ams proposes revised shares-only earn-out structure to former Heptagon shareholders ...

(PR title cont'd) ... to reflect higher-than-expected capital expenditure requirements

Premstaetten, Austria (20 February 2018) -- ams AG (SIX: AMS), a leading worldwide supplier of high performance sensor solutions, has proposed a revised earn-out structure to the former shareholders of Heptagon reflecting higher-than-expected capital expenditures and other costs which were required for Heptagon’s business to realize its 2017 revenue pipeline.

To ensure Heptagon’s business achieved the expected success in 2017, ams had to provide financing for significantly higher levels of capital expenditures and committed significantly more resources than projected; this enabled Heptagon’s business to establish sufficient production capacity and execute the extensive new product ramp-ups at the core of its 2017 business pipeline.

To adequately reflect this situation, ams has submitted a proposal on a revised earn-out structure to all former Heptagon shareholders. The revised earn-out structure replaces the previous combination of cash payment and ams shares portion with a shares-only consideration, thereby avoiding any cash payment. The key element of the revised structure is a total distribution of up to 3.9 million ams shares at the average closing price of CHF 99.15 resulting from the 15 trading days before yesterday’s proposal date. The implementation of the proposal is contingent on a threshold of 60% of preferred Heptagon shares (approximately 56% of total Heptagon shares) represented by former Heptagon shareholders having offered their acceptance. At an acceptance rate of 100% the revised structure would require around 900,000 ams shares more for distribution than the previous structure.

ams’ Management Board has determined that the proposal, which also reflects the appreciation of ams shares since the closing of the transaction, is in the interest of the company while fair for both sides. First feedback suggests a positive view on the proposal by large former Heptagon shareholders. As before, the share distribution will come from existing treasury shares without any new share dilution.