LIFELINE SPAC I OYJ
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
About Canatu
Canatu is a deep technology company developing advanced carbon nanotubes (“CNTs”) and related products and manufacturing equipment for the semiconductor (the “Semiconductor”), automotive (the “Automotive”) and medical diagnostics (the “Medical”) industries. These industries require extremely high-quality CNTs and offer Canatu strong growth and profitability potential. Canatu’s versatile platform technology has broad potential applications, with a current core spanning from CNT membranes for extreme ultraviolet (“EUV”) lithography in Semiconductor to film heaters for advanced driver-assistance systems (“ADAS”) in Automotive, and with electrochemical sensors in Medical being in development phase. Canatu uses a patented Dry DepositionTM methodology in manufacturing CNTs, which yields high-purity and strong CNTs.
Canatu was founded in 2004 as a spin-off from Aalto University’s
Canatu operates through two business models. First, the Company uses its proprietary CNT reactors to develop and manufacture advanced CNT products. Second, the Company sells its proprietary CNT reactors and licenses its related technology, allowing customers to produce advanced CNT products themselves under a limited license and Canatu to incur both fixed reactor sales net turnover and material recurring net turnover through royalties and non-discretionary consumables.
Canatu is experiencing rapid growth, with a compound annual growth rate of 108 per cent from 2020 to 2023. In 2023, Canatu’s net turnover was
About
Key information on the Combination
- After assessing a large pool of potential acquisition targets,
Lifeline SPAC I has concluded that Canatu materially conforms to the investment criteria set byLifeline SPAC I , and has selected Canatu as the target company. -
The fixed purchase price in the Combination will be paid by 21,791,821 new shares of a new class converted automatically to series A shares (the “Series A shares”) in
Lifeline SPAC I after the investor warrants have been issued (the “Consideration Shares”) and 1,676,752 new option rights in exchange for all shares, option rights, and other rights exchangeable to shares in Canatu, which implies an equity value of EUR 234.7 million and an estimated enterprise value ofEUR 230 million as of the completion of the Combination (the “Completion”).[1] Lifeline SPAC I and the Sellers have also agreed on an additional purchase price of up to 6,499,831 Series A shares in the Combined Company, which may become payable based on the Combined Company’s future volume-weighted average share price exceedingEUR 14 , 18, and 22 per share, as well as on a new Option Plan 2024-II (as defined below) of 500,074 new option rights which will vest based on the Combined Company’s future volume-weighted average share price exceedingEUR 14 , 18, and 22 per share, entitling the holders to up to 500,074 new Series A shares in the Combined Company. For further information, see “Consideration Shares” below.-
As a result of the Combination and the conversion of the Consideration Shares and assuming the current shareholders of
Lifeline SPAC I do not demand the redemption of their Series A shares in connection with the Combination, Canatu’s current shareholders (including theSecondary Tranche Investors (as defined below)) will hold a total of 69 per cent and LifelineSPAC I’s current shareholders a total of 31 per cent of Series A shares of the Combined Company immediately subsequent to the Completion. The total number of Series A shares in the Combined Company will be 31,791,821 immediately subsequent to the Completion.[2] -
The Combination and listing are expected to support Canatu’s growth in accordance with its strategy. Assuming current shareholders of
Lifeline SPAC I do not demand the redemption of their Series A shares in connection with the Combination, the Combination will provide Canatu with approximatelyEUR 103.5 million in gross proceeds (calculated on the basis of the Escrow Funds (as defined below) as at31 December 2023 and before, for example, taxes and certain transaction costs) to finance its growth. For further information, see “Use of proceeds” below. -
In accordance with Nasdaq Helsinki’s rules regarding Special Purpose Acquisition Companies (“SPACs”), Lifeline
SPAC I’s Board of Directors has unanimously decided to recommend to LifelineSPAC I’s shareholders the approval of the Combination and voting in its favor in LifelineSPAC I’s Extraordinary General Meeting to be held on or about23 August 2024 (the “EGM”). Certain large shareholders of Lifeline SPAC I, i.e., Ahlstrom Invest B.V, certain investment funds of Sp-Rahastoyhtiö and WIP Asset Management,Mandatum Life Insurance Company Limited ,Oy G.W.Sohlberg Ab andVarma Mutual Pension Insurance Company and certain other shareholders including LifelineSPAC I’s management, members of the Board of Directors and sponsors, who together represent approximately 72 per cent of all votes carried by LifelineSPAC I’s shares, have irrevocably undertaken to support the Combination and vote in its favor in the EGM. -
In connection with the Combination, certain Sellers have elected to sell a part of their shares in Canatu to certain investors (the “Secondary Tranche Investors”) for a cash consideration immediately prior to the Completion. The shares correspond to approximately
EUR 49.7 million , based on a fixed enterprise value for Canatu ofEUR 230 million (the “Secondary Tranche”). The Secondary Tranche Investors will become Sellers and will be entitled to the consideration as set forth in the share exchange agreement, including the Consideration Shares and the additional purchase price. The Secondary Tranche Investors include leading Finnish institutional and technology investors, such asDanske Capital ,First Fellow Oy ,Elo Mutual Pension Insurance Company ,Hannu Turunen ,Ilmarinen Mutual Pension Insurance Company ,Kirva Holding Oy ,Mandatum Asset Management Oy ,Tech Consulting Group TCG Oy ,Varma Mutual Pension Insurance Company andVeikko Laine Oy . -
The Completion is subject to its approval in the EGM. The Completion is also subject to obtaining the necessary regulatory approvals, as well as to other customary conditions. After the Completion, the Combined Company will change its name to
Canatu Plc (in Finnish: Canatu Oyj) and it will be headquartered inVantaa, Finland . Lifeline SPAC I will apply for the admission of the shares of the Combined Company to trading on Nasdaq First North Growth Market Finland (the “First North Growth Market”) maintained by Nasdaq Helsinki. The listing is currently expected to take place inSeptember 2024 .
