Nizoral Acquisition in APAC and Proposed Placing
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014).
Alliance Pharma plc
("Alliance" or the "Group")
Acquisition of Nizoral in Asia-Pacific
Proposed Equity Placing to raise £34.0 million
Alliance Pharma plc (AIM: APH), the specialty pharmaceutical company, is pleased to announce that it has agreed to acquire exclusive marketing rights to Nizoral, a medical, anti-dandruff shampoo brand, in Asia-Pacific ("APAC") (the "Nizoral Rights") from Janssen Pharmaceutica NV (a member of the Johnson & Johnson group of companies) (the "Vendor") for a total consideration of £60.0 million (the "Acquisition").
The Acquisition, which will boost Alliance's successful and rapidly growing APAC distributor business, is expected to generate material earnings enhancement in the first full year of ownership.
The Acquisition will be funded by an underwritten equity placing of new ordinary shares in the capital of the Company to raise gross proceeds of £34.0 million (c. £32.1 million net of transaction expenses) (the "Placing") at an indicative placing price of 91 pence per Placing Share, to be confirmed pursuant to an accelerated bookbuild process, and by the draw down of c.£27.9 million of a £35.0 million extension of the Group's debt facilities. The Placing is being conducted by means of an accelerated bookbuild process, which will be launched immediately following this announcement.
Transaction highlights
· Alliance has agreed to acquire Nizoral, a medical, anti-dandruff shampoo brand, in the APAC region from Janssen Pharmaceutica NV for a total consideration of £60 million payable to the Vendor on completion
· The consideration will be funded by a combination of the underwritten Placing to raise net proceeds of c.£32.1 million and c.£27.9 million in debt
· The Nizoral Rights include more than 15 countries including Japan, Thailand, South Korea, China and Pacific markets
· In 2017, the Nizoral Rights achieved net sales of £18.5 million1 in APAC
· Taking into account Alliance's anticipated costs, the Nizoral Rights would have generated EBITDA on a pro forma basis in APAC ("Pro Forma EBITDA") of £7.1 million in 2017
· The Acquisition boosts Alliance's exposure to fast-growing APAC markets and will enhance Alliance's APAC distributor footprint
· Nizoral will represent Alliance's fourth International Star brand, complementing Kelo-cote™, MacuShield™ and Vamousse™
· The Acquisition is expected to generate material earnings enhancement in the first full year of ownership
1 Currency conversion rate: £1.00 = USD1.3528
Peter Butterfield, Chief Executive Officer of Alliance, commented:
"Asia-Pacific is Alliance's fastest-growing region and we are delighted to strengthen the development of our APAC business through this earnings-enhancing acquisition of Nizoral, an excellent brand with a long medical heritage. Nizoral has significant sales, profits and growth potential in the APAC region and will become the fourth International Star brand in our product portfolio."
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For further information: |
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Alliance Pharma plc |
Tel: +44 (0) 1249 466 966 |
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Peter Butterfield, Chief Executive Officer |
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Andrew Franklin, Chief Financial Officer |
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Numis Securities Limited |
Tel: +44 (0) 20 7260 1000 |
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Nominated Adviser: Michael Meade / Freddie Barnfield / Freddie Naylor-Leyland |
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Corporate Broking: James Black |
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Investec Bank plc |
Tel: +44 (0) 20 7597 5970 |
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Corporate Finance: Daniel Adams |
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Corporate Broking: Patrick Robb / David Herring |
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Buchanan |
Tel: +44 (0) 20 7466 5000 |
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Mark Court / Sophie Wills / Gemma Mostyn-Owen |
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Conference Call
Peter Butterfield, CEO, Andrew Franklin, CFO, and Alex Duggan, CCO, will present details of the Acquisition and Placing during a conference call for analysts and investors at 8.30am BST today. A presentation to accompany the conference call will be made available prior to the call on the Group's website at www.alliancepharmaceuticals.com.
Conference call details:
Participant dial-in: +44 (0) 20 3428 1542
International dial-in: http://events.arkadin.com/ev/docs/FEL_Events_International_Access_List.pdf
Participant code: 67141876#
Notes to editors
Alliance Pharma plc is an international specialty pharmaceutical company.
Headquartered in Chippenham, UK, Alliance commenced trading in 1998 and has been listed on AIM since 2003. Alliance has a strong track record of acquiring established niche products and it currently owns or licenses the rights to approximately 90 pharmaceutical and consumer healthcare products. It has sales in more than 100 countries either directly via its affiliates or through its selected network of distributor partners. Alliance joined the AIM market of the London Stock Exchange in December 2003 and trades under the symbol APH.
Acquisition of the Nizoral Rights from Janssen Pharmaceutica NV
Alliance, the specialty pharmaceutical company, is pleased to announce that it has agreed to acquire exclusive marketing rights to Nizoral, a medical, anti-dandruff shampoo brand, across over 15 countries in the APAC region from Janssen Pharmaceutica NV for a total consideration of £60 million. The Acquisition will boost Alliance's successful and fast-growing APAC distributor business.
The Acquisition is consistent with the Company's strategy of acquiring differentiated international growth brands. Nizoral will represent the Company's fourth International Star brand, complementing Kelo-cote, MacuShield and Vamousse.
