Baylin Secures $10.3M for Kaelus Bid Amid Governance Scrutiny

TORONTO, ON – December 18, 2025 – Baylin Technologies Inc. has successfully secured C$10.3 million in a crucial private placement, marking a significant step forward in its ambitious plan to acquire Swedish radio frequency (RF) specialist Kaelus AB. The financing, announced today, is earmarked to partially fund the approximately $42 million transaction, a deal positioned by Baylin as a transformative move to bolster its position in the global wireless technology market.

While the capital raise signals progress, it also brings to light the intricate financial maneuvering and corporate governance dynamics at play, including a substantial investment from the company's own controlling shareholder. The deal, expected to close in the first quarter of 2026, still faces several financial and regulatory hurdles before it can be finalized.

A Strategic Push into Advanced RF Technology

The acquisition of Kaelus AB represents a calculated effort by Baylin to integrate a highly respected and complementary business into its portfolio. Kaelus, headquartered in Sweden with a global footprint, is a leader in advanced RF conditioning products, test and measurement equipment, and innovative antenna solutions. The company is particularly renowned for its world-class Passive Intermodulation (PIM) test equipment, a critical tool for ensuring the quality and performance of modern wireless networks.

Kaelus’s product line is seen as a natural fit that will significantly enhance Baylin's existing offerings, particularly those of its subsidiary Galtronics. Industry insiders note that Kaelus’s expertise in RF filtering and conditioning could dramatically improve Galtronics’ hyper-directional stadium antennas and other high-performance products. Furthermore, Kaelus brings innovative technologies like its “transparent” antennas, which allow different frequency signals to pass through, enabling wireless carriers to stack antennas and potentially reduce significant tower rental costs.

The strategic rationale is clear: combining Baylin’s established presence with Kaelus's deep engineering expertise and strong customer relationships with major global wireless operators is expected to create a formidable competitor. The new entity would boast one of the industry's most comprehensive RF product portfolios, designed to meet the escalating demands of 5G and future wireless standards. Baylin anticipates the merger will not only diversify its revenue streams but also provide substantial cross-selling opportunities and operational synergies.

The Financial Blueprint for a $42 Million Deal

The $10.3 million raised through the private placement of 41.25 million subscription receipts at $0.25 each is just the first piece of a larger, more complex financial puzzle. Baylin has stated it requires approximately $42 million in total cash to complete the acquisition, fully repay its outstanding debt to its principal lender, and cover all associated transaction expenses.

To bridge the remaining gap, the company has signed a non-binding term sheet with a Canadian lender for a new $30.9 million credit facility. While this brings the total secured and planned financing close to the target, the press release confirms that Baylin is still in the process of securing the final required funding to close the deal and fortify its balance sheet.

Should the acquisition proceed as planned, the financial upside for Baylin appears significant. The company projects the deal will be highly accretive, forecasting that the combined business will generate approximately $141 million in revenue in 2026. More impressively, Baylin expects the acquisition to triple its Adjusted EBITDA to around $15.9 million in 2026, even before accounting for any cost synergies. This projected boost in profitability is also expected to allow the company to deleverage its balance sheet, with its net debt to Adjusted EBITDA ratio forecast to drop from a challenging 4.9x to a much healthier 2.3x post-financing.

Governance Under the Microscope

Adding a layer of complexity to the financing is the significant participation of Baylin’s controlling shareholder, 2385796 Ontario Inc., an entity controlled by the Chairman of the Board, Jeffrey C. Royer. The controlling shareholder purchased 15 million of the subscription receipts for an aggregate price of $3.75 million, representing over a third of the private placement.

This move constitutes a “related-party transaction” under Canadian securities regulations. However, Baylin has stated the transaction is exempt from the formal valuation and minority shareholder approval requirements typically mandated by Multilateral Instrument 61-101. This exemption is applicable because the value of the transaction did not exceed 25% of the company's market capitalization, a threshold designed to trigger enhanced protections for minority investors. The board approved the subscription with Mr. Royer recusing himself from the vote.

Upon completion of the acquisition and the conversion of all subscription receipts, Mr. Royer's controlling stake in Baylin is expected to be diluted from approximately 71.6% to 50.4%. While this is a notable reduction, it still leaves him with majority control, ensuring his continued and decisive influence over the company's strategic direction. This structure means that the shareholder approval required by the Toronto Stock Exchange (TSX) for the acquisition will be satisfied through a written consent from the controlling shareholder, bypassing a broader shareholder vote.

Navigating Hurdles on the Path to Closing

Despite the successful financing round, the path to finalizing the Kaelus AB acquisition is not yet clear. Several critical conditions must be met before the deal can close. Baylin must still secure final approval from the TSX for the transaction and the issuance of new shares.

Perhaps more significantly, the acquisition is subject to review and approval by the foreign investment authority in Finland, where Kaelus maintains operations. Such regulatory reviews, particularly involving strategic technology sectors, can be unpredictable and introduce potential delays. The most pressing condition, however, remains the successful assembly of the complete financing package. The company must formalize its planned credit facility and secure any additional capital needed to meet the $42 million requirement. The successful navigation of these financial and regulatory checkpoints in the coming months will ultimately determine if Baylin's transformative vision becomes a reality.