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Betolar Oy
Betolar is planning an initial public offering and listing on Nasdaq First North Growth Market Finland (Cision)

2021-11-18 06:48

PRESS RELEASE

Betolar Plc November 18th, 2021 at 7:48 am EET

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Betolar is planning an initial public offering and listing on Nasdaq First North Growth Market Finland

Betolar Plc (”Betolar” or the “Company”), a Finnish pioneering building materials technology company, announces that it is planning an Initial Public Offering (“IPO” or “Offering”) and listing of its shares on Nasdaq First North Growth Market Finland (the “Listing”). Betolar’s Geoprime® solution enables concrete product manufacturers globally to replace cement in concrete production thereby cutting CO2 emissions up to 80% and reducing the use of virgin natural resources by utilizing industrial side streams as raw material in concrete production. The proceeds from the contemplated Offering are intended to be used to enable further research and development related to the Company’s solutions and to accelerate the execution of its international growth strategy.

Betolar in brief

Betolar is a Finnish growth phase materials technology company founded in 2016, with mission to enable the green transition of various industries globally, especially in the construction, process and energy industries, by offering solutions based on the Company's unique materials technology. With its Geoprime® solution, the Company offers sustainable and low-CO2 alternative for the production of concrete and for concrete applications. The solution can be used to convert previously underutilised or unused industrial side streams into a substitute for cement used in concrete production. Material and production development innovations utilizing Betolar's AI can reduce CO2 emissions at the raw material level by up to 80% compared to traditional cement-based concrete.

With its innovative Geoprime® solution, Betolar aims to meet two major industry challenges:

(1)    Cement emissions accelerate climate change. The construction industry generates approximately 10% of global CO2 emissions. Cement manufacturing is the largest single source of emissions in the construction industry, creating approximately 7% of global CO2 emissions. The most important raw material for cement is non-renewable limestone, which releases large amounts of CO2 in the cement production process. In addition, cement production requires a lot of thermal energy.

(2)    Various industries are producing annually billions of tons of industrial side streams that are underused, while at the same time the diminishing virgin natural resources are being used in construction material production.

Geoprime® solution can be used to produce environmentally friendly building materials, geopolymers, from various industries’ production side streams. Such side streams include, for example, slags from the steel industry, such as blast furnace slag, fly ash and bottom ash from coal, bio-ash from the energy industry, green liquor sludge from the forest industry and mine tailings. In Geoprime® solution geopolymers act mainly as a binder in the production of a concrete-like curable material together with the aggregate. Geopolymer solutions can be applied in all building materials that currently use concrete. Due to its versatility, geopolymers can also be utilized in demanding special applications for which the properties of conventional concrete are not sufficient. Betolar leverages and optimizes existing manufacturing processes and industry side streams in its solutions.

The Company's planned earnings model is based on licensing of the Geoprime® concept and resale of chemicals used as a part of the Geoprime® solution. The Company expects to generate revenue through recurring license fees for Geoprime® solutions acquired by parties in various industries, as well as through resale of chemicals combined with the license fee or charged separately. Betolar offers the chemicals used in its solutions to its customers as part of the Geoprime® concept. In line with its strategy, Betolar aims to grow first in Europe and Asia, and later globally.

The Company's financial goal is to reach revenues of EUR 200 million and positive operative cash flow in mid-term by year 2026. In the long term, Betolar aims to position Geoprime® brand as one of the leading among environmentally sustainable products within the building materials industry and reach cumulative 150 million tonnes CO2 emission savings by 2030. The Company will continue to invest strongly in R&D. The targeted level of R&D expenditure is approximately 5% of the Company’s targeted revenue in the long term.

Tero Ojanperä, Chairman of the Board of Directors, comments:

Betolar has developed a unique technology and service solution for the construction industry that responds to the greatest sustainability challenges in concrete construction. The company received its first patents in 2019, and since then the development of Geoprime® materials technology, data and artificial intelligence platform and commercial solution have progressed rapidly. Global demand for sustainable and low-carbon construction products is growing rapidly as construction companies, designers, investors and societies around the world look for new, more sustainable solutions in the global cement market. We believe that the Geoprime® solution will have a prominent position in the target markets of Europe and Asia, and this represents a significant business opportunity for Betolar in the global cement market worth EUR 200 billion.

