Proposed Acquisition, Placing and Notice of GM
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
Volex plc
("Volex" or the "Company")
Proposed Acquisition, Placing and Notice of General Meeting
Proposed acquisition of the business and assets of Silcotec Europe Limited
Proposed Placing to raise £36.0 million at 75 pence per share
Notice of General Meeting
Notice of Results
Volex plc (AIM: VLX), the global provider of cable assemblies, announces the proposed acquisition of the business and assets of Silcotec Europe Limited ("Silcotec" or the "Seller"), a manufacturer and seller of cable harnesses (the "Acquisition") for a total consideration of up to approximately €18.1 million (the "Consideration").
The Company also announces a conditional placing to raise £36.0 million before expenses (the "Placing") through the issue of 48,000,000 new ordinary shares of 25 pence each (the "Placing Shares") at a price of 75 pence per Placing Share (the "Placing Price"), in order to finance the Acquisition, as well as provide additional capital for the Enlarged Group. The Placing has been oversubscribed with demand from new and existing institutional shareholders.
Acquisition and Placing Highlights
· Silcotec is a manufacturer and seller of cable harnesses and electronic sub-assemblies for the medical, telecommunications and computer industries
· 160 employees in the production facility in Slovakia with customer service and finance personnel based in Ireland
· For the year ended 31 December 2016 Silcotec generated revenue of €17.8 million and EBIT of €3.1 million
· Accompanied by a significant fundraising to de-lever Volex, and provide financial resources to grow the business
· The Consideration of up to approximately €18.1 million comprises: (i) initial cash consideration of €13.1million which shall be payable to the Seller on completion of the Acquisition ("Completion"); (ii) €3 million to be satisfied by the issue of 3,521,437 new ordinary shares of 25 pence each in Volex (the "Consideration Shares") to the Seller on Completion which are subject to a one year lock up; and (iii) deferred cash consideration of up to €2 million payable to the Seller 12 months from Completion, subject to certain conditions
· Placing to raise £36.0 million before expenses through the issue of 48,000,000 Placing Shares at a price of 75 pence per Placing Share
· Placing is conditional on, inter alia, the passing of the resolutions (the "Resolutions") which are to be proposed at a General Meeting of the Company to be held on 4 June 2018 (the "General Meeting") and admission of the Placing Shares to trading on AIM ("Admission") taking place no later than 5 June 2018
· Proceeds of Placing to fund the Acquisition, future acquisitions and other investment projects within the Company to improve its competitiveness
· Placing oversubscribed with demand from new and existing institutional shareholders
Commenting on the Acquisition and the Placing Nat Rothschild, Executive Chairman of Volex, said:
"This acquisition is an important step in expanding our Cable Assembly activities in Europe. Silcotec is a well run business, providing high quality cables, assemblies and box-builds for the medical industry. In addition, following the fund raising, Volex will have a well capitalised balance sheet to allow for further investment in our business which will benefit our customers, employees and shareholders."
Background to and reasons for the Acquisition and the Placing
As previously stated, the strategy of the Company includes the consolidation of the highly fragmented cable assembly industry by acquiring smaller competitors, and thereby realising savings in group-wide procurement and through more efficient sales and operations.
On 26 April 2018, the Company announced the acquisition of MC Electronics LLC ("MC"), a North-American based manufacturer of customised complex medical and industrial cables, wire harnesses and electro-mechanical assemblies for medical and industrial applications. MC, which has operations in California and Juarez, Mexico, produces customised cables, wire harnesses and electro-mechanical assemblies for over 40 customers in the North American market.
This most recent acquisition is the next step in the execution of the Company's strategy to grow its cable assembly business.
The proceeds from the Placing will be used to finance the Acquisition, to provide financial resources to acquire other competitors in the cable assembly industry, and to provide working capital. The Company's aim is to build a well-diversified, global business, providing the highest standard of quality and service to customers in the medical and industrial equipment markets. In addition, part of the proceeds will be used to invest in automation and restructuring in the Company's power cord factories, in order to improve its competitiveness and to secure additional business from its existing customers.