There are potential distribution synergies between the Nizoral Rights and the existing Alliance business. Alliance already has regional offices established in Singapore and Shanghai which will benefit from the enhanced distribution capabilities the Acquisition will bring. Furthermore, Alliance has a strong and proven APAC management team that currently is growing the existing Alliance APAC business at greater than 40% moving annual total growth; APAC represented 10.8% (£11.2 million) of Alliance's group sales in 2017.
The Acquisition is expected to generate material earnings enhancement in the first full year of ownership and offers an attractive return on investment, with ROIC expected to exceed Alliance's WACC in 2019.
The enlarged Group would benefit from a c.17% increase in pro forma sales2, with four International Star brands driving organic growth and generating c.34% of pro forma sales.
2 includes the pre-Acquisition sales for the 12 months to 31 December 2017 for Vamousse, Ametop and Nizoral
Overview of the Nizoral Rights
The Nizoral Rights have existing sales across over 15 countries including Japan, Thailand, South Korea, China and Pacific. The product is sold as 2% and/or 1% solution shampoos in APAC countries, with the exception of Japan, where exclusively it is sold as a lotion.
The Nizoral Rights achieved 2017 net sales of £18.5 million and pro forma EBITDA3 of £7.1 million, with 70% of sales coming from the top five markets. In APAC, Nizoral is predominantly an OTC focused brand, although this will vary by country, with clinical support driven from prescriptions. The Nizoral Rights generated Pro-Forma EBITDA of £8.5 million (2015) and £9.0 million (2016). Growth between 2015 and 2017 was driven by a good performance across a number of markets, offset by a one off distributor effect in China during 2017.
The active pharmaceutical ingredient in Nizoral is ketoconazole, an antifungal which is the world's leading prescribed ingredient for seborrheic capitis and seborrheic dermatitis (causes of dandruff), which has undergone over 50 clinical studies. Nizoral is a well-known, clinically meaningful and trusted brand globally with a 30 year history in an attractive category:
· Dandruff affects over 50% of the adult population;
· In 2016, the OTC Medicated Haircare segment was worth $363.1 million in APAC4; and
· A loyal consumer base: 97% of reviewers commenting on the Janssen Pharmaceutica NV product website recommend Nizoral.
Nizoral is predominantly a distributor-led business in APAC. The Nizoral Rights have been deprioritised by Janssen Pharmaceutica NV in APAC, offering Alliance good growth potential by focussing on Nizoral, a strategy the Group has already successfully implemented with Kelo-cote in APAC, which the Company acquired in 2015, generating growth of 146% in the first two years post acquisition. Alliance believes that there are potential distribution synergies with Vamousse, the Company's recently acquired head lice treatment.
3 adjusted to reflect future costs under the transitional services agreement and manufacturing service agreement
4 Source: Euromonitor 2016
Integration
Alliance has an effective and established approach to integrating acquired brands and has reached agreement with the Vendor for transitional services for a period of 24 months, extendable in 12 month increments, to effect Marketing Authorisation transfers to Alliance. During the transition period, the Vendor will operate the business in the ordinary course, remitting net profit to Alliance on a periodic basis.
In addition, Alliance and Janssen Pharmaceutica NV have agreed terms to a five year manufacturing service agreement for drug substance and product supply for Nizoral from Janssen Pharmaceutica NV.
Debt Financing
The Company has agreed an extension to its existing debt facility with its lenders, Lloyds Bank plc, The Royal Bank of Scotland plc and Silicon Valley Bank. This extension comprises a £35.0 million revolving credit facility with a margin of 1.7% to 2.75% over LIBOR depending on the ratio of net debt to EBITDA. The Company will draw down c.£27.9 million of the RCF to part-fund the Acquisition resulting in initial leverage at completion of the Acquisition of c.2.5x enlarged Group EBITDA, calculated using pro forma EBITDA on a trailing 12 month basis, with leverage then expected to reduce on an ongoing basis.
Placing of New Ordinary Shares
The Acquisition is being part-funded by the underwritten Placing by means of an accelerated bookbuild process which will be launched immediately following this announcement, to raise gross proceeds of £34.0 million (c.£32.1 million net of transaction expenses) at an indicative placing price of 91 pence per Placing Share, to be confirmed pursuant to an accelerated bookbuild process. This structure has been adopted to provide maximum certainty of funding to the Vendor. The Board therefore believes that the proposed Placing is in the best interests of shareholders.
The Acquisition is conditional upon, amongst other things, receipt of the total consideration of the transaction by the Vendor. The Placing is conditional upon, amongst other things, Admission becoming effective, the debt facilty being capable of being drawn on and the Placing Agreement not being terminated in accordance with its terms, which include, amongst other things, the right to terminate the agreement in the event of Alliance suffering a material adverse change to its business.
Details of the Placing
Numis Securities Limited ("Numis Securities" or "Numis") and Investec Bank plc ("Investec" and, together with Numis, the "Bookrunners" and each a "Bookrunner") will commence a book building process in respect of the Placing (the "Bookbuild"). The book will open with immediate effect. The Bookrunners have entered into the Placing Agreement under which, subject to the conditions set out therein, the Bookrunners will agree to use their respective reasonable endeavours to procure subscribers for the Placing Shares at a price determined following completion of the Bookbuild and as set out in the Placing Agreement. Failing that, the Bookrunners will subscribe for Placing Shares such that Alliance raises gross proceeds of £34.0 million pursuant to the Placing. The Placing is subject to the terms and conditions set out in Appendix 1 to this Announcement. Members of the public are not entitled to participate in the Placing.