Use of proceeds
In its initial public offering in
“We have analysed tens of Nordic technology growth companies for
“As the first investor in Canatu, I have watched firsthand its incredible growth over the last 17 years to become a leader in the advanced carbon nanotubes space. This is a major milestone in the Canatu story, and I believe it will empower the company to drive tomorrow’s industry-transforming products forward. Canatu’s robust and versatile technology platform and continuous innovation enable exciting new business opportunities, such as biosensors for medical diagnostics.”
Tuomo Vähäpassi, founding partner and CEO of
“Canatu has extensive potential in advanced CNT applications. We have followed Canatu’s development for some time and are delighted to combine with Canatu at a stage where it aims to accelerate its business in semiconductor and automotive applications and is entering the emerging medical diagnostics market. We are impressed by Canatu’s technological competencies, which stem from the long heritage of Finnish research in nanomaterials, its experienced management, and attractive financial profile, all of which lay a strong foundation to create value for our current and new shareholders.”
“Canatu has grown rapidly in recent years with significant breakthroughs, especially in the EUV technology within the semiconductor industry. The Combination and collaboration with Lifeline
Canatu as an investment
In Canatu’s view, its key strengths include:
- Rapidly growing deep technology company with attractive margins;
- Current, high-growth focus markets are estimated to grow to EUR 2–4 billion by 2030;
- Customer relationships with leading global companies;
- Differentiated IPR-protected technology supporting a strong competitive position;
- Proven and efficient mass manufacturing capability;
- Business model enabling scalable, asset-light growth with high-margin potential;
- Technology powerhouse with experienced management attracting global top talent;
-
Financial targets of annual revenue of over
EUR 100 million and adjusted EBIT margin (adjusted for goodwill amortisations under the Finnish Accounting Standards) of over 30 per cent in 2027.
1. Rapidly growing deep technology company with attractive margins
Canatu is a rapidly growing deep technology company that uses its carbon nanotube (CNT) technology platform to create advanced CNTs for industry transforming products.
Canatu’s net turnover has grown strongly from
2. Current, high-growth focus markets are estimated to grow to EUR 2–4 billion by 2030[3]
Canatu’s carefully selected focus industries (Semiconductor, Automotive and Medical) are all experiencing technological disruption. Semiconductor must service the growing demand for high-end chips driven by advancements in artificial intelligence and computing, Automotive is seeking to shift into autonomous and assisted driving and electric vehicles, and Medical is in some parts of the care chain aiming to increasingly transition to point-of-care testing from laboratory-based testing. In Canatu’s view, it is well positioned to support the above-mentioned industry shifts and provide high value-add via CNT solutions.
Semiconductor
In Semiconductor, which is a heavily concentrated industry and relies on certain countries, such as
Inspection Consumables are used in multiple quality control phases along the EUV lithography process. Inspection Consumables prevent particles from contaminating the photomask in the inspection phase and filter out unwanted wavelengths of light. In the patterned mask inspection, currently the primary application area of Canatu’s Inspection Consumables, the market for the Inspection Consumables is estimated to grow from approximately
The market for CNT-based Pellicles is currently only emerging, e.g. Canatu is scheduled to deliver the first two CNT-reactors to its customers in 2024, and the market growth is expected to be dependent on the adoption curve of advanced pellicles. The addressable market for CNT-based Pellicles is estimated to amount to approximately EUR 260–1,050 million in 2027 and grow to approximately EUR 950–2,010 million in 2030. If the demand for CNT-based Pellicles were satisfied with Canatu CNT-reactor sales only, the market size would be materially smaller, approximately hundreds of millions of euros in 2030, due to Canatu’s reactors’ high efficiency. In such a scenario, recurring revenue elements such as the sale of non-discretionary consumables and royalties would potentially comprise a very large part of the market. The estimated CNT-based Pellicles market growth is also driven by the strong expected growth of the semiconductor end-product markets (e.g. AI-enabling hardware, data centres and consumer electronics). Additionally, however, the demand for CNT-based Pellicles is expected to grow due to their technical capabilities and applicability across different EUV lithography machine generations, both of which seem to be superior compared to other pellicle technologies (including composite- and graphene-based pellicles). EUV pellicles protect photomasks from contaminating particles and assuring a higher quality of chip production. Defected photomasks result on lower yields and less profitable business for chip manufacturers. Compared to composite-based pellicles, CNT-based Pellicles are expected to offer (i) an estimated potential productivity increase of up to 7–15 per cent due to their higher EUV-light transmission rate[4] and (ii) higher thermal stability and mechanical strength due CNTs’ physical characteristics. CNT-based Pellicles’ higher thermal stability and mechanical strength are particularly valuable in advanced EUV lithography machine (i.e. ASML Holding N.V.’s NXE:3800E machines and the generations following that) applications, where increasing heat loads and mechanical stress make composite-based pellicles an economically less viable option.
The CNT-based Pellicles market size estimates’ lower ends assume that CNT-based Pellicles will have selective adoption in logic chip production and limited adoption in memory chip production and primarily in the advanced EUV lithography machines (the “Selective Adoption”), while the higher ends assume a gradual increase towards full adoption in logic chip production and moderate adoption in memory chip production (the “Wide Adoption”). The Combined Company’s Long-Term Financial Targets assume the Selective Adoption. If the Wide Adoption materialises, it could potentially provide a material organic upside to the Combined Company’s Long‑Term Financial Targets.