Details of the Acquisition
Silcotec is a manufacturer and seller of cable harnesses and electronic sub-assemblies for the medical, telecommunications and computer industries, with its principal manufacturing location in Slovakia with approximately 160 employees. The business has a small head office in Ireland. Silcotec is a low volume, high mix business, with a reputation of providing excellent quality and on-time delivery.
Volex shares relationships with some of Silcotec's key customers and the Acquisition also brings attractive new medical and scientific customers to Volex.
For the year ended 31 December 2016 Silcotec reported audited revenues of €17.8 million and EBIT of €3.1 million.
The Consideration of up to approximately €18.1 million comprises: (i) initial cash consideration of €13.1 million which shall be payable to the Seller on Completion; (ii) €3 million to be satisfied by the issue of 3,521,437 Consideration Shares to the Seller on Completion which are subject to a one year lock up; and (iii) deferred cash consideration of up to €2 million payable to the Seller 12 months from Completion, subject to certain conditions. The cash consideration for the Acquisition will be subject to a working capital and net asset adjustment in accordance with the terms of the business acquisition and share purchase agreement entered into by Volex and the Seller on today's date (the "Acquisition Agreement"). The Acquisition is scheduled to complete in early June 2018.
The Acquisition Agreement and related documents contain certain undertakings and warranties given by Silcotec, which are customary for a transaction of this nature.
The Acquisition Agreement is capable of termination by the Company prior to Completion if the Company becomes aware of any fact which would constitute a material breach of the warranties or a material claim under the tax schedule in respect of which the Company would have been entitled to claim for losses of not less than €180,000 or the Seller is in material breach of any provision of the Acquisition Agreement.
The Company proposes to raise £36.0 million of gross proceeds pursuant to the Placing at the Placing Price. The use of proceeds will be as follows:
· cash consideration in respect of the Acquisition;
· future accretive M&A and associated working capital;
· investment in automation and systems to lower costs; and
· working capital requirements of the Company to provide organic growth in both the Power Cords and Cable Assemblies divisions.
Synergy benefits from the Acquisition are expected to deliver a pre-tax cost saving of appropriately $0.5 million in the first full financial year following Completion. The Acquisition and the Placing are expected to be earnings neutral in the first full financial year ending 31 March 2019.
The Board expects that further acquisitions will be made in the next year which will also be accretive to earnings.
Details of the Placing
The Company has conditionally raised £36.0 million, before expenses, through the Placing of 48,000,000 Placing Shares at 75 pence per Placing Share with certain existing Shareholders and new institutional investors.
The Placing Price of 75 pence per Placing Share represents a 0.7 per cent. premium to the closing middle market price of 74.5 pence per Ordinary Share on 15 May 2018, the last Business Day before this Announcement.
On 16 May 2018, the Company and Liberum Capital Limited ("Liberum") entered into the Placing Agreement pursuant to which Liberum agreed, subject to certain conditions, to use its reasonable endeavours to procure subscribers for the Placing Shares pursuant to the Placing. The Placing is not underwritten.
The Placing is conditional, inter alia, upon:
(i) the passing of the Resolutions to be proposed at the General Meeting;
(ii) Admission becoming effective by not later than 8.00 a.m. on 5 June 2018 (or such later time and/or date as Liberum and the Company may agree, being not later than 8.00 a.m. on 19 June 2018); and
(iii) the Placing Agreement becoming unconditional in all respects.
Accordingly, if any of such conditions are not satisfied, or, if applicable, waived, the Placing will not proceed.
The Placing is not conditional upon Completion of the Acquisition. In the unlikely event that the Acquisition does not complete in circumstances where Admission has already taken place, the Board's current intention is that the net proceeds of the Placing will be invested and/or applied for general corporate purposes and, where possible, financing other acquisition opportunities that fulfil the Company's strategic objectives.
Under the Placing Agreement, which may be terminated by Liberum in certain circumstances (including force majeure) prior to Admission, the Company has given certain warranties and indemnities to Liberum concerning inter alia the accuracy of the information contained in this Announcement, certain financial information and other matters relating to the Group and its business.
Application will be made for the Placing Shares to be admitted to trading on AIM subject to the passing of the Resolutions at the General Meeting. It is expected that Admission will become effective on 5 June 2018 and that dealings for normal settlement in the Placing Shares will commence at 8.00 a.m. on 5 June 2018.