In the event that the Placing does not proceed then the Acquisition will not proceed. If the Placing proceeds to Admission, the net proceeds of the Placing will be used to part fund the consideration payable pursuant to the Acquisition. While the Placing will not proceed if the Acquisition Agreement has been terminated before Admission, the Placing is not conditional on completion of the Acquisition. If the Company terminates the Acquisition Agreement following Admission and the Acquisition does not complete, the directors of the Company will consider how best to use the net proceeds of the Placing.
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares. This includes the right to receive all dividends and other distributions declared or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares. The price per Ordinary Share at which the Placing Shares are to be placed (the "Placing Price") will be determined at the close of the Bookbuild. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the closing of the Bookbuild.
Application has been made for the Placing Shares to be admitted to trading on the AIM market of the London Stock Exchange plc (the "London Stock Exchange" and together, "Admission"). It is expected that Admission will take place at or around 8.00 a.m. (London time) on 21 June 2018 and settlement for the Placing Shares is expected to take place on the same date on a T+2 basis. The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional upon the Placing Agreement not being terminated in accordance with its terms.
The Appendices (which form part of this Announcement) set out further information relating to the Bookbuild and the terms and conditions of the Placing.
This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section below and Appendices to this Announcement (which forms part of this Announcement) which sets out the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendices) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, confirmations, acknowledgements and undertakings contained in Appendix 1.
IMPORTANT NOTICES
Neither this Announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in, or into the United States, Australia, Canada, Japan, or South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the capital of the Company in the United States, Australia, Canada, Japan or South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions. The Placing Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under any securities laws of any state of other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of any state of other jurisdiction of the United States.
There is no intention to register any portion of the Placing in the United States or to conduct any public offering of securities in the United States or elsewhere. All offers of Placing Shares will be made pursuant to an exemption under the Prospectus Directive 2003/71/EC, as amended from time to time, including by Directive 2010/73/EC to the extent implemented in the relevant member state and includes any relevant implementing directive measure in any member state (the "Prospectus Directive") from the requirement to produce a prospectus.
Members of the public are not eligible to take part in the Placing. This Announcement and the terms and conditions set out in Appendix I are for information purposes only and are directed only at: (a) persons in Member States of the Economic European Area who are qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive ("Qualified Investors"); and (b) in the United Kingdom, Qualified Investors who are persons who (i) have professional experience in matters relating to investments falling within the definition of "investments professional" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); (ii) are persons falling within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order; or (iii) are persons to whom it may otherwise be lawfully communicated; (all such persons together being referred to as "Relevant Persons"). This Announcement must not be acted on or relied on by persons who are not Relevant Persons.
Persons (including without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.
This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made by Numis Securities Limited ("Numis") or Investec Bank plc ("Investec"), or by any of their respective partners, directors, officers, employees, advisers, consultants or affiliates as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to any interested person or its advisers, and any liability therefore is expressly disclaimed. None of the information in this Announcement has been independently verified or approved by Numis or Investec any of their respective partners, directors, officers, employees, advisers, consultants or affiliates. Save for any responsibilities or liabilities, if any, imposed on Numis or Investec by FSMA or by the regulator regime established under it, no responsibility or liability is accepted by either Numis or Investec or any of their respective partners, directors, officers, employees, advisers, consultants or affiliates for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this Announcement or its contents or otherwise in connection with this Announcement or from any acts or omissions of the Company in relation to the Placing.
Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"), is acting for the Company and no-one else in connection with the transactions and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the transactions and arrangements described in this Announcement. Numis is not responsible to anyone other than the Company for providing the protections afforded to clients of Numis or for providing advice in connection with the contents of this Announcement or the transactions and arrangements described herein.
Investec, which is authorised by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the FCA and the PRA, is acting solely for the Company and no-one else in connection with the transactions and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the transactions and arrangements described in this Announcement. Investec is not responsible to anyone other than the Company for providing the protections afforded to clients of Investec or for providing advice in connection with the contents of this Announcement or the transactions and arrangements described herein.
The distribution of this Announcement (including the Appendices) and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Numis and/or Investec that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company, Numis and Investec to inform themselves about, and to observe, such restrictions.
No prospectus will be made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published. Persons needing advice should consult an independent financial adviser.
In connection with the Placing, each of the Bookrunners and any of their affiliates, acting as investors for their own account, may take up a portion of the shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for the own accounts such shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, the Bookrunners and any of their affiliates acting in such capacity. In addition, the Bookrunners and any of their affiliates may enter into financing arrangements (including swaps) with investors in connection with which the Bookrunners and any of their respective affiliates may from time to time acquire, hold or dispose of shares. The Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
Cautionary statements
This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. The information contained in this Announcement is subject to change without notice and except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this Announcement.
This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Bookrunners have only procured investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.
APPENDIX 1
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") (WHICH IS FOR INFORMATION PURPOSES ONLY) ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, INCLUDING BY DIRECTIVE 2010/73/EC TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSLEVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
The Placing Shares have not been and will not be registered under the US Securities Act of 1993, as amended (the "US Securities Act") or under any securities laws or with any regulatory authority of any state of other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of any state of other jurisdiction of the United States. There will be no public offer of the securities mentioned herein in the United States. The Placing Shares are being offered and sold only: (i) outside of the United States in "Offshore Transactions" within the meaning of, and in accordance with, Regulation S under the US Securities Act and otherwise in accordance with applicable laws and (ii) in the United States to a limited number of institutions that are both (a) "Qualified Institutional Buyers" (as defined in Rule 144A under the US Securities Act) (a "QIB") and (b) "Major US Institutional Investors" within the meaning of Rule 15A-6 under the Securities Exchange Act of 1934, as amended in transactions exempt from registration under the US Securities Act and applicable law in any states or other jurisdictions of the United States. No public offering of the placing shares is being made in the United States or elsewhere.
