Evli Plc has published an Exemption Document drafted for the merger of Evli Plc and EAB Group Plc

EVLI PLC STOCK EXCHANGE RELEASE JUNE 29, 2022 AT 2:00 P.M. (EET/EEST)

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.

EVLI PLC HAS PUBLISHED AN EXEMPTION DOCUMENT DRAFTED FOR THE MERGER OF EVLI PLC AND EAB GROUP PLC

Evli Plc (“Evli”) and EAB Group Plc (“EAB”) announced on May 31, 2022 that Evli and EAB had signed a combination agreement (the “Combination Agreement”) and a merger plan (the “Merger Plan”) on the combination of the companies through a merger (the “Combined Company”). The proposed combination of Evli and EAB will be executed through a statutory absorption merger in accordance with the Finnish Companies Act (624/2006 as amended) whereby all assets and liabilities of EAB are transferred without a liquidation procedure to Evli (the “Merger”). The contemplated effective date of the Merger is October 1, 2022.

On June 3, 2022, the Boards of Directors of Evli and EAB proposed to the Extraordinary General Meetings of the companies to be held on July 14, 2022 that they would resolve upon the Merger as set forth in the Merger Plan.

Evli and EAB have agreed in the Combination Agreement and the Merger Plan to continue their normal business activities in accordance with their usual and past practices during the merger process. Notwithstanding the foregoing, Evli and EAB have agreed that EAB shall have the right to distribute to its shareholders prior to the scheduled implementation date of the Merger an aggregate amount not to exceed the lesser of (a) EUR 2,350,000 or (b) such amount as EAB may distribute subject to any applicable statutory solvency requirements. EAB is expected to hold an Extraordinary General Meeting in August or September 2022 to consider the interim financial statements for the payment of the dividend under the Combination Agreement and the Merger Plan.

The Exemption Document

Today, Evli has published an exemption document concerning the Merger (the “Exemption Document”) drafted for the Extraordinary General Meeting of EAB and for the purposes of issuing merger consideration shares to the shareholders of EAB. The Exemption Document is drafted in accordance with the Commission Delegated Regulation (EU) 2021/528 (the “Delegated Regulation”). The Exemption Document does not constitute a prospectus for the purposes of the EU Prospectus Regulation (EU) 2017/1129 (the “Prospectus Regulation”) and has not been pre-approved by the Finnish Financial Supervisory Authority or any other authority. Pursuant to Article 1(4)(g) of the Prospectus Regulation, an exemption to the obligation to draw up and publish a prospectus in accordance with the Prospectus Regulation can apply to shares issued as merger consideration in connection with the Merger. Such an exemption requires that an Exemption Document is made available to the public, including a description of the transaction and its impact on the issuer. The Exemption Document has only been published in Finnish.

The Exemption Document will be available from or about June 29, 2022 onwards online at Evli’s and EAB’s websites www.evli.com/egm and www.eabgroup.fi/sijoita-meihin/hallinnointi/yhtiokokous. The Exemption Document is valid until the Extraordinary General Meetings of Evli and EAB to be held on July 14, 2022, and is intended to be republished and updated where applicable in connection with the listing of merger consideration shares.

In accordance with the requirements of the Delegated Regulation, the Exemption Document includes narrative and financial information about the material impacts that the transaction will have on the Combined Company’s financial statement. This previously unpublished financial information is published in this release. Capitalised terms not specified below have the same meaning as in the Exemption Document.

Illustrative combined financial information

The illustrative financial information about the material impacts of the Merger on Evli’s financial statement have been prepared in accordance with the International Financial Reporting Standard (IFRS) applied at Evli and Evli’s accounting policies. The illustrative combined financial information of the Combined Company is presented assuming the activities were included in the same group from the beginning of the period. The illustrative combined income statement information has been calculated by combining the financial information of Evli and EAB for the financial year ended December 31, 2021 as described below.

The combined financial information is presented for illustrative purposes only and is based on a hypothetical situation. It does not take into account the impacts from purchase price allocation, potential differences in accounting policies, transaction costs, tax impacts or potential refinancing. Neither does the illustrative combined financial information reflect any cost savings, synergy benefits or future integration costs that are expected to be generated or may be incurred as a result of the Merger. The illustrative combined financial information is based on audited information. The combined information is unaudited.         

In financial reporting, the Merger will be accounted for as a business combination at consolidation using the acquisition method of accounting under the provision of IFRS 3. The purchase consideration is determined based on the fair value of the Merger Consideration on the Effective Date. The amount of the fair value of the Merger Consideration Shares will be recorded in Evli’s consolidated financial statements as an equity increase so that the share capital is increased by EUR 30 million in accordance with the Merger Plan and the remainder is entered into the reserve for invested non-restricted equity. The amount of the Merger Consideration based on the quotation of Evli’s B shares on the official list of Nasdaq Helsinki Ltd on May 31, 2022 was approximately EUR 44 million, of which approximately EUR 41 million was to be paid in shares. The final amount of the Merger Consideration will be determined based on the fair value of Evli’s B shares on the Effective Date. In the acquisition method, the assets and liabilities of EAB that are transferred to Evli are valued at their fair values as of the acquisition date with any excess of the Merger Consideration over the fair value of the identifiable net assets acquired recognised as goodwill. The book value of the net assets of EAB on EAB’s consolidated balance sheet as at December 31, 2021 was EUR 20.6 million.

Illustrative combined income statements of the Combined Company

The following table sets forth the illustrative combined income statements of the Combined Company derived from Evli’s audited carve-out financial statements for the financial year ended on December 31, 2021, and EAB’s audited consolidated financial statements for the financial year ended on December 31, 2021.

