This press release may not, directly or indirectly, be distributed or published in or into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or United States. The offer is not being made to (and acceptance will not be accepted from) persons in those countries or elsewhere where their participation requires further documentation, filings or other measures in addition to those required by Swedish law.

21/02/2014 — GOTHENBURG, Sweden — (BUSINESS WIRE)

CZ Acquisition, Inc. (“CZ Acquisition”), a wholly owned subsidiary of Medina Capital Fund LP (“Medina Capital”), hereby announces a recommended cash offer to the shareholders in Cryptzone Group AB (publ) (“Cryptzone”) to acquire all outstanding shares in Cryptzone (the “Offer”). Cryptzone’s shares of series B are listed on NASDAQ OMX First North (”First North”). Cryptzone’s shares of series A are not listed.

The Offer in brief

• CZ Acquisition offers SEK 7 in cash per share in Cryptzone, irrespective of share series, corresponding to an aggregate Offer value of approximately SEK 70,450,254.¹
• The Offer represents a premium of:
  • 8.4 percent compared to the volume-weighted average price of SEK 6.46 for Cryptzone’s share of series B on First North during the last 90 trading days prior to announcement of the Offer;
  • 29.0 percent compared to the volume-weighted average price of SEK 5.42 for Cryptzone’s share of series B on First North during the last 30 trading days prior to announcement of the Offer; and
  • 11.1 percent compared to the closing price for Cryptzone’s share of series B on First North of SEK 6.30 on 20 February 2014, being the last trading day prior to announcement of the Offer.
• The Board of Directors² of Cryptzone unanimously recommends Cryptzone’s shareholders to accept the Offer.
• Knutsson Holdings AB, LMK Ventures AB, LMK Stiftelsen, Ilija Batljan, Kattvik Financial Services, LMK Forward AB, A.T.V. Holding AB and Mats Dahlin, together holding 6,418,929 shares in Cryptzone, corresponding to approximately 62.9 percent of the votes and approximately 63.7 percent of the capital in Cryptzone, have irrevocably undertaken to accept the Offer.
• The Offer is not conditional upon financing.
• The acceptance period for the Offer is expected to commence on 28 February 2014 and end on 21 March 2014. Settlement is expected to commence on 31 March 2014.

“We believe that combining Cryptzone’s product portfolio with the Medina Capital team’s expertise in the cybersecurity sector and proven ability to assist companies with lead generation, product development and operations will enable Cryptzone to capture its full growth potential,” says Manuel D. Medina, Managing Partner of Medina Capital.

“Cryptzone will receive a strong owner who can provide deep knowledge in the security segment and also resources to ensure the financing of the company, in both the short and the long term. This enables Cryptzone’s innovative Swedish technology to be a strong player on the U.S. market, and provides tremendous assistance in ensuring our planned growth and investments can be implemented in a positive way,” says Ilija Batljan, Chairman of Cryptzone.

Background and reasons for the Offer

Cryptzone is a technology innovator of proactive controls to mitigate IT security risks. Cryptzone develops and sells world-class technical solutions, including AppGate Access Control, Simple Encryption Platform and secured endpoint protection based on the Cryptzone Management Console. Cryptzone provides its solutions to companies, governmental authorities, defence organizations, financial institutions and organizations in a wide range of other market segments.

CZ Acquisition is a wholly owned subsidiary of Medina Capital, where the latter for some time has followed the development of Cryptzone. Medina Capital believes that by acquiring Cryptzone and delisting it from First North, it will reduce the overhead inherent in operating in a listed environment as well as expose Cryptzone to future financing resources within the private equity environment. Leveraging the extensive operational experience in the IT infrastructure sector and deep knowledge of the software market of its partners, Medina Capital’s investment will be complimented with strategic advice and technology industry relationships which should provide significant benefits to the Cryptzone executive team.

Medina Capital has completed its confirmatory due diligence process to analyze Cryptzone and decided to make an Offer that couples an attractive valuation with a vision for continued development and growth of Cryptzone.

