Proposed acquisition of Zesty Limited

RNS Number : 2716N

Induction Healthcare Group PLC

19 May 2020

 

19 May 2020

Induction Healthcare Group PLC

("Induction", the "Company or the "Group")

Proposed acquisition of Zesty Limited

Proposed Issue of New Ordinary Shares

and

Notice of General Meeting

Induction, a leading healthcare technology company that helps healthcare professionals deliver better care more efficiently, announces that it has entered into a conditional share purchase agreement to acquire Zesty Limited (Zesty) a digital healthcare patient engagement platform company, for a consideration comprising (1) £500,000 in cash plus (2) the issue of 12,424,527 New Ordinary Shares (the "Acquisition").

About Zesty

Zesty's platform provides an integration layer with a hospital's electronic patient record ("EPR") or patient administration system ("PAS") and a portal that allows patients to manage their hospital outpatient appointments, read their administrative and clinical correspondence, attend a video based consultation and store a personal copy of their clinical record, through this integration layer.

For the year ended 31 December 2018, Zesty reported revenue of £1.04 million and a net loss before tax of £0.51 million, with a net current asset position of £0.33 million as at 31 December 2018.

Acquisition Highlights

By integrating Zesty's and Induction's technologies, the enlarged group will, in the Directors' view, be one of the first technology platforms to interconnect patients, clinicians and healthcare information across both multiple hospital sites and EPR platforms.

The Directors expect the Acquisition to provide many synergistic benefits including:

· Sales: Zesty and Induction sell to the same sales channel, i.e. to hospitals

·   Software development: pooling software engineering resources (to smooth peaks and troughs in product development)as, for example, both teams develop their back-ends using Ruby on Rails

· Management: James Balmain will be appointed to the position of Joint-CEO of the Group, a role that will be shared with Dr Hugo Stephenson, current CEO of the Group

·     Board: the appointment of James Balmain and Andrew Williams to the Induction Board at completion of the Acquisition will bring their experience to the enlarged Induction group.  James has extensive technology experience and relationships with NHS Trust C-suites and Andy has extensive experience and connections in healthcare IT including having been CEO of NHS Digital. 

·   On or shortly following completion of the Acquisition, it is anticipated that Ibraheem Mahmood will step down from the board of directors of the Company. However, Ibs will continue in a Business Development role, primarily focused on M&A and fundraising for the Group.

Acquisition Consideration

The consideration payable in respect of the Acquisition comprises the payment in cash of £500,000 and the issue of consideration shares to the Sellers, being the issue of 12,424,527 New Ordinary Shares. The New Ordinary Shares represent approximately 41.9 per cent. of the existing issued share capital of the Company and will, when issued, represent approximately 29.5 per cent. of the Enlarged Share Capital.  The New Ordinary Shares will rank pari passu with the Existing Ordinary Shares in the Company.

The issue of the New Ordinary Shares is conditional, inter alia, upon the approval by Shareholders of the Resolutions to be sought at the General Meeting convened for 5 June 2020.

The Directors believe that the combination of the payment in cash of £500,000 and the proposed issue of the New Ordinary Shares to the Sellers is the most appropriate method of funding the Acquisition at the present time.

Notice of General meeting

The issue of the New Ordinary Shares (and therefore completion of the Acquisition) is conditional upon the approval by the Company's Shareholders ("Shareholders") of the Resolutions to be proposed at the General Meeting of the Company, which is being held at Glebe Cottage, Sandhutton, Thirsk YO7 4RW at 9.00 a.m. BST on 5 June 2020.

The Circular will be posted to the Company's shareholders and made available on the Company website: https://inductionhealthcare.com/   

Dr Hugo Stephenson, CEO of Induction, said :   

"Zesty has demonstrated that it can improve patient experience while saving hospitals time and money through its market leading patient portal and outpatient bookings engine. In the process, Zesty has solved the problem of integrating with different electronic patient record systems. Connecting the most used app by NHS doctors (Induction) and the most used app by NHS trusts (MicroGuide) with patients and their health records, has the potential to deliver the right resources to the right places at the right time - a transformational opportunity for healthcare."

