MapsPeople A/S announcement regarding the offering of new shares with pre-emptive rights
MapsPeople A/S |Inside Information
Company Announcement No. 11 - 2024
Aalborg, July 25, 2024
Announcement regarding the offering of new shares with pre-emptive rights
Today, MapsPeople announces that the Board of Directors has decided to call for an Extraordinary General Meeting (“EGM”) with the main purpose of initiating an offering of new shares with pre-emptive rights. Subject to approval at the EGM, the offering aims to raise gross mDKK 30-36 in new capital from existing and new shareholders. The offer will be structured as a rights issue, meaning that the offer of new shares (the "New Shares") will be a public offer with pre-emptive rights (the "Pre-emptive Rights") for the existing shareholders (the "Existing Shareholders") for a subscription price of DKK 2.00 per 1 New Share (the "Subscription Price").
As of this announcement, the Offer has been partly secured through irrevocable subscription undertakings from Existing Shareholders and guarantee commitments from certain new investors to subscribe for approximately 82% of the total Offer (mDKK 36) and will result in MapsPeople receiving at least gross proceeds of mDKK 30. Full subscription of the offer will result in MapsPeople receiving approximately gross proceeds of mDKK 36.
In addition, the board has approved that the Management Team complete negotiations to improve terms on approximately 50% of the company’s current long-term debt to increase the duration of the debt and specifically ensure interest-only payment through the remainder of 2024 and 2025. This will result in a working capital improvement of mDKK 6.5 in 2025 and an increase of the current debt facility with mDKK 7.5 from new loans in 2024.
Background for the Offer and the application of the gross results of the Offer
The Smart Building market that MapsPeople serves with their Indoor Mapping platform is experiencing very high growth rates of 45% annually through 2023, according to Gartner, and is undergoing rapid changes with new applications and partners arising at a very high rate. To secure MapsPeople’s international leadership position for the future, it is important to ensure growth higher than the market pace and participate actively in the predicted market consolidation. Hence, the board of Directors has decided on the above for two main reasons.
Firstly, these initiatives are intended to provide additional headroom to execute the operational plan and maintain the planned high growth rates for the business in 2024 and 2025. Over the past 12 months, the company has significantly reduced its cost base, including reducing staff and spending in sales and marketing by almost 50%. It has, however, proven a challenge to maintain the high growth rates with this significantly decreased sales and marketing spend, so to utilize the growth potential of the main product MapsIndoors fully, the company has concluded that it must selectively invest in more lead generation and sales capacity in a controlled and capital efficient manner, while keeping MapsPeoples targeted Customer Acquisition Cost (“CAC”) ratio between 12-18 months. This will assist the company’s organic growth in the second half of 2024 and, equally important, support continued high growth rates in 2025 by generating a strong pipeline for next year.
Secondly, MapsPeople has, in the past quarters, been presented with multiple smaller M&A opportunities of companies with a similar product and customers that would pose solid opportunities to accelerate growth with highly synergetic “tuck-in acquisitions”. Beyond accelerating the growth of ARR and revenue, such opportunities will strengthen market presence and access to key growth markets. The company also foresees sizable joint operational cost synergies post-integrations, which will positively impact EBITDA and cash generation within 6-12 months. MapsPeople has evaluated that the current market conditions allow such smaller market consolidation initiatives at financially sound terms in the coming 6-18 months and wants to be in a position to actively pursue healthy and accretive acquisitions.
Such acquisitions are expected to be financed partly by issuing new MapsPeople shares and partly by cash from this capital raise, as the ability to move fast on these opportunities is estimated to become a critical parameter to secure market leadership. The company expects that mDKK 20-25 of the gross proceeds will be used for this acquisitive growth purpose.
For additional information, please contact
MapsPeople A/S
Morten Brøgger, CEO
Mobile (+45) 31 23 48 72
Email [email protected]
Stigsborgvej 60, 9400 Nørresundby
Denmark
Certified Advisor
Grant Thornton
Jesper Skaarup Vestergaard
Mobile (+45) 31 79 90 00
Stockholmsgade 45
2100 Copenhagen Ø
Denmark
IMPORTANT INFORMATION
This announcement is not an offer to sell or a solicitation of any offer to buy any securities issued by MapsPeople in any jurisdiction where such offer or sale would be unlawful, and the announcement and the information contained herein are not for distribution or release, directly or indirectly, in or into such jurisdictions, including but not limited to, the United States, Australia, Canada or Japan.
This announcement does not constitute an offering circular, company description or other offer document, and nothing herein contains an offering of securities. No one should purchase or subscribe for any securities in MapsPeople except as described in this company announcement.
Neither the existing shares of MapsPeople (the "Existing Shares") nor the New Shares have been, or will be, registered under the United States Securities Act of 1933, as amended ("Securities Act"). Neither the Existing Shares nor the New Shares may be offered or sold, directly or indirectly, in or into the United States or to persons residing there. Moreover, the Private Placement is not made to persons resident in Australia, Hong Kong, Japan, Canada, New Zealand, South Africa, Switzerland, or Singapore or to persons whose participation would require the publication up of a prospectus, registration or other measures.
Certain statements in this announcement constitute forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and the Company's anticipated or planned financial and operational performance. The words "targets", "believes", "expects", "aims", "intends", "plans", "seeks", "will", "may", "might", "anticipates", "would", "could", "should", "continues", "estimates" or similar expressions or the negative forms thereof, identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. MapsPeople has based these forward-looking statements on its current views with respect to future events and financial performance. By their nature, forward-looking statements are based on certain assumptions and projections on future events and financial performance, which involve a number of risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. Actual results are likely to differ from those set forth in the forward-looking statements. Any forward-looking statements speak only as at the date of this document and neither the Company nor any of its respective affiliates, directors, officers, employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not and may not rely on these forward-looking statements.
