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Accrol Group Hldgs (ACRL)

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Monday 02 November, 2020

Accrol Group Hldgs

Acquisition and Launch of ABB

RNS Number : 0067E
Accrol Group Holdings PLC
02 November 2020
 

02 November 2020

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

 

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN ACCROL GROUP HOLDINGS PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF ACCROL GROUP HOLDINGS PLC.

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR").  UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA THE REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. 

 

ACCROL GROUP HOLDINGS PLC
("Accrol", the "Group" or the "Company")

 

CONDITIONAL ACQUISITION OF LEICESTER TISSUE COMPANY LIMITED ("LTC")

AND

PROPOSED PLACING AND OPEN OFFER

 

Accrol, a UK leading independent tissue converter, announces that it has entered into a conditional agreement to acquire the entire issued share capital of the LTC Group, a UK-based tissue converter, for an enterprise value of up to £41.8 million, comprising initial consideration of £35.0 million at Acquisition Completion and up to a further £6.8 million deferred consideration due in 2021, contingent on certain performance criteria being achieved.

 

Founded in 2014, LTC is a well-invested, fast growing, independent tissue conversion business, supplying private label and branded toilet roll and kitchen towel to UK customers, including major supermarket multiples and value retailers.

 

Acquisition highlights

 

LTC is a well-invested business of good scale with high-quality, modern machine assets, comprising four tissue lines, with significant capacity, highly effective systems and a strong day-to-day operational leadership team.

 

In the unaudited financial year ended 30 September 2020, the LTC business delivered revenue of £ 28.0 million, up c.44 per cent. on the previous financial year and adjusted EBITDA* of £ 4.5 million, up c.181 per cent. LTC' s revenue grew at a CAGR of c.70 per cent. between 2017 and 2019.

 

The Acquisition will increase Accrol's share of the total UK retail tissue market to approximately 16 per cent. of the £1.7 billion UK industry and consolidate its position in the private label retail tissue market.

 

With c.48 per cent. of Accrol's sales currently delivered south of Leicester, LTC's central England location provides a significant opportunity for logistical synergies.

 

LTC's product mix and customers are complementary to and enhance Accrol's existing customer relationships.

 

The Directors estimate annualised run rate cost synergies in excess of £1.0 million from procurement and operational efficiencies.

 

The Acquisition is expected to be immediately earnings enhancing.  Initial Consideration of £35.0 million representing an enterprise value / FY20 adjusted EBITDA* multiple of 7.8x before synergies and 5.5x when combined with the maximum Deferred Consideration (which is subject to new contract incremental EBITDA contributions of £3.1m).

 

* Unaudited adjusted EBITDA for year ended 30 September 2020 under UK GAAP including adjustments for director salary costs not expected to continue and certain other non-recurring costs

 

Acquisition financing

 

The Company intends to finance the consideration for the Acquisition and Associated Costs of approximately £3.5 million via a conditional placing of new Ordinary Shares at a price of 44 pence per Ordinary Share with institutional and other investors to raise approximately £38.5 million.

 

Contingent on LTC achieving up to £3.1 million incremental EBITDA contribution on revenue generated from certain new contracts between March 2021 and the end of June 2021 (with the opportunity to extend this period up to the end of September 2021 in the event of any delay in respect of one specified contract), the Group will pay the Deferred Consideration of up to £6.8 million to the LTC Vendors, which will be satisfied in cash and/or by the issue of new Ordinary Shares (at the Group's discretion) to the LTC Vendors at the relevant time. 

 

Completion of the Acquisition is conditional upon the admission of the Primary Placing Shares to trading on AIM, which in turn, is conditional on the passing of certain Resolutions to be proposed at a General Meeting authorising the Company to allot the Primary Placing Shares. If the condition to the Acquisition is not satisfied by 11 December 2020, the Acquisition will not proceed.

 

Accelerated bookbuild and intention to launch the Open Offer

 

The Primary Placing will be conducted through an accelerated bookbuild, which will be launched immediately following the release of this Announcement. Zeus Capital and Liberum Capital are acting as the Joint Bookrunners in connection with the Placing.

 

It is intended that the Primary Placing will raise approximately £38.5 million in gross proceeds at a price of 44 pence per Primary Placing Share, which will be used, inter alia, to fund the Initial Consideration and Associated Costs.  Further details of the proposed Primary Placing are detailed in this Announcement.

 

If the Primary Placing is oversubscribed, the Directors believe the opportunity may exist for investors to acquire further Ordinary Shares from potential Selling Shareholders. The Optionholders (who are also members of the Accrol management team) may be willing to consider exercising certain of their options and selling some or all of the resultant shares via a Secondary Placing, enabling such shares to be sold to placees. If the Secondary Placing proceeds:

 

any proceeds of the Secondary Placing would be received by the relevant Selling Shareholders and not by the Company; and

 

if an Optionholder elects to sell shares in a Secondary Placing, the balance of shares resulting from the exercise of his options which are not sold to placees in a Secondary Placing, would be locked in in two tranches: the first tranche until the release by the Company of its half-year results for the six months ended 31 October 2020 (expected in January 2021) and the second tranche until 1 August 2021.

 

 

Accrol also intends to raise up to a further c.£4.1 million by way of an Open Offer to Shareholders (other than certain overseas Shareholders), primarily to provide the Company with additional working capital and to further strengthen its balance sheet. The Placing Shares will not be subject to clawback from the Open Offer. Further details of the proposed Open Offer will be provided to Shareholders in due course.

 

The Appendix to this Announcement (which forms part of this Announcement) contains the detailed terms and conditions of the Placing.

 

Dan Wright, Executive Chairman of Accrol, said:

 

"I am delighted to announce the conditional acquisition of the LTC Group, which is fully aligned with our "Brand Killers" growth strategy. We have been very selective about Accrol's first acquisition, and LTC's scale and quality demonstrates the ambitions we have for the Group.  Accrol has a highly experienced senior management team with proven and relevant M&A integration skills, which is committed to building a world-class, operationally efficient business of size and scale and delivering substantial shareholder returns through organic and acquisitive growth.

 

"With c.£25 million having been invested in the LTC business since its foundation in 2014, it is equipped with top quality machines and has highly capable day-to-day operational leadership, on which we can build. I look forward to welcoming the LTC team to the Group and to an exciting future for our combined business." 

 

Gareth Jenkins, Chief Executive Officer of Accrol, added:  

 

"This is a step change for Accrol. LTC adds significant capacity to our existing business, which is already growing ahead of the market, as well as immediately enhancing the earnings of the Group.  In addition to bringing a wider customer base, it increases the size and scale of the business, enabling greater cost efficiencies and improved market positioning.

 

"The Group's cash flow will also benefit from the Acquisition, not least because we are able to defer a £5 million investment in a new line, planned for Q4 FY21, and also because of the cash generative nature of LTC." 

 

For further information, please contact:

 

 

 

Accrol Group Holdings plc

 

Dan Wright, Executive Chairman

Via Belvedere Communications

Gareth Jenkins, Chief Executive Officer

 

 

 

Zeus Capital Limited (Nominated Adviser, Broker & Joint Bookrunner) 

 

Dan Bate / Jordan Warburton

Tel: +44 (0) 161 831 1512

Dominic King / John Goold

Tel: +44 (0) 203 829 5000

 

 

Liberum Capital Limited (Joint B ookrunner)

Tel: +44 (0) 20 3100 2222

Clayton Bush / Edward Thomas

 

 

 

Deloitte LLP (Financial Adviser)

Tel: +44 (0) 20 7936 3000

Andrew Westbrook / Chris Nicholls

 

 

 

Belvedere Communications Limited

 

Cat Valentine

Tel: +44 (0) 7715 769 078

Keeley Clarke

Tel: +44 (0) 7967 816 525

Llew Angus

Tel:  +44 (0) 7407 023 147

 

[email protected]

 

Overview of Accrol

 

Accrol is based in Lancashire and is a leading independent tissue converter, producing toilet roll, kitchen roll and facial tissue products for many of the UK's major grocery retailers and many of the large discounters. The business imports Parent Reels from around the world and converts them into finished goods, employs 395 people and operates from four sites in Lancashire:

 

· A manufacturing, storage and distribution facility in Blackburn

· A storage and administrative centre in Blackburn

· A facial tissue plant, also in Blackburn

· A manufacturing, storage and distribution facility in Leyland

 

The Group's vision is to deliver the best possible value to the UK consumer on essential everyday tissue products. The "Brand Killers" growth strategy is simple: take market share from established brands by providing consumers with the best value products and its customers with great service, whilst ensuring it is the lowest cost operator. Accrol currently has circa 13 per cent. of the UK's £1.7 billion tissue market, which makes it the fourth largest operator in the UK by revenue.