The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the existing Ordinary Shares and will rank for all dividends or other distributions declared, made or paid after the date of issue of the Placing Shares.
Related Parties
NR Holdings Limited ("NR Holdings"), and Ruffer LLP on behalf of its clients have agreed to subscribe for 11,654,538 and 8,501,000 Placing Shares respectively as part of the Placing. These Shareholders are related parties of the Company for the purposes of the AIM Rules by virtue of their status as substantial Shareholders of the Company. The Directors, with the exception of Nat Rothschild (who is a beneficiary of NR Holdings), consider, having consulted with the Company's nominated adviser, Liberum, that the terms of the Placing with such related parties are fair and reasonable insofar as the Company's Shareholders are concerned.
General Meeting
The issue of the Placing Shares is conditional upon, inter alia, the approval by Shareholders of the Resolutions to be proposed at the General Meeting of the Company which has been convened for 10 a.m. on 4 June 2018. A circular containing a notice convening the General Meeting to be held at 10 Snow Hill, London, EC1A 2AL will shortly be sent to Shareholders (the "Circular"). A copy of the Circular will also be made available on the Company's website, https://www.volex.com/investor-relations.
If Shareholders do not pass the Resolutions, the issue of the Placing Shares and the Acquisition will not proceed.
Irrevocable Undertakings
The Company has received irrevocable undertakings to vote in favour of the Resolutions from those Directors who hold Ordinary Shares and certain other Shareholders holding, in total, 49,734,544 Ordinary Shares, representing, in aggregate, 53.3 per cent. of the Company's issued Ordinary Shares.
Recommendation
The Board considers the Acquisition and the issue of the Placing Shares to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends that you vote in favour of the Resolutions to be proposed at the General Meeting, as those Directors who hold Ordinary Shares intend to do in respect of their own beneficial holdings amounting, in aggregate, to 23,430,757 Ordinary Shares and representing approximately 25.1 per cent. of the existing issued Ordinary Share capital.
Notice of Results
The Company will announce its results for the year ended 1 April 2018 on 18 June 2018.
For further information, please contact:
Volex plc Tel: 07909 995887
Nat Rothschild, Executive Chairman
Daren Morris, CFO
Liberum
(Nominated Adviser & Sole Bookrunner) Tel: 0203 100 2222
Steve Pearce
Euan Brown
Appendix I to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing. Persons who choose 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 Appendix I) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in Appendix I.
IMPORTANT NOTICES
This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement. The content of this Announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this Announcement for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.
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, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. 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. 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 statement is based.
Liberum is authorised by the Financial Conduct Authority (the "FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing, and Liberum will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
The distribution of this Announcement in certain jurisdictions may be restricted by law. This Announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities the United States of America, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa or in any jurisdiction in which such offer or solicitation would be unlawful and should not be relied upon in connection with any decision, or as any inducement, to subscribe for or acquire any new Ordinary Shares. In particular, this Announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States. No public offer of securities is being made in the United Kingdom or elsewhere.
This Announcement is not an offer of securities for sale or a solicitation of any offer to purchase securities in the United States. Placing Shares may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "US Securities Act") or an exemption therefrom. The Company has not and does not intend to register any securities under the US Securities Act and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this Announcement, will not be accepted. The Placing Shares have not been and will not be registered with any regulatory authority of any state within the United States.
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; Placing Shares offer no guaranteed income and no capital protection; and an investment in 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, Liberum will only procure 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 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 I
TERMS AND CONDITIONS OF PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE ANNOUNCEMENT (WHICH IS FOR INFORMATION PURPOSES ONLY) AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX I ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, INCLUDING DIRECTIVE 2010/73/EC, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND (B) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS AND (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED and in all cases who are capable of being categorised as a professional client or an eligible counterparty for the purposes of the FCA Conduct of Business Rules (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS APPENDIX I 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 THE ANNOUNCEMENT (INCLUDING THIS APPENDIX I) MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX I AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX I DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN VOLEX PLC (THE "COMPANY").