Automotive
In Automotive, Canatu currently focuses on offering CNT-based film heaters for LiDARs (the “LiDAR Heaters”) and cameras (the “Camera Heaters”), with CNT-based film heaters for full windshields (the “Windshield Heaters”) and headlights as well as solar cells being a potential future extension area. LiDAR Heaters and Camera Heaters are used for advanced driver assistance systems (“ADAS”) to keep vehicles’ critical sensors clear from moisture condensation (fog), snow and ice. In Canatu’s view, its CNT-based LiDAR Heaters and Camera Heaters provide higher optical performance than currently available alternative solutions. Canatu expects that the optical performance of LiDAR Heaters and Camera Heaters potentially becomes increasingly important when vehicle manufacturers pursue increasingly adopting higher autonomy-level ADAS (partly ADAS that support the SAE (Society Automotive Engineers) automation level 2, but in particular ADAS that support the SAE automation levels 3–5) in their vehicles. Canatu’s applications relating to Windshield Heaters, currently in pre-development phase, are designed to enhance vehicles’ thermal energy efficiency, while providing high optical performance for windshield ADAS sensors. Canatu expects that the energy efficiency and the high optical performance of its possible future windshield heater film solution potentially become increasingly important when vehicle manufacturers pursue growing their production of battery-electric vehicles.
The market for LiDAR Heaters is expected to grow from approximately
The market for Windshield Heaters is expected to grow from approximately
Medical
In Medical, Canatu currently develops CNT-based biosensors (the “CNT-based Biosensors”) for electrochemical biosensors, aimed to enable a quick and potentially inexpensive alternative compared to current methods for medical diagnostics (e.g. laboratory tests). CNT-based Biosensors can be utilised to detect a variety of analytes that leave biomarkers (e.g. DNA mutations, pathogens, hormones and drug molecules) and test multiple biomarkers from a single sample simultaneously. Canatu’s current focus is on the development of testing solutions for detecting paracetamol overdose and lung and breast cancers, however, the Company has identified dozens of other potentially applicable use cases. Based on Canatu’s analysis, the physical characteristics of Canatu CNTs might enable point-of-care tests that are potentially considerably more sensitive and accurate with over 10 times higher signal-to-noise ratio than the tests based on traditional materials currently used for biosensors (e.g. gold and carbon paste). Canatu CNTs have the potential to get results from 86 bacterial cells per millilitre while the industry standard is 300,000 bacterial cells per millilitre. As Canatu’s production line is already established, at scale, Canatu has mass production capacity for tens of millions of CNT-based Biosensors annually.
Assuming Canatu’s CNT-based Biosensors fulfil technological and regulatory requirements, the total addressable market in breast cancer testing, lung cancer testing and paracetamol overdose testing in 2030 is estimated to range from
3. Customer relationships with leading global companies
Canatu’s customers are typically large global companies that hold strong market positions within their respective fields of business.
The potential customer universe in Semiconductor includes companies such as
Similarly, the potential customer universe in Automotive includes companies such as
The potential customer universe in Medical is only emerging given that the Company expects the first products to enter into market in 2025–2026. However, as a key part of its go-to-market strategy Canatu is in and is extending discussions in both human health and veterinary sector with certain leading global companies in order to find suitable partner(s). In human health and veterinary sector some of the leading companies potentially relevant to Canatu include
In 2023 and 2024 the Company has invoiced almost 50 customers most of which are engaged either in Semiconductor or Automotive, while the five largest customers accounted for approximately 90 per cent of Canatu’s net turnover in 2023. The product development cycles are long and customer relationships are thus typically expected to be long-lasting as well. For instance, the Company commenced its development of EUV technology products in 2017 with the first products entering into mass manufacturing in 2021.
Canatu has demonstrated high customer retention in its current relationships, as all customers who have entered into mass-manufacturing relationships with Canatu remain customers as of the date of this release.
Due to non-disclosure obligations and sensitivity of trade secrets, Canatu cannot typically disclose the identities of its customers.
4. Differentiated IPR-protected technology supporting a strong competitive position
In Canatu’s view, advanced CNTs in general offer an optimal combination of optical, electrical, thermal, mechanical, and chemical properties, providing a combination of lightweight, strength, and multifunctional properties that in several application areas are superior to other materials.
The advanced CNTs that are required e.g. in products that the Company manufactures or is in process to manufacture to its focus industries, Semiconductor, Automotive and Medical, are in Canatu’s view difficult to manufacture and customise in scale as the applications require highly sophisticated material and process technology. Canatu considers that these requirements characterise advanced CNTs as high barrier of entry industry where there are only few or no capable competitors in each of the Company’s focus areas. Canatu views
Canatu’s competition in its focus industries can be described as twofold. Firstly, the Company’s products compete against other materials and technologies than CNT. Secondly, Canatu’s products may compete with other CNT companies.
When Canatu’s products compete with other materials and technologies than CNT, the competitive advantage stems partly out of the general properties of advanced CNT and partly out of the specific properties of Canatu CNT. For instance, in EUV pellicles, Canatu’s CNT membranes offer better durability and up to 7–15 per cent better EUV transmission[5] (which is connected to higher productivity) than traditional composite materials, and, in LiDAR Heaters and Camera Heaters, Canatu CNTs offer higher optical and conductivity performance than the currently available solutions based mainly on metal wire technology. In Medical, the Company expects its CNT membranes to offer clearly better sensitivity and accuracy than the currently used materials, e.g. gold and carbon paste.