 

The business was recently subject to a highly complex and successful turnaround, initiated and completed by the Group's current senior management team. This involved the simplification of all the Group's operations, delivering an improvement in gross margin of 49 per cent. over the last two years, from 14.7 per cent. to 21.9 per cent., and a much reduced cost base, down by 37 per cent. over the same period. With output capacity increased by 243 per cent., and profitability restored, the management team's attention is now focused on further strengthening and broadening the business to create a diversified group of size and scale, capable of delivering substantial Shareholder returns.

 

Information on LTC Group

 

LTC, founded in 2014, is an independent supplier of private label toilet tissue and kitchen towel to supermarket multiples and value retailers across the UK. Like Accrol, LTC converts parent reels to toilet tissue and kitchen towels using conversion plant machinery, delivering the finished goods through third party logistics providers.

 

LTC has delivered revenue CAGR of c.70 per cent. between 2017 and 2019. Revenue in the year ended 30 September 2019 was £19.4 million, generating adjusted EBITDA* of £1.6 million. In the unaudited year ended 30 September 2020, LTC generated revenues of £28.0 million and adjusted EBITDA* of £4.5 million. This represents a further c.44 per cent. revenue growth and c.181 per cent. growth in adjusted EBITDA* from the financial year ended 30 September 2019.

 

Over £25 million has been invested in LTC's business since its incorporation, including a purpose-built 110,000 sq. ft. facility into which the company relocated in 2018. A 50,000 sq. ft. warehouse was added in 2019. LTC's operations are strategically located in central England, in Leicester, just nine miles from the M1 motorway.

 

The LTC business employs around 80 people, c.70 of whom are production and warehouse operatives. It has four fully automated converting lines with a combined capacity of £68 million. The most recent line was commissioned in February 2020 and the oldest in 2014.

 

LTC secured significant contract wins at the end of FY19 with a supermarket multiple and value retailer and it has a strong pipeline of new opportunities. Its customer portfolio contains one of the UK's leading supermarket multiples and one of the largest value retailers.

 

Core products include a luxury range, and products are sold with either LTC branding or as private label for the retailer to add its own branding. The toilet roll range includes 2 and 3 ply rolls, luxury, super-soft, quilted and fragranced. Own brands comprise Soooo, Quantum and Quilted Softpockets. The kitchen towel range includes 2 and 3 ply and Grime Buster, Splash Buster and Soooo own brands.

 

*  adjustments include director salary costs not expected to continue and certain other non-recurring costs.

 

Strategic rationale for the Acquisition, the Placing and the Open Offer

 

With a strong and experienced leadership team in place and an improved operational cost base, the Directors believe that Accrol has the right foundations on which to begin building an organisation of size and scale, which is less exposed to input cost fluctuations.

 

The management team is focused on expanding the Group's capacity and market share in its core markets, through greater penetration of the luxury tissue segment. Good progress has already been made on this strategy, supported by the strength of the Group's customer relationships and through successful R&D in tissue material and processes.

 

The Board believes that the Acquisition delivers significant growth opportunities, compelling financial returns and strategic opportunities for the Group, which are wholly aligned with its "Brand Killers" strategy. These opportunities include the following:

 

Building market share, with more to gain : the Acquisition will increase Accrol's share of the UK retail tissue market to approximately 16 per cent. of the £ 1.7 bn UK industry;

 

Consolidating Accrol's position in private label: the Acquisition will boost Accrol's position as one of the leaders in the private label retail tissue market by increasing its share of the private label market;

 

Earnings enhancing: the Acquisition is expected to be immediately earnings enhancing and is expected to deliver a minimum of 10 per cent. earnings enhancement during the first full year of ownership;

 

Significant synergies: the Acquisition is expected to deliver in excess of £1.0 million annualised cost synergies in the first full year from procurement and operational efficiencies;

 

Strengthened logistics network : LTC's central England location provides an opportunity to optimise the Group's UK logistics network - c.48 per cent. of Accrol sales are delivered south of Leicester;

 

Access to new customers: the Acquisition will create a strong customer network for the Group, as LTC brings new and complementary customers with a limited overlap, which is expected to deliver increased commercial strength to the Group; and

 

Additional capacity: LTC is a well invested business with four, high-quality, modern converting lines with significant capacity. This increased capacity enables the postponement of Accrol's £5 million capital investment in new converting machinery previously scheduled for Q4 FY21 until Q4 FY22.

 

 

In order to integrate the LTC business and deliver the expected synergies, the Accrol Board expect to incur c.£1.0 million of exceptional costs in relation to the movement of work and general restructuring of the Enlarged Group.

 

The Acquisition represents a further milestone in Accrol's journey after completing its turnaround, which has provided a simplified platform on which to build scale. As a close strategic fit to Accrol, operating in the same sector and undertaking the same production processes, LTC provides a key opportunity to build scale in the UK tissue, kitchen roll and facial tissue market. The Acquisition would increase Accrol's scale and production capacity, whilst further supporting potential future opportunities such as a paper mill development.

 

Details of the Acquisition

 

On 2 November 2020, the Company entered into a conditional agreement to acquire the LTC Group, via its acquisition of the entire issued share capital of LTC Parent from the LTC Vendors for a maximum total consideration of up to £41.8 million, to be satisfied as follows:

 

• the Initial Consideration which represents 7.8x LTC's adjusted EBITDA*  of £4.5 million for the unaudited 12-month period to 30 September 2020. The Initial Consideration will be satisfied on Acquisition Completion; and

 

• up to a further £6.8 million of deferred consideration payable to the LTC Vendors, contingent on LTC achieving up to £3.1 million incremental EBITDA contribution on revenue generated from certain new contracts between March 2021 and the end June 2021 (with the opportunity for this period to be extended up to the end of September 2021 in the event of any delay in respect of one specified contract). The Deferred Consideration, to the extent it becomes payable, may be satisfied in cash and/or by the issue of new Ordinary Shares (at the Group's discretion) to the LTC Vendors at the relevant time, subject to and in accordance with the terms of the Acquisition Agreements. The relevant share price of any new Ordinary Share so issued will be confirmed by the Joint Brokers at the relevant time, based on the average middle market quotation of one Ordinary Share based on the Daily Official List for the 3 consecutive Business Days ending on the third Business Day immediately prior to the date of the payment of the Deferred Consideration. 

 

Post a 12 month transition period following Acquisition Completion, none of the LTC Vendors are expected to continue their involvement with or engagement in the LTC Group's business. The LTC Vendors have agreed to abide by non-compete covenants for a three year period post-Acquisition Completion. It is intended that the current operating management team of LTC will continue in the LTC Group's business under the leadership of the Board.

 

The LTC Vendors have also agreed to give customary warranties and a tax covenant, backed by buyside warranty and indemnity insurance.

 

Acquisition Completion is conditional on Admission and will take place after the receipt of the Initial Consideration by the LTC Vendors, which will be paid from the proceeds of the Primary Placing. If that condition is not satisfied on or before 11 December 2020, the Acquisition will not proceed.

 

For the period from 2 November 2020 to Acquisition Completion, the LTC Vendors have agreed to operate and manage the LTC Group in the ordinary course and they are required to seek the Company's prior written consent before carrying out, or not carrying out, certain acts which may give rise to any liability for, or otherwise impact, the business of the LTC Group.

 

Further details of the structure of the Acquisition will be included in a circular outlining the terms of the Open Offer, which will be sent to Shareholders (other than certain overseas Shareholders) in due course.

 

Details of the Placing

 

Structure

 

The Directors have given careful consideration as to the structure of the proposed fundraising and have concluded that the Placing and the proposed Open Offer are the most suitable fundraising options available to the Company and the Shareholders at this time.

 

The Company intends, through the conditional placing of Primary Placing Shares with existing and new institutional investors, to raise gross proceeds of approximately £38.5 million, at a price of 44 pence per Primary Placing Share, which will be used to fund, inter alia, the Initial Consideration and Associated Costs.