This announcement and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into or from the United States, Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which such release publication or distribution would be unlawful.
Each Placee should consult with its own advisers as to legal, tax, business and related aspects of an acquisition of Placing Shares. The price of shares and any income expected from them may go down as well as up and Placees may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance.
Persons who are invited to and who choose to participate in the Placing by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given (the "Placees"), will be deemed: (i) to have read and understood this Announcement, including this Appendix, in its entirety; and (ii) to be participating and making an offer for Placing Shares on the terms and conditions and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix.
In particular, each such Placee represents, warrants and acknowledges that:
1. it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing
Shares that are allocated to it for the purposes of its business;
2. it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it has authority to exercise, and is exercising, investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement;
3. it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix;
4. except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any person on whose account it is acting, as referred to in paragraph (b) above):
(i) is located outside the United States and is acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S; or
(ii) is located in the United States and is both a QIB and a Major US Institutional Investor and will duly execute a US investor letter and deliver the same to one of the Bookrunners or its affiliates prior to receipt of the confidential private placement memorandum and confirmation of its allocation in the Placing and in any event prior to settlement of the Placing Shares and, if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has investment discretion with respect to each account and has full power and authority to make the representations, warranties, undertakings, agreements and acknowledgements herein on behalf of each such account; and
5. if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale to Qualified Investors in a member state of the EEA which has implemented the Prospectus Directive, or in circumstances in which the prior consent of the Bookrunners has been given to each such proposed offer or resale.
Details of the Placing Agreement, the Placing Shares and the Bookbuild
The Bookrunners are acting as joint bookrunners in connection with the Placing and have entered into the Placing Agreement with the Company under which they have agreed to use their respective reasonable endeavours to procure Placees to take up the Placing Shares, on the terms and subject to the conditions set out therein.
The Bookrunners will today commence the bookbuilding process to determine demand for participation in the Placing by Placees (the "Bookbuild"). This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The Bookrunners shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their absolute discretion following consultation with the Company, determine.
In the event that the Bookrunners fail to procure Placees for at least gross proceeds of £30 million (or such other number as agreed by the Company and the Bookrunners), then subject to the satisfaction (or waiver) of the Conditions, each Bookrunner severally agrees it shall itself as principal acquire, upon the terms and conditions set out in this Appendix, 50 per cent. of any such shortfall of the Placing Shares not so taken up.
The Placing Shares will, as from the date when they are issued, be fully paid up, rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares after Admission and otherwise rank pari passu in all respects with, and be identical to, the existing Ordinary Shares then in issue.
Application for listing and admission to trading
Application will be made for admission of the Placing Shares to trading on AIM.
It is expected that Admission of the Placing Shares will become effective at or around 8.00 a.m. (London time) on or around 21 June 2018 and that dealings in the Placing Shares will commence at that time (or such later time as the Company and the Bookrunners may agree).
Participation in, and principal terms of, the Placing
The Bookrunners are arranging the Placing severally, and not jointly, nor jointly and severally, as bookrunners and placing agents of the Company for the purpose of procuring Placees at the Placing Price (as defined below) for the Placing Shares.
1. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunners. Each Bookrunner may itself agree to be a Placee in respect of all or some of the Placing Shares or may nominate any member of its group to do so.
2. The Bookbuild, if successful, will establish a single price payable to the Bookrunners as placing agents for the Company by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares will be agreed by the Bookrunners (in consultation with the Company) following completion of the Bookbulid. The Placing Price and the number of Placing Shares to be issued will be announced on a Regulatory Information Service following the completion of the Bookbuild (the "Placing Results Announcement").
3. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at one of the Bookrunners. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price which is ultimately established by the Company and the Bookrunners or at prices up to a price limit specified in its bid. Bids may be scaled down by the Bookrunners on the basis referred to in paragraph 7 below.
4. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with the Bookrunners' consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Company and the Bookrunners, to pay to them (or as the Bookrunners may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee. Each prospective Placee's obligations will be owed to the Company and the Bookrunners.
5. The Bookbuild is expected to close by 19 June 2018, but may be closed earlier or later at the discretion of the Bookrunners and the Company. The Bookrunners may, in agreement with the Company, accept bids, either in whole or in part, that are received after the Bookbuild has closed.
6. The Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined in consultation with the Company and may scale down any bids for this purpose on such basis as they may determine. The Bookrunners may also, notwithstanding paragraphs 4 and 5 above, and subject to prior agreement with each other, (a) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (b) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time. The Company reserves the right (upon agreement with the Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing at its discretion.
7. Allocations of the Placing Shares will be determined by the Bookrunners after consultation with the Company (the proposed allocations having been supplied by the Bookrunners to the Company in advance of such consultation). Allocations will be confirmed orally by the Bookrunners and a trade confirmation will be despatched as soon as possible thereafter. A Bookrunner's oral confirmation to such Placee constitutes an irrevocable legally binding commitment upon such person (who will at that point become a Placee), in favour of the Bookrunners and the Company, to acquire the number of Placing Shares allocated to it and to pay the Placing Price in respect of such shares on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the Bookrunners' consent, such commitment will not be capable of variation or revocation after the time at which it is submitted.