James Balmain, CEO of Zesty, said:

"I see the frustration that clinical teams and patients feel every day. Basic things, like updating a patient record or booking an appointment - are just not easy enough. So an app for doctors, connected to an app for patients makes total sense. Induction and Zesty coming together can help improve the way healthcare is delivered.

I am excited by the reach and capability of the new combined Induction Group. We will be working as hard as we can to help bring clinical teams and patients together, in an efficient and low-friction way. The COVID-19 pandemic has focused minds within healthcare on the benefits of using digital technology in all sorts of ways - I think we can and should be doing more."

ENQUIRIES

Induction Healthcare
Dr Hugo Stephenson, Chief Executive Officer Ibs Mahmood, Chief Business Officer	Via FTI Consulting
Numis Securities (Nominated Adviser and Broker)	[phone]
James Black / Freddie Barnfield / Huw Jeremy / Matthew Jones
FTI Consulting	[phone]
Jamie Ricketts / Elena Kalinskaya / Sam Purewal / Mary Whittow

About Induction

Induction Healthcare Group PLC is a leading healthcare technology company that helps healthcare professionals deliver better care more efficiently. T he Group has two platforms, Induction and MicroGuide, that support healthcare professionals in multiple markets, including UK, Ireland, Australia and South Africa. Induction is the number one healthcare collaboration app in the UK. The app helps over 140,000 users - mostly doctors - to increase productivity and enhance communication by securely sharing phone numbers and bleeps, bookmarks, documents and messages in a clinical setting. The MicroGuide platform provides medical organisations with the ability to collaboratively create, edit, and publish their own local medical guidelines in a secure and locally administrated environment. The Induction app is used by the majority of hospital doctors within the NHS. The MicroGuide platform is used by the majority of trusts within the NHS. 

As at 1 May 2020, the Induction app had 140,819 registered users, primarily in the UK. The registered user base grew by 67.2% from 1 May 2019 to 1 May 2020.

As at 1 May 2020, the MicroGuide app had 173,196 registered users, primarily in the UK. The registered user base grew by 36.2% from 1 May 2019 to 1 May 2020.

  Acquisition of Zesty Limited

  Admission of New Ordinary Shares

  and

  Notice of General Meeting

1.  Introduction

The Company announces today that it has entered into a conditional share purchase agreement to acquire Zesty Limited, a digital healthcare patient engagement platform company, for a consideration comprising (1) £500,000 in cash plus (2) the issue of 12,424,527 New Ordinary Shares.  Based on the mid-market closing price of an Ordinary Share on 18 May 2020, the 12,424,527 New Ordinary Shares to be issued pursuant to the Acquisition is equivalent to approximately £12.2 million and therefore the aggregate purchase price is equivalent to approximately £12.7 million.

The issue of the New Ordinary Shares (and therefore completion of the Acquisition) is conditional upon the approval by Shareholders of the Resolutions to be proposed at the General Meeting of the Company convened for 5 June 2020. Subject to Shareholders approving the Resolutions to be proposed at the General Meeting, it is expected that completion of the Acquisition will take place on or about 5 June 2020 and that Admission of the New Ordinary Shares will take place on or about 9 June 2020.

The New Ordinary Shares are not being offered on a pro rata basis to existing Shareholders and accordingly the Admission is conditional upon Shareholders resolving to disapply statutory pre-emption rights. Shareholders will find set out at Part 2 of the Circular a Notice of General Meeting which has been convened for 9.00 a.m. on 5 June 2020 at which the Resolutions will be proposed to, inter alia,  approve the allotment and issue of the New Ordinary Shares and to dis-apply statutory pre-emption rights in respect of such allotment.