 

The Placing is being conducted through an accelerated bookbuild process which will commence immediately following the release of this Announcement.

 

Principal terms of the Placing

 

Zeus Capital and Liberum Capital are acting as the joint bookrunners in connection with the Placing, in accordance with the terms and conditions set out in the Appendix (which forms part of this Announcement).

 

The final number of Primary Placing Shares to be issued pursuant to the Primary Placing and the number of Secondary Placing Shares to be sold (if any) by the Selling Shareholders pursuant to a Secondary Placing will be agreed by the Joint Bookrunners, the Company and, if relevant, the Selling Shareholders, at the close of the bookbuild and the results of the Placing will be announced as soon as practicable thereafter. The timing for the close of the bookbuild and the allocation of Placing Shares shall be at the absolute discretion of the Joint Bookrunners and the Company.

 

Under the Placing and Open Offer Agreement, the Company has agreed to pay to Zeus Capital a fixed corporate finance fee and has agreed to pay both Zeus Capital and Liberum Capital, commissions based on the aggregate value of the Primary Placing Shares placed, and Open Offer Shares subscribed for, at the Issue Price and the costs and expenses incurred in relation to the Primary Placing together with any applicable VAT.

 

Any Selling Shareholders selling Secondary Placing Shares (if any) have each agreed to pay to both Zeus Capital and Liberum Capital commissions based on the aggregate value of any Secondary Placing Shares placed at the Issue Price and sold by that Selling Shareholder pursuant to any Secondary Placing, together with any applicable VAT.

 

The Issue Price of the Primary Placing Shares is 44 pence per Primary Placing Share.

 

The Placing is not being underwritten. The Placing Shares are not subject to clawback and are not part of the Open Offer.

 

Oversubscription for the Primary Placing

 

If the Primary Placing is oversubscribed, the Directors believe the opportunity may exist for investors to acquire further Ordinary Shares from Selling Shareholders, who may be willing to consider effecting an Option Exercise, and selling to Placees certain of the Option Shares allotted and issued to them pursuant to any Option Exercise. Should this be the case, the Company intends to conclude a Secondary Placing to enable Option Shares to be sold to Placees at the Issue Price. Any proceeds of a Secondary Placing would be received by the relevant Selling Shareholders and not by the Company.

 

Conditionality

 

The Placing is conditional, inter alia, upon the following:

 

Zeus Capital and Liberum Capital having received legally binding commitments from Placees to subscribe for the Primary Placing Shares;

 

the passing, without amendment, of the Resolutions at the General Meeting;

 

Admission occurring by no later than 8.00 a.m. on 23 November 2020 (or such later time and/or date as may be agreed between the Company and the Joint Bookrunners, being no later than 8.00 a.m. on the Long Stop Date);

 

the Placing and Open Offer Agreement becoming unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms; and

 

the Acquisition being unconditional in all respects, subject only to Admission.

 

 

If: (i) any of the conditions contained in the Placing and Open Offer Agreement, including those described above, are not fulfilled or (where applicable) waived by the Joint Bookrunners by the respective time or date where specified (or such later time or date as the Joint Bookrunners may notify to the Company); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing and Open Offer Agreement is terminated, the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. The Placing is not conditional on the Open Offer proceeding or on any minimum take-up under the Open Offer.  If Admission of the Primary Placing Shares does not take place, the Acquisition will not proceed and the Company may be required to pay the LTC Vendors a break fee of £500,000 (inclusive of VAT) as a result.

 

Application for Admission

 

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM. Admission of the Placing Shares is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 23 November 2020.  No temporary documents of title will be issued.

 

Effect of the Placing

 

The Placing Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares in the capital of the Company in issue at the date of this Announcement and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

 

Details of the Open Offer

 

In addition to the Primary Placing, the Company intends to raise up to a further c.£4.1 million by way of a conditional Open Offer to Shareholders (other than certain overseas Shareholders) pursuant to which those Shareholders will be invited to subscribe for up to 9,297,454 Open Offer Shares, each Open Offer Share being offered at the Issue Price, on a basis of one Open Offer Share for every 21 Existing Ordinary Shares held. The Open Offer will also allow those Shareholders to apply for more than their pro rata entitlement to the extent the Open Offer is not fully subscribed. The Open Offer will be conditional on the passing of the Resolutions at the General Meeting (so far as they relate to the Open Offer) and Admission. Further details of the Open Offer will be announced, and a circular outlining the terms of the Open Offer will be sent to Shareholders (other than certain overseas Shareholders) in due course.

 

Application will be made to the London Stock Exchange for admission of the Open Offer Shares to trading on AIM. Admission of the Open Offer Shares is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 23 November 2020. 

 

The Placing and Open Offer Agreement

Pursuant to the terms of the Placing and Open Offer Agreement, Zeus Capital and Liberum Capital, as agents for the Company and, if any Secondary Placing proceeds, the Selling Shareholders, have agreed to use their respective reasonable endeavours to procure subscribers for the Primary Placing Shares or purchasers of Secondary Placing Shares (as the case may be) at the Issue Price. The Placing and Open Offer Agreement is conditional upon, amongst other things, the conditions set out above in the paragraph above headed "Conditionality" and none of the warranties given to Zeus Capital and Liberum Capital prior to Admission being or becoming untrue, inaccurate or misleading in any material respects.

The Placing and Open Offer Agreement contains customary warranties given by the Company in favour of Zeus Capital and Liberum Capital in relation to, amongst other things, the accuracy of the information in this Announcement and any other document issued in connection with the Primary Placing and other matters relating to the Group and its business, LTC and the Acquisition. In addition, the Company has agreed to indemnify Zeus Capital (and its affiliates) and Liberum Capital (and its affiliates) in relation to certain liabilities which they may incur in respect of the Primary Placing, Admission or the Acquisition.

The Selling Shareholders have also given warranties in favour of Zeus Capital and Liberum Capital in relation to, amongst other things, their title and capacity to the Secondary Placing Shares which might be sold by them (if any) pursuant to the Secondary Placing if it proceeds and the accuracy of the information about them and any such Secondary Placing Shares to be sold by them, in any document issued in connection with the Placing.

Zeus Capital and Liberum Capital have the right to terminate the Placing and Open Offer Agreement in certain circumstances prior to Admission. In particular, in the event of breach of the warranties, a material adverse change or if the Placing and Open Offer Agreement does not become unconditional.

Use of proceeds

 

The Directors intend to use the proceeds of the Primary Placing and the Open Offer to:

 

pay the Initial Consideration;

meet the expenses relating to the Acquisition, the Primary Placing and the Open Offer;

provide additional working capital for the Group; and/or

reduce the Group's net debt.

 

Current trading and outlook

 

The Group entered the new financial year in a strong position and is on track to deliver results in line with management expectations for FY21. This has been achieved despite the impact to volumes across the private label sector in Q1, as panic buying unwound. The Group's margins, however, increased ahead of expectations in this period as the product mix improved. Consumer shopping habits normalised in Q2, with private label sales bouncing back to pre-COVID-19 levels. All discounters are expected to address their online shopping service capability over the next 12 months. The outlook for volumes in this market remains strong, with significant expansion plans being accelerated, as the UK economy adjusts to the wider impact of the pandemic.

 

With circa 13 per cent. of the total UK tissue market prior to the Acquisition and a strong infrastructure for growth taking shape, the Directors believe Accrol is well positioned to benefit in a value-conscious, post COVID-19 world. We will continue to invest in our people, automation and our impact on the environment to ensure the sustainability of the business throughout its planned growth.

 

Whilst mindful of the ongoing risks of COVID-19, the Board is confident in the prospects for the Group and its ability to capitalise on opportunities in both its core markets and the wider new personal hygiene and household sector.

 

Banking update

 

As noted in the Company's results announcement dated 2 September 2020, the Company improved and extended its banking facilities to August 2023, providing greater accessibility, flexibility, and headroom for the business, as it pursues its growth strategy. Upon completion of the Acquisition, the existing hire purchase banking facilities of LTC will be retained and an invoice discounting facility will be repaid in full.