THE INFORMATION CONTAINED IN THIS APPENDIX I IS NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE SUCH RELEASE WOULD BE UNLAWFUL. THIS APPENDIX I (AND THE INFORMATION CONTAINED HEREIN) DOES NOT CONTAIN OR CONSTITUTE AN OFFER OF SECURITIES FOR SALE, OR SOLICITATION OF AN OFFER TO PURCHASE SECURITIES, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER STATE OR JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, OR TO OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) ABSENT REGISTRATION EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO PUBLIC OFFERING OF THE SECURITIES WILL BE MADE IN THE UNITED STATES.
THE COMPANY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT AND INVESTORS WILL NOT BE ENTITLED TO THE BENEFITS OF THAT ACT. NO OFFER, PURCHASE, SALE OR TRANSFER OF THE ORDINARY SHARES MAY BE MADE EXCEPT IN CIRCUMSTANCES WHICH WILL NOT RESULT IN THE COMPANY BEING REQUIRED TO REGISTER AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT.
THE DISTRIBUTION OF THIS ANNOUNCEMENT AND/OR THE PLACING AND/OR THE ISSUE OF THE PLACING SHARES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. NO ACTION HAS BEEN TAKEN BY THE COMPANY, LIBERUM OR ANY OF THEIR RESPECTIVE AFFILIATES, AGENTS, DIRECTORS, OFFICERS OR EMPLOYEES THAT WOULD PERMIT AN OFFER OF THE PLACING SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH PLACING SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE COMPANY AND LIBERUM TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.
EACH PLACEE (AS DEFINED HEREIN) SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN THE PLACING SHARES. THE PRICE OF ORDINARY SHARES IN THE COMPANY AND INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF THEIR SHARES.
By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") will be deemed to have read and understood the announcement of which this Appendix I forms part (the "Announcement") in its entirety, to be participating, making an offer and subscribing for Ordinary Shares to be issued pursuant to the Placing ("Placing Shares") on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix I.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix I or the Announcement should seek appropriate advice before taking any action.
Details of the Placing Agreement and of the Placing Shares
Liberum Capital Limited ("Liberum") has today entered into a placing agreement (the "Placing Agreement") with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Liberum, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price (as defined below). The Placing is not underwritten by Liberum.
The Placing is conditional upon, inter alia, (i) the approval by the Company's shareholders of the Resolutions to be proposed at the General Meeting (which will, inter alia, grant authority to the directors of the Company to allot the Placing Shares and disapply pre-emption rights in respect of the Placing Shares); (ii) Admission to trading on AIM of the Placing Shares ("Admission") occurring by 8.00 a.m. on 5 June 2018 (or such later date as the Company and Liberum may agree, in any event being not later than 8.00 a.m. on 19 June 2018) and (iii) the Placing Agreement becoming unconditional in all respects and not having been terminated.
Application will be made for the Placing Shares to be admitted to trading on AIM. The Placing Shares will, following Admission, rank pari passu in all respects with the existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of Ordinary Shares after Admission.
No Prospectus
The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published. No prospectus or other offering document has been or will be submitted to be approved by the Financial Conduct Authority ("FCA") in relation to the Placing or the Placing Shares, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix I) and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies (the "AIM Rules")) by or on behalf of the Company on or prior to the date of the Announcement (the "Publicly Available Information") and subject to any further terms set forth in the trade confirmation to be sent to individual Placees to confirm their subscription for the Placing Shares.
Each Placee, by participating in the Placing, agrees that the content of the Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of Liberum or the Company or any other person and neither Liberum, nor the Company nor any other person acting on such person's behalf nor any of their affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. 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. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Participation in, and principal terms of, the Placing
1. Liberum is acting exclusively as nominated adviser and sole bookrunner to the Company (for the purposes of the AIM Rules for Companies) and no one else in connection with Admission, the Placing and the matters set out in this Announcement.
2. Liberum is arranging the Placing as an agent of the Company. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Liberum. Liberum and its affiliates are entitled to participate in the Placing as principal.
3. The price per Placing Share is fixed at 75 pence (the "Issue Price") and is payable by the Placees to Liberum (or as it may direct).