When Canatu’s products compete with the CNTs of other CNT manufacturing companies, the Company considers its competitive advantage to be based on its differentiated CNT manufacturing technology (CNT reactors), which utilises a proprietary Dry DepositionTM technology. Contrary to Canatu, its CNT competitors seem to have based their CNT technology on so called wet dispersion technology. Canatu considers its Dry DepositionTM technology to have material advantages over the more traditional wet dispersion technology. These advantages are initially based on differences in manufacturing methodology where wet dispersion has to be subjected to considerably more process steps and to use of, e.g., different solvents. This, in Canatu’s view, means that the Company’s Dry DepositionTM technology is easier to modify to produce desired features and provides longer and more pristine carbon nanotubes that are stronger and purer than that manufactured with wet dispersion. For instance in EUV pellicles, Canatu considers that a pellicle manufactured with wet dispersion is bound to be thicker to offer the same mechanical strength than a pellicle manufactured with Canatu’s Dry DepositionTM technology. This, in Canatu’s view, would mean that a pellicle manufactured with wet dispersion technology would have lower EUV transmission, which in turn would mean inferior productivity potential.
Canatu’s intellectual property assets include 188 patents and patents pending across 38 distinct families as well as several trade secrets, pertaining both to Company’s Dry DepositionTM manufacturing (reactor) technology as well as to different applications in its focus industries Semiconductor, Automotive and Medical. Whilst CNT in general is a widely patented area of technology, Canatu considers its intellectual property assets to provide certain protection to its technology.
5. Proven and efficient mass manufacturing capability
Similar to some other high technology materials, one obstacle to advanced CNTs’ wider use and applicability has been the lack of mass manufacturing capability and capacity to produce advanced CNTs in scale with demanding specified properties.
Canatu started to mass manufacture its first CNT products (touch sensors for Automotive) in 2015 and has since then manufactured nearly 1 million such sensors with no field returns. In Semiconductor, the mass manufacturing of Inspection Consumables commenced in 2021 and the first CNT reactor sales were agreed in 2023 and are to be delivered in 2024.
Canatu considers its proven mass manufacturing capability and capacity to form a key competitive advantage as the Company can commit to manufacture high quality CNTs in high volumes to critical applications trusting its mass manufacturing experience and efficiency.
6. Business model enabling scalable, asset-light growth with high-margin potential
Canatu’s business model builds on and leverages the Company’s efficient and proprietary Dry Deposition™ CNT-technology platform.
In Semiconductor, Canatu currently either manufactures and sells CNT membranes for EUV lithography (e.g. for Inspection Consumables) or manufactures and licenses CNT-reactor technology for customers’ in-house CNT membrane manufacturing needs (e.g. for EUV pellicles). Licensing Canatu’s CNT-reactor technology typically entails a fixed fee for reactor delivery and subsequent recurring license payments, as well as the sale of non-discretionary production consumables by Canatu.
In Automotive, Canatu is currently ramping up mass production and sale of LiDAR Heaters and Camera Heaters. Canatu is currently developing Windshield Heaters in cooperation with its customers. The commercialisation of the Windshield Heater technology, if pursued, may be either via Canatu’s own mass production and sale of Windshield Heaters or via manufacturing and licensing CNT-reactor technology for selected customers’ in-house Windshield Heater production.
Independent of whether Canatu mass manufactures and sells CNT-based products or manufactures and licenses CNT-reactor technology, the Company’s Dry Deposition™ CNT-technology platform is expected to support asset-light growth and attractive gross margin potential, in both Semiconductor and Automotive.
7. Technology powerhouse with experienced management attracting global top talent
Canatu’s success is built on experienced management and highly skilled employees. At the end of
Canatu’s management team has a proven track record of success, guiding Canatu with strategic vision and leadership skills. CEO
In addition to the financial performance, the management team has demonstrated its effectiveness by building long-term relationships with key players within Canatu’s respective industries. In Canatu’s view, having a close relation to key people paves the way for collaboratively finding new solutions and developing potential new CNT products.
Canatu aims to continue to attract top global talent in carbon nanomaterials from technological, manufacturing, and commercial perspectives who share the ambition of building into and retaining Canatu as a globally leading carbon nanomaterial developer.
8. Financial targets of annual revenue of over
On the basis of Canatu’s current business plan, the Combined Company targets annual revenue of over
The Long-Term Financial Targets largely build on (i) Canatu’s existing customer relationships, (ii) the Company’s current or currently developed offering within the selected three focus industries, and (iii) the Company’s assessment of its gross margin potential within those focus industries.
The current mass production phase customers within Semiconductor (including CNT-reactor customers) are expected to be the largest contributors to the revenue target of over
In Automotive, Canatu’s current mass production and mass development customers (i.e. customers with whom Canatu is doing active joint development work with a target of moving to mass production (typically within 2–4 years with Automotive customers)) are expected to be the key customers in 2027. LiDAR Heaters and Camera Heaters are expected to be medium contributors to the revenue target of over
Medical is expected to have limited contribution to the Long-Term Financial Targets as Canatu’s offering for the industry is currently under development, and the Company estimates that market entry could take place within 1–5 years, depending on the application. Canatu is currently evaluating possible go-to-market partners, and the ones eventually chosen are expected to be the Combined Company’s key customers in 2027. Relative to other focus industries, Medical is expected to offer high gross margin potential for the Combined Company in 2027. However, given that the offering is still under development and the market entry is pending, this expectation is based on Canatu’s management’s preliminary view of potential manufacturing costs and sales prices.