(MEUR)	Combined	Evli	EAB
Net turnover1)	133.7	116.2	17.5
Personnel expenses	-45.2	-36.6	-8.6
Other administrative expenses	-20.6	-17.6	-3.0
Other operating expenses	-2.1	-1.3	-0.8
Share of result of associated companies	0.7	0.5	0.2
EBITDA2)	66.6	61.5	5.1
% of net turnover	50%	53%	29%
Depreciation, amortisation and impairment	-7.3	-4.8	-2.5
Operating profit3)	59.3	56.6	2.6
% of net turnover	44%	49%	15%
1) The illustrative combined net turnover is calculated by combining the operating income, interest income, fee and commission expenses and interest expenses of Evli and EAB in accordance with Evli’s reporting policy. Previously, EAB has reported interest income and interest expenses as separate items after operating profit. For the purposes of this combining, these items are reclassified as a part of net turnover. 2) Operating profit + depreciation, amortisation and impairment 3) The illustrative combined operating profit does not include any purchase price allocation impacts such as amortisation and depreciation for any fair value adjustments on non-current assets or other purchase accounting impacts to be recognised in the combination of Evli and EAB under IFRS and, for this reason and others, is not representative of future operating results of the Combined Company.

EVLI PLC

Board of Directors

FURTHER INFORMATION:

On behalf of Evli:

Maunu Lehtimäki, CEO, Evli Plc, tel. +358 50 553 3000, [email protected]
Requests for interviews via the company’s communications: Mikaela Herrala, Head of Marketing, Communications and IR, Evli Plc, tel. +358 50 544 5740, [email protected]

On behalf of EAB:

Daniel Pasternack, CEO, EAB Group Plc, tel. +358 50 569 3416, [email protected]

Evli and EAB in brief

Evli in brief

We see wealth as an engine to drive progress. We draw on our heritage, broad expertise and Nordic values to grow and manage wealth for institutions, corporations and private persons in a responsible way.

We are the leading asset manager in Finland* offering a broad range of services including mutual funds, asset management and capital markets services, alternative investment products, equity research, share plan design and administration as well as Corporate Finance services. Responsible investing is integrated in every investment decision and our expertise is widely acknowledged by our clients. Evli has Finland’s best expertise in responsible investment.**

Evli Group employs around 250 professionals and Evli has a total of EUR 15.8 billion in client assets under management (net 3/2022). Evli Plc’s B shares are listed on the official list of Nasdaq Helsinki Ltd.

*Kantar Prospera External Asset Management Finland 2015, 2016, 2017, 2018, 2019, 2021, Kantar Prospera Private Banking 2019, 2020 Finland
**SFR Scandinavian Financial Research Institutional Investment Services Finland 2021

EAB in brief

Elite Alfred Berg is an expert in investments that helps private individuals, professional investors and companies in Finland manage their assets comprehensively, systematically, and responsibly. More than 10,000 customers rely on our services to manage assets worth EUR nearly 4 billion. We collaborate in portfolio management with Alfred Berg Norway and Sweden. Our combined customer assets in the Nordic countries amount to more than EUR 15 billion. As the leading provider of personnel funds in Finland, we serve 95,000 personnel fund members. Our customers are served by more than 100 investment professionals in 13 locations around Finland.

Elite Alfred Berg is the marketing name of the EAB Group. The Group’s parent company EAB Group Plc’s shares are listed on the Nasdaq Helsinki stock exchange. The Group companies include EAB Asset Management Ltd, which offers asset management activities, and EAB Fund Management Ltd, which acts as a fund company and authorised alternative investment fund manager. Explore EAB Group’s services at www.eabgroup.fi.

Distribution: Nasdaq Helsinki, main media, www.evli.com

Important Notice

This release is not an offer of shares in the United States and it is not intended for distribution in or into the United States or in any other jurisdiction in which such distribution would be prohibited by applicable law. The shares in the Combined Company will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered, sold or delivered within or into the United States, except pursuant to an applicable exemption of, or in a transaction not subject to, the Securities Act.

This release does not constitute an offer of or an invitation by or on behalf of, Evli or EAB, or any other person, to purchase any securities.

This release does not constitute a notice to an Extraordinary General Meeting or an Exemption Document. Any decision with respect to the proposed statutory absorption merger of EAB into Evli in accordance with the Finnish Companies Act should be made solely on the basis of information to be contained in the actual notices to the Extraordinary General Meetings of Evli and EAB, as applicable, and the Exemption Document as well as on an independent analysis of the information contained therein. You should consult the Exemption Document for more complete information about the Combined Company and the Merger.

This release includes ‘forward-looking statements’ that are based on present plans, estimates, projections and expectations and are not guarantees of the Combined Company’s future performance. They are based on certain expectations and assumptions, which, even though they seem to be reasonable at present, may turn out to be incorrect. The shareholders of Evli or EAB should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Combined Company to differ materially from those expressed or implied in the forward-looking statements. Neither Evli nor EAB, nor any of their respective affiliates, advisors or representatives or any other person undertakes any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.

This release includes estimates relating to the benefits expected to arise from the Merger, which have been prepared by Evli and EAB and are based on a number of assumptions and judgments. The assumptions relating to the estimated benefits and related Merger costs are inherently uncertain and are subject to a wide variety of significant business, economic, regulatory and competitive risks and uncertainties that could cause the actual benefits and costs arising from the Merger, if any, to differ materially from the estimates in this release. Further, there can be no certainty that the Merger will be completed in the manner and timeframe described in this release, or at all.