The purpose of this announcement and the Circular is to provide further details of the Acquisition and Admission and to explain the background to and reasons for the Acquisition and why the Directors consider the Acquisition to be in the best interests of the Company and its Shareholders as a whole and why the Directors unanimously recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, notice of which is set out at Part 2 of the Circular.

2.  Background to and reasons for the Acquisition

Background to the Group

The Directors' vision for the Group is that every healthcare professional every day chooses to use an Induction technology to streamline delivery of care to patients. Induction has two platforms, the Induction app and the MicroGuide app, that support healthcare professionals in multiple markets, including the UK, Ireland, Australia, USA and South Africa.

Induction has a strong market position in the UK, with, as at 1 May 2020, just over 119,000 UK users.  The Induction app helps more than 140,000 users in total worldwide - mostly doctors - to increase productivity and enhance communication by securely sharing phone numbers and bleeps, bookmarks, documents and messages in a clinical setting.

Induction's MicroGuide platform provides medical organisations with the ability to collaboratively create, edit and publish their own local medical guidelines in a secure and locally administrated environment.

Induction's technology is used by the majority of doctors within the UK National Health Service ("NHS") and has been purchased by the majority of Acute Trusts within the NHS. 

Information on the Acquisition

Overview

Zesty's platform provides an integration layer with a hospital's electronic patient record ("EPR") or patient administration system ("PAS") and a portal that allows patients to manage their hospital outpatient appointments, read their administrative and clinical correspondence, attend a video based consultation and store a personal copy of their clinical record, through this integration layer.

Financial information

For the year ended 31 December 2018, Zesty reported revenue of £1.04 million and a net loss before tax of £0.51 million, with a net current asset position of £0.33 million as at 31 December 2018.

Rationale for the Acquisition

The Acquisition will create an enlarged group with an integrated platform which the Directors expect will accelerate the growth of the Induction and MicroGuide apps and Zesty's current patient portal business, as well as creating new product and growth opportunities that the Directors believe will emerge from healthcare professionals, patients, and healthcare information systems being interconnected. The Board considers that the terms of the Acquisition and the valuation of Zesty are attractive given this potential for growth and the opportunity to change the way healthcare is delivered.

The enlarged group

By integrating Zesty's and Induction's technologies, the enlarged group will, in the Directors' view, be one of the first technology platforms to interconnect patients, clinicians and healthcare information across both multiple hospital sites and EPR platforms.  Specifically, starting in the UK, it is expected to have:

i.  Extensive integration with most leading hospital EPR and PAS platforms

ii.  A very high rate of adoption and usage for a patient facing digital platform for hospitals (Zesty)

iii.  One of the highest adoption and usage rates of a healthcare technology by doctors in hospitals (Induction app)

iv.  A broad base of commercial relationships with acute trusts (MicroGuide).

The enlarged group plans to use this platform to:

i.  In the next six months: use secure messaging to allow doctors to interact with the EPR

ii.  In the next year: enable patients to work with their doctors in building a copy of their clinical record, empowering them to take more ownership of their health

iii.  In the next two years: enable more routine patient monitoring, triage and management to take place outside the hospital so that the hospital can focus on more severe and emergency care

iv.  Also in the next two years: apply machine learning to detect bottlenecks and early warning signals that can inform improved resource allocation and service delivery.

The Directors expect the Acquisition to provide many synergistic benefits including:

i.  Sales: Zesty and Induction sell to the same sales channel, i.e. to hospitals

ii.  Software development: pooling software engineering resources (to smooth peaks and troughs in product development) as, for example, both teams develop their back-ends using Ruby on Rails

iii.  Management: James Balmain will be appointed to the position of Joint-CEO of the Group, a role that will be shared with Dr Hugo Stephenson, current CEO of the Group

iv.  Board: the appointment of James Balmain and Andrew Williams to the Induction Board at completion of the Acquisition will bring their experience to the enlarged Induction group.  James has extensive technology experience and relationships with NHS Trust C-suites and Andy has extensive experience and connections in healthcare IT including having been CEO of NHS Digital.