Canatu has a solid track record of strong gross margins. Canatu’s gross margin was 61 per cent in 2021, from which it increased to 66 per cent in 2022 and further to 71 per cent in 2023. The positive gross margin development has been impacted among other by factors such as the start of mass production of Inspection Consumables in 2021, the commissioning of a new fully automated mass production line in 2022, and the continued growth of Semiconductor in 2023. Going forward, the Combined Company’s pricing power and gross margins are expected to be supported by strong moats:
- High barrier to entry -business: In Canatu’s view, advanced CNTs are difficult to produce and customise in scale, and applications require highly sophisticated material and process technology.
- There are only few capable competitors per application area: Canatu considers that it is globally one of very few companies currently capable of producing advanced CNTs.
- Significant value-add potential to customers’ processes and end-products: Canatu’s customised advanced CNTs potentially offer significant enhancement potential to customers’ process quality and productivity or to the properties of their end-products.
- IP protection through patents and proprietary processes: Canatu holds 188 patents and patents pending across 38 distinct families, while certain key parts of the production process are protected by trade secrets.
Scale benefits from Canatu’s operating cost base are expected to support the Long-Term Financial Targets of reaching an adjusted EBIT margin (adjusted for goodwill amortisations under the Finnish Accounting Standards) of over 30 per cent in 2027. Total operating expenses are expected to provide substantial scale benefits as they are expected to grow at a clearly lower pace than the growth rates implied by the long‑term revenue target. While Canatu has been investing in its growth by increasing its average headcount from 52 FTEs in 2021 to 93 FTEs in 2023, the Company anticipates that reaching the Long-Term Financial Targets in 2027 may require growing the headcount by 25–35 FTEs annually. Canatu’s other operating expenses have historically grown in line with the headcount growth and this is expected to continue also when going forward, while the change from a private company to a publicly listed company will incur some additional operating expenses. Depreciation and amortisation have represented less than 10 per cent of Canatu’s total operating cost base in 2021–2023, and, assuming performance in line with the Long-Term Financial Targets, Canatu’s management does not expect major changes in depreciation and amortisation going forward (excluding possible goodwill amortisations under FAS). Canatu’s depreciation and amortisation in 2021–2023 primarily comprised depreciation of machinery and equipment, production machinery, buildings, and other tangible assets, while amortisation primarily comprised of patents and premises’ renovations costs. Unlike quite many similar companies, Canatu has not activated its R&D-related personnel expenses in 2021–2023.
Canatu’s total capital expenditure amounted to
The Combination’s benefits to Canatu
Canatu considers that the key benefits of the Combination from its perspective include:
- Enhanced credibility toward all stakeholders
A strengthened balance sheet and the status of a publicly listed company would support Canatu’s credibility for all stakeholders, which is expected to have positive impact on the Combined Company’s business and operations.
2. Enhanced ability to attract and retain talent
Canatu expects that its ability to attract and retain talent would be further enhanced via the status of a publicly listed company. As a publicly listed company Canatu can also offer incentives that are more transparent and ultimately have better liquidity. In addition, Canatu aims to establish a new long-term incentive programme reflecting international / PE programmes’ character and magnitude.
3. Additional capital to deploy into strategic investments
Canatu is well-positioned to explore and capitalise on new market opportunities, driving further expansion and profitability. Canatu’s strategic investments in selected areas have, in Canatu’s view, the potential to provide a significant return on invested capital.
4. Becoming better known
Public companies are more transparent because they need to disclose information, including financial statement results, publicly. Through company and press releases and financial media coverage, Canatu would become more recognisable and gain the attention of potential customers and new strategic partners.
5. Collaboration with
Canatu would benefit from Lifeline
Key financials
The following table presents selected key performance indicators for Canatu for the financial years ended
For the financial year ended 31 December | |||
EUR thousand | 2023 | 2022 | 2021 |
(unaudited, unless otherwise stated) | |||
Net turnover(1............................ | 13,591 | 8,382 | 5,455 |
Gross profit(2............................. | 9,632 | 5,503 | 3,330 |
Gross profit %(2.......................... | 71% | 66% | 61% |
EBITDA................................... | 278(3 | -1,782 | -2,911 |
EBITDA %................................ | 2%(3 | -21% | -53% |
Operating profit (loss), EBIT(1....... | -640(3 | -2,440 | -3,660 |
Operating profit (loss), EBIT %...... | -5%(3 | -29% | -67% |
Net profit(1................................ | -1,318(3 | -2,974 | -3,930 |
Equity ratio %............................ | 28%(3 | 30% | 12% |
__________
1) Audited.
2) Based on Lifeline
3) Includes approximately
Canatu’s preliminary outlook for 2024
Canatu’s net turnover for the 2024 financial year is forecasted to be between
The net turnover outlook for the 2024 financial year is based on (i) Canatu’s monthly management reports, according to which the Company estimates that its net turnover in H1/2024 ranges between
Canatu expects the relative contribution to the guided net turnover by Semiconductor to be very large, by Automotive limited and by Medical non-material. The total capital expenditure in 2024 is expected to amount to EUR 5–6 million, excluding any potential impact from potential changes in Canatu’s practice regarding the activation of R&D-related personnel expenses.
The statements set forth above include forward-looking statements and are not guarantees of Canatu’s financial performance in the future. Canatu’s actual results and financial position could differ materially from those expressed or implied by these forward-looking statements as a result of numerous factors.
The Long-Term Financial Targets of the Combined Company
The Long-Term Financial Targets assume that (i) CNT-based Pellicles are adopted in 500W and 500W+ EUV lithography scanners only and (ii) CNT-based inspection consumables are used only in patterned mask inspection. If CNT-based Pellicles are adopted in lower-power EUV lithography scanners as well and/or CNT-based inspection consumables are adopted in other phases of the mask manufacturing process beyond the patterned mask inspection, there is potentially a material organic upside potential to the Combined Company’s Long-Term Financial Targets.
