that the Company issues 3,424,451 New Shares and that the Sellers sell the maximum number of Sale Shares. However, the Additional Shares will not in any case represent more than 15 percent of the combined total number of New Shares and Sale Shares.
• Cornerstones presented below (together the “Cornerstone Investors”) have each individually given subscription undertakings in relation to the planned Offering. The subscription undertakings given by the Cornerstone Investors are subject to certain conditions being fulfilled including a condition that the valuation of the Company’s outstanding Shares (before any proceeds from the Offering), at the Subscription Price, does not exceed EUR 50 million. According to the terms and conditions of the subscription undertakings, the Cornerstone Investors will be guaranteed the number of Offer Shares covered by the subscription undertaking. The Cornerstone Investors will not be compensated for their subscription undertakings. The Cornerstone Investors have given subscription undertakings as follows:

 

• Certain funds managed by parties owned by Aktia Bank plc: EUR 3.0 million
• Handelsbanken Fonder: EUR 3.4 million
• Certain funds managed by Sp-Fund Management Company Ltd: EUR 3.0 million

 

The subscription undertakings of the Cornerstone Investors represent approximately 36.9 percent of the Offer Shares assuming that the Over-Allotment Option will not be exercised (approximately 32.1 percent assuming that the Over-Allotment Option will be exercised) and assuming that the Sellers will sell the maximum number of Sale Shares and that the Company issues 3,424,451 New Shares in the Offering.

 

• The Offer Shares would correspond to approximately 35.1 percent of Shares in the Company (“Shares”) and the number of votes vested by the Shares after the Share Issue, assuming that the Company issues 3,424,451 New Shares in the Offering, The Sellers sell the maximum number of Sale Shares, the Over-Allotment Option (as defined below) will not be exercised (approximately 40.4 percent assuming that the Company issues 3,424,451 New Shares in the Offering, The Sellers sell the maximum number of Sale Shares and that the Over-Allotment Option is exercised in full). As a result of the Offering, the number of Shares may increase to a maximum of 11,021,276 Shares assuming that the Company issues 3,424,451 New Shares in the Offering.
• The subscription period for the Public Offering commences on 22 November 2021 at 10:00 and ends on or about 30 November 2021 at 16:00. The subscription period for the Personnel Offering commences on 22 November 2021 at 10:00 and ends on or about 30 November 2021 at 16:00. The subscription period for the Institutional Offering commences on 22 November 2021 at 10:00 and ends on or about 2 December 2021 at 11:00, unless the subscription periods are suspended or extended.
• Trading on First North is expected to begin on or about 3 December 2021 and the trading code of the shares is DWF.
• The Company and CapMan Growth Equity Fund 2017 are expected to commit and Lifeline Ventures Fund II Ky, the members of the Company’s Board of Directors and Management Team and certain Country Managers of the Company have committed to customary lock-up arrangements in connection with the Offering.

 

Timo Ahopelto, Chairman of the Board of Digital Workforce comments:

 

“The planned initial public offering creates an opportunity for Digital Workforce to expand its operations, speed up growth, and reach financial targets. At the same time, we are happy that many institutional investors have already decided to redeem their shares in the future of robotic process automation and take part, as cornerstone investors, in Digital Workforce’s initial public offering.”

 

Mika Vainio-Mattila, CEO of Digital Workforce comments:

 

“Through the planned initial public offering, we seek to ensure our ability to grow also in the future. We expect the initial public offering to enable investments towards growth and to help us in executing our strategy. We believe in intelligent automation, and that all that can be automated, will be automated. To speed up this development, we are thrilled to offer to our personnel the opportunity to become shareholders in Digital Workforce through the initial public offering.”

 

Reasons for the Offering

The purpose of the Offering is to create the preconditions for the Company’s listing on First North and, thus, enable the investments in accordance with the Company’s strategy to achieve the expected high growth and the improvement of profitability. The Company expects the listing on First North to provide the Company a new channel for acquiring equity financing both from Finland and abroad, to create liquidity for the Company’s shares and to develop the Company’s profile and reputation amongst potential customers, business partners, employees and investors. Similarly, the purpose of the Offering is to strengthen the Company’s capital structure. Furthermore, the purpose of the Offering is to expand the Company’s ownership base amongst both Finnish private investors and domestic and international institutions. The Offering will also enable the Company’s shares to be used more efficiently in incentivising employees and as consideration in corporate acquisitions.

