Spinnova intends to launch an initial public offering and listing on Nasdaq First North Growth Market Finland
Press release 28 may 2021
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Spinnova intends to launch an initial public offering and listing on Nasdaq First North Growth Market Finland
Spinnova Ltd (“Spinnova” or the “Company”), a company that has developed a sustainable production technology for a transformative, new textile fibre known as SPINNOVA® fibre, announces its intention to proceed with an initial public offering (“IPO” or “Offering”) and listing of its shares on Nasdaq First North Growth Market Finland. The Company’s production technology enables the production of SPINNOVA® fibre from multiple raw material inputs, including wood and leather waste, and other renewable raw materials such as agricultural, food and beverage industry waste and textile waste.
Pursuing an IPO and listing is a natural and important next step for Spinnova. With the listing the Company expects to benefit from a broader shareholder base and easier access to international capital markets. The IPO is expected to enable Spinnova to implement its growth strategy and finance the Company’s investments to scale-up wood-based fibre production. Furthermore, the IPO and listing are expected to benefit Spinnova by strengthening the recognition of Spinnova and its SPINNOVA® brand among customers, potential new employees and investors and in the textile sector in general, and thus enhance Spinnova’s competitiveness in the market.
The contemplated offering in the IPO will consist only of new shares issued by the Company. Gross proceeds from the share issue are expected to be approximately EUR 100 million and will be used to finance the Company’s investments into the scale-up of wood-based fibre production and for other business development purposes such as upscaling of the production capacity for leather-based fibres, pilot projects in other sustainable raw material areas, continued investments in R&D and patents and further commercialisation of the business, including investments into sales and marketing.
Spinnova in brief
Spinnova was incorporated in November 2014, but its sustainable technology is the result of more than ten years of research and development. The Company believes that its production technology provides a sustainable alternative for the global textile market as consumers are increasingly demanding and willing to pay more for sustainable alternatives to water and chemical intensive cotton or man-made fibres such as polyester and viscose. SPINNOVA® fibre is 100 per cent recyclable, quickly biodegradable, contains no microplastics and can be produced without dissolution or the use of harmful chemicals or harmful additives. The Company classifies SPINNOVA® fibre as the most natural man-made textile fibre due to its structural properties. The mechanical production process uses no harmful chemicals and produces no waste or side streams. The look and feel of SPINNOVA® is similar to natural fibres such as cotton and linen.
Having completed the main phase of research and development, the Company is ramping up its global commercialisation phase. The Company expects to commercialise its technology platform, which is able to produce SPINNOVA® fibre from multiple raw materials without requiring changes in the underlying technology. The Company’s technology platform has been proven effective at the Company’s industrial scale pilot production facility in Jyväskylä, Finland that has been operational for more than two years.
Spinnova has engaged a variety of co-operation partners for its production and commercial ramp-up. Among these are a joint venture with the world’s largest cellulose provider Suzano S.A. for production of wood-based fibre and with KT Trading AG, the sister company of the shoe manufacturer and retailer ECCO for leather-waste based fibre. The Company also collaborates with global apparel brands such as adidas AG, H&M Group, and has a technology partnership with the global production equipment manufacturer Valmet. The collaboration with global apparel brands is part of the Company’s go-to-market strategy and is expected to increase brand visibility and awareness. Furthermore, the technology partnership with Valmet is expected to enable Spinnova to execute its growth strategy while ensuring the high quality of its production technology through Valmet’s global operations.
Spinnova aims to be a global leader in the sustainable textile materials market. Spinnova’s aim is to continue expanding its production capacity and establish more partnerships with apparel brands and textile manufacturers. To achieve its goals, Spinnova has divided its strategy into three areas: 1) technology strategy, 2) go-to-market strategy, and 3) product and brand strategy.
In order to achieve the production targets and to make its technology competitive for the broader market, the Company has created a technology strategy consisting of a technology roadmap, R&D, technology concept and intellectual property protection.
In order to achieve the business targets set by the Company, a go-to-market strategy has been created and it focuses on the three elements of Spinnova’s business model: 1) technology sales, 2) fibre production and sales, and 3) fabric sales. Spinnova’s go-to-market strategy encompasses selling its technology platform exclusively to the joint venture companies in which Spinnova holds a 50% ownership stake, and in the future, potentially selling its technology platform exclusively to other parties and/or setting up Company’s own production, or employing a licensing model.