Canatu expects that the current level of capital expenditure is adequate for reaching the Long-Term Financial Targets of annual revenue of over
The statements set forth above include forward-looking statements and are not guarantees of the Combined Company’s financial performance in the future. The Combined Company’s actual results and financial position could differ materially from those expressed or implied by these forward-looking statements as a result of numerous factors.
General description and terms of the Combination
Decision-making process in
In accordance with Nasdaq Helsinki’s rules regarding SPACs, the independent members of Lifeline
To support their assessment concerning the Combination, the independent members of Lifeline
Consideration Shares
The fixed purchase price in the Combination will be paid by 21,791,821 Lifeline
In connection with the Combination, Canatu’s current option programs will be voided, and a new option program is established by the
As a result of the Completion and the conversion of Consideration Shares, Canatu’s current shareholders (including the
In the share exchange agreement, the Sellers have committed to customary transfer restrictions (with the exception of the
In addition, in connection with the Combination,
Redemption of Series A shares
According to Lifeline
Investor warrants
As described in Lifeline
The subscription period of the investor warrants begins 30 days after the Combined Company’s shares have been admitted to trading on the First North Growth Market and runs for five years after the commencement of the subscription period. The intention is to have the investor warrants entered in the book-entry securities system maintained by
Secondary Sale
In connection with the Combination, certain Sellers have elected to sell a part of their shares in Canatu to certain investors (the “Secondary Tranche Investors”) for a cash consideration immediately prior to the Completion. The shares correspond to approximately
Preliminary schedule
The schedule presented below is preliminary and subject to change.
2 August 2024 :Lifeline SPAC I publishes a company description containing detailed information about the Combination2 August 2024 :Lifeline SPAC I convenes the EGMAugust 2024 : Capital Markets Day23 August 2024 : LifelineSPAC I’s EGM-
23 August –
5 September 2024 : Period during which the redemption of Series A shares must be requested in accordance with the Articles of Association 16 September 2024 : Completion of the Combination[6]17 September 2024 : Listing on the First North Growth Market23 September 2024 : Record date of the investor warrants
Listing
In accordance with Nasdaq Helsinki’s rules regarding SPACs,
Management and corporate governance of the Combined Company
The name of the Combined Company will be
The CEO of the Combined Company will be Canatu’s current CEO
Pursuant to Lifeline
- Timo Ahopelto has served as member and as Chair of Lifeline
SPAC I’s Board of Directors since 2021. In addition, Ahopelto has served as founding partner ofLifeline Ventures since 2009. Ahopelto has worked in several industries ranging from biotech to mobile apps and from digital media to industrial process technology. Ahopelto holds a Master of Science in Industrial Engineering degree. - Tuomo Vähäpassi has served as Lifeline
SPAC I’s CEO since 2021. Vähäpassi is also one of theFounding Partners ofLifeline SPAC I . Vähäpassi has been Chair or member of the Board of Directors ofG.W. Sohlberg Corporation since 2005and member of the Board of Directors ofKamux Corporation in 2020–2023. Vähäpassi served as Partner ofHannes Snellman in 2001–2007 (Co-Head of M&A in 2003–2007) and Managing Director / Head of the Corporate Finance unit ofSkandinaviska Enskilda Banken AB (publ)Helsinki Branch in 2008–2020. Vähäpassi holds an LL.M. degree.
Pursuant to Lifeline
- Ari Ahola has served as member and as Chair of Canatu’s Board of Directors since 2021. Before that Ahola served as Canatu’s member of the Board of Directors in 2013–2019 and Chair of the Board of Directors in 2008–2013. Ahola has been Founder-CEO of eFruit
International Inc since 1999 and Infosto Inc’s Founder-CEO since 1994 and Chair of the Board of Directors since 2023. Previously, Ahola has served as Chair of the Board of Directors of BioZone Scientific International, Inc. Ahola holds a Master of Business Administration (MBA) degree. Thomas P. Lantzsch has served as member of Canatu’s Board of Directors since 2023. Previously, Lantzsch has served as advisory member of the Board of Directors ofHERE North America LLC in 2017–2023. Lantzsch has also served as Senior Vice President and General Manager of Internet ofThings Group atIntel Corporation in 2017–2023 and Arm Holdings PLC’s Executive Vice President of Strategy in 2009–2016. Lantzsch holds a Master of Science in Finance and a Bachelor of Science in Electrical Engineering degrees.- Scott Sears is currently Chief Physician Executive for
Honest Medical Group , partnering with health systems and physician organisations across multiple states in theU.S to ensure high quality, patient-centered, and fiscally accountable healthcare for patients. Previously,Dr. Sears has served as Chief Medical Officer ofInHealth MD Alliance , Chief Clinical Officer of Sound Physicians, Chief Medical Officer ofSt. Vincent Physician Network , and Regional Primary Care Medical Director forSCL Health .Dr. Sears has also served as the inaugural medical director forStillwater Hospice , as clinical faculty and as a member of the admissions committee for theUniversity of Washington School of Medicine , and as vice-chair on the board of directors for theSenior Resource Alliance inCentral Florida .Dr. Sears holds both MD and MBA degrees, is a Fellow of both theAmerican College of Physicians and theSociety of Hospital Medicine , is a Certified Executive Coach, and a Certified Physician Executive. Anthony Cannestra has served as member of Canatu’s Board of Directors since 2017. Cannestra has been member of the Board of Directors of quadric.io, Inc since 2019, member of the Board of Directors ofMetaware Corporation since 2018 and member of the Board of Directors ofDellfer, Inc since 2017. Cannestra holds a Master of Business Administration (MBA) degree.Kai Seikku has served as CEO ofOkmetic Oy since 2010 and Board member since 2016 and Vice General Manager ofNational Silicon Industry Group Co Ltd (Shanghai, China ) since 2016. Previously, Seikku has served as CEO ofHKFoods Plc (formerly known asHKScan Corporation and HK Ruokatalo Group Oyj) in 2005–2009 and CEO ofHasan & Partners Oy in 1999–2005. He has also been Board member ofVTT Technical Research Centre of Finland Ltd since 2024 and ofNoHo Partners Plc since 2022. Seikku holds a Master of Science in Economics degree.