Use of Proceeds

Digital Workforce aims to raise gross proceeds of approximately EUR 22.5 million through the Share Issue, assuming that the Share Issue is subscribed for in full. Digital Workforce’s fees and expenses related to the Offering are estimated to amount to approximately EUR 2.0 million (assuming that Digital Workforce will raise gross proceeds of EUR 22.5 million), resulting in net proceeds for Digital Workforce from the Share Issue of approximately EUR 20.5 million.

The Company expects to use the proceeds from the Share Issue to support the Company’s growth strategy primarily as follows:

• Approximately 70 percent of the net proceeds from the Share Issue will be used for investments in new sales and delivery resources to accelerate growth especially in the UK and US markets. The Company considers it possible to support expected growth in the aforementioned high-growth markets with acquisitions in order to increase the capabilities of the service offering and the customer base.
• Approximately 15 percent of the net proceeds from the Share Issue will be used for investments to adoption of new technologies to maintain the high quality and leading global position of Digital Workforce’s intelligent automation and end-to-end cloud service offering.
• Approximately 15 percent of the net proceeds from the Share Issue will be used for investments to ensure sufficient delivery capabilities and business scalability, for example, by opening a new off-shore centre for delivery of centralised services and by developing management tools and systems for the management of organisations.

Listing and Publication of the Offering

Before the Offering, the Shares of the Company have not been subject to trading on any regulated market or multilateral trading facility. The Company will submit a listing application to Nasdaq Helsinki for the listing of the Company’s shares on the multilateral First North market maintained by Nasdaq Helsinki under the trading symbol DWF.

The FIN-FSA has yesterday on 18 November 2021 approved the Company’s Finnish Prospectus relating to the Offering. The Finnish Prospectus will be available as an electronic version on the Company’s website at www.digitalworkforce.com/listautuminen and Danske Bank’s website at www.danskebank.fi/digitalworkforce on or about 19 November 2021. The Finnish Prospectus will also be available upon request at the Company’s registered office at Mechelininkatu 1 A, 00180 Helsinki, Finland.

An English language translation of the Finnish Prospectus will be available as an electronic version on the Company’s website at www.digitalworkforce.com/listautuminen and on Danske Bank’s website at www.danskebank.fi/digitalworkforce on or about 19 November 2021.

The place of subscription in the Offering is the Sole Global Coordinator Danske Bank A/S, Finland Branch (“Danske Bank”). In addition, the Company has appointed Nordnet Bank AB as a place of subscription in the Retail Offering for its Book-entry account and Equity savings account holders. The place of subscription in the Personnel Offering is Evli Alexander Incentives Oy.

Summary of Certain Key Dates

Prospectus available	19 November 2021
Subscription period of the Offering commences	22 November 2021 at 10:00
Subscription period of the Offering can be suspended at the earliest	29 November 2021 at 16:00
Subscription period for the Public and Personnel Offerings ends (on or about)	30 November 2021 at 16:00
Subscription period for the Institutional Offering ends (on or about)	2 December 2021 at 11:00
Results of the Offering published (on or about)	2 December 2021
The Offer Shares will be registered with the Finnish Trade Register (on or about)	2 December 2021
Entry of Offer Shares into book-entry accounts begins (on or about)	3 December 2021
Trading in the shares on First North begins (on or about)	3 December 2021

Advisers in the Offering

Danske Bank is acting as the Sole Global Coordinator in the Offering (“Sole Global Coordinator”) and as the certified adviser in accordance with the rules of Nasdaq First North Growth Market Rulebook. Castrén & Snellman Attorneys Ltd is acting as the legal adviser to the Company, Borenius Attorneys Ltd. as the legal adviser to the Sole Global Coordinator and Miltton Oy as communications adviser to the Company.

Additional Information:

Mika Vainio-Mattila, CEO, +358 40 752 0617

Sanna Enckelman, CFO, +358 50 388 3917

Certified Adviser:

Danske Bank A/S, Finland Branch, +358 40 841 3052

About Digital Workforce

Digital Workforce is a Finnish Intelligent Automation (IA) and Robotic Process Automation (RPA) services provider. According to the Management, based on a competitive environment survey carried out by the Company, and research company Forrester[1], Digital Workforce is one of the leading service providers specialising in RPA and IA on an industrial scale in terms of revenue, service offering, customer referenced and head count. Digital Workforce helps its customers to automate knowledge work tasks and business processes with IA through its digital workers. Digital Workers are software robots that are in essence automated team members that execute business processes precisely, tirelessly and with fewer mistakes than human workers – with no significant changes to the customer’s existing systems. Digital workers have superpowers based on RPA, Artificial intelligence and cloud services, which make them fast and efficient.