Medina Capital places great value on the leadership of Cryptzone’s management team and its employees. The strengthened financial position afforded by the completed offer from Medina Capital will enhance the ability for the entire Cryptzone organization and the individual employees to succeed. Medina Capital intends to maintain the current organizational structure and operations in Sweden, including the terms of employment of Cryptzone’s employees. Medina Capital intends to move Cryptzone’s headquarters to the United States in connection with a focus on the U.S. market.

The Offer

CZ Acquisition offers SEK 7 in cash for each share in Cryptzone. The offer price is subject to adjustments should Cryptzone pay any dividend or make any other value distribution prior to the settlement of the Offer, and will accordingly be reduced by the amount per share of any such dividend or value distribution.

The Offer represents a premium of:

• 8.4 percent compared to the volume-weighted average price of SEK 6.46 for Cryptzone’s shares of series B on First North during the last 90 trading days prior to announcement of the Offer;
• 29.0 percent compared to the volume-weighted average price of SEK 5.42 for Cryptzone’s shares of series B on First North during the last 30 trading days prior to announcement of the Offer; and
• 11.1 percent compared to the closing price of Cryptzone’s shares of series B on First North of SEK 6.30 on 20 February 2014, being the last trading day prior to announcement of the Offer.

No commission will be charged in connection with the Offer.

The total value of the Offer amounts to approximately SEK 70,450,254.³

The acceptance period for the Offer is expected to commence on 28 February 2014 and end on 21 March 2014. Settlement is expected to commence on 31 March 2014 subject to the conditions for the Offer being fulfilled or waived.

Recommendation from the Board of Directors of Cryptzone

The Board of Directors⁴ of Cryptzone unanimously recommends Cryptzone’s shareholders to accept the Offer.

CZ Acquisition’s holding in Cryptzone

Neither CZ Acquisition nor Medina Capital own or control any shares in Cryptzone, nor have they acquired any shares in Cryptzone during the last six months prior to the announcement of the Offer.

CZ Acquisition may acquire, or enter into arrangements to acquire, shares in Cryptzone during the acceptance period. Any purchases made or arranged shall be made in accordance with Swedish law and disclosed in accordance with applicable rules.

Conditions for the Offer

Completion of the Offer is conditional upon:

(i) the Offer being accepted to such extent that CZ Acquisition becomes the owner of shares representing more than 90 percent of the total number of shares in Cryptzone on a fully diluted basis;

(ii) no other party announcing an offer to acquire shares in Cryptzone on terms that are more favorable to the shareholders of Cryptzone than the Offer;

(iii) the Offer and the acquisition of Cryptzone receiving all necessary regulatory, governmental or similar clearances, approvals and decisions, in each case on terms which, in CZ Acquisition’s opinion, are acceptable;

(iv) neither the Offer nor the acquisition of Cryptzone being wholly or partly prevented or materially adversely affected by any legislation or other regulation, court decision, public authority decision or similar circumstances, which is actually or could reasonably be anticipated, and which is outside the control of CZ Acquisition and which CZ Acquisition could not reasonably have foreseen at the time of the announcement of the Offer;

(v) CZ Acquisition not discovering that any information publicly disclosed by Cryptzone or otherwise made available by Cryptzone to CZ Acquisition is materially inaccurate, incomplete or misleading or that any material information which should have been publicly disclosed by Cryptzone has not been so;

(vi) no circumstances, of which CZ Acquisition did not have knowledge about at the time of the announcement of the Offer, occurring which have a material adverse effect, or could reasonably be expected to have such effect, upon Cryptzone’s sales, results, assets, liquidity or equity; and

(vii) Cryptzone not taking any measures that typically are intended to impair the prerequisites for making or implementing the Offer.

CZ Acquisition reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions is not fulfilled or cannot be fulfilled. However, with regard to conditions (ii)-(vii) such withdrawal will only be made provided that the defective fulfillment of such condition is of material importance to CZ Acquisition’s acquisition of the shares in Cryptzone.