4. No fee or commission will be paid to Placees or by Placees in respect of any Placing Shares.
5. Each Placee's allocation is determined by Liberum in its discretion following consultation with the Company and has been or will be confirmed orally or in writing (including by email) by Liberum and a trade confirmation will be dispatched as soon as possible thereafter. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of Liberum and the Company, under which it agrees to subscribe for the number of Placing Shares allocated to the Placee at the Issue Price and otherwise on the terms and subject to the conditions set out in this Appendix I and in accordance with the Company's articles of association. Except with Liberum's consent, such commitment will not be capable of variation or revocation at the time at which it is submitted.
6. Each Placee's allocation and commitment will be evidenced by a trade confirmation issued to such Placee by Liberum. The terms of this Appendix I will be deemed incorporated in that trade confirmation.
7. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Liberum (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.
8. Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all allocated 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".
9. All obligations of Liberum 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".
10. 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 and will not be capable of rescission or termination by the Placee.
11. To the fullest extent permissible by law and applicable FCA rules, save in the event of fraud on its part, none of (a) Liberum, (b) the Company, (c) any of their respective affiliates, agents, directors, officers, or consultants, (d) to the extent not contained within (a), (b) nor (c), any person connected with Liberum or the Company as defined in the Financial Services and Markets Act 2000 ("FSMA") ((c) and (d) being together "affiliates" and individually an "affiliate"), or (e) any person acting on Liberum's behalf, shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither Liberum nor the Company nor any of their respective affiliates shall have any liability (including, to the extent permissible by law and any fiduciary duties) in respect of Liberum's conduct of the Placing or of such alternative method of effecting the Placing as Liberum and the Company may agree.
Registration and Settlement
Liberum will confirm the final allocations of Placing Shares to be issued to Placees (each a "Final Placing Participation") pursuant to the Placing orally or in writing to Placees and will issue a trade confirmation in respect of such Final Placing Participations. The trade confirmation will include the payment and settlement procedures to be followed by Placees in connection with their subscriptions for the Placing Shares comprised in their Final Placing Participations.
Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK and Ireland Limited ("CREST"), subject to certain exceptions. Liberum 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 CREST by the expected time for settlement and delivery set out in the trade confirmation or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Each Placee agrees that it will do all things reasonably necessary to ensure that delivery and payment is completed in accordance with the instructions set out in the trade confirmation, and in accordance with the standing CREST instructions in respect of the Placing Shares that it has in place with Liberum.
If allocated Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as the allocated 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 United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing. 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), neither Liberum nor the Company shall be responsible for payment thereof.
It is expected that settlement in respect of the Placing Shares will take place on 5 June 2018 on a delivery versus payment basis.
Conditions of the Placing
The Placing is conditional upon, amongst other things:
(a) the approval by the Company's shareholders of the Resolutions to be proposed at the General Meeting (which will, inter alia, grant authority to the directors of the Company to allot the Placing Shares and disapply pre-emption rights in respect of the Placing Shares);
(b) Admission occurring by 8.00 a.m. on 5 June 2018 (or such later date the Company and Liberum may agree, in any event being not later than 8.00 a.m. on 19 June 2018); and
(c) the Placing Agreement becoming unconditional in all respects and not having been terminated.
If any of the conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and Liberum may agree), or the Placing Agreement is terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Right to terminate under the Placing Agreement" below, and will not otherwise be capable of rescission or termination by it.
Liberum may, in its absolute discretion and upon such terms as it thinks fit, waive fulfilment of all or any of the conditions in the Placing Agreement in whole or in part, or, with the agreement of the Company, may extend the time provided for fulfilment of one or more conditions. Any such extension or waiver will not affect Placees' commitments as set out in the Announcement.
Liberum may terminate the Placing Agreement in certain circumstances, details of which are set out below.
Neither Liberum nor the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability, save in the event of fraud on their respective parts, 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 to the Placing nor for 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 Liberum.
Right to terminate under the Placing Agreement
Liberum (in its absolute and sole discretion) may terminate the Placing Agreement at any time on or before Admission if, inter alia, it comes to the attention of Liberum that:
(a) any of the warranties were untrue, inaccurate or misleading;
(b) the Company and/or its directors have failed to comply with their obligations under the Placing Agreement, the AIM Rules or applicable law;
(c) any statement contained in certain documents relating to the Placing and Admission (including the Announcement) is or becomes untrue, inaccurate or misleading; or
(d) in the opinion of Liberum a material adverse change event occurs which Liberum considers to be material in the context of the Company and its subsidiaries, the Placing or Admission.