 

Expected timetable of principal events

Announcement of the Placing and Open Offer

ovember 2020

Announcement of closing of the Placing

ovember 2020

Dispatch of circular (including notice of General Meeting and launch of Open Offer)

 

ovember 2020

General Meeting


 

Admission of the Placing Shares and Open Offer Shares to trading on AIM

Acquisition Completion

 

Important information

 

This Announcement is for information purposes only and does not itself constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities in the Company and does not constitute investment advice.

Neither this Announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, in or into the United States, Australia, New Zealand, Canada, Japan or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of the securities laws of any state or territory of the United States, Australia, New Zealand, Canada, Japan or the Republic of South Africa. The distribution of this Announcement in other jurisdictions may be restricted by law and persons into whose possession this Announcement comes should inform themselves about, and observe any such restrictions.

Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither this Announcement nor any part of it nor the fact of its distribution shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

In particular, the Placing Shares have not been and will not be registered under the US Securities Act, or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States, and accordingly the Placing Shares may not be offered, sold, pledged or transferred, directly or indirectly, in, into or within the United States except pursuant to an exemption from the registration requirements of the US Securities Act and the securities laws of any relevant state or other jurisdiction of the United States. There is no intention to register any portion of the Placing in the United States or to conduct a public offering of securities in the United States or elsewhere.

Zeus Capital is authorised and regulated in the United Kingdom by the FCA and is acting as nominated adviser and joint bookrunner to the Company in respect of the Placing. Liberum Capital is authorised and regulated in the United Kingdom by the FCA and is acting as joint bookrunner to the Company in respect of the Placing. Each of Zeus Capital and Liberum Capital is acting for the Company and for no-one else in connection with the Placing, and will not be treating any other person as its client in relation thereto, and will not be responsible for providing the regulatory protections afforded to its customers nor for providing advice in connection with the Placing or any other matters referred to herein and apart from the responsibilities and liabilities (if any) imposed on Zeus Capital or Liberum Capital, as the case may be, by FSMA, any liability therefor is expressly disclaimed. Any other person in receipt of this Announcement should seek their own independent legal, investment and tax advice as they see fit.

Deloitte LLP is acting as Financial Adviser to the Company in respect of the Acquisition and no-one else and will not be responsible to anyone other than the Company for providing the protections offered to clients of Deloitte LLP or for providing advice in relation to the Acquisition. Deloitte LLP is authorised and regulated in the United Kingdom by the Financial Conduct Authority in respect of regulated activities. Deloitte LLP can be contacted at its principal office: 1 New Street Square, London EC4A 3HQ.

 

Forward-looking statements

 

This Announcement contains statements about the Group and the Enlarged Group that are, or may be deemed to be, "forward-looking statements".

 

All statements, other than statements of historical facts, included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by, or that include, the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "should", "anticipates", "estimates", "projects", "would", "could", "continue" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include, without limitation, statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects and (ii) business and management strategies and the expansion and growth of the operations of the Group and the Enlarged Group.

 

These forward-looking statements are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. Investors should not place undue reliance on such forward-looking statements and, save as is required by law or regulation (including to meet the requirements of the AIM Rules for Companies, the Prospectus Rules, the FSMA and/or MAR), does not undertake any obligation to update publicly or revise any forward-looking statements (including to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based). All subsequent oral or written forward-looking statements attributed to Accrol or the Group or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements contained in this Announcement are based on information available to the Directors at the date of this Announcement, unless some other time is specified in relation to them, and the posting or receipt of this Announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date.

 

 

Appendix

 

TERMS AND CONDITIONS OF THE PLACING

 

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY

 

1.  Introduction

 

Members of the public are not eligible to take part in the Placing.  This announcement and the terms and conditions set out and referred to herein (together, the "Announcement") are directed only at persons selected by Zeus Capital and Liberum Capital (the "Bookrunners") who are (a) persons in member states of the European Economic Area who are "Qualified Investors", as defined in Article 2(e) of Regulation 2017/1129/EU (the "Prospectus Regulation") and (b) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "Investment Professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or fall within the definition of "High Net Worth Companies, Unincorporated Associations or Partnerships or Trustees of High Value Trusts", as described in article 49(2)(a) to (d) of the Order and (ii) are Qualified Investors or (c) otherwise to persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "Relevant Persons").  This Announcement must not be acted on or relied on by persons who are not Relevant Persons.  By accepting this Announcement, you represent and agree that you are a Relevant Person.  Any investment or investment activity to which this Announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

 

Distribution of this Announcement in certain jurisdictions may be restricted or prohibited by law.  Persons distributing this Announcement must satisfy themselves that it is lawful to do so.

 

The Ordinary Shares (as defined below) in the capital of the Company that are the subject of the Placing (the "Placing Shares") have not been and will not be registered under the United States Securities Act of 1933, as amended (the "USSecurities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of the relevant state or other jurisdictions of the United States.  No public offering of the Placing Shares is being made in the United States, the United Kingdom or elsewhere.

 

An investment in the Placing Shares is subject to a number of risks. Before making an investment decision with respect to the Placing Shares, prospective investors should carefully consider the risks associated with an investment in the Company, the Company's business and the industry sector in which the Company operates, in addition to all of the other information set out in this Announcement and that which is lawfully publicly available.

 

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN THE PLACING SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT AND ANNOUNCEMENTS RELATING TO THE PLACING, ANY PART OF ANY OF THEM OR ANY INFORMATION CONTAINED IN ANY OF THEM MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

 

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to purchase any Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. Subject to certain exceptions, this Announcement and the information contained herein is not and should not be forwarded or distributed in whole or in part, directly or indirectly, in, into or within the United States, Australia, New Zealand, Canada, Japan or the Republic of South Africa or in any other jurisdiction in which such publication or distribution is unlawful, to the extent that it would be unlawful to publish or distribute it. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement.

 

Notwithstanding the foregoing, the Company reserves the right to offer and deliver and the Placing Shares may be offered to and acquired by, a limited number of persons in the United States reasonably believed to be "qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under the US Securities Act ("Rule 144A"), in transactions exempt from, or not otherwise subject to, the registration requirements of the US Securities Act. The Placing Shares being offered and sold outside the United States are being offered and sold in "offshore transactions" as defined in and pursuant to Regulation S under the US Securities Act ("Regulation S").

 

No prospectus has been filed or will be filed, and no receipt for a prospectus has been obtained or will be obtained, from the securities commission or equivalent authority of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance or the South African Reserve Bank; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, New Zealand, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, New Zealand, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

 

This Announcement should be read in its entirety.  In particular, you should read and understand the information provided in the "Important Information for invited Placees" section of this Announcement.

 

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing will be deemed to have read and understood the contents of this Announcement in their entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Announcement.

 

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: (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties (each as defined in MiFID II); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offer.

 

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

 

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

 

Persons who are invited to, and who choose to participate in, the Placing, by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given, will be deemed to have read and understood the contents of this Announcement in their entirety and to be making such offer on the terms and conditions contained herein, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Announcement. In particular each such Placee represents, warrants and acknowledges that:

 

i.

it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

ii.

it is acquiring the Placing Shares for its own account or for an account with respect to which it exercises sole investment discretion and has the authority to make, and does make, the representations, warranties, acknowledgments and undertakings contained in this Announcement;

iii.

if it is in a member state of the European Economic Area ("EEA") and/or if it is a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, that any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in any member state of the EEA in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA or in circumstances in which the prior consent of the Bookrunners has been given to each such proposed offer or resale; and

iv.

it understands that the Placing Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

 

2.  Placing

 

Each of Zeus Capital and Liberum Capital are acting as the Company's agent in respect of the Primary Placing, and, if it proceeds, as agent of the Selling Shareholders in respect of any Secondary Placing. Zeus Capital and Liberum Capital shall, following consultation with the Company, determine the extent of each Placee's participation in the Placing. No commissions will be paid to or by Placees in respect of their agreement to subscribe for, or purchase, any Placing Shares.

 

Each Placee will be required to pay to either Zeus Capital or Liberum Capital (as the case may be), on the Company's or Selling Shareholders' behalf as agent (or to such settlement agent as shall be described), the Issue Price as the subscription sum or purchase price for each Placing Share that it is required to subscribe for, or purchase, in accordance with the terms set out in or referred to in this Announcement. Each Placee's obligation to subscribe or purchase and pay for Placing Shares under the Placing will be owed to each of the Company, the Selling Shareholders, Zeus Capital or Liberum Capital (as the case may be). Each Placee will be deemed to have read this Announcement in its entirety. Neither of the Bookrunners nor any other Bookrunner Person will have any liability (subject only to applicable legislation and regulations) to Placees or to any person other than the Company and the Selling Shareholders in respect of the Placing.