The objective of the product and brand strategy is to establish partnerships with leading apparel brands, to increase Spinnova’s brand awareness and to differentiate Spinnova’s product to drive demand for SPINNOVA® fibre and fabric. According to the Company’s view, the Company could in the future work with both premium and luxury brands and mass-market brands. The Company’s published brand collaborations today include: adidas, H&M Group, The VF Corporation brand Icebreaker, Marimekko, BESTSELLER, Bergans of Norway and ECCO.
Spinnova’s Key Strengths
Spinnova believes that the following factors in particular are its key strengths and represent long term competitive advantages:
- Unique and disruptive technology platform for producing sustainable and the most natural man-made textile fibres and materials
- Experienced management, personnel and Board of Directors with extensive technical and commercial know-how
- Strong R&D capabilities and experienced R&D team
- Highly scalable modular technology with low project risk
- Strong partners on-board for commercial ramp-up
- Favourable joint venture structure
- Intellectual property protected by strong patents and business secrets
- SPINNOVA® fibre’s properties are comparable with natural textile fibres
- Strong brand associated with sustainability
- Large and growing addressable market
Janne Poranen, CEO and Co-founder of Spinnova:
“My co-founder Juha Salmela and I are very pleased about our intention to launch the initial public offering and listing. They would enable the further commercialisation of our technology and the realisation of our mission; providing the textile industry with sustainable fibre, produced with minimal harm to the environment and at a competitive price. Spinnova has had an interesting journey so far, enabled by our committed and enthusiastic team and partners, and our growth continues. I feel grateful and honoured to have reached this milestone.”
Timo Soininen, Executive Chair of the Board of Directors of Spinnova:
“Spinnova is a great example of Finnish technological innovation stemming from the long history of our engineering expertise in the pulp and paper industry. The company is now ready to disrupt the world’s textile industry for the better with its unique SPINNOVA® fibre. We believe that SPINNOVA® fibre will play an important role in the future efforts of global apparel brands to meet the growing demand for appropriate textile fibres while replacing environmentally unsustainable fibres. This creates a significant business opportunity for the company, as the shortage of cellulose-based fibres is estimated to total about EUR 45-60 billion by 2030.”
Information on the Offering
Pursuing an IPO and listing is a natural and important next step for Spinnova, by which the Company expects to benefit from a broader shareholder base and to access international capital markets. The IPO is expected to enable Spinnova to implement its growth strategy and finance the Company’s investments to scale-up wood-based fibre production. Furthermore, the IPO is expected to benefit Spinnova by strengthening the recognition of Spinnova and its SPINNOVA® brand among customers, potential new employees and investors and in the textile sector in general, and thus enhance Spinnova’s competitiveness in the market.
The contemplated Offering will consist only of new shares issued by the Company. As part of the IPO, Spinnova, the members of the Board of Directors and Management Team of Spinnova, as well as such existing shareholders of Spinnova who hold at least 5 per cent of the total number of shares or votes in the Company, will be subject to customary lock-up provisions. The shares will be offered to qualified and institutional investors in Finland and internationally (excluding the U.S.) as well as to the general public in Finland. All offers and sales outside the United States will be made in compliance with Regulation S under the U.S. Securities Act of 1933, as amended.
Gross proceeds from the share issue are expected to be approximately EUR 100 million and will be used in accordance with the following order of priority: (i) EUR 60 million to finance the Company’s investments into the scale-up of wood-based fibre production through its exclusive joint venture with Suzano, and (ii) EUR 40 million for other business development purposes such as upscaling of the production capacity for leather-based fibres, pilot projects in other sustainable raw material areas, continued investments in R&D and patents, additional employee hires, business-to-business marketing, and increased working capital requirements and general corporate purposes.
Certain funds managed by entities owned by Aktia Bank plc, certain funds managed by WIP Asset Management Ltd, certain funds managed by DnB Fund Management, Ilmarinen Mutual Pension Insurance Company, certain funds managed by Pareto Asset Management and certain funds managed by Sp-Fund Management Company Ltd (together the “Cornerstone Investors”) have in total, subject to certain customary conditions, committed to subscribe for shares in the Company amounting to EUR 55 million in the contemplated Offering at a pre-money equity value of up to EUR 275 million. Based on the undertakings provided by the Cornerstone Investors, the following Cornerstone Investors have committed to subscribe for in the IPO a number of shares at the final price that corresponds to a gross subscription price of: certain funds managed by entities owned by Aktia Bank plc EUR 12.5 million, certain funds managed by WIP Asset Management Ltd EUR 12.5 million, certain funds managed by DnB Fund Management EUR 10 million, Ilmarinen Mutual Pension Insurance Company EUR 10 million, certain funds managed by Pareto Asset Management EUR 5 million and certain funds managed by Sp-Fund Management Company Ltd EUR 5 million.
