Strategic Review

RNS Number : 4952S

Evocutis PLC

03 December 2012

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Press Release

3 December 2012

Evocutis plc

("Evocutis" or "the Company")

Statement Re: Strategic Review

Commencement of "Formal Sale Process" as defined in the Takeover Code

Evocutis plc (AIM: EVO), the company focused on advanced laboratory and clinical evaluations of skincare products for the health and cosmetic markets, today announces that it has appointed consultants Growth Innovators Group and advisors Zeus Capital to assist the Company in reviewing and evaluating a number of strategic options open to the Company to maximise value for shareholders.  Options include securing long term strategic partners for the business and may include an offerbeing made for the Company.  Discussions in relation to a merger with a third party or a sale of the business will take place within the context of a "formal sale process" as defined in The Takeover Code (the "Code") in order to enable conversations with parties interested in making such a proposal to take place on a confidential basis.

Evocutis has now introduced LabSkin™ as a consumable product but expects that significant revenue generation from this product line will take some time to develop.  As far as the Board is aware, LabSkin™ remains one of few commercially available products of its kind.  While the Company has encountered similar products within its extensive network of partners and collaborators, LabSkin™ has some unique and distinguishing features.  The Board believes that LabSkin™ is, at this time, a highly competitive technology, capable of out-performing other product testing approaches in the market.

The Board is also conscious of the impending European ban on cosmetic products that contain ingredients that have at any time been subject to animal testing.  This ban comes in to force in March 2013.  The Board's view is that this is tantamount to a global ban, as all new products are developed for the global market.  Therefore, with the cosmetics industry seeking new ingredients, the potential demand for LabSkin™, as a non-animal testing platform with the ability to emulate multiple skin types and conditions, currently provides an excellent value creation opportunity for shareholders.

As a consequence the Company is now in a position from which to assess and decide which of the options available to it best serves the interests of shareholders.

Process

Discussions in relation to a merger with a third party or a sale of the Company will take place within the context of a "formal sale process" as set out in the Code.  Parties with a potential interest in making an offer for, merging with, or proposing other forms of corporate transaction with Evocutis should contact Zeus Capital Limited (contact details as set out below).

Any interested party will be required to enter into a non-disclosure agreement with the Company on reasonable terms satisfactory to the Board and on the same terms, in all material respects, as the other interested parties, before being permitted to participate in the process. Following execution of an agreed non-disclosure agreement, the Company intends to provide interested parties with information materials on the Company.  Following receipt of the materials, interested parties shall be invited to submit proposals to the Company.  Interested parties who submit a proposal of interest to the Board will be invited into the next phase of the process.

The Board reserves the right to alter any aspect of the process as outlined above or to terminate it at any time and will make further announcements as appropriate.  The Board reserves the right to reject any approach or terminate discussions with any interested party or participant at any time.

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to Note 3 on Rule 2.2 of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process.  Interested parties should note Rule 21.2 of the Code, which will prohibit any form of inducement fee or other offer-related arrangement, and that the Company, although it may do so in the future, has not at this stage requested any dispensation from this prohibition under Note 2 on Rule 21.2.

This announcement is not an announcement of a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.

Following this announcement, the Company is now considered to be in an "offer period" as defined in the Code, and the dealing disclosure requirements listed below will apply.

-Ends-

For further information, please contact:

Evocutis plc
Tom Bannatyne, Chairman	[phone]
Dr Gwyn Humphreys, Interim Chief Executive Officer	www.evocutis.com

Zeus Capital Limited
Andrew Jones	Tel: [phone]
Nick Cowles	www.zeuscapital.co.uk

XCAP Securities Plc
Halimah Hussain	Tel: [phone]
	www.xcapgroup.co.uk

Media enquiries:

Abchurch Communications
Sarah Hollins / Adam Michael / Jamie Hooper	Tel: [phone]
[e-mail]	www.abchurch-group.com

A copy of this announcement will be available on the Company's website at www.evocutis.com as soon as possible.  The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Zeus Capital Limited is acting exclusively as financial adviser to Evocutis and no one else in connection with the matters described in this announcement.  In connection with such matters, Zeus Capital Limited, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person other than Evocutis for providing the protections afforded to clients of Zeus Capital Limited or for providing advice in connection with the matters described in this announcement or any matter referred to herein.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.  The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe such restrictions.  Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Ordinary share capital in issue

In accordance with Rule 2.10 of the Code, Evocutis currently has 174,675,828 ordinary shares of 1p each in issue. (ISIN: GB00B4WKYH05)

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure."

Notes to editors

About Evocutis plc

With a rich portfolio of new product opportunities, Evocutis offers antimicrobial and dermatological expertise to the cosmetic, consumer healthcare and pharmaceutical industries.  Being uniquely able to combine research for laboratory testing, advanced skin models and clinical testing, Evocutis offers a complete service for the development of skin care products and ingredients. Through research and testing Evocutis enables its clients to advance the discovery of skin care products that actually work.

Offering high quality contract research services, Evocutis specialises in Human Skin Microbiology, tissue culture systems and Human Volunteer and Clinical Dermatology Research. Unique characteristics of its colonised full thickness model of human skin (LabSkin™) allow rapid, cost effective screening of, for example, anti-ageing, anti-inflammatory and antimicrobial ingredients and products for use on skin. Additionally, the clinical, human volunteer testing facility that is housed on-site provides rapid, bespoke evaluation of dermatological products.

When it comes to advanced laboratory and clinical evaluations of skincare products for the health and cosmetic markets, the Evocutis focus is simple: intelligent and specialised R&D input. 

For further information, please see www.evocutis.com

About LabSkin™

LabSkin™ is an animal-replacement technology, that emulates living skin tissue and is a high value research and product testing tool for the cosmetic and healthcare industries. It is a full thickness human skin model, comprised of both dermal and epidermal layers, and is produced exclusively and reproducibly on site at Evocutis from primary human cells (keratinocytes & fibroblasts). The model exhibits a fully differentiated epidermal layer, which provides a completely dry surface for tailored testing requirements.

LabSkin™ is highly versatile, and alongside its antimicrobial model, Evocutis is developing models to test anti-ageing and moisturising products. The antimicrobial LabSkin™ model allows testing using pathogenic microorganisms which would not be possible in human clinical studies. In addition, methods have been developed to allow LabSkin™ to be inoculated with skin washings taken directly from human skin, thus providing a step-change in the quality of data possible from a laboratory model.  By benchmarking activity against best-in-class products, the activity of new ingredients and formulations can be assessed for several antimicrobial endpoints, including immediate kill, rate of kill and residual activity. 

Recent research indicates that our natural microflora is an integral part of our skin and makes a significant contribution to skin health.  LabSkin™ provides a unique living skin surface which is validated for microbial applications and can simultaneously provide information on irritation, penetration, barrier function and skin structure.

 

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