Matti Löppönen, CEO, comments:

Betolar is an exceptional, growth stage materials technology company that aims to promote the green transition of various industries globally. Betolar enables large-scale, environmentally sound, sustainable business operations for industrial operators in a cost-efficient manner. With our Geoprime® solution, manufacturers of concrete and concrete products can reduce their emissions by up to 80 percent compared to traditional cement-based concrete, while utilizing industrial side streams to replace limestone-based cement thus saving virgin resources and safeguarding biodiversity. We believe that our solution is a very attractive alternative, both economically and environmentally, to replace traditional cement without significant investments into new production equipment or processes.

Juha Leppänen, Founder and Chief Innovation Officer, comments:

The uniqueness of our Geoprime® solution is based on the Company's deep scientific and industrial expertise as well as the versatility and scalability of the solution. Betolar is not a manufacturer of building materials, but a technology and service company that offers IP protected materials technology, an ever-evolving data and artificial intelligence platform, and commercial and industrial expertise to its customers. Our international industrial, commercial, and scientific network is at the heart of our business. Through our service platform, our latest technology and constantly advancing know-how are available to our customers and their production processes at all times, contributing to strengthen both ours and our customers' continuous competitive edge and positive environmental impact.

Betolar’s key strengths

Betolar believes that the following factors are its key strengths and represent competitive advantages:

  • Innovative and flexible solution to reduce cement CO2 emissions
  • Expected ability to offer first mover advantage benefits for its customers
  • Strategic partnerships with leading concrete and binder industry companies
  • Continuous development of the Company’s solutions with the help of its platform model supported by AI
  • Scalable and asset light business model based on a platform, supported by the solution’s flexible commissioning and limited additional investment requirements for the customer
  • Strong and experienced management

Betolar’s strategy

Betolar's strategy focuses on enabling green transformation and transition for various industries, such as construction, concrete, cement, and mining industries. To achieve its strategic goals, the Company focuses on the following:

  • Ramping up the international business and generating revenue with Betolar's solutions. Betolar’s ​​strategy focuses on commercializing its Geoprime® concept and ramping up its international business through customer pilots, partnerships and industrial scaling. The development of the Geoprime® concept will be continued through further development of industrial side stream based binder solutions, development of the AI platform and accumulating available data, and development of the service offering included in the Geoprime® concept. The Company invests in the introduction of the Geoprime® concept in the customer interface, the ramp-up of sales and marketing operations in Europe and Asia, and the promotion of various product development paths with strategic partnerships.
  • Building a data-driven business ecosystem. Betolar’s goal is to create a business ecosystem around its business model, that is based on accumulating data from geopolymer technology, in which the Company’s AI platform’s role is central. The AI platform is designed to support Betolar’s R&D and business operations, and in the future, it is planned to enable also hyperautomation streamlining of customers’ production processes. In the future, Betolar’s goal is to offer Geoprime®-technology based final products so-called intelligent solutions that, in addition to production process information and raw material analyses, are able to provide their users with data on, for example, the status and characteristics of the final product.
  • Ensuring adequate access to industrial side streams. Betolar's solution is designed to work with a number of different types and qualities of industrial side streams, and Betolar will continue to develop the suitability of its solution for new alternative side stream materials in the future. Betolar also seeks to promote and develop the suitability of various side streams for its solutions by working closely with the side stream producers and by contributing to the processing and modification of side streams in the production process. In the long term, Betolar will also aim to develop a side stream independent binder solution, that can be used to supplement availability of side stream based binder materials in the manufacture of building materials in the future. In addition to these, in the future Betolar intends to develop its own activator and additive solution to work in connection with the Geoprime® solution.

Expected operational milestones

Betolar has the following short term (within 1-2 years) business targets:

  • 10-15 pilot cases per year with new customers with significant volume potential, based on the Company's more than 150 potential identified customer pipeline
  • First commercial customer agreements
  • Ramping up delivery and sales organisations
  • Expanding brand and marketing operations to targets markets
  • Strong R&D based solution co-creation and value chain development with industry partners and customers
  • Launch Geoprime® Academy training platform
  • Automated laboratory piloting and artificial intelligence platform development

In the medium term (within 4-6 years) Betolar has the following business targets:

  • Scale up Betolar solution globally
  • Reach 100 commercial agreements
  • Scaling number of applications and production volume with Betolar AI platform and ecosystem
  • Strong global sales, marketing and delivery capabilities

In the long term (within 10 years) Betolar has the following business targets:

  • R&D expenditure approximately 5% of the Company’s targeted revenue
  • Geoprime® brand as one of the leading among environmentally sustainable products within the building materials industry
  • Reach cumulative 150 million tonnes CO2 emission savings (compared to the average CO2 emissions of Portland Cement at 2021 level)

In addition to business targets, Betolar has the following medium- and long-term financial targets based on its scalable business model:

  • Medium term: Reach revenues of EUR 200 million and a positive cash flow from operating activities by year 2026
  • Long term: Reach revenues of over EUR 1 billion and an EBITDA margin of 30% within 10 years

The Offering

The objective of the Offering and the Listing is to enable implementation of Betolar’s growth strategy. The listing would also allow Betolar to obtain access to capital market to raise additional funding and expand the Company’s ownership base with both domestic and foreign investors, which would increase the liquidity of the Company’s shares. The listing would increase Betolar's visibility and the general interest of investors, business partners and customers in Betolar, which would support the implementation of the Company's growth strategy, brand building and recruitment of new employees, and the Company's image as a high quality company and reliable business partner. The listing would also enable the Company’s shares to be used more efficiently in the rewarding of personnel and in connection with M&As.

In the planned Offering, new shares in the Company are offered for subscription. The members of the Board of Directors and the management team of the Company, the creditors of the Company's convertible loan, holders of option rights, and certain shareholders are expected to commit to customary lock-up agreements. The objective of the Offering is to raise approximately EUR 35 million in gross proceeds (before transaction fees and expenses).

Ilmarinen Mutual Pension Insurance Company, certain funds managed by SP-Fund Management Company Ltd, Ahlström Invest B.V., Nidoco AB, Seafarers' Pension Fund, and S-Pankki Fenno Osake have in total, subject to certain conditions, committed to subscribe for shares amounting to approximately EUR 24 million in the Offering at a pre-money equity value of up to EUR 70 million.

The full terms, conditions and instructions for the contemplated IPO, will be included in the Finnish language EU Growth prospectus and its English language translation (the "Offering Circular") that will be prepared by Betolar in connection with the contemplated IPO. The prospectus and the Offering Circular will be published on the Company’s website, “www.betolar.com”.

Advisers

Skandinaviska Enskilda Banken AB (publ) Helsinki Branch acts as Sole Global Coordinator and Bookrunner of the Offering, and as the Company’s Certified Adviser referred to in the Nasdaq First North Growth Market Rulebook. Roschier, Attorneys Ltd. acts as legal advisor to the Company whereas White & Case LLP is legal advisor to the Global Coordinator and Bookrunner. Functos Ltd and Superson Ltd are acting as communications advisor to the Company.

Further enquiries and possible interview requests

Matti Löppönen, CEO, Betolar Plc, +358 50 306 6335

Taneli Hassinen, Functos Ltd, +358 40 504 3321 (from 9:00 am EET)

Important information

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. The information in this announcement is subject to change. This announcement is not an offer to sell or a solicitation of any offer to buy any securities issued by Betolar Plc (the "Company") in any jurisdiction where such offer or sale would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In any Member State of the European Economic Area (the "EEA"), other than Finland, and in the United Kingdom, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of article 2(e) of Regulation (EU) 2017/1129, as amended (the "Prospectus Regulation") and Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018. Any potential offering of the securities referred to in this announcement will be made by means of a prospectus. This announcement is not a prospectus as set out in the Prospectus Regulation. Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. This announcement and the information contained herein are not for distribution in or into the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. In the United Kingdom, this announcement and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this announcement relates is available only to, and will be engaged in only with, "qualified investors" (as defined in section 86(7) of the Financial Services and Markets Act 2000) and who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). Persons who are not relevant persons should not take any action on the basis of this announcement and should not act or rely on it. This announcement is for information purposes only and under no circumstances shall constitute an offer or invitation, or form the basis for a decision, to invest in any securities of the Company. Skandinaviska Enskilda Banken AB (publ) Helsinki Branch ("SEB") is acting exclusively for the Company and no-one else in connection with the Offering. It will not regard any other person as its client in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein. The contents of this announcement have been prepared by, and are the sole responsibility of, the Company. Neither SEB or any of its directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

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 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. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this announcement by such forward-looking statements. 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. 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.

Information to Distributors

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) the regulations and guidelines of the Finnish Financial Supervisory Authority regarding investment services and activities (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.


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