 

Each Placee is deemed to agree that, if it does not comply with its obligations, Zeus Capital or Liberum Capital may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for its account and benefit (as agent for the Company and the Selling Shareholders), an amount equal to the aggregate amount owed by the Placee plus any interest due (as more particularly described in paragraph 7 below). The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise in any jurisdiction upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on  Zeus Capital and/or Liberum Capital all such authorities and powers necessary or desirable to carry out any such sale and agrees to ratify and confirm all actions which Zeus Capital and/or Liberum Capital lawfully takes in pursuance of such sale. Various dates referred to in this Announcement are stated on the basis of the expected timetable for the Placing. It is possible that some of these dates may be changed other than the Long Stop Date referred to below. The expected date for Admission of the Placing Shares is 23 November 2020. In any event, the latest date for Admission is 11 December 2020 (the "Long Stop Date").

 

Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this Announcement and on the terms contained or referred to in it.  No admission document for the purposes of the AIM Rules for Companies, or prospectus, is required to be published, or has been, or shall be, published, in relation to the Placing or the Placing Shares.

 

3.  Participation and settlement

 

Participation in the Placing is only available to persons who are invited to participate in it by Zeus Capital or Liberum Capital.

 

To participate in the Placing, a Placee should communicate its offer to subscribe for, or purchase, a fixed number of Placing Shares under the Placing orally or in writing to Zeus Capital or Liberum Capital (as the case may be). Such offer will constitute a legally binding irrevocable commitment on such Placee's part to subscribe for, or purchase, that number of Placing Shares at the Issue Price on the terms and subject to the conditions set out or referred to in this Announcement and subject to the Company's memorandum and articles of association. Such commitment is not capable of variation, termination or rescission by the Placee in any circumstances except fraud. All such obligations are entered into by the Placee with the Bookrunners acting in their capacity as agents of the Company and the Selling Shareholders and are therefore directly enforceable by the Company.

 

If successful, each Placee's allocation of Placing Shares will be agreed between the Bookrunners and the Company and will be confirmed orally or in writing to each Placee by the Bookrunners (as agent for the Company and the Selling Shareholders). Oral or written confirmation (at the Bookrunners' discretion) from the Bookrunners to such Placee confirming its allocation will constitute a legally binding commitment upon such Placee (who at that point will become a Placee), in favour of the Bookrunners and the Company and the Selling Shareholders to acquire the number of Placing Shares allocated to it ("Placing Participation"). Each Placee has an immediate, separate, irrevocable and binding obligation owed to the relevant Bookrunner, as agent for the Company and the Selling Shareholders, to pay the Bookrunners (or as they may direct) in cleared funds an amount equal to the product of the Issue Price and the total number of Placing Shares such Placee has agreed to subscribe for, or purchase, in the Placing.  After such agreement is entered into, trade confirmations or contract notes will be dispatched to the Placee by Zeus Capital or Liberum Capital (as the case may be) stating (i) the number of Placing Shares for which such Placee has agreed to subscribe for or purchase, (ii) the aggregate amount such Placee will be required to pay for those Placing Shares, (iii) relevant settlement information and (iv) settlement instructions. 

 

Zeus Capital and Liberum Capital (after consulting with the Company) reserve the right to scale back the number of Placing Shares to be subscribed for, or purchased by, any Placee or the number of Placing Shares to be subscribed for, or purchased by, all Placees in aggregate. Zeus Capital and Liberum Capital also reserve the right not to offer allocations of Placing Shares to any person and not to accept offers to subscribe for, or purchase, Placing Shares or to accept such offers in part rather than in whole. Zeus Capital and Liberum Capital shall be entitled to effect the Placing by such method as they shall in their sole discretion lawfully determine in the exercise of their appointments and the powers, authority and discretion conferred on them as Bookrunners.

 

To the fullest extent permissible by law, neither Zeus Capital nor Liberum Capital nor any holding company thereof, nor any subsidiary, branch or affiliate of Zeus Capital or Liberum Capital (each an "Affiliate") nor any person acting on behalf of any of the foregoing shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Liberum Capital or Zeus Capital, nor any of their Affiliates nor any person acting on behalf of any such person shall have any liability to Placees in respect of their conduct of the Placing.

 

Settlement of transactions in the Placing Shares will take place within the CREST system, subject to certain exceptions, on a "delivery versus payment" (or "DVP") basis. Zeus Capital and/or Liberum Capital (as the case may be) reserve the right to require settlement for and/or delivery to any Placee of any Placing Shares by such other means as it deems appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out herein.

 

Following the close of the accelerated bookbuild process, each Placee allocated Placing Shares in the Placing will be sent a contract note or trade confirmation stating the number of Placing Shares to be allocated to it at the Issue Price and settlement instructions. Placees should settle against CREST ID: 7BUAG for Liberum and CREST ID: 601 for Zeus Capital. It is expected that such contract note or trade confirmation will be despatched on or around 3 November 2020 and that this will also be the trade date.

 

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the relevant Bookrunner.

 

The Company will deliver the Placing Shares to a CREST account operated by the Bookrunners (or either one of them) as agent for the Company, and the relevant Bookrunner will enter its delivery (DEL) instruction into the CREST system. The Bookrunners (or either one of them) will hold any Placing Shares delivered to this account as nominee for the Placees until settlement. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

 

It is expected that settlement will be on 23 November 2020 and on a delivery versus payment basis in accordance with the instructions set out in the contract note or trade confirmation. A Placee whose Placing Shares are to be delivered to a custodian or settlement agent should ensure that the written confirmation is copied and delivered promptly to the appropriate person within that organisation.

 

4.  Placing and Open Offer Agreement

 

Zeus Capital and Liberum Capital have entered into the Placing and Open Offer Agreement with the Company and the Selling Shareholders under which Zeus Capital and Liberum Capital have agreed, on a conditional basis, to use their reasonable endeavours as the Company's agents to procure subscribers at the Issue Price for the Primary Placing Shares and, if any Secondary Placing proceeds, to use their reasonable endeavours as the Selling Shareholders' agents to procure purchasers at the Issue Price for the Secondary Placing Shares. The Placing will not be underwritten by either of the Bookrunners or by any other person. This Announcement gives details of the terms and conditions of, and the mechanics for participation in, the Placing.

 

5.  Placing conditions

 

The Placing is conditional on (i) each of Zeus Capital's and Liberum Capital's obligations under the Placing and Open Offer Agreement not being terminated in accordance with its terms, (ii) Admission of the Primary Placing Shares taking place by the relevant time and date stated herein, and (iii) each of Zeus Capital's and Liberum Capital's obligations under the Placing and Open Offer Agreement becoming unconditional in all other respects. Zeus Capital and Liberum Capital may extend the time and/or date for the fulfilment of any of the conditions referred to above to a time no later than 8.00 a.m. on the Long Stop Date.

 

If any such condition is not fulfilled (and, if capable of waiver under the Placing and Open Offer Agreement, is not waived by Zeus Capital and Liberum Capital) by the relevant time, or if the Placing and Open Offer Agreement is terminated in accordance with the provisions set out below the Placing will lapse and each Placee's rights and obligations in respect of the Placing will cease and terminate at such time.

 

Each of Zeus Capital's and Liberum Capital's obligations under the Placing and Open Offer Agreement may be terminated by Zeus Capital and Liberum Capital at any time prior to Admission in certain circumstances including, among other things, following a breach of the Placing and Open Offer Agreement by the Company and/or the occurrence of certain force majeure events as provided in the Placing and Open Offer Agreement. The exercise of any right of termination pursuant to the Placing and Open Offer Agreement, any waiver of any condition in the Placing and Open Offer Agreement and any decision by Zeus Capital and Liberum Capital whether or not to extend the time for satisfaction of any condition in the Placing and Open Offer Agreement will be within their absolute discretion (as is the exercise of any of their rights or powers that are referred to in this Announcement).