Details of James Balmain's and Andrew Williams' experience are as follows:

James Henry Stewart Balmain , aged 46, Joint-Chief Executive Officer

James co-founded Zesty Limited in 2012, a multi award winning UK digital health company. Prior to Zesty, James held senior digital roles at EE and the Shop Direct group. James has a wealth of NHS facing commercial experience, having led sales and product development for Zesty Limited.

Andrew (Andy) David Williams , aged 61, Non- Executive Director

Andy has had a long career in the IT and telecoms sectors and held a series of very senior positions in IBM, Lucent Technologies, Alcatel-Lucent and Computer Science Corporation (CSC), where he ran large divisions of the companies. For the last fifteen years or so, he has specialised in running services organisations - ranging from consulting, systems integration to outsourcing. As a result he has a very good understanding of technology and how to apply it to achieve business change. He was chief executive of NHS Digital for three years between 2014 and 2017 - overseeing the use of data and IT for the NHS in England, where he gained an in-depth understanding of the use of technology in healthcare. Since leaving NHS Digital, he has become a non-executive director and chairman of several health technology companies.

Current Trading and Prospects

In the Company's unaudited interim results for the six months ended 30 September 2019 published on 28 November 2019 the Company noted:

· Continued growth in users and engagement - in the month to 31 October 2019:

§ Registered user base grew by a further 4% to 114,074

§ Growth in lookups (directory / guidelines), calls and document downloads at 7% each

· Ongoing development and release of new Induction app features including secure messaging, and document exchange within clinical teams

· Healthy acquisition pipeline targeting new and complementary products and geographies

· Expectation that Induction app will generate revenues in 2020 (in addition to MicroGuide, which is already revenue-generating)

Since 30 September 2019 the continued focus of Induction remains on serving healthcare professionals. The Company's strong balance sheet and net cash position enable it to deliver new features to support the healthcare community and fund its active acquisition pipeline.

Induction app

In March 2020, the Company saw significant growth in demand for its tools, as a result of the strain that COVID-19 is placing on healthcare institutions, including:

· 66% increase in daily user registrations 

· 428 new collaborative private spaces were set up, and engaged an additional 11,500 clinicians

· 33,480 clinical guidelines and documents were viewed, 4.75 times the number of views in February 2020.

MicroGuide app

The Company's MicroGuide app, which the Directors believe to be the leading clinical guidelines management platform for healthcare services, is widely used across approximately 75% of NHS trusts. The number of registered users has increased by 6% to 168,678 since 31 January 2020. 

Medical organisations have been publishing new and updated guidelines for their clinical communities via the MicroGuide app at an unprecedented rate, with monthly publications for March 2020 up over 200% when compared with March 2019.

Access to guidelines has also increased significantly with approximately 800,000 guidelines pageviews occurring in March 2020 alone. This is a 40% increase year-on-year and, in the Directors' view, proves the value that clinicians receive from access to locally specific content at the point of care.

MicroGuide is proud to be supporting Barts Health NHS Trust in the Nightingale London project with antimicrobial and COVID-19 content.

The Acquisition Consideration

The consideration payable in respect of the Acquisition comprises the payment in cash of £500,000 and the issue of consideration shares to the Sellers, being the issue of 12,424,527 New Ordinary Shares. The New Ordinary Shares represent approximately 41.9 per cent. of the existing issued share capital of the Company and will, when issued, represent approximately 29.5 per cent. of the Enlarged Share Capital.  The New Ordinary Shares will rank pari passu with the Existing Ordinary Shares in the Company.

The issue of the New Ordinary Shares is conditional, inter alia, upon the approval by Shareholders of the Resolutions to be sought at the General Meeting convened for 5 June 2020.