CZ Acquisition reserves the right to waive, in whole or in part, one or more of the conditions above in accordance with applicable laws and regulations, including, with respect to condition (i) above, to complete the Offer at a lower level of acceptance.

Description of CZ Acquisition and financing of the Offer

CZ Acquisition, corporate registration number 5482804, is a wholly owned subsidiary of Medina Capital (see above). CZ Acquisition has its registered office in the City of Wilmington, County of New Castle, Delaware, USA, with the address c/o Corporate Creations Network Inc., 3411 Silverside Road, #104 Rodney Building, Wilmington, Delaware, USA. CZ Acquisition was founded on 14 February 2014 and registered with the Division of Corporations of the State of Delaware, USA on 14 February 2014. CZ Acquisition has not conducted and does not currently conduct any business and its sole business purpose is to make the Offer and take all necessary actions to complete the Offer and operate as the parent company of Cryptzone.

The Offer will be financed by CZ Acquisition with available funds, which will be provided by Medina Capital to CZ Acquisition in the form of shareholder’s contribution. The Offer is not conditional upon financing.

Indicative timetable5
Preliminary date for publication		27 February 2014
of the Offer document
Preliminary dates for the		28 February 2014 – 21 March 2014
acceptance period
Preliminary date for settlement		31 March 2014

CZ Acquisition reserves the right to extend the acceptance period for the Offer, as well as postpone the date for settlement.

Undertakings from shareholders in Cryptzone

Knutsson Holdings AB, LMK Ventures AB, LMK Stiftelsen, Ilija Batljan, Kattvik Financial Services, LMK Forward AB, A.T.V. Holding AB and Mats Dahlin, together holding 6,418,929 shares in Cryptzone, corresponding to approximately 62.9 percent of the votes and approximately 63.7 percent of the capital in Cryptzone, have irrevocably undertaken to accept the Offer.

Due diligence

CZ Acquisition has conducted a due diligence review of confirmatory nature in relation to the preparation of the Offer. CZ Acquisition has, in connection therewith, met with the management of Cryptzone.

CZ Acquisition has in connection with the due diligence been provided with certain non-public price-sensitive information. Cryptzone will disclose this information before the end of the acceptance period.

Compulsory acquisition and de-listing

As soon as possible following CZ Acquisition acquiring shares representing more than 90 percent of the total number of shares in Cryptzone, CZ Acquisition intends to initiate compulsory acquisition of the remaining shares in Cryptzone in accordance with the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)). In connection hereto, CZ Acquisition intends to promote a de-listing of Cryptzone’s shares of series B from First North.

Applicable law and disputes

The Offer shall be governed by and in accordance with the laws of Sweden. The Swedish Corporate Governance Board’s (Sw. Kollegiet för Svensk Bolagsstyrning) rules concerning takeover bids for shares in Swedish companies whose shares are traded on certain trading platforms (the “Takeover Rules”), and the Swedish Securities Council’s (Sw. Aktiemarknadsnämnden) rulings regarding the interpretation and application of the Takeover Rules, and, where applicable, the Swedish Securities Council’s former rulings regarding interpretation and application of the Swedish Industry and the Commerce Stock Exchange Committee’s (Sw. Näringslivets börskommitté) rules on public offers, shall apply in relation to the Offer.

The courts of Sweden shall have exclusive jurisdiction over any dispute arising out of or in connection with the Offer and the City Court of Stockholm shall be the court of first instance.

Advisers

CZ Acquisition has retained Advokatfirman Lindahl as legal adviser in connection with the Offer.

Miami, Florida, USA, 21 February 2014

CZ Acquisition, Inc.

The Board of Directors

CZ Acquisition discloses the information provided herein pursuant to the Takeover Rules. The information was submitted for publication on 21 February 2014 at 07.00 (CET).