 

None of Zeus Capital, Liberum Capital or the Company will have any liability to any Placee or to anyone else in respect of any such termination, waiver or extension or any decision to exercise or not to exercise any such right of termination, waiver or extension in respect of the Placing and Open Offer Agreement or the Placing generally.

 

6.  Placees' warranties and undertakings to the Company, the Selling Shareholders, Zeus Capital and Liberum Capital

 

By agreeing with Zeus Capital and Liberum Capital, as agents of the Company and the Selling Shareholders, to subscribe for, or purchase, Placing Shares under the Placing, each Placee (and any person acting on a Placee's behalf) irrevocably acknowledges, confirms, represents, warrants and undertakes to, and agrees with, each of the Company, the Selling Shareholders, Zeus Capital and Liberum Capital, in each case as a fundamental term of such Placee's application for Placing Shares, of the Company's obligation to allot and/or issue any Primary Placing Shares to it or at its direction, and of any Selling Shareholder's obligation to transfer any Secondary Placing Shares to it, or at its discretion, that:

 

(a)  it has read this Announcement in its entirety and agrees to and accepts all the terms set out and referred to in this Announcement;

 

(b)  its Placing Participation on the terms and conditions set out in this Announcement is legally binding, irrevocable and is not capable of termination or rescission by such Placee in any circumstances and that it has the funds available to pay the Issue Price in respect of the Placing Shares for which it has given a commitment under the Placing;

 

(c)  it has not relied on, received or requested nor does it have any need to receive, any prospectus, offering memorandum, listing particulars or any other Announcement (other than this Announcement), any information given or any representations, warranties, agreements or undertakings (express or implied), written or oral, or statements made at any time by the Company or Liberum Capital or Zeus Capital or by any subsidiary, holding company, branch or associate of the Company or Liberum Capital or Zeus Capital or any of their respective officers, directors, agents, employees or advisers, or any other person in connection with the Placing, the Company and its subsidiaries or the Placing Shares and that in making its application under the Placing it is relying solely on the information contained this Announcement and it will not be relying on any agreements by the Company and its subsidiaries or Liberum Capital or Zeus Capital, or any director, employee or agent of the Company or Liberum Capital or Zeus Capital other than as expressly set out in this Announcement, for which neither Liberum Capital, Zeus Capital nor any of their directors and/or employees and/or person(s) acting on their behalf shall to the maximum extent permitted under law have any liability except in the case of fraud;

 

(d)  it is sufficiently knowledgeable to understand and be aware of the risks associated with, and other characteristics of, the Placing Shares and, among others, of the fact that it may not be able to resell the Placing Shares except in accordance with certain limited exemptions under applicable securities legislation and regulatory instruments;

 

(e)  its rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this Announcement and will not be subject to rescission or termination by it in any circumstances;

 

(f)  it has not been, and will not be, given any representation or warranty in relation to the Placing Shares or to the Company or to any other member of its Group or to any Selling Shareholder in connection with the Placing, other than (i) by the Company as included or referred to in this Announcement, and (ii) by the Company to the effect that at the time that the Placee enters into a legally binding commitment to subscribe for or purchase the Placing Shares pursuant to the Placing, the Company will not then be in breach of its obligations under the AIM Rules for Companies or under MAR to disclose publicly in the correct manner all such information as is then required to be so disclosed by the Company;

 

(g)  it has not relied on any representation or warranty in reaching its decision to subscribe for, or purchase, Placing Shares under the Placing, save as given or made by the Company as referred to in the previous paragraph;

 

(h)  it is not a client of Zeus Capital or Liberum Capital in relation to the Placing and neither Zeus Capital nor Liberum Capital is acting for it in connection with the Placing and will not be responsible to it in respect of the Placing for providing protections afforded to their respective clients;

 

(i)  it has not been, and will not be, given any representation or warranty by any Bookrunner Person in relation to any Placing Shares, the Company, any other member of its Group or any Selling Shareholder and no Bookrunner Person will have any liability to it for any information contained in this Announcement or which has been published by the Company or otherwise made lawfully publicly available or for any decision by it to participate in the Placing based on any such information or on any other information provided to it;

 

(j)  it acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of the Bookrunners, their respective affiliates or any person acting on its or their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is described in this Announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Zeus Capital, Liberum Capital, the Company or any of their respective directors, officers or employees or any person acting on behalf of any of them, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee or any material prepared by the respective research departments of Zeus Capital or Liberum Capital), and neither Zeus Capital, Liberum Capital nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Zeus Capital, Liberum Capital, their affiliates or any other person acting on its or their behalf has or may have conducted;

 

(k)  it will be responsible for any stamp duty or stamp duty reserve tax or securities transfer tax in relation to the Placing Shares comprised in its Placing Participation and that none of Liberum Capital, Zeus Capital, the Company or any Selling Shareholder will be responsible for any liability to stamp duty or stamp duty reserve tax or securities transfer tax in relation to the Placing Shares comprised in such Placee's Placing Participation;

 

(l)  each Placee acknowledges and agrees that the Placing Participation confirmed orally or in writing by each Placee to the relevant Bookrunner (as agent for the Company) and further confirmed orally or in writing  by the relevant Bookrunner is a legally binding contract between it and Liberum Capital or Zeus Capital, the Company or Selling Shareholder, subject to any scaling back, as described above, in the Bookrunners' absolute discretion and the terms and conditions of such Placee's Placing Participation will be governed by, and construed in accordance with, the laws of England, to the exclusive jurisdiction of whose courts such Placee irrevocably agrees to submit;

 

(m)  it will pay the full subscription sum and/or purchase price at the Issue Price as and when required in respect of all Placing Shares for which it is required to subscribe for or purchase under its Placing Participation and will do all things necessary on its part to ensure that payment for such shares and their delivery to it or at its direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that it has in place with Zeus Capital or Liberum Capital (as the case may be) or puts in place with Zeus Capital or Liberum Capital (as the case may be);

 

(n)  it is permitted to subscribe for and purchase Placing Shares under the laws of all relevant jurisdictions which apply to it and it has complied, and will fully comply, with all such laws (including where applicable, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended)) and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription, and it will provide promptly to Zeus Capital or Liberum Capital (as the case may be) such evidence, if any, as to the identity or location or legal status of any person which Zeus Capital or Liberum Capital (as the case may be) may request from it in connection with the Placing (for the purpose of complying with any such laws or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Zeus Capital or Liberum Capital (as the case may be) on the basis that any failure by it to do so may result in the number of Placing Shares that are to be allotted and/or issued and/or transferred to it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Zeus Capital or Liberum Capital (as the case may be) may decide;

 

(o)  if it has received any "inside information" (as defined in the Market Abuse Regulation No. 596/2014) about the Company in advance of the Placing, it has not (i) dealt in the securities of the Company; (ii) encouraged or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person, prior to the information being made generally available;

 

(p)  it has complied and will comply with all applicable provisions of the FSMA with respect to anything done or to be done by it in relation to any Placing Shares in, from or otherwise involving the United Kingdom and it has not made or communicated or caused to be made or communicated, and it will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;

 

(q)  it is a Relevant Person;

 

(r)  it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or Zeus Capital and/or Liberum Capital for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2(e) of the Prospectus Regulation ("Qualified Investor") acting as agent for such person, and (iv) such person is either (1) a Qualified Investor or (2) its "client" (as defined in section 86(2) of FSMA) that has engaged it to act as his agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

 

(s)  nothing has been done or will be done by it in relation to the Placing or to any Placing Shares that has resulted or will result in any person being required to publish a prospectus in relation to the Company or to any Ordinary Shares in accordance with FSMA or the Prospectus Rules or in accordance with any other laws applicable in any part of the European Union or the European Economic Area;

 

(t)  it will not treat any Placing Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of its participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Company and/or Zeus Capital and/or Liberum Capital (as the case may be) to contravene any such legislation in any respect;

 

(u)  (in this paragraph "US person" and other applicable terms have the meanings that they have in Regulation S) (i) none of the Placing Shares have been or will be registered under the US Securities Act or under the securities laws of any State of or other jurisdiction within the United States, (ii) subject to certain exceptions, Placing Shares may not be offered or sold, resold, or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US person, (iii) it is (unless otherwise expressly agreed with Zeus Capital and Liberum Capital (as the case may be)) neither within the United States nor a US person, (iv) it has not offered, sold or delivered and will not offer sell or deliver any of the Placing Shares to persons within the United States, directly or indirectly, (v) neither it, its affiliates, nor any persons acting on its behalf, has engaged or will engage in any directed selling efforts with respect to the Placing Shares, (vi) it will not be subscribing Placing Shares with a view to resale in or into the United States, and (vii) it will not distribute this Announcement  or any offering or other material relating to Placing Shares, directly or indirectly, in or into the United States or to any persons resident in the United States;

