Hemply Balance

In 2023, Dendrio reported net sales of approximately SEK 710 million with a profit after financial items of SEK 25 million. In 2024, net sales are forecast to amount to SEK 750 million, with an EBITDA margin of 6%. The letter of intent stipulates that the purchase price for Dendrio amounts to between SEK 425 million and SEK 453 million and will be paid with newly issued shares in Hemply Balance. Assuming that the transaction is completed, existing shareholders in Hemply Balance will own 4% after the transaction, which would mean that the existing shareholders in Hemply Balance will receive a theoretical shareholder value of approximately SEK 17,7 – 18,9 million, corresponding to SEK 0,113 – 0,12 per share.

Daniel Hallenberg, Member of the Board of Directors and Acting CEO of Hemply Balance:
"We are pleased to announce the transaction with Dendrio, a successful and fast-growing company in a sector with great potential. The principal shareholders of Dendrio will remain the principal owners, and Dendrio will have the opportunity to create value for its shareholders as a listed company. If the transaction is completed, Hemply Balance's current shareholders will have a shareholding in Dendrio that is theoretically worth approximately SEK 17.7 – 18.9 million, and we expect this value to grow over time."

Dendrio is owned by Bittnet Group, which is listed on the Bucharest Stock Exchange, Agista, a Romanian investment fund, and private owners Constantin Savu and Cătălin Georgescu (the "Sellers"). After the transaction is completed, Dendrio will be listed on the Nordic Growth Market ("NGM") in Stockholm, with the goal of also being listed on Börse Stuttgart in Germany.

Key facts about Dendrio Solutions SRL

• Founded in 1999 in Romania, Dendrio specialises in providing corporate customers with customised IT infrastructure and services. Furthermore, Dendrio has an active acquisition agenda and an ambition to grow internationally in the coming years.

• Dendrio's offering includes comprehensive IT solutions, which include general consulting, IT assessments, implementation and migration, maintenance and support, and infrastructure optimisation.

• Dendrio is expanding and intends to acquire market-leading companies continuously.
  
• Dendrio has experienced substantial growth in recent years through strategic acquisitions, including leading market players such as software integrator Gecad Net and IT infrastructure specialist Crescendo. In addition, Dendrio has acquired Top Tech and 2net, regional companies with over 30 years in the market, and recently Dataware, an internationally recognised company recognised by Fujitsu for its advanced solutions. Dataware has also obtained authorisation for 5G equipment, essential for developing Dendrio's services.

• Demand for Dendrio's solutions is estimated to remain high:
  o Public sector digitalization: The digitalization of the public sector in Romania and related markets is growing rapidly, and Dendrio has established itself as a reliable, in- demand, and experienced player. European programmes, such as the National Recovery and Resilience Plan (PNRR), actively accelerate development.
  o Expansion in the private sector: The private sector in the region is also experiencing strong growth, mainly driven by the increasing need for digitalization in the entrepreneurial sector. This demand is further supported by various EU projects aimed at promoting technological progress and innovation.

Dendrio's Owner
Bittnet Systems SA: 84,7 %
Agista Investments SA: 11,8%
Constantin Savu och Cătălin Georgescu: 3,5 %

Dendrio's CEO
Cristian Herghelegiu

Dendrio’s Board of Directors
Constantin Savu, Catalin Georgescu, Marius Tulea och Iulian Zamfir.

Cristian Herghelegiu, CEO of Dendrio: "With the reverse acquisition of Hemply Balance, we will increase Dendrio's visibility and continue to build value as a publicly traded company over time. Our ambition is to carry out a dual listing on Börse Stuttgart. In recent years, our delivery areas have experienced high growth and customer satisfaction. Through acquisitions and geographic expansion, we aim to become a leader in Europe in our core segments."

Marcus Bonsib, Chairman of the Board of Directors of Hemply Balance: "Since the autumn of 2023, when the new Board of Directors of Hemply Balance took office, we have had the ambition to leverage our expertise in reverse acquisitions to facilitate the smooth and efficient listing of a larger, high-quality company while adding significant value to the shareholders of Hemply. We believe that Dendrio has just begun its growth journey and expect that the listing on NGM will enable Dendrio to expand even faster across Europe through acquisitions."

The transaction, in brief

• Dendrio and Hemply Balance have signed a letter of intent, in which the purchase price amounts to approximately SEK 425 – 453 million, which will be paid through newly issued shares in Hemply Balance. After the non-cash issue, the valuation amounts to approximately SEK 442 – 472 million. Hemply Balance and Dendrio intend to enter a share purchase agreement in 2024.
  
• Following the transaction, the Sellers will own 96% of the shares in Hemply Balance. The existing shareholders of Hemply Balance will thus own 4% of the shares in Hemply Balance, which will become the parent company of Dendrio Solutions SRL after the transaction. If the transaction is completed, the existing owners of Hemply Balance will receive a theoretical value of approximately SEK 17,7 – 18,9 million.
  
• The transaction is conditional upon, among other things:
  o That the operating company Hemply Services AB is divested or wound up and that Hemply Balance Holding AB will have a net cash position of SEK 750,000 when entering the share purchase agreement.
  o That an Extraordinary General Meeting of Hemply Balance approves the transaction and the divestment of Hemply Services AB.

• Major shareholders in Hemply Balance, who represent over 50% of the capital and vote in Hemply Balance before the transaction, have irrevocably undertaken to vote in favour of the acquisition of Dendrio at an Extraordinary General Meeting.
  
• In connection with the acquisition, Hemply Balance shall, following NGM's regulations, undergo a process to ensure that the company meets NGM's listing requirements.
  
• An information memorandum will be prepared, including financial information for 2023 and Q3 2024 and other details about Dendrio, including the market in which they operate and risks.
  
• The entire transaction is expected to be completed by 2024 year end.

After a share purchase agreement has been entered into, a notice of the Extraordinary General Meeting will be published with more information about the transaction and the shareholders' rights.

For more information, please contact:
Daniel Hallenberg, CEO
E-mail: daniel@hemplybalance.com

Marcus Bonsib, Chairman of the Board
E-mail: mbonsib@gmail.com

Aalto Capital LLP is the exclusive financial advisor to Bittnet Systems and Dendrio Solutions.
For more information, please contact:
John McRoberts, Aalto Capital, Managing Partner John.mcroberts@aaltocapital.co.uk

About Hemply Balance
Hemply Balance Holding AB (publ) is a health food company that markets innovative, safe, and high-quality products in two categories: dietary supplements and beauty products. The company focuses mainly on products that contain CBD and adaptogens, adding what we refer to as "The Missing Ingredient." It sells to retailers in Europe and the Japanese market. The company is listed on NGM Nordic SME in Stockholm.

For more information, please see Hemply Balance's website, www.hemplybalance.com.

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Forward-looking statements
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