8. Each Placee's allocation and commitment to the Bookrunners (acting as placing agents for the Company) will be evidenced by a contract note issued to such Placee by the Bookrunners. The terms of this Appendix will be deemed incorporated in that contract note.
9. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".
10. All obligations of the Bookrunners under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".
11. By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below under "Right to terminate under the Placing Agreement" and will not be capable of rescission or termination by the Placee.
12. To the fullest extent permissible by law, neither the Bookrunners, nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Bookrunners, nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Bookrunners' conduct of the Placing or of such alternative method of effecting the Placing as the Bookrunners and the Company may determine.
13. The Placing Shares will be issued subject to the terms and conditions of this Appendix and each Placee's commitment to subscribe for Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Bookrunners' conduct of the Placing.
14. All times and dates in this Announcement may be subject to amendment. The Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The Bookrunners' obligations under the Placing Agreement are conditional on, inter alia:
1. publication of the Placing Announcement through a RIS by no later than 7.00 a.m. (London time) on the date of the Placing Agreement (or such other time and/or date as the Company and the Bookrunners may agree);
2. publication of the Placing Results Announcement through a RIS by no later than 6.00 p.m. (London time) on the date of the Placing Agreement (or such other time and/or date as the Company and the Bookrunners may agree);
3. Admission occurring not later than 8:00 a.m. (London time) on 21 June 2018 (or such later time and/or date, not being later than 8:00 a.m. (London time) on 5 July 2018, as the Company and the Bookrunners may otherwise agree);
4. the Company having confirmed to the Bookrunners that, prior to the delivery of such confirmation, none of the warranties of the Company contained in the Placing Agreement was untrue, inaccurate or misleading on and as at the date of the Placing Agreement or will be untrue, inaccurate or misleading immediately prior to Admission when repeated at that time, by reference to the facts and circumstances then subsisting;
5. the Company having complied with or performed its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission;
6. any Acquisition Documents which are to be entered into prior to completion of the Acquisition having been duly executed by the parties thereto and remaining in full force and effect and (save with the consent of the Bookrunners) not having been modified, or rescinded, lapsed or been terminated (in whole or in part);
7. in the good faith opinion of the Bookrunners, between the date of the Placing Agreement and Admission there has been no material adverse change in, or any development involving a prospective material adverse change in, or affecting, the condition (financial, operational, legal or otherwise) or the earnings, management, business affairs, solvency, credit rating or prospects of the Company, the Target Business or of the Group (taken as a whole), whether or not arising in the ordinary course of business;
8. the Acquisition Agreement: (i) having been duly executed by the parties thereto by or on the date of the Placing Agreement; (ii) remaining in full force and effect and not having been materially modified, or rescinded, lapsed or been terminated (in whole or in part) prior to Admission (save with the consent of the Bookrunners, such consent not to be unreasonably withheld or delayed); and (iii) having become unconditional in all respects save for any condition relating to Admission occurring and the Placing Agreement not having been terminated and having become unconditional in all respects; and
9. the Facility Agreement (i) having been duly executed by the parties thereto by or on the date of the Placing Agreement; (ii) remaining in full force and effect and not having been materially modified, or rescinded, lapsed or been terminated (in whole or in part) prior to Admission (save with the consent of the Bookrunners, such consent not to be unreasonably withheld or delayed); and (iii) having become unconditional in all respects save for any condition relating to Admission occurring and the Placing Agreement not having been terminated and having become unconditional in all respects.
The Bookrunners may, at their discretion and upon such terms as they think fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to certain conditions in the Placing Agreement save that the above conditions relating, inter alia, to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
If: (i) any of the conditions contained in the Placing Agreement, including those described above, is not fulfilled or (where permitted) waived by the Bookrunners by the relevant time or date specified (or such later time or date as the Company and the Bookrunners may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it (or any person on whose behalf the Placee is acting) in respect thereof.
Neither the Bookrunners nor any of their respective affiliates, agents, directors, officers or employees nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive, or to extend the time and/or date for the satisfaction of, any condition in the Placing Agreement nor in respect of any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunners.
In the event that the Placing does not proceed then the Acquisition will not proceed. If the Placing proceeds to Admission, the net proceeds of the Placing will be used to part fund the consideration payable under the Acquisition Agreement for the Acquisition. While the Placing will not proceed if the Acquisition Agreement has been terminated before Admission, the Placing is not conditional on completion of the Acquisition. If the Company terminates the Acquisition Agreement following Admission and the Acquisition does not complete, the directors of the Company will consider how best to use the net proceeds of the Placing.
