MiddleGround Capital enters into Investment Agreement with STEMMER IMAGING AG and announces intention to launch a Voluntary Public Takeover Offer

THIS ANNOUNCEMENT IS NOT AN OFFER, WHETHER DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, RUSSIA, SINGAPORE, OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION WHERE SUCH OFFER PURSUANT TO LEGISLATION AND REGULATIONS IN SUCH RELEVANT JURISDICTION WOULD BE PROHIBITED BY APPLICABLE LAW.

MiddleGround Capital enters into Investment Agreement with STEMMER IMAGING AG
and announces intention to launch a Voluntary Public Takeover Offer

• Voluntary public takeover offer at EUR 48.00 per share corresponds to a premium of 52% to the closing share price on July 19, 2024
• STEMMER and MiddleGround conclude investment agreement to unlock long-term growth opportunities for STEMMER
• MiddleGround has irrevocably secured a stake of approx. 77.7% of all outstanding shares of STEMMER through a share purchase agreement with the major shareholder PRIMEPULSE and irrevocable undertakings by shareholders to tender their shares in the offer
• Acceptance period for shareholders to tender their shares is expected to commence shortly once BaFin has approved the offer document
• MiddleGround intends to take STEMMER private after completion of the offer

22 July 2024 – MiddleGround Capital (“MiddleGround”), a Lexington-based private equity firm, together with Blitz 24-884 AG (in future: Ventrifossa BidCo AG) (“Bidder”), a holding company controlled by funds managed or advised by MiddleGround, announced today its decision to launch a voluntary public takeover offer (the “Takeover Offer”) at a price of EUR 48.00 per share in cash for all outstanding shares of STEMMER IMAGING AG (“STEMMER” or the “Company”) (ISIN DE000A2G9MZ9 / GSIN A2G9MZ), a leading provider of machine and artificial vision solutions.

In this context, MiddleGround and STEMMER entered into an investment agreement to unlock additional long-term growth opportunities for STEMMER. The offer price corresponds to a premium of 52% to the closing share price on July 19, 2024, and a premium of 41% to the volume-weighted average price of the STEMMER share over the past three months until July 19, 2024. The Takeover Offer will be subject to customary conditions, in particular regulatory clearances. It will not contain a minimum acceptance threshold.

In connection with the Takeover Offer, MiddleGround has already irrevocably secured a stake of approximately 69.4% of all outstanding shares through a share purchase agreement with the majority shareholder PRIMEPULSE SE (“PRIMEPULSE”). In the share purchase agreement, PRIMEPULSE has committed to sell the majority of its shares in the Company and to contribute the remainder to the Bidder, thus remaining indirectly invested in the Company as a minority shareholder.

In addition, shareholders who together hold approximately 8.3% of all outstanding shares, including the members of the Management Board of STEMMER, have irrevocably undertaken to accept the Takeover Offer for the STEMMER shares held by them.

After completion of the takeover offer, MiddleGround intends to take STEMMER private, which could, inter alia, be effected through a delisting.

“We believe our longstanding expertise in the value-add distribution space makes us a proven partner for growing STEMMER’s leading position in the machine vision space,” said John Stewart, Managing Partner of MiddleGround. “We look forward to working closely with the team as they expand the company’s presence within the European market and broaden its reach to the US and globally.”

“We have strong conviction in companies that benefit from industry 4.0 tailwinds, which perfectly positions us to help STEMMER reach the next phase of its potential,” said Alex van der Have, Managing Director and Head of Europe for MiddleGround. “While already a clear leader in machine vision solutions, we believe STEMMER has the potential for accelerated growth, both in existing and new markets."

“MiddleGround Capital is a professional, entrepreneurial partner with a high level of operational expertise that understands the success factors for our business very well and can sustainably support STEMMER in its further development and growth strategy,” said Arne Dehn, CEO of STEMMER. “We therefore welcome the agreement with MiddleGround Capital in the interests of our employees, customers, suppliers and shareholders.”

“We are delighted about MiddleGround Capital's great interest in the further development of STEMMER,” said Klaus Weinmann, Chairman of the Supervisory Board of STEMMER and CEO of PRIMEPULSE. “STEMMER has developed very positively in recent years and is now ready for the next growth step.”