The Directors believe that the combination of the payment in cash of £500,000 and the proposed issue of the New Ordinary Shares to the Sellers is the most appropriate method of funding the Acquisition.

3.  Sale and Purchase Agreement

On 18 May 2020, the Company entered into a conditional share purchase agreement (the SPA) pursuant to which the Company agreed to purchase the share capital of Zesty from its shareholders. The consideration payable upon completion comprises £500,000 in cash and the allotment and issue (credited as fully paid) of the New Ordinary Shares.

The shares in Zesty to be acquired will be fully paid and free from any pre-emption right, conversion right, option, mortgage, charge, pledge, lien, hypothecation, security interest, retention of title or other encumbrance of any kind and together with all the rights attaching to those shares. The SPA and any dispute or claim arising out of, or in connection with it (including non-contractual disputes or claims) are governed by and construed in accordance with English law. The courts of England and Wales are to have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of the SPA.

Completion of the Acquisition is dependent upon:

· the despatch by the Company of the Circular to shareholders;

· the passing of the Resolutions at the General Meeting;

· the exercise and / or waiver and / or lapse in full of all of the existing share options granted to employees of Zesty and (to the extent exercised) the allotment and issue by Zesty of ordinary shares in the capital of Zesty pursuant to the relevant exercised share options; and 

· the conversion in full of certain shareholder loans made by certain shareholders in Zesty to Zesty and the issue by Zesty of ordinary shares in the capital of Zesty to those shareholders.

If these conditions are not satisfied by 5.00 pm on 30 June 2020, the SPA will (unless otherwise agreed) terminate and the Acquisition will not proceed.

The SPA contains certain customary warranties and was accompanied by a tax deed given by certain Sellers in relation to Zesty and its business, subject to agreed limitations. Pursuant to the SPA, the Company has also given certain warranties to the Sellers in relation to the Group and its business, subject to agreed limitations.

For so long as each of Services Innovants Sante et Autonomie (SISA) FPCI and Andrew Goodwin remain holders of an agreed number of shares in the Company following completion of the Acquisition each is entitled to appoint a person to be an observer at meetings of the Board.  Only one of the observers appointed by each of SISA and Andrew Goodwin shall be entitled to attend meetings of the Board and neither observer shall be entitled to payment of any fees or expenses by the Company.

The SPA does not provide for the Acquisition to include the acquisition of shares which may be issued by Zesty pursuant to the exercise of certain options to subscribe for shares in Zesty which are currently "under water" (that is to say where the price to exercise the relevant options would be less than the consideration which the relevant option holders would have expected to receive had they sold their shares under the SPA).  However, in the unlikely event that any such options are exercised, it is anticipated that the Company will compulsorily acquire those shares at an equivalent price per share to that which Zesty shareholders are selling their shares under the SPA and in circumstances where the option exercise price payable by the exercising "under water" option holders to subscribe for shares in Zesty will be greater than the consideration payable by the Company to acquire those shares. 

On completion of the Acquisition, Zesty will become a wholly owned subsidiary of the Company.

4.  General Meeting

A notice of a General Meeting to be held at Glebe Cottage, Sandhutton, Thirsk YO7 4RW at 9.00 a.m. on 5 June 2020 is set out at Part 2 of the Circular. At this meeting four resolutions will be proposed:

· the first resolution is an ordinary resolution to grant a new authority and power to the Directors to permit them to allot the New Ordinary Shares in connection with the Acquisition as described in the Circular;

· the second resolution, which is also an ordinary resolution, is to grant a new authority and power to the Directors to permit them to, inter alia, allot shares in connection with a rights issue, up to a maximum of approximately one-third of the issued ordinary share capital and in connection with the issue of shares pursuant to any share option scheme of the Company;

· the third resolution, which is a special resolution, is to grant the Directors the authority to allot the New Ordinary Shares in connection with the Acquisition on a non pre-emptive basis; to allot shares in connection with a rights issue; and to allot shares in connection with the issue of shares pursuant to any share option scheme of the Company; and

· the fourth resolution, which is also a special resolution, is to grant the Directors the authority to allot shares or to sell treasury shares, in each case for cash and on a non pre-emptive basis, having an aggregate nominal value not exceeding 20% of the issued ordinary share capital (excluding treasury shares) as it is expected to be following completion of the Acquisition.