 

(v)  Zeus Capital and/or Liberum Capital (as the case may be) may itself agree to become a Placee in respect of some or all of the Placing Shares or by nominating any other relevant Bookrunner Person or any person associated with any Bookrunner Person to do so;

 

(w)  time is of essence as regards its obligations under this Announcement;

 

(x)  this Announcement and any contract which may be entered into between it and Zeus Capital or Liberum Capital (as the case may be) and/or the Company and/or any Selling Shareholder pursuant to this Announcement or the Placing, and all non-contractual obligations arising between the Placee and Zeus Capital or Liberum Capital (as the case may be) and/or the Company  and/or any Selling Shareholder in respect of the Placing, will be governed by and construed in accordance with the laws of England, for which purpose it submits (for itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute, or matter arising out of or relating to this Announcement or such contract, except that each of the Company, the Selling Shareholders, Zeus Capital and Liberum Capital will have the right to bring enforcement proceedings in respect of any judgment obtained against such Placee in the English courts or in the courts of any other relevant jurisdiction;

 

(y)  it agrees that the Company, the Selling Shareholders, Zeus Capital, Liberum Capital and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Zeus Capital on its own behalf, to Liberum Capital on its own behalf and on behalf of the Company and the Selling Shareholders, and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

 

(z)  it agrees to indemnify on an after-tax basis and hold the Company, the Selling Shareholders, Zeus Capital, Liberum Capital and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with its breach of any of the representations, warranties, acknowledgements, agreements and undertakings in this Announcement and further agrees that the provisions of this Announcement shall survive after completion of the Placing;

 

(aa)  it acknowledges that no action has been or will be taken by any of the Company, the Selling Shareholders, Zeus Capital, Liberum Capital or any person acting on behalf of the Company, the Selling Shareholders, Zeus Capital or Liberum Capital that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

 

(bb)  it acknowledges that its commitment to subscribe for, and purchase, Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms 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 conduct of the Primary Placing or the Selling Shareholders' conduct of any Secondary Placing;

 

(cc)  it represents and warrants that, if it is a pension fund or investment company, its subscription for an/or purchase of Placing Shares is in full compliance with all applicable laws and regulations;

 

(dd)  to the fullest extent permitted by law, it acknowledges and agrees to each of the disclaimers contained in this Announcement;

 

(ee)  each right or remedy of the Company, a Selling Shareholder or Zeus Capital or Liberum Capital (as the case may be) provided for in this Announcement is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part will not preclude the subsequent exercise of any such right or remedy;

 

(ff)  any Announcement 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 Zeus Capital or Liberum Capital (as the case may be);

 

(gg)  nothing in this Announcement will exclude any liability of any person for fraud on its part, and all times and dates in or referred to in this Announcement are subject to amendment at the discretion of Zeus Capital and Liberum Capital except that in no circumstances will the date scheduled for Admission be later than the Long Stop Date; and

 

(hh)  none of its rights or obligations in respect of the Placing is conditional on any other person agreeing to subscribe for or purchase any Placing Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing will affect any of its obligations in respect of the Placing.

 

7.  Payment default

 

A Placee's entitlement to receive any Placing Shares under the Placing will be conditional on Zeus Capital's or Liberum Capital's (as the case may be) receipt (as agent for the Company) of payment in full for such shares by the relevant time to be stated in the written confirmation referred to above, or by such later time and date as Zeus Capital or Liberum Capital (as the case may be) may determine, and otherwise in accordance with that confirmation's terms. Zeus Capital or Liberum Capital (as the case may be) may waive this condition, and will not be liable to any Placee for any decision to waive it or not.

 

If any Placee fails to make such payment by the required time for any Primary Placing Shares (1) the Company may release itself, and (if it decides to do so) will be released from, all obligations it may have to allot and/or issue any such Primary Placing Shares to such Placee or at its direction which are then unallotted and/or unissued, (2) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any such Primary Placing Shares to the full extent permitted under its constitution or by law and to the extent that such Placee then has any interest in or rights in respect of any such shares, (3) the Company or, as applicable, Zeus Capital and/or Liberum Capital (as the case may be), may sell (and each of them is irrevocably authorised by such Placee to do so) all or any of such shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of the Company or, where applicable, Zeus Capital and/or Liberum Capital (as the case may be), (i) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Primary Placing Shares and (ii) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale, and (4) such Placee will remain liable to the Company and to Zeus Capital and/or Liberum Capital (as the case may be) for the full amount of any losses and of any costs which it may suffer or incur as a result of it (i) not receiving payment in full for such Primary Placing Shares by the required time, and/or (ii) the sale of any such Primary Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it.

 

If any Placee fails to make such payment by the required time for any Secondary Placing Shares (1) the relevant Selling Shareholder(s) may release itself, and (if it decides to do so) will be released from, all obligations it may have to transfer any such Secondary Placing Shares to such Placee or at its direction, (2) the relevant Selling Shareholder(s) may exercise all rights of lien, forfeiture and set-off over and in respect of any such Secondary Placing Shares to the full extent permitted under its constitution or by law and to the extent that such Placee then has any interest in or rights in respect of any such shares, (3) relevant Selling Shareholder(s) or, as applicable, Zeus Capital and/or Liberum Capital (as the case may be), may sell (and each of them is irrevocably authorised by such Placee to do so) all or any of such shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of the relevant Selling Shareholder(s) or, where applicable, Zeus Capital and/or Liberum Capital (as the case may be), (i) any amount up to the total amount due to it as, or in respect of, the purchase price, or as interest on such monies, for such Secondary Placing Shares and (ii) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale, and (4) such Placee will remain liable to the relevant Selling Shareholder(s) and to Zeus Capital and/or Liberum Capital (as the case may be) for the full amount of any losses and of any costs which it may suffer or incur as a result of it (i) not receiving payment in full for such Secondary Placing Shares by the required time, and/or (ii) the sale of any such Secondary Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it. 

 

Interest may be charged, in each case, in respect of payments not received by Zeus Capital, and/or Liberum Capital (as the case may be) for value by the required time referred to above at the rate of two percentage points above the base rate of Barclays plc.

 

8.  Overseas jurisdictions

 

The distribution of this Announcement and the offering and/or issue of shares pursuant to the Placing in certain jurisdictions is restricted by law. Persons who seek to participate in the Placing must inform themselves about and observe any such restrictions. In particular, this Announcement does not constitute or form part of any offer or invitation, or a solicitation of any offer or invitation, to subscribe for or acquire or sell or purchase or otherwise deal in any Ordinary Shares in the United States, Canada, Japan, New Zealand or Australia or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful, save to the extent it is lawful to do so. The Placing Shares have not been and will not be registered under the US Securities Act or under the securities laws of any state of or other jurisdiction of the United States, and, subject to certain exceptions, may not be offered or sold, resold or delivered, directly or indirectly, in or into the United States, or to, or for the account or benefit of, any US persons (as defined in Regulation S). This Announcement and the Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed upon, or endorsed the merits of, the offering of the Placing or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States. No public offering of the Placing Shares is being or will be made in the United States.

 

Subject to certain limited exceptions, any person who subscribes for, or purchases, the Placing Shares will be deemed to have declared, represented, warranted and agreed to, by accepting delivery of this document or by applying for the Placing Shares, and accepting delivery of the Placing Shares, the representations and warranties set out in paragraph 6 of this Announcement.

 

Notwithstanding the above, the Company and the Selling Shareholders reserve the right to make the Placing Shares available within the United States to institutional investors reasonably believed to be QIBs in transactions exempt from, or not subject to, the registration requirements of the US Securities Act. Any such transactions shall be at the sole discretion of the Company, the Selling Shareholders, Zeus Capital and Liberum Capital. Any person reasonably believed to be a QIB to whom Placing Shares are offered and by whom Placing Shares are acquired will be required to execute and deliver an investor representation letter provided by the Company setting out certain restrictions and procedures regarding the Placing Shares. The investor representation letter will require each QIB to represent and agree among other things that: (i) it is a QIB; and (ii) it will only offer, sell, transfer, assign, pledge or otherwise dispose of the Placing Shares in transactions exempt from or not subject to the registration requirements of the US Securities Act and in compliance with applicable securities laws.

