STOCKHOLM, Sweden, Aug. 15, 2002 (PRIMEZONE) --- Ledstiernan has acquired Speed Ventures for MSEK 147 in shares and convertibles. The transaction represents an injection of MSEK 133 in liquid funds (after deduction of transaction costs)and brings 10 new portfolio companies in Ledstiernan's focus area into the Group for an acquisition value of MSEK 24.
The half-year result after financial net was a loss of MSEK 58.5 (loss MSEK 162), of which write-downs in the value of Ledstiernan's portfolio, made necessary by the generally weak trend in company valuations during the year, account for MSEK 50 (150).
Equity amounts to MSEK 653 (616) after the issue of MSEK 130 in connection with the acquisition of Speed Ventures, which corresponds to SEK 4.79 per share. The pro forma equity ratio is 94%.
Investments in Ledstiernan's portfolio during the period amounted to MSEK 27, a significate reduction on the previous half-year's MSEK 114, due to the greater maturity of the portfolio companies.
Liquid funds amount to MSEK 331, or SEK 2.43 per share, after the acquisition of Speed. Ledstiernan's coming second phase investmentsin its existing portfolio will represent less than half of these liquidfunds.
Sales breakthroughs by several portfolio companies, including Columbitech, which has entered into an OEM agreement with Symbol Technologies, the large US, NYSE-listed high-tech corporation. This agreement puts the company into a position of leadership in wireless data networks, known as WLAN.
International interest in our portfolio companies such as ipUnplugged, Hotsip and SourceByNet, which has lead to further financing in these companies.
Ledstiernan is building Europe's leading seed and venture capital company with a focus on mobile communication. Ledstiernan is listed on Stockholmsborsen's "O" list.
FINANCIAL DEVELOPMENTS
Ledstiernan acquired 98% of the shares in Speed Ventures NV on June 27 in return for 27,405,308 shares having a value of MSEK 130 and an issue of convertible loan stock for MSEK 17.6. The transaction strengthened Ledstiernan's financial position as it brought liquid funds of MSEK 133 (after deduction of transaction costs) and a portfolio of ten promising companies in Ledstiernan's focus area into the Group. This cash injection alone is equivalent to SEK 4.38 per Ledstiernan share in the event of full conversion (SEK 4.21 in the event of repayment of the convertible loan) and a total value of SEK 6 per Ledstiernan share. The acquisition consolidates Ledstiernan's position as the leading venture capital company in mobile communication and is the first stage in the consolidation of the venture capital market, on which Ledstiernan intends to play a prominent role.
Ledstiernan's result after financial net for the first half of the year was a loss of MSEK 58.5 (loss 162). Write-downs of MSEK 50 (150) in the value of Ledstiernan's portfolio have been taken against the result, due to the generally weakness of company valuations during the year. This brings the accumulated write-downs in the value of Ledstiernan's portfolio to MSEK 184 in total. These are provisions against possible losses and not proven losses.
The book value of the acquired portfolio has been written down by MSEK 31 from MSEK 55, which makes the acquisition value in Ledstiernan's account MSEK 24. This adjustment is due to the negative goodwill arising as a result of the acquisition caused by Ledstiernan's acquiring Speed's assets at a lower value than the estimated total value of all its assets.
Ledstiernan does not plan to consolidate Speed Ventures as a group as no business was taken over as such other than assets in the form of net cash and a portfolio of equities. Speed Ventures NV and its subsidiaries will be discontinued or placed in liquidation and their assets transferred to Ledstiernan.
Ledstiernan's administrative costs have been brought down to the targeted lower annual level of MSEK 25 or below and amounted to MSEK 12.8 for the period. It is estimated that the amalgamated portfolio can be managed without any increase in administrative costs within the framework of Ledstiernan's existing organisation. This will be reflected in substantial cost synergies, which are estimated at some MSEK 10 per year.
LIQUIDITY AND FINANCIAL POSITION
As a result of the above transaction, Ledstiernan has strengthened its financial position and had cash in hand of MSEK 331, or SEK 2.43 per share, as of June 30, 2002. Ledstiernan has no interest-bearing debt. An MSEK 17.6 convertible loan was issued in part payment for the acquisition of Speed Ventures. This loan stock will either be repaid or converted in December 2002 at a conversion price of SEK 6 per share. The loan does not carry interest.
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