In relation to the authority sought by the Company pursuant to the fourth resolution, the Board has carefully considered the Pre-Emption Group's recommendation for issues in the circumstances brought about by the current COVID-19 pandemic dated 1 April 2020 that investors support, on a case-by-case basis, issuances by companies of up to 20% of their issued share capital and whether the Company should seek approval of Shareholders for this additional flexibility. 

If the fourth resolution is passed by Shareholders at the General Meeting, the Directors anticipate that they will have regard to the Pre-Emption Group's recommendations, including as regards consulting with a representative sample of its major shareholders in advance of issuing shares pursuant to the disapplication of the statutory pre-emption rights, that so far as possible any such share issuance should be made on a soft pre-emptive basis and that the Directors should be involved in the allocation process.

In considering whether to seek approval of Shareholders for the flexibility which would be afforded by the passing of resolution number 4, the Board has considered a number of factors.  While the Company's current focus is making sure its employees remain safe and healthy, the Board recognises that the Company has been supporting global efforts to combat COVID-19 through its technology and tools for healthcare professionals in the NHS (UK), Ireland, North America, South Africa and Australia.  The Company is working hard to release new features of its Induction and MicroGuide apps earlier than expected to support healthcare professionals improve efficiencies and enhance communications as they seek to navigate through this new unfamiliar and rapidly changing work environment.  Additionally, the Board acknowledges that as market conditions stabilise the Board may be able to pursue business development opportunities as a result of changes in healthcare landscape arising from the COVID-19 pandemic and/or M&A opportunities.  Consequently the Board is seeking the additional flexibility to allot shares on a non-pre-emptive basis up to 20% of its issued share capital at this time so that it is able to effect a fundraising efficiently and quickly and  can react quickly to, or pursue, opportunities that may be available to it as a consequence of the COVID-19 virus outbreak.

5.  Further Information

Further copies of the Circular can be made available by contacting the Company Secretary ([e-mail]) up until and including   the date of the General Meeting, and can also be downloaded from the Company's website at   www.inductionhealthcare.com. The attention of Shareholders' is drawn to the remainder of this announcement and the Circular.

6.  Action to be taken

In view of the ongoing COVID-19 pandemic, the Company and the Board remind all shareholders of the British Government's new rules prohibiting gatherings of more than two people from a different household, unless essential for work purposes. The Company's view, which is supported by The Chartered Governance Institute (ICSA) is that attendance at a general meeting by a shareholder other than one specifically required to form the quorum for that meeting, is not essential for work purposes.  The Company has arranged for a quorum to be present in person at the meeting.  Accordingly, Shareholders of the Company should therefore comply with the British Government's rules by not attending the General Meeting in person and instead appoint the Chairman as their proxy with their voting instructions. The deadline for doing this is by 9.00 a.m. on 3 June 2020. The chair of the General Meeting will direct that voting on all resolutions set out in this notice will take place by way of a poll. Anyone seeking to attend the General Meeting in person will be refused entry.  In order to reduce the risk of infection, the General Meeting will end immediately following the business of the General Meeting. The Company is taking these measures to comply with the British Government's rules in relation to the COVID-19 pandemic, to safeguard its shareholders' and employees' health and to make the General Meeting as safe as possible.

Shareholders will also find enclosed with the Circular a Form of Proxy for use at the General Meeting.