Right to terminate under the Placing Agreement
The Bookrunners are entitled, at any time before Admission, to terminate (after such consultation with the Company as the circumstances shall permit) the Placing Agreement in accordance with its terms in certain circumstances, including, inter alia:
1. if it comes to the knowledge of either Bookrunner that any of the warranties given by the Company in the Placing Agreement was untrue or inaccurate or misleading when made and/or that any of such warranties would be untrue or inaccurate in a material respect or misleading if it were to be repeated at any time prior to Admission by reference to the facts, matters and circumstances then subsisting and, in the opinion of either Bookrunner (acting in good faith), the effect of such is that it would materially prejudice the success of the Placing or the distribution of the Placing Shares;
2. any material adverse change in, or any development reasonably likely to lead to a material adverse change in, the condition (financial, operational, legal or otherwise) or the earnings, management, business affairs, solvency, credit rating or prospects of the Company, the Target Business or of the Group (taken as a whole) whether or not arising in the ordinary course of business and in the opinion of either Bookrunner (acting in good faith) the effect of such change is that it would materially prejudice the success of the Placing or the distribution of the Placing Shares, at any time since the date of the Placing Agreement;
3. the occurrence of one or more specified adverse macro-economic changes, suspension or material limitation in the trading on AIM or the London Stock Exchange's main market for listed securities of any securities of the Company or a general moratorium on commercial banking activities in London or New York which, in the opinion of either Bookrunner (acting in good faith) would materially prejudice the success of the Placing or the distribution of Placing Shares; or
4. any of the conditions to Placing are not fulfilled or waived (as applicable).
By participating in the Placing, Placees agree that the exercise by either Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of such Bookrunner and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise. In the event that either Bookrunner exercises their right of termination, the other Bookrunner may continue and shall assume all obligations of the Bookrunner that has withdrawn from the Placing.
Restriction on Further Issue of Shares
The Company has undertaken to the Bookrunners that, between the date of the Placing Agreement and 90 days after Admission, it will not, without the prior written consent of the Bookrunners, inter alia: (i) allot or issue any Ordinary Shares (or any other shares or securities in the capital of the Company) or issue any options over Ordinary Shares (or any securities exchangeable for, or convertible into, Ordinary Shares or other shares or securities in the capital of the Company save for the issue of any options pursuant to (and in accordance with the rules of) the Company's existing share option or other share incentive schemes or for the issue of Ordinary Shares pursuant to the exercise of any options under such schemes, or (ii) enter into or procure or (so far as it is able) permit the Group to enter into any commitment or agreement, or put itself in a position where it is obliged to announce that any commitment or agreement may be entered into, which could materially or adversely affect the Placing or which is or may be material in the context of the business or affairs of the Group (save as required in order to comply with law or with the AIM Rules), or agree to do, any of the foregoing (whether or not legally or contractually obliged to do so).
By participating in the Placing, Placees agree that the exercise by any Bookrunner of any power to grant consent to the undertaking by the Company of a transaction which would otherwise be subject to the restrictive provisions on further issuance under the Placing Agreement shall be within the absolute discretion of that Bookrunner and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise of the power to grant consent.
No Prospectus
No offering document or prospectus has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing.
Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today and subject to the further terms set forth in the contract note to be provided to individual Placees. Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) and all other publicly available information previously published by the Company by notification to a Regulatory Information Service is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of the Company or either Bookrunner or any other person and none of the Company or the Bookrunners nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation by that person.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN: GB0031030819 following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"). Subject to certain exceptions, the Bookrunners and the Company reserve the right to require settlement for, and delivery of, the Placing Shares (or any part thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with the relevant Bookrunner stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the Bookrunner and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares that it has in place with the relevant Bookrunner.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Bookrunners.
It is expected that settlement will be on 21 June 2018 in accordance with the instructions set out in the trade confirmation.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Bookrunners' account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. If there are any circumstances in which any stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the Placing Shares (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer of or agreement to transfer Placing Shares), none of the Bookrunners nor the Company shall be responsible for payment thereof.
Representations, Warranties and Further Terms
By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably:
1. represents and warrants that it has read and understood the Announcement, including this Appendix, in its entirety and that its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;
2. acknowledges that no offering document or prospectus has been or will be prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares;
3. acknowledges that the Placing does not constitute a recommendation or financial product advice and neither Bookrunner has had regard to its particular objectives, financial situation or needs;
4. acknowledges that none of the Bookrunners, the Company, any of their respective affiliates, agents, directors, officers or employees has provided, nor will provide, it with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of the Bookrunners, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;
5. acknowledges that the Ordinary Shares are listed on AIM and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices under the AIM Rules, which includes a description of the Company's business and the Company's financial information, including balance sheets and income statements, and that it is able to obtain or access to such information, or comparable information concerning other publicly traded companies, in each case without undue difficulty;
6. acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither of the Bookrunners, nor their respective affiliates or any person acting on behalf of any of them, has or shall have any liability for any information, representation or statement contained in, or omission from, this Announcement or any information previously published by or on behalf of the Company, pursuant to applicable laws, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given, or representations, warranties or statements made, by any of the Bookrunners or the Company nor any of their respective affiliates, agents, directors, officers or employees and none of the Bookrunners or the Company or any such affiliate, agent, director, officer or employee will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
7. acknowledges and agrees that it may not rely, and has not relied, on any investigation that either Bookrunner, any of their affiliates or any person acting on their behalf, may have conducted with respect to the Placing Shares or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing Shares or the accuracy, completeness or adequacy of the information from the London Stock Exchange or any other information; each Placee further acknowledges that it has conducted its own investigation of the business, financial and other position of the Company and made its own assessment of the Placing Shares and has received all information it believes necessary or appropriate in connection with its investment in the Placing Shares;
8. acknowledges that it has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares;
9. acknowledges that none of the Bookrunners, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information made publicly available by or in relation to the Company or any representation, warranty or statement relating to the Company or the Group contained therein or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
10. represents and warrants that it, and any prospective beneficial owner for whose account or benefit it is purchasing the Placing Shares, is and, at the time the Placing Shares are subscribed for will be, (i) located outside the United States and is acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S; or (ii) is a QIB and a Major US Institutional Investor and will duly execute a US investor letter and deliver the same to one of the Bookrunners or its affiliates;
