BAYLIN TECHNOLOGIES SIGNS AGREEMENT FOR A TRANSFORMATIONAL ACQUISITION OF SWEDEN'S KAELUS AB, CREATING A GLOBAL WIRELESS TECHNOLOGY LEADER

Executive Summary

• Baylin Technologies Inc. has entered into a definitive Share Purchase Agreement to acquire 100% of Kaelus AB, a Sweden-based global provider of next-generation antenna solutions and RF technology, for approximately $42 million CAD.
• The transaction is funded through a combination of cash and equity, including a $10 million private placement of Subscription Receipts led by Paradigm Capital and a $30.9 million non-revolving senior loan from a Canadian lender.
• The acquisition is expected to significantly scale the combined entity, with forecasted 2026 revenue of ~$141 million and Adjusted EBITDA of ~$15.9 million, effectively tripling Baylin's prior EBITDA while reducing leverage from 4.9x to ~2.3x.

Key Details

• Transaction Structure: Baylin acquires 100% of Kaelus AB shares for SEK 285 million (~$42 million CAD), subject to adjustment and net of excess cash.
• Consideration: The purchase price is satisfied via $26 million in cash and the issuance of approximately 52.2 million Common Shares (representing ~34% of currently outstanding shares and ~21% post-offering).
• Share Pricing: The number of Common Shares is based on a volume-weighted average trading price of $0.2928 (TSX, 30-day period ended Nov 26, 2025).
• Lock-up: Issued Common Shares are subject to lock-up agreements ranging from 9 to 24 months.
• Equity Financing: A $10 million offering of Subscription Receipts led by Paradigm Capital, priced at $0.25 per receipt. Each receipt converts to one Common Share upon closing.
• Warrant Terms: The agent receives compensation warrants exercisable for 2 years at $0.25, equal to 6.5% of receipts for non-"president's list" subscribers and 2% for "president's list" subscribers.
• Debt Financing: A non-binding term sheet for a $30.9 million non-revolving senior loan with a 36-month term, secured by first-priority interest over Baylin's assets. Proceeds will fund the cash portion of the purchase and repay the existing revolving credit facility with Royal Bank of Canada.
• Financial Impact (2026 Forecast):
  • Combined Revenue: ~$141.2 million.
  • Combined Adjusted EBITDA: ~$15.9 million (tripling Baylin's standalone 2024 EBITDA of $5.4 million).
  • Combined Gross Profit Margin: ~43.8%.
  • Leverage Ratio: Expected to reduce from 4.9x to ~2.3x.
• Combined Backlog: Total backlog at end of Q3 2025 was $51.2 million.
• Closing Conditions: Subject to TSX approval, Finnish regulatory approval, Baylin shareholder approval, and satisfaction of the financing condition (raising ~$42 million cash).
• Timeline: Expected closing in the first quarter of 2026. Subscription Receipt Offering expected to close on or close to December 18, 2025.
• Strategic Rationale: Kaelus brings complementary RF engineering capabilities, base station antennas, synchronization tech, and test & measurement equipment, enhancing Baylin's wireless infrastructure portfolio.

Notable Quotes

• Leighton Carroll, CEO, Baylin Technologies: "This Acquisition will be a transformative step for Baylin... Together we anticipate offering one of the most complete RF portfolios in the market, with significant opportunities for organic growth, cross-selling, and margin expansion."
• Peter Sandberg, CEO, Kaelus: "I'm pleased to continue the Kaelus journey alongside Galtronics and Baylin as we create a stronger, more strategic partner for our customers... we are well-positioned to deliver one of the most comprehensive RF solutions in the market and capture significant opportunities in today's AI-connected world."
• Jeffrey Royer, Chairman, Baylin: "Kaelus will be a natural fit within our long-term strategy. This Acquisition is expected to strengthen our scale, diversify our revenue, and position the Company for growth across multiple high-value verticals."