It is important that Shareholders complete and sign the Form of Proxy in accordance with the instructions printed thereon and return it to the Company's registrars, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, as soon as possible and in any event so as to arrive no later than 9.00 a.m. on 3 June 2020. Completion and return of the Form of Proxy will not preclude Shareholders from attending and voting at the meeting, should they wish to do so.  However, Shareholders are urged not to attend the General Meeting, and any who seek to attend will be refused entrance. Eligible Shareholders are encouraged to use the CREST Proxy Voting Service or lodge their vote electronically via www.sharevote.co.uk, details of which are contained in the notes to the notice of General Meeting.

7.  Admission, settlement and dealings

Admission of the New Ordinary Shares is conditional on the passing of the Resolutions and completion of the Acquisition. The expected timetable for the Acquisition is set out in this announcement and in the Circular. The New Ordinary Shares, when issued, will rank pari passu in all respects with the Existing Ordinary Shares. The total number of Ordinary Shares in issue following the issue of these shares will be 42,050,728.

8.  Recommendation and irrevocable undertakings to vote in favour of the Resolutions

The Directors consider the Acquisition and Admission to be in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

ADDITIONAL DISCLOSURES PURSUANT TO AIM RULE 12

Pursuant to AIM Rule 12 and Schedule Four of the AIM Rules, the Company hereby discloses summaries of the service contract / appointment letter of the proposed directors who will be appointed to the Company's Board at completion of the Acquisition.

James Henry Stewart Balmain

On completion of the Acquisition, it has been agreed that the Company and James Balmain will enter into a service agreement for Mr Balmain's employment as joint chief executive officer (alongside Hugo Stephenson as joint chief executive officer) at an annual salary of £217,000.  Mr Balmain will also receive an allowance of £40,000 per annum, in addition to his salary, to cover his travel expenses and his living expenses in the UK. The Company will also contribute a sum equal to 10% of Mr Balmain's salary to the Company's pension scheme (with Mr Balmain having the right to elect to take the pension contribution as salary). The Company will maintain life assurance and private medical insurance for Mr Balmain.

The service agreement will be terminable on 6 months' notice by either party and will contain restrictive covenants relating to competition, customers and employees and provisions for the protection of the intellectual property of the Group.

Andrew (Andy) David Williams

On completion of the Acquisition, it has been agreed that the Company and Andy Williams will enter into a letter for the appointment of Mr Williams as a non executive director of the Company at an annual fee of £35,000.  Mr Williams will be responsible for payment of tax, national insurance, VAT and other contributions required by law.

Mr Williams may be required to serve on one or more of the Company's board committees as may be agreed.

Either party may give the other 3 months' notice in order to terminate the appointment. However the appointment may be terminated by the Company without notice or payment in lieu of notice in certain circumstances, including if Mr Williams is not re-elected to the board either at the first annual general meeting following his appointment or after having been required to retire by rotation.

EXPECTED TIMETABLE

Announcement of the Acquisition		19 May 2020
Publication of the Circular and notice of General Meeting		20 May 2020
Last date and time for receipt of Proxy Forms for the General Meeting		9.00 a.m. on 3 June 2020
General Meeting		9.00 a.m. on 5 June 2020
Completion of the Acquisition		8 June 2020
Admission of New Ordinary Shares to trading on AIM		8.00 a.m. on 9 June 2020

All future times and/or dates referred to in this announcement and the Circular are subject to change at the discretion of the Company and Numis and, if any of the above times or dates should change, the revised times and/or dates will be notified by an announcement on a regulatory information service. All times are UK times unless otherwise specified.

TRANSACTION STATISTICS*

Ordinary Shares currently in issue as at the date of the Circular	29,626,201
Aggregate consideration payable by the Company pursuant to the Acquisition	£500,000 in cash plus the issue of 12,424,527 New Ordinary Shares (such 12,424,527 New Ordinary Shares being equivalent to approximately £12.2 million (based on the mid-market closing price of an Ordinary Share on 18 May 2020))
New Ordinary Shares proposed to be issued pursuant to the Acquisition	12,424,527
Enlarged Share Capital (approximate)	42,050,728
Percentage of Enlarged Share Capital represented by the New Ordinary Shares (approximate)	29.5%

* These figures set out the maximum consideration payable and the maximum number of New Ordinary Shares issuable on the assumption that (i) all relevant Resolutions contained within the Circular are passed, (ii) the Acquisition completes in accordance with the terms set out in the Circular and (iii) no other Ordinary Shares are issued by the Company prior to completion of the Acquisition.