If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in the Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.
By participating in the Placing, each Placee agrees with the Company and Liberum that the exercise by Liberum of any right of termination or by the Company or Liberum of any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Liberum and that neither the Company nor Liberum need make any reference to such Placee and that none of Liberum, the Company, or any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise, save in the event of fraud on their respective parts.
By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after the issue by Liberum of a trade confirmation confirming each Placee's allocation and commitment in the Placing.
Representations, Warranties and Further Terms
By participating in the Placing, each Placee (and any person acting on such Placee's behalf), provided that a Placee may be acting as agent for and on behalf of discretionary managed clients and in that case will be agreeing as agent and not as principal, for its own part only, represents, warrants, undertakes, acknowledges and agrees (for itself and for any such prospective Placee) to each of the Company, Liberum and their respective directors, officers, employees, agents and affiliates that (save where Liberum expressly agrees in writing to the contrary):
1. it has read and understood the Announcement, including the Appendices, in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in the Announcement and the Publicly Available Information;
2. it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (a) is required under the Prospectus Directive; and (b) has been or will be prepared in connection with the Placing;
3. the existing Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;
4. it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and none of Liberum, the Company or any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in the Announcement (including the Appendices), or the Publicly Available Information; nor has it requested either of Liberum, the Company or any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;
5. neither Liberum, nor any person acting on its behalf nor any of its affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
6. the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares is contained in the Announcement (including the Appendices) and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on Publicly Available Information; (b) none of Liberum, the Company or any of their respective affiliates, agents, directors, officers or employees has made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information; (c) it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and (d) has not relied on any investigation that Liberum or any person acting on its behalf may have conducted with respect to the Company, the Placing or the Placing Shares;
7. the content of the Announcement (including the Appendices) and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and neither Liberum nor any persons acting on their behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in the Announcement (including the Appendices) or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in the Announcement (including the Appendices), the Publicly Available Information or otherwise. Nothing in this Appendix I shall exclude any liability of any person for fraudulent misrepresentation;
8. the Placee acknowledges that as the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States of America, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa, subject to certain exceptions, they may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States of America, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa or in any country or jurisdiction where any such action for that purpose is required;
9. it and/or each person on whose behalf it is participating:
(a) is entitled to acquire the Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;
(b) has fully observed such laws and regulations;
(c) has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares (or as agent where applicable) and will honour such obligations; and
(d) has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix I) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its subscription for Placing Shares;
10. it irrevocably appoints any duly authorised officer of Liberum as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe for under the terms of this Appendix I;
11. it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, Japan, New Zealand, the Republic of Ireland or the Republic of South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;
12. the Placing Shares have not been and will not be registered under the Securities Act and may not be offered, sold or resold in or into the United States or to or for the account or benefit of US persons except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 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 Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
13. it and the beneficial owner of the Placing Shares is not a US person (as defined in Regulation S under the Securities Act) and is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" not as a result of any directed selling efforts, in each case as defined in, and in accordance with, Regulation S under the Securities Act;
14. it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;
15. it will not distribute, forward, transfer or otherwise transmit the Announcement or any part of it (including the Appendices), 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. neither Liberum, nor its affiliates, agents, directors, officers or employees and any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Liberum and Liberum has no duties or responsibilities to it for providing the protections afforded to its clients 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;
17. it has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges and agrees that it will make payment to Liberum for the Placing Shares allocated to it in accordance with the terms and conditions of this Appendix I on the due times and dates set out in this Appendix I, failing which the relevant Placing Shares may be placed with others on such terms as Liberum may, in its absolute discretion determine without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Appendix I) which may arise upon the sale of such Placee's Placing Shares on its behalf;
18. the Placee acknowledges that no action has been or will be taken by any of the Company, Liberum or any person acting on their behalf that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any other country or jurisdiction;
19. the person who it specifies for registration as holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the Placee, as the case may be. Neither Liberum nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to acquire the Placing Shares pursuant to the Placing and agrees to pay the Company and Liberum in respect of the same (including any HMRC interest or penalties) on the basis that the Placing Shares will be allotted to a CREST stock account of Liberum or transferred to a CREST stock account of Liberum who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;