Full terms, conditions and instructions for the contemplated IPO will be included in the prospectus that will be prepared by Spinnova in connection with the contemplated IPO. Should the Company decide to proceed with the IPO, the prospectus will be published on the Company’s website at www.spinnovagroup.com/ipo.
Spinnova will host a press conference on Zoom today 28 May 2021 at 11:00 a.m. EET.
Registration to the press event (hosted in Finnish):
Nasdaq Helsinki, Communications, firstname.lastname@example.org, tel. +358 40 555 2030.
Carnegie Investment Bank AB (publ) acts as Sole Global Coordinator and Bookrunner in connection with the IPO. Borenius Attorneys Ltd acts as legal advisor to the Company and White & Case LLP acts as legal advisor to the Sole Global Coordinator and Bookrunner. Hill+Knowlton Strategies acts as communications adviser to Spinnova. Alexander Corporate Finance Oy will act as the Company’s Certified Adviser in accordance with the Nasdaq First North Growth Market Rulebook.
For further information, please contact:
Janne Poranen, CEO
+358 400 138711
Spinnova – Sustainable textile materials naturally
Spinnova transforms the way textiles are manufactured globally. Based in Finland, Spinnova has developed breakthrough technology for making textile fibre out of wood or waste, such as textile or food waste, without harmful chemicals. The patented SPINNOVA® fibre creates 0% waste or side streams, 0% microplastics and has minimal CO2 emissions and water use. SPINNOVA® materials are quickly biodegradable and circular. Spinnova is committed to using only sustainable raw materials such as FSC certified wood.
Spinnova has been awarded e.g. World Changing Idea and Innovation by Design by the Fast Company, as well as Sustainability Achievement of the year by the ISPO and Scandinavian Outdoor Awards twice and chosen Best Material of the Monocle Design Awards 2021.
The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, New Zealand, Australia, Japan, Hong Kong, Singapore or South Africa. The information contained herein 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. Spinnova Ltd (the “Company”) does not intend to register any portion of the offering in the United States under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or to offer securities to the public in the United States.
The issue, exercise and/or sale of securities are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company or Carnegie Investment Bank AB (publ) assume no responsibility in the event there is a violation by any person of such restrictions.
The information contained herein shall not constitute an offer to sell or a solicitation of an offer to purchase or subscribe, 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 document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Company.
The Company has not authorized any offer to the public of securities in the United Kingdom or in any Member State of the European Economic Area other than Finland. With respect to the United Kingdom and each Member State of the European Economic Area other than Finland and which applies 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 in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity, which fulfils the requirements of a qualified investor 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 a communication to persons in any form and by any means, presenting 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 those securities. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129 of the European Parliament and of the Council, as amended.
This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Full terms, conditions and instructions for the contemplated initial public offering will be included in the prospectus that will be prepared by Spinnova Ltd in connection with the contemplated initial public offering. Should the Company decide to proceed with the initial public offering, the prospectus will be published on the Company’s website at www.spinnovagroup.com/ipo.
Any offering to subscribe for the securities referred to in this communication will be made by means of a prospectus that will be provided by Spinnova Ltd pursuant to an approval by the Finnish Financial Supervisory Authority and containing detailed information about the Company and management, as well as financial information. This communication is an advertisement and not a prospectus for the purpose of the Prospectus Regulation. Investors should not acquire any securities referred to in this communication except on the basis of information contained in a prospectus. Any approval and registration by the Finnish Financial Supervisory Authority of the prospectus shall not be considered as an endorsement of the securities that are the subject of the prospectus.
Certain statements in this communication are “forward-looking statements”. Forward-looking statements include statements concerning plans, assumptions, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, the Company’s competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, its business strategy and the anticipated trends in the industry and the political and legal environment in which it operates and other information that is not historical information, investments, the contemplated initial public offering and listing, future cash flow generation, operating profit margin, financial position and liquidity. In some instances, they can be identified by the use of forward-looking terminology, including the terms “believes”, “intends”, “may”, “will” or “should” or, in each case, their negative or variations on comparable terminology.
Forward-looking statements in this release are based on assumptions, many of which in turn are based on assumptions. By their very nature, forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and the risk exists that the predictions, forecasts, projections, plans and other forward-looking statements will not be achieved. Given these risks, uncertainties and assumptions, you are cautioned not to place undue reliance on such forward-looking statements. Any forward-looking statements contained herein speak only as at the date of this release. Save as required by law, the Company and the managers do not intend and do not assume any obligation, to update or correct any forward-looking statement contained herein.