Ownership structure
Based on the latest available data and assuming Lifeline
Shareholder | Series A shares | Series B shares | Series C shares | Total shares | % of all shares | % of all votes |
eFruit | - | - | 3,484,077 | 3,484,077 | 10.2 | 10.2 |
- | - | 3,264,417 | 3,264,417 | 9.5 | 9.5 | |
- | - | 2,526,275 | 2,526,275 | 7.4 | 7.4 | |
Inventure Fund Ky...................... | - | - | 2,341,698 | 2,341,698 | 6.8 | 6.8 |
900,000 | - | 1,422,243 | 2,322,243 | 6.8 | 6.8 | |
- | - | 1,731,398 | 1,731,398 | 5.0 | 5.0 | |
Other shareholders..................... | 9,100,000 | 2,500,000 | 7,021,713 | 18,621,713 | 54.3 | 54.3 |
Total....................................... | 10,000,000 | 2,500,000 | 21,791,821 | 34,291,821 | 100.00 | 100.00 |
The above calculation is based on Canatu’s and Lifeline
Share exchange agreement
The share exchange agreement contains certain customary undertakings, such as Canatu conducting its business in the ordinary course of business before the Completion and both parties cooperating with the other party in measures required for the Completion.
Moreover, certain Sellers have given
The share exchange agreement may be terminated either by
New long-term incentive plan for the Combined Company
To maintain the entrepreneurial spirit and a moderate fixed cost base also as a public company but still incentivise highly sought-after employees, the Combined Company aims to establish a new long-term incentive programme that reflects the character and magnitude of international and private equity-driven programmes.
The Board of Directors of
Availability of the Company Description
In connection with the Combination,
Advisers
Press conference and investor communications
In the conference Lifeline
The webcast can be followed at: https://event.videosync.fi/tiedotustilaisuus-05072024.
Further enquiries and interview requests
Chair of the Board of Directors
CEO
CFO
About Canatu
Canatu is a carbon nanomaterial developer creating the most advanced carbon nanotubes for industry-transforming products. The Canatu carbon nanotube (Canatu CNT) technology has been created with a unique process that aims to ensure the required versatility and reliability for highly engineered solutions. Canatu partners with forerunner companies, together transforming products for better tomorrows with nano carbon. Canatu’s focus is in the semiconductor, automotive, and medical diagnostics industries, with the portfolio’s core spanning from CNT membranes for extreme ultraviolet (EUV) lithography to film heaters for advanced driver-assistance systems (ADAS).
About
Important notice
The publication or distribution of this release may be restricted by law and persons into whose possession this release or any document or other information referred to herein comes should inform themselves about and observe such restrictions. The information contained herein is not for publication or distribution, in whole or in part, directly or indirectly, in or into
The information contained herein does not constitute an offer of securities for sale in
This release is for information purposes only and does not constitute an offer of or an invotation by or on behalf of,
This release does not constitute a notice to the EGM or a company description. Any decision with respect to the Combination should be made solely on the basis of information to be contained in the actual notice to the EGM and the company description related to the Combination and listing on First North Growth Market as well as on an independent analysis of the information contained therein. You should consult the company description for more complete information about
This communication is directed only at (i) persons who are outside the
The company description will be published on Lifeline
This release includes “forward-looking statements” that are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations and assumptions, which, even though they seem to be reasonable at present, may turn out to be incorrect. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Combined Company to differ materially from those expressed or implied in the forward-looking statements. Neither
This release contains financial information regarding the businesses and assets of
Carnegie and Danske are acting as financial advisers to
Annex 1 – Historical financial information of Canatu
The following tables present a summary of Canatu’s profit and loss account and balance sheet as at and for the financial years ended
Profit and Loss Account
For the year ended 31 December | |||
EUR thousand | 2023 | 2022 | 2021 |
(audited) | |||
NET TURNOVER...................................................................... | 13,591 | 8,382 | 5,455 |
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Change in inventory of finished and work-in-progress products........... | 156 | – | – |
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Other operating income.............................................................. | 2,855 | 1,196 | 547 |
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Raw materials and services |
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Raw materials and consumables |
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Purchases during the financial period............................................ | -3,378 | -1,886 | -1,480 |
Stock change........................................................................... | 279 | – | – |
External services....................................................................... | -430 | -472 | -265 |
Materials and external services total.............................................. | -3,530 | -2,358 | -1,745 |
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Staff expenses |
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Wages and salaries................................................................... | -6,254 | -4,336 | -3,513 |
Social security expenses |
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Pension expenses..................................................................... | -1,150 | -793 | -620 |
Other social security expenses..................................................... | -248 | -157 | -131 |
Staff expenses total................................................................... | -7,651 | -5,285 | -4,264 |
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Depreciation and reduction in value |
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Depreciation according to plan..................................................... | -918 | -658 | -749 |
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Other operating expenses........................................................... | -5,142 | -3,717 | -2,904 |
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OPERATING PROFIT (LOSS)..................................................... | -640 | -2,440 | -3,660 |
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Financial income and expenses |
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Other interest and financial income............................................... | 4 | 7 | 7 |
Interest and other financial expenses............................................. | -682 | -540 | -277 |
Financial income and expenses total............................................. | -678 | -534 | -270 |
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PROFIT (LOSS) BEFORE APPROPRIATIONS AND INCOME TAXES | -1,318 | -2,974 | -3,930 |
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PROFIT (LOSS) FOR THE FINANCIAL YEAR............................... | -1,318 | -2,974 | -3,930 |
Balance Sheet