Medina Capital in brief

CZ Acquisition is a wholly owned subsidiary of Medina Capital, which is based in Miami, Florida, USA. Medina Capital is a high-growth equity investment firm focused on IT infrastructure companies in areas such as cloud computing, cybersecurity, big data, software-defined security and software-defined networking. The firm’s philosophy emphasizes investing in high-growth companies with established products or services that will benefit from Medina Capital’s strategic guidance.

For more information about Medina Capital, please visit http://www.medinacapital.com

Cryptzone in brief

The Cryptzone group is a technology innovator of proactive controls to mitigate IT security risks. Cryptzone’s solutions enable organizations to securely connect, collaborate and comply within the digital workplace.

Specializing in encryption content security and secure access technologies, Cryptzone designs solutions that are barely visible to users, yet afford powerful security that protects enterprise information assets, corporate applications and other network resources.

The Company is headquartered in Sweden, with sales offices in U.S., UK, Belgium and Germany, and with an extensive partner network of over 150 global partners.

Cryptzone’s shares of series B are listed on NASDAQ OMX First North. Certified Adviser is Thenberg & Kinde Fondkommission AB.

For more information about Cryptzone, please visit www.cryptzone.com

Important information

The Offer is not being made to persons whose participation in the Offer requires that an additional offer document is prepared or registration effected or that any other measures are taken in addition to those required under Swedish law and regulations.

This press release and any related offer documentation are not being distributed and must not be mailed or otherwise distributed or sent in or into any country in which the distribution or offering would require any such additional measures to be taken or would be in conflict with any law or regulation in such country. Any such action will not be permitted or sanctioned by CZ Acquisition. Any purported acceptance of the Offer resulting directly or indirectly from a violation of these restrictions may be disregarded.

The Offer is not being made, directly or indirectly, by use of mail or any other means or instrumentality (including, without limitation, facsimile transmission, electronic mail, telex, telephone and the internet) in or into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or the United States, and the Offer cannot be accepted by any such use, means, instrumentality or facility of, or from within Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or the United States. Accordingly, this press release and any related offer documentation are not being and should not be mailed or otherwise distributed, forwarded or sent in or into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or the United States.

CZ Acquisition will not deliver any consideration from the Offer into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or the United States.

This press release is not being, and must not be, sent to shareholders with registered addresses in Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or the United States. Banks, brokers, dealers and other nominees holding shares for persons in Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or the United States must not forward this press release or any other document received in connection with the Offer to such persons.

This press release has been published in Swedish and English. In the event of any discrepancy in content between the language versions, the Swedish version shall prevail.

¹ Based on 10,064,322 outstanding shares in Cryptzone, of which 17,676 are shares of series A and 10,046,646 are shares of series B. The offered price is subject to adjustment should Cryptzone pay any dividend or make any other value distribution to shareholders prior to the settlement of the Offer, and will accordingly be reduced by the amount of any such dividend or value distribution.

² Due to conflict of interest, board members Ilija Batljan and Mats Dahlin have not participated in the Board of Directors’ evaluation of the Offer or its handling of the Offer. The above mentioned board members cannot be considered as independent since they, either direct or through means of community of interest, have entered into irrevocable undertakings to sell their shares to CZ Acquisition under the Offer.

³ Based on 10,064,322 outstanding shares in Cryptzone, of which 17,676 are shares of series A and 10,046,646 are shares of series B.

⁴ Due to conflict of interest, board members Ilija Batljan and Mats Dahlin have not participated in the Board of Directors’ evaluation of the Offer or its handling of the Offer. The above mentioned board members cannot be considered as independent since they, either direct or through means of community of interest, have entered into irrevocable undertakings to sell their shares to CZ Acquisition under the Offer.

⁵ All dates are preliminary and may be subject to change.

CONTACT:

CZ Acquisition, Inc
Adam Smith, +1 (305) 375-6000

 

KEYWORDS:   United States  Europe  North America  Florida  Sweden

INDUSTRY KEYWORDS:   Technology  Internet  Networks  Software  Security

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