20. it is acting as principal only in respect of the Placing or, if it is acting for any other person, (a) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; and (b) it is and will remain liable to the Company and Liberum for the performance of all its obligations as a Placee (and as an agent if applicable) in respect of the Placing (regardless of the fact that it is acting for another person);
21. neither it, nor the person specified by it for registration as holder of Placing Shares is, or is acting as nominee or agent for, and the Placing Shares will not be allotted to, any person is or may be liable to stamp duty or stamp duty reserve tax under (or at a rate determined under) the Finance Act 1986;
22. it will not make an offer to the public of the Placing Shares and it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the EEA prior to the expiry of a period of six months from Admission 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 or an offer to the public in any other member state of the EEA within the meaning of the Prospectus Directive;
23. it is a person of a kind described in: (a) Article 19(5) (Investment Professionals) and/or 49(2) (High net worth companies etc.) of the Order, as amended, and/or an authorised person as defined in section 31 of FSMA; and (b) section 86(7) of FSMA (Qualified Investor), being a person falling within Article 2(1)(e) the Prospectus Directive, or is otherwise a person to whom the Announcement may be lawfully communicated and in all cases who is capable of being categorised as a professional client or an eligible counterparty for the purposes of the FCA Conduct of Business Rules. For such purposes, it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;
24. it has only communicated or caused to be communicated and it 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 Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that Liberum has not approved the Announcement in its capacity as an authorised person under section 21 of FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;
25. it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);
26. if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), the 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 a member state of the EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the express prior written consent Liberum has been given to the offer or resale;
27. save in the case of fraud, neither Liberum, nor any of its affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in the Announcement (including the Appendices) or for any information previously published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed information or any representation, warranty or undertaking relating to the Company, and will not be liable for its decision to participate in the Placing based on any information, representation, warranty or statement contained in the Announcement (including the Appendices) or elsewhere, provided that nothing in this paragraph shall exclude any liability of any person for fraud;
28. none of Liberum, the Company, any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of Liberum, the Company or their respective affiliates, agents, directors, officers or employees is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, acknowledgements, agreements, undertakings, or indemnities contained in the Placing Agreement nor the exercise or performance of Liberum's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
29. it acknowledges and accepts that Liberum may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares and/or related instruments for its own account for the purpose of hedging its underwriting exposure or otherwise and, except as required by applicable law or regulation, Liberum will not make any public disclosure in relation to such transactions;
30. Liberum and its affiliates, each acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in the Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by Liberum and/or any of its affiliates, acting as an investor for its or their own account(s). Neither Liberum nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;
31. it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;
32. it has complied with its obligations in connection with money laundering and terrorist financing including under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2017 and the Money Laundering Sourcebook of the FCA (together, the "Regulations") 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;
34. it is aware of and has complied with its the obligations regarding insider dealing EU Regulation 596/2014 on Market Abuse ("MAR") and section 56 of the Criminal Justice Act 1993 and confirms that it has and will continue to comply with those obligations;
35. it has neither received nor relied on any "inside information" as defined in MAR concerning the Company in accepting this invitation to participate in the Placing;
35. in order to ensure compliance with the Regulations, Liberum (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. Pending the provision to Liberum or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Liberum's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at Liberum's or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity Liberum (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence reasonably satisfactory to them, Liberum and/or the Company may terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;
36. it acknowledges that its commitment to acquire Placing Shares on the terms set out in the Announcement (including this Appendix I) will continue notwithstanding any reasonable amendment that may in 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's or Liberum's conduct of the Placing;
37. it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;
38. the Company, Liberum and others (including each of their respective affiliates, agents, directors, officers or employees) will rely upon the truth and accuracy of the foregoing representations, warranties, undertakings, acknowledgements and agreements, which are given to Liberum, on its own behalf and on behalf of the Company and are irrevocable;
39. if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, undertakings, acknowledgements, agreements and undertakings on behalf of each such accounts;
40. time is of the essence as regards its obligations under this Appendix I;
41. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Liberum;
42. the Placing Shares will be issued subject to the terms and conditions of this Appendix I and the Company's articles of association; and
43. these terms and conditions in this Appendix I and all documents into which this Appendix I is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any 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 the Company or Liberum 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 representations, warranties, acknowledgements and undertakings contained in this Appendix I are given to each of the Company and Liberum (for its own benefit, and where relevant, the benefit of its affiliates) and are irrevocable. The Company and Liberum will rely upon the truth and accuracy of the foregoing acknowledgements, undertakings, representations and warranties.