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

"Act"	the Companies Act 2006 as amended
"Acquisition"	the proposed acquisition by the Company of Zesty Limited pursuant to the SPA
"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AIM"	AIM, a market of the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies and the AIM Rules for Nominated Advisers, as applicable
"AIM Rules for Companies"	the rules for AIM companies published by the London Stock Exchange, as amended or re-issued from time to time
"AIM Rules for Nominated Advisers"	the rules for nominated advisers to AIM companies published by the London Stock Exchange, as amended or re-issued from time to time
"Board" or "Directors"	the directors of the Company
"Certificated" or "in certificated form"	the description of a share or other security which is not in uncertificated form (that is, not in CREST)
"Circular"	The Circular to be published in connection with the Acquisition
"Company" or "Induction"	Induction Healthcare Group plc, a company incorporated in England and Wales with company number 11852026 with its registered office at C/O Office Space In Town, 20 St. Dunstan's Hill, London, United Kingdom, EC3R 8HL
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as also defined in the CREST Regulations)
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended from time to time)
"Enlarged Share Capital"	the enlarged share capital of the Company following Admission, comprising the Existing Ordinary Shares and the New Ordinary Shares
"Existing Ordinary Shares"	the Ordinary Shares in issue as at the date of this announcement
"FCA"	the United Kingdom Financial Conduct Authority
"Form of Proxy"	the form of proxy accompanying the Circular for use by Shareholders in connection with the General Meeting
"FSMA"	the UK Financial Services and Markets Act 2000 (as amended) including any regulations made pursuant thereto
"General Meeting" or "GM"	the general meeting of the Company which has been convened for 9.00 a.m. on 5 June 2020, notice of which is set out in Part 2 of the Circular
"Group" or "Induction"	the Company and its subsidiaries
"London Stock Exchange"	London Stock Exchange plc
"New Ordinary Shares"	the 12,424,527 new Ordinary Shares proposed to be issued by the Company to satisfy the majority of the consideration payable in connection with the Acquisition
"Numis"	Numis Securities Limited, acting as nominated adviser and broker to the Company for the purposes of the AIM Rules, and where the context allows, its affiliates
"Official List"	the official list of the UK Listing Authority
"Ordinary Shares"	ordinary shares in the share capital of the Company each with a nominal value of 0.5 pence
"Panel"	the Panel on Takeovers and Mergers
"Prospectus Rules"	the prospectus rules of the UKLA made in accordance with section 73A of FSMA as amended from time to time pursuant to the Prospectus Regulation 2017 (EU 2017/1129)
"Registrar"	Equiniti Limited, Aspect House, Spencer Road, Lancing Business Park, West Sussex BN99 6DA
"Resolutions"	the resolutions set out in the notice of General Meeting
"Securities Act"	the United States Securities Acts of 1933, as amended, and the rules and regulations promulgated thereunder
"Sellers"	James Balmain and others as set out in the SPA
"Shareholders"	holders of the Ordinary Shares from time to time
"SPA"	the share purchase agreement relating to the acquisition of Zesty Limited dated 18 May 2020 between the Company and the Sellers
"Sterling" or "£"	pounds sterling, the lawful currency from time to time of the United Kingdom
"UK Listing Authority"	the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA
"uncertificated" or "uncertificated form"	recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by of CREST
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"Zesty"	Zesty Limited, a private company limited by shares incorporated in England and Wales with company number 08294659 with its registered office at 82 St John Street, London, England, EC1M 4JN

 

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