11. understands that, if located in the United States, there may be certain consequences under United States and other tax laws resulting from an investment in the Placing and it has made such investigation and has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally;
12. represents and warrants that it has not been offered to purchase or subscribe for Placing Shares by means of (i) any "directed selling efforts" as defined in Regulation S, or (ii) any form of "general solicitation" or "general advertising" within the meaning of Rule 502(c) of Regulation D in connection with any offer or sale of Placing Shares in the United States;
13. it understands that the Placing Shares have not been, and will not be, registered under the US Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the US Securities Act, or pursuant to an exemption from the registration requirements of the US Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the US Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
14. understands that no representation has been made as to the availability of the exemption provided by Rule 144 or any other exemption under the US Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
15. acknowledges and agrees that it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;
16. acknowledges that in making any decision to acquire Placing Shares it (i) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing for or purchasing the Placing Shares, (ii) will not look to either Bookrunner for all or part of any loss it may suffer as a result of any such subscription or purchase, (iii) is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of an investment in the Placing Shares, (iv) is able to sustain a complete loss of an investment in the Placing Shares and (v) has no need for liquidity with respect to its investment in the Placing Shares;
17. undertakes, unless otherwise specifically agreed with the Bookrunners, that it is not and at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of Australia, Canada, Japan or the Republic of South Africa and further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into any of those jurisdictions;
18. acknowledges that the Placing Shares have not been and will not be registered, and that a prospectus will not be cleared in respect of any of the Placing Shares, under the securities laws or legislation of Australia, Canada, Japan, or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, or delivered or transferred, directly or indirectly, in or into those jurisdictions;
19. represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;
20. represents and warrants that it has complied with its obligations under the Criminal Justice Act 1993, MAR and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and the Money Laundering Sourcebook of the FCA and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
21. acknowledges that in order to ensure compliance with the Regulations, the Bookrunners (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity, location or legal status. Pending the provision to the Bookrunners or the Company's registrars, as applicable, of evidence of identity, location or legal status, definitive certificates in respect of the Placing Shares may be retained at the Bookrunners' absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed in the Bookrunners' or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity, location or legal status the Bookrunners (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either the Bookrunners and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptable of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;
22. represents and warrants that it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make the acknowledgments, warranties, representations, undertakings, and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company and/or the Bookrunners for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);
23. if a financial intermediary (as that term is used in Article 3(2) of the EU Prospectus Directive), represents, warrants and undertakes that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of the Bookrunners has been given to the offer or resale;
24. represents, warrants and undertakes that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;
25. represents, warrants and undertakes that it has not offered or sold and will not, prior to Admission, offer or sell any Placing Shares to persons in the EEA except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public (within the meaning of the Prospectus Directive) in any member state of the EEA;
26. represents, warrants and undertakes that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;
27. represents, warrants and undertakes that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom;
28. represents and warrants, if in a member state of the European Economic Area, unless otherwise specifically agreed with the Bookrunners in writing, that it is a "Qualified Investor";
29. represents and warrants, if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Order or (ii) who falls within Article 49(2)(a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order, or (iii) to whom this Announcement may otherwise lawfully be communicated;
30. acknowledges and agrees that no action has been or will be taken by either the Company or the Bookrunners or any person acting on behalf of the Company or the Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;
31. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) and will honour such obligations and that it has not taken any action or omitted to take any action which will or may result in the Bookrunners, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;
32. undertakes that it (and any person acting on its behalf) will make payment in respect of the Placing Shares allocated to it in accordance with this Appendix on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other acquirers or sold as the Bookrunners may in their sole discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale fall short of the product of the relevant Placing Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties) which may arise upon such placing or sale of such Placee's Placing Shares;
33. acknowledges that neither of the Bookrunners, nor any of their respective affiliates, agents, directors, officers or employees is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that its participation in the Placing is on the basis that it is not and will not be a client of either Bookrunner in connection with its participation in the Placing and that neither Bookrunner has any duty nor responsibility to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
34. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither of the Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement ("Indemnified Taxes"). Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and the Bookrunners on an after-tax basis in respect of any Indemnified Taxes;
35. agrees to indemnify on an after tax basis and hold the Company, the Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of its representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;
36. except as set out in clause 32 below, represents and warrants that it has neither received nor relied on any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) concerning the Company prior to or in connection with accepting the invitation to participate in the Placing and is not purchasing Placing Shares on the basis of material non-public information;
37. if it has received any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, confirms that it has received such information within the market soundings regime provided for in article 11 of MAR and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available;
38. if it is a pension fund or investment company, confirms that its purchase of Placing Shares is in full compliance with applicable laws and regulations;
39. agrees that the Company, the Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements, agreements, and undertakings which are given to the Bookrunners for itself and on behalf of the Company and are irrevocable and it irrevocably authorises the Company and the Bookrunners to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;
40. acknowledges that none of the Company or the Bookrunners owes any fiduciary or other duties to any Placee in respect of any acknowledgments, confirmations, undertakings, representations, warranties or indemnities in the Placing Agreement;
41. acknowledges and agrees that its commitment to take up Placing Shares on the terms set out in this Announcement (including this Appendix) will continue notwithstanding any amendment that may or in the future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company or the Bookrunners' conduct of the Placing;
42. acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Bookrunners or the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum; and
43. acknowledges that these terms and conditions and any agreements entered into by it pursuant to the terms and conditions set out in this Appendix, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any dispute regarding the existence, validity or termination of such contract or relating to any non-contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by either the Company or either Bookrunner in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.