As at 31 December | |||
EUR thousand | 2023 | 2022 | 2021 |
(audited) | |||
ASSETS |
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NON-CURRENT ASSETS |
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Intangible assets |
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Intangible rights........................................................................ | 1,101 | 918 | 766 |
Other capitalized long-term expenses | 0 | 1 | 2 |
Intangible assets total................................................................. | 1,101 | 919 | 768 |
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Tangible assets |
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Buildings................................................................................. | 1,665 | 1,769 | 1,873 |
Machinery and equipment........................................................... | 5,579 | 2,658 | 1,832 |
Other tangible assets................................................................. | 1,891 | 1,195 | 707 |
Advance payments and construction in progress.............................. | 227 | 153 | 0 |
Tangible assets total.................................................................. | 9,362 | 5,775 | 4,411 |
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RECEIVABLES |
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Inventory |
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Materials and supplies................................................................ | 279 | – | – |
Finished products/goods............................................................. | 156 | – | – |
Total inventory.......................................................................... | 435 | – | – |
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Short-term assets |
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Account receivable.................................................................... | 1,215 | 1,016 | 445 |
Other receivables...................................................................... | 283 | 259 | 259 |
Accrued receivables................................................................... | 1,444 | 480 | 259 |
Total receivables....................................................................... | 2,942 | 1,754 | 962 |
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Other investments..................................................................... | 1,344 | 1,344 | 6,341 |
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Cash and cash equivalents.......................................................... | 5,895 | 14,764 | 2,088 |
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TOTAL ASSETS....................................................................... | 21,079 | 24,556 | 14,570 |
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LIABILITIES & EQUITY |
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Shareholders’ equity |
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Share capital............................................................................ | 8 | 8 | 8 |
Other equity............................................................................. | 58,053 | 58,050 | 49,496 |
Retained earnings (loss)............................................................. | -50,813 | -47,839 | -43,909 |
Profit for the financial period........................................................ | -1,318 | -2,974 | -3,930 |
Capital and reserves total............................................................ | 5,930 | 7,245 | 1,666 |
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LIABILITIES |
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Long-term liabilities |
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Convertible bonds..................................................................... | 5,378 | 5,000 | - |
Loans from financial institutions.................................................... | 701 | 8,518 | 6,351 |
Long-term liabilities, total............................................................ | 6,080 | 13,518 | 6,351 |
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Short-term liabilities |
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Loans from financial institutions.................................................... | 6,615 | 1,305 | 3,972 |
Received prepayments............................................................... | 48 | 243 | 771 |
Accounts payable...................................................................... | 701 | 772 | 705 |
Other liabilities.......................................................................... | 163 | 105 | 88 |
Accrued liabilities...................................................................... | 1,515 | 1,368 | 1,018 |
Short-term liabilities, total............................................................ | 9,069 | 3,793 | 6,553 |
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Total liabilities........................................................................... | 15,148 | 17,311 | 12,905 |
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TOTAL LIABILITIES & EQUITY................................................... | 21,079 | 24,556 | 14,570 |
Annex 2 – Alternative performance measures
The following table sets forth the definitions and reasons for use for the key performance measures of Canatu presented in the section “Key financials” in the above release that are not financial measures defined in the Finnish Accounting Standards and are called as the alternative performance measures (APMs). These are used by
APM | Definition | Reason for use |
Gross profit | Net turnover less cost of goods sold. Cost of goods sold is calculated as a sum of materials and external services total, change in inventory of finished and work-in-progress products and production related variable staff expenses.
Production related variable staff expenses amounts to | Show the Company’s profitability from operations. |
Gross profit % | Gross profit as a percentage of net turnover. | Gross profit % is an indication of the Company’s gross earnings capacity, over time. |
EBITDA | Operating profit (loss) before depreciation according to plan. | The measure is used since it shows the profitability before financial items, taxes, depreciation, amortization, and impairments and is used to analyse the Company’s operating activities. |
EBITDA % | Operating profit (loss) before depreciation according to plan in relation to net turnover. | EBITDA margin is an indication of the profitability of operations in relation to net turnover, over time. |
Equity ratio % | Shareholders’ equity divided by total assets less received prepayments | Used to measure solvency and describe the share of the company's assets financed by equity. |
Annex 3 – Fairness Opinion
[1] Consideration Shares are originally issued as Series C shares, a new share class established to complete the Combination, and they convert automatically at a ratio of 1:1 to Series A shares after investor warrants have been issued, via a clause in the new Articles of
[2] All shareholders of
[3] All market size estimates are based on a market study by an international management consultancy commissioned by
[4] Based on a market study by an international management consultancy commissioned by
[5] Based on a market study by an international management consultancy commissioned by
[6] All figures presented in this release relating to shares and option rights in
[7] The portion of Canatu's transaction expenses exceeding
Attachments
- Download announcement as PDF.pdf
- 240704 Fairness Opinion.pdf
© STT Info Finland, source