The Takeover Offer will be made pursuant to an offer document to be approved by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – “BaFin”). This offer document will be published following receipt of permission by BaFin, at which point the public acceptance period will commence. The offer document (in German and a non-binding English translation) and other information pertaining to the Takeover Offer will be published on the following website: www.project-oculus.de.

Advisors

Jefferies is serving as lead financial and debt financing advisor and Clifford Chance is serving as legal counsel to MiddleGround Capital.

About STEMMER IMAGING AG

STEMMER IMAGING AG is the leading international systems house for machine vision technology. With a background of all-round engineering expertise, STEMMER IMAGING AG delivers the entire spectrum of machine vision services for both, industrial and non-industrial applications – from value-added services to the development of subsystems and its own products, based on an extensive commercial range of products. For more information, please visit: https://www.stemmer-imaging.com/

About MiddleGround

MiddleGround Capital is a private equity firm based in Lexington, Kentucky with over $3.5 billion of assets under management. MiddleGround makes control equity investments in middle market B2B industrial and specialty distribution businesses. MiddleGround works with its portfolio companies to create value through a hands-on operational approach and partners with its management teams to support long-term growth strategies. For more information, please visit: https://middleground.com/.

About PRIMEPULSE SE

PRIMEPULSE is the investment company of the founders of the TecDAX-listed IT service provider CANCOM and invests primarily in growth-oriented IT and technology companies in the DACH region. These companies benefit from PRIMEPULSE's many years of experience in the IT environment and a deep understanding of business models and markets, which is actively contributed to the strategic development of the portfolio companies.

MiddleGround Capital Media Contacts:

Doug Allen/Maya Hanowitz

Dukas Linden Public Relations

MiddleGround@dlpr.com

+1 (646) 722-6530

Important Notice

This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares in STEMMER, whether directly or indirectly in or into the United States of America, Australia, Canada, Hong Kong, Japan, New Zealand, Russia, Singapore or South Africa, in jurisdictions where such offer pursuant to legislation and regulations in such relevant jurisdictions would be prohibited by applicable law.

The Takeover Offer itself as well as its terms and conditions and further provisions concerning the Takeover Offer will be set out in the offer document in detail after the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) has permitted the publication of the offer document. Investors and holders of shares in STEMMER are strongly advised to thoroughly read the offer document and all other relevant documents regarding the Takeover Offer upon their availability since they will contain important information. Shareholders not resident in Germany wanting to accept the Offer must make inquiries on relevant and applicable legislation, including but not limited to whether governmental consent is required and possible tax consequences. The Takeover Offer is not made, directly or indirectly, and sale will not be accepted from, or on behalf of, shareholders in any jurisdiction where presenting the Takeover Offer or acceptance thereof would be in conflict with the laws of such jurisdictions.

The Takeover Offer will exclusively be subject to the laws of the Federal Republic of Germany. Any agreement that is entered into as a result of accepting the Takeover Offer will be exclusively governed by the laws of the Federal Republic of Germany and is to be interpreted in accordance with such laws.

The Takeover Offer and the information and documents contained in the offer document are not being made and have not been approved by an “authorized person” for the purposes of section 21 of the UK Financial Services and Markets Act 2000 (the "FSMA"). Accordingly, the information and documents contained in the offer document are not being distributed to, and must not be passed on to, the general public in the United Kingdom unless an exemption applies. The communication of the information and documents contained in the offer document is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is a communication by or on behalf of a body corporate which relates to a transaction to acquire day to day control of the affairs of a body corporate; or to acquire 50 per cent or more of the voting shares in a body corporate, within article 62 of the FSMA (Financial Promotion) Order 2005.

The Takeover Offer will be made on the basis of the exemptions to publish a prospectus in Switzerland set out in article 36 para. 1 lit. b of the Swiss Financial Services Act ("FinSA"). None of the offering documentation or information relating to the Takeover Offer constitutes a prospectus pursuant to the FinSA. No such documentation or information has been nor will be filed with or approved by any Swiss regulatory authority.