More information available at www.digitalworkforce.com

IMPORTANT INFORMATION

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore or South Africa or New Zealand or any other jurisdiction in which distribution or publication would be unlawful. This announcement does not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. No part of this initial public offering relating to the securities will be registered in the United States nor will the securities be offered to the public in the United States. Copies of this announcement are not being, and should not be, distributed in or sent into the United States.

In certain states, the issue, use and/or sale of securities is subject to special legal or legislative restrictions. The Company and Danske Bank A/S, Finland Branch assume no responsibility in the event there is a violation by any person of such restrictions.

The information contained in this announcement is for informational purposes only and does not purport to be full or completed. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The in-formation contained herein shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this announcement refers, unless they do so on the basis of the information contained in the applicable prospectus published by the Company.

The Company does not offer securities to the public in any jurisdiction outside Finland. With respect to each Member State of the European Economic Area other than Finland and which has implemented Regulation (EU) 2017/1129 of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the Prospectus Regulation)(each, a Relevant Member State), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus referred to in the Prospectus Regulation. As a result, the securities may only be offered in Relevant Member States (a) to qualified investors as defined in the Prospectus Regulation; or (b) in any other circumstances falling within Article 1(4) of the Prospectus Regulation. For the purposes of this paragraph, the expression an ‘offer of securities to the public’ means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities.

The Company will not offer securities to the public in any jurisdiction outside Finland. With respect to each Member State of the European Economic Area other than Finland and which has implemented Regulation (EU) 2017/1129 of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the Prospectus Regulation)(each, a Relevant Member State), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus referred to in the Prospectus Regulation. As a result, the securities may only be offered in Relevant Member States (a) to qualified investors as defined in the Prospectus Regulation; or (b) in any other circumstances falling within Article 1(4) of the Prospectus Regulation. For the purposes of this paragraph, the expression an ‘offer of securities to the public’ means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities.

In the United Kingdom, this announcement is for distribution only to and is directed only at persons who (i) fall within the definition of “qualified investors” of the Prospectus Regulation, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended); (ii) have professional experience in matters relating to investments which fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (iii) are persons falling within Article 49(2)(a) to (d) (‘high net worth companies’, unincorporated associations, etc.) of the Financial Promotion Order, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as Relevant Persons). This announcement is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

 

This announcement includes forward-looking statements, which include statements regarding the Company’s business strategy, financial condition, profitability, results of operations and market data, as well as other statements that are not historical facts. Words such as ‘believe’, ‘anticipate’, ‘plan’, ‘expect’, ‘target’, ‘estimate’, ‘project’, ‘predict’, ‘forecast’, ‘guideline’, ‘should’, ‘aim’, ‘continue’, ‘could’, ‘guidance’, ‘may’, ‘potential’, ‘will’, as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, the Company does not have any intention or obligation to publicly update or revise any forward-looking statements to reflect events or circumstances subsequent to the publication of this announcement.

 

For the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) Chapter 5 of the Finnish Financial Supervisory Authority’s regulations regarding investment services and activities, FFFS 2017:2, (together the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares have been subject to a product approval process, where the target market for shares in the Company are: (i) retail investors and (ii) investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II (the “target market”). Notwithstanding the assessment of the target market, distributors should note that: the price of the shares may decline and investors could lose all or part of their investment; the shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The target market assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offering. For the avoidance of doubt, the target market assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in the Company. Each distributor is responsible for undertaking its own target market assessment in respect of the shares in the Company and determining appropriate distribution channels.

 

Forward-Looking Statements

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”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or similar expressions. The forward-looking statements in this announcement are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialise or prove to be correct. Because these forward-looking statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. The Company does not 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 or circumstances. Undue reliance should not be placed 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.

[1] Source: The Forrester Wave Robotic Process Automation Q1 2021, Forrester 2021; from public sources