Miscellaneous
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 Liberum will be responsible and the Placees shall indemnify the Company and Liberum on an after-tax basis for any stamp duty or stamp duty reserve tax or other similar taxes or duties (together with interest, fines and penalties) paid by either of them in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify Liberum accordingly.
The Company and Liberum 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 Liberum accordingly. Furthermore, each prospective Placee agrees to indemnify on an after-tax basis and hold each of the Company and Liberum and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax or other similar taxes or duties in any jurisdiction to the extent that such interest, fines or penalties arise from the unreasonable 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 whether inside or outside the United Kingdom by them or any other person on the acquisition, subscription, transfer or sale by them of any Placing Shares or the agreement by them to acquire, subscribe for, sell or transfer any Placing Shares.
Other than as stated in the terms and conditions, each Placee and any person acting on behalf of the Placee acknowledges that Liberum does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.
Other than as stated in the terms and conditions, each Placee and any person acting on behalf of the Placee acknowledges and agrees that Liberum may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.
Unless the context otherwise requires, all references to time are to London time. All times and dates in the Announcement are subject to amendment by Liberum (in its absolute discretion). Liberum shall notify the Placees and any person acting on behalf of the Placees of any changes.
No statement in the Announcement is intended to be a profit forecast, and no statement in the 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.
The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM, a market of the London Stock Exchange.
The contents of the websites of the Company (including any materials which are hyper-linked to such websites) do not form part of the Announcement and prospective investors should not rely on them.
The rights and remedies of Liberum and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.
Where a Placee is acting as agent for and on behalf of its discretionary managed clients, then its participation and its acceptance of these terms and conditions are as agent and not as principal.
APPENDIX II
DEFINITIONS
'Acquisition' the proposed acquisition of the business and assets of Silcotec, a manufacturer and seller of cable harnesses
'Acquisition Agreement' the business acquisition and share purchase agreement dated 16 May 2018 between, amongst others, the Seller and the Company relating to the Acquisition
'Admission' the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules
'AIM Rules' the AIM Rules for Companies, as published by the London Stock Exchange from time to time
'Board' or 'Directors' the board of directors of the Company
'Circular' the circular containing a notice convening the General Meeting to be sent to Shareholders on today's date
'Company' or 'Volex' Volex plc
'Completion' completion of the Acquisition
'Consideration' the consideration payable by the Company for the Acquisition
'Consideration Shares' 3,521,437 Ordinary Shares to be issued to Silcotec on Consideration Shares Admission
'Consideration Shares Admission' the admission of the Consideration Shares to trading on AIM becoming effective in accordance with the AIM Rules
'Enlarged Group' the Group following Completion, as enlarged by the Acquisition
'General Meeting' the general meeting of the Company convened for 10 a.m. on 4 June 2018
'Group' the Company and its subsidiaries
'Liberum' Liberum Capital Limited
'MC' MC Electronics LLC
'Notice of General Meeting' the notice of General Meeting set out at the end of the Circular
'NR Holdings' NR Holdings Limited
'Ordinary Shares' the ordinary shares of 25 pence each in the share capital of the Company
'Placing' the proposed placing by the Company of the Placing Shares at the Placing Price
'Placing Agreement' the conditional placing agreement dated 16 May 2018 between the Company and Liberum in connection with the Placing
'Placing Price' 75 pence per Placing Share
'Placing Shares' 48,000,000 Ordinary Shares to be conditionally subscribed in accordance with the terms of the Placing Agreement
'Resolutions' the resolutions to be proposed at the General Meeting and set out in the Notice of General Meeting
'Shareholder' a holder of Ordinary Shares
'Silcotec' or 'Seller' Silcotec Europe Limited
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