The foregoing representations, warranties, agreements, undertakings, acknowledgements and confirmations are given for the benefit of the Company as well as each of the Bookrunners and are irrevocable. Each Placee, and any person acting on behalf of the Placee, acknowledges that neither the Company nor either of the Bookrunners owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.
The agreement to allot and issue Placing Shares to Placees (and/or to persons for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. Such agreement also assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax or other similar taxes may be payable, for which neither the Company nor the Bookrunners will be responsible and the Placees shall indemnify the Company and the Bookrunners on an after-tax basis for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify the Bookrunners accordingly. Placees are advised to consult with their own advisers regarding the tax aspects of the subscription for Placing Shares.
The Company and the Bookrunners are not liable to bear any transfer taxes that arise on a sale of Placing Shares subsequent to their acquisition by Placees or for transfer taxes arising otherwise than under the laws of the United Kingdom. Each Placee should, therefore, take its own advice as to whether any such transfer tax liability arises and notify the Bookrunners accordingly. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold each of the Bookrunners and the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes to the extent that such interest, fines or penalties arise from the default or delay of that Placee or its agent.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that any Bookrunner or any of its affiliates may, at its absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares and that, in the event that the Bookrunners fail to procure Placees for any of the Placing Shares then the Bookrunners will, as principal, subscribe for such Placing Share.
When a Placee or person acting on behalf of the Placee is dealing with a Bookrunner, any money held in an account with such Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from such Bookrunner's money in accordance with the client money rules and will be used by such Bookrunner in the course of its own business and the Placee will rank only as a general creditor of such Bookrunner.
All times and dates in this Announcement may be subject to amendment. The Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.
No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
APPENDIX II
DEFINITIONS
The following definitions apply in Appendix I to this Announcement, and as the context shall admit, in the Announcement:
|
Acquisition |
the acquisition by the Company of the Target Business |
|
Acquisition Agreement |
the conditional agreement in the approved terms relating to the Acquisition to be entered into on or about 19 June 2018 between Alliance Pharma Limited and the Vendor |
|
Acquisition Documents |
the ancillary documentation referred to in and entered into or to be entered into pursuant to the Acquisition Agreement |
|
Admission |
admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules |
|
AIM |
AIM, a market operated by the London Stock Exchange |
|
AIM Rules |
the AIM Rules for Companies published by the London Stock Exchange |
|
Announcement |
this Announcement, including this Appendix and the terms and conditions set out herein |
|
Bookbuild |
the bookbuild process to be conducted by the Bookrunners by which the Bookrunners will determine demand for participation in the Placing by the Placees |
|
Bookrunners |
Numis and Investec (and "Bookrunner" shall mean either one of them) |
|
Company |
Alliance Pharma plc |
|
CREST |
the computerised settlement system to facilitate transfer of the title to an interest in securities in uncertificated form operated by Euroclear UK & Ireland |
|
EEA |
European Economic Area |
|
Euroclear UK & Ireland |
Euroclear UK & Ireland Limited |
|
FCA Facility Agreement |
the Financial Conduct Authority the conditional credit agreement amendment and restatement agreement to be entered into on our about 19 June 2018 between the Company, Bank of Scotland plc, National Westminster Bank plc and Silicon Valley Bank |
|
Form of Confirmation |
the form of confirmation or contract note made between Numis or Investec (as the case may be) and a Placee which incorporate by reference the terms and conditions of the Placing contained in this Announcement |
|
FSMA |
the Financial Services and Markets Act 2000 |
|
Group |
the Company and its subsidiary undertakings (and "Group Company" shall be construed accordingly) |
|
Investec |
Investec Bank plc |
|
London Stock Exchange |
London Stock Exchange plc |
|
Major US Institutional Investor |
Major US institutional investor as defined in Rule 15a-6 under the US Securities Exchange Act of 1934, as amended |
|
MAR |
the EU Market Abuse Regulation (2014/596/EU) |
|
Numis |
Numis Securities Limited |
|
Ordinary Shares |
ordinary shares of 1 pence each in the capital of the Company |
|
Placees |
persons who agree to subscribe for Placing Shares at the Placing Price |
|
Placing |
the conditional placing of the Placing Shares by the Bookrunners on behalf of the Company at the Placing Price, in accordance with the Placing Agreement |
|
Placing Agreement |
the agreement dated 19 June 2018 between the Company and the Bookrunners relating to the Placing |
|
Placing Price |
the single price per Ordinary Share established by the Bookbuild which is payable to the Bookrunners as agent for the Company by all Placees whose bids are successful |
|
Placing Shares |
new Ordinary Shares to be issued pursuant to the Placing |
|
QIB |
qualified institutional buyer as defined in Rule 144A under the US Securities Act |
|
Regulation D |
Regulation D under the US Securities Act |
|
Regulation S |
Regulation S under the US Securities Act |
|
RIS |
shall have the same meaning as in the AIM Rules |
|
Target Business |
the business of manufacturing, marketing and selling Nizoral in the APAC region |
|
Vendor |
Janssen Pharmaceutica N.V., a member of the Johnson & Johnson group of companies |
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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