 

Prospective investors are hereby notified that sellers of the Placing Shares may be relying on the exemption from the registration provisions under Section 5 of the US Securities Act provided by Rule 144A.

 

Potential purchasers of the Placing Shares in the United States are advised to consult legal counsel prior to making any offer for, resale, pledge or other transfer of such Placing Shares. Until 40 days after the commencement of the Placing, an offer, sale or transfer of the Placing Shares within the United States by a dealer (whether or not participating in the Placing) may violate the registration requirements of the US Securities Act. No representation has been, or will be, made by the Company, any Selling Shareholder, Zeus Capital or Liberum Capital as to the availability of Rule 144 under the US Securities Act or any other exemption under the US Securities Act or any state securities laws for the reoffer, pledge or transfer of the Placing Shares.

 

Any person in the United States who obtains a copy of this document and who is not a QIB is required to disregard it.

 

9.  Placing Shares

 

The Placing Shares will, when issued or transferred be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares.

 

In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

 

 

DEFINITIONS

In this Announcement the following terms have the following meanings:

 

"Accrol Board" or "Directors"   means the board of directors of the Company

 

"Accrol Group MIP"  means the Accrol Group Management Incentive Plan

 

"Acquisition"  means the acquisition of the entire issued share capital of LTC Parent, of which LTC will become a wholly owned subsidiary immediately thereafter

 

"Acquisition Agreements"  the agreements entered into between, variously, the LTC Vendors, LTC Parent  and the Company to effect the Acquisition, further details of which will be included in a circular outlining the terms of the Open Offer to be sent to Shareholders (other than certain overseas Shareholders) in due course

 

"Acquisition Completion"  means completion of the Acquisition Agreements in accordance with their terms

 

"Admission"  means admission of the New Ordinary Shares to trading on AIM becoming effective, in accordance with the AIM Rules for Companies

 

"AIM"  means the market of that name operated by the London Stock Exchange

 

"AIM Rules for Companies"  means the rules of AIM as set out in the publication entitled "AIM Rules for Companies" published by the London Stock Exchange from time to time

 

"Associated Costs"  means the costs associated with the Primary Placing, the Open Offer and the Acquisition

 

"Bookrunner Person"   means any person being (i) the Bookrunner, (ii) an undertaking which is a subsidiary undertaking of  the Bookrunner, (iii) a parent undertaking of the Bookrunner or a subsidiary undertaking of any such parent undertaking, or (iv) a director, officer, agent or employee of any such person

 

"Bookrunners" or "Joint Bookrunners"  means Zeus Capital and Liberum Capital or either one of them as the context may require

 

"Company" or "Accrol"   means Accrol Group Holdings plc, a public limited company incorporated in England and Wales under registered number 09019496

 

"Directors"   means the directors of the Company

 

"Deferred Consideration"  means up to £6.8 million deferred  consideration which may become payable by the Group in 2021, in cash and/or through the issue of new Ordinary Shares (at the Group's discretion) in accordance with the terms of the Acquisition Agreements, if certain performance criteria have been achieved by LTC Group

 

"EBITDA"  means earnings before interest, tax, depreciation and amortisation

 

"Enlarged Group"  means the Group and including, without limitation, the LTC Group following Acquisition Completion

 

"Existing Ordinary Shares"   means the 195,246,536 Ordinary Shares in issue at the date of this document, being the entire current issued share capital of the Company

 

"FSMA"  means Financial Services and Markets Act 2000 (as amended)

 

"General Meeting"   means the general meeting of the Company which will be convened for the purpose of proposing the Resolutions

 

"Group"  means the Company, its subsidiaries and subsidiary undertakings for the time being

 

"Initial Consideration"  the consideration of £35,000,000 (subject to a customary locked box mechanism) on a cash free, debt free basis, which is to be satisfied (including the payment of £26,382,105 in cash), by the Group under the Acquisition Agreements at Acquisition Completion

 

"Issue Price"   means 44 pence per New Ordinary Share

 

"Liberum Capital"  means Liberum Capital Limited, a company incorporated in England and Wales with company number 05912554, authorised and regulated by the Financial Conduct Authority

 

"London Stock Exchange"   means London Stock Exchange plc

 

"Long Stop Date"  means 11 December 2020

 

"LTC" or "Leicester Tissue Company"   means Leicester Tissue Company Limited, a company incorporated in England and Wales with company number 8786053

 

"LTC Group"   means LTC Parent and its current and prospective subsidiaries and subsidiary undertakings

 

"LTC Parent"   means LTC Parent Ltd, a company incorporated in England and Wales with company number 12471299

 

"LTC Vendors"  Amirali Sharif Tejani, Ayaz Tejani, Aly Tejani, Aamira Tejani and Ambereen Tejani-Sharif

 

"MAR"  means the Market Abuse Regulation (EU No. 596/2014)

 

"Money Laundering Regulations"  means the Money Laundering Regulations (SI 2007 No. 2157), as amended, and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

 

 

"New Ordinary Shares"  means the new Ordinary Shares to be issued pursuant to the Primary Placing, the Open Offer and, if effected, the Option Exercise

 

"Open Offer"  means the conditional invitation by the Company to its Shareholders (other than certain overseas Shareholders) to apply to subscribe for up to 9,297,454 New Ordinary Shares up to an aggregate value of up to c.£4.1 million at the Issue Price per Open Offer Share, details of which will be contained in a circular to be sent to Shareholders in due course

 

"Open Offer Shares"  means up to 9,297,454 New Ordinary Shares to be offered to Shareholders (other than certain overseas Shareholders) under the Open Offer

 

"Option Exercise"  means a conditional exercise by some or all of the Optionholders of options over the Option Shares in accordance with the terms of the Accrol Group MIP

 

"Option Shares"   means New Ordinary Shares which would be issued (in aggregate) to the Selling Shareholders, if the Option Exercise is effected

 

"Optionholders"   means those employees of the Group who currently hold share options pursuant to the Accrol Group MIP and who may be willing to complete the Option Exercise

 

"Ordinary Shares"   means ordinary shares of £0.001 each in the capital of the Company

 

"Parent Reels"  means large tissue reels which are Accrol's raw materials, typically weighing between 1 and 1.5 tonnes

 

"Placees"  means the persons who have agreed to subscribe for the Primary Placing Shares and/or purchase any Secondary Placing Shares (as the context requires)

 

"Placing"  means the Primary Placing and any Secondary Placing

 

 

"Placing and Open Offer Agreement"   means the conditional agreement dated 2 November 2020 relating to the Placing and the Open Offer, made between, inter alia, the Company, Zeus Capital, Liberum Capital and the Optionholders

 

"Placing Shares"  means the Primary Placing Shares and any Secondary Placing Shares

 

"Primary Placing"  means the proposed conditional placing by Zeus Capital and Liberum Capital (on behalf of the Company) of the Primary Placing Shares at the Issue Price

 

"Primary Placing Shares"  means the 87,500,000 New Ordinary Shares which are to be conditionally placed for cash with investors pursuant to the Primary Placing in accordance with the terms of the Placing and Open Offer Agreement and whose allotment and issue is conditional (amongst other things) on the passing of the Resolutions

 

"Prospectus Rules"  means the Prospectus Regulation Rules published by the FCA

 

"Regulatory Information Service"  has the meaning given in the AIM Rules for Companies

 

"Resolutions"   means the resolutions to be proposed at the General Meeting

 

"Restricted Jurisdictions"  means each of Australia, New Zealand, Canada, Japan, the Republic of South Africa and the United States and "Restricted Jurisdiction" means any one of them

 

"Secondary Placing"  means a conditional placing by Zeus Capital and Liberum Capital (on behalf of the Selling Shareholders) of Secondary Placing Shares at the Issue Price

 

"Secondary Placing Shares"   means Option Shares which might be conditionally placed for cash with investors pursuant to a Secondary Placing, in accordance with the terms of the Placing and Open Offer Agreement

 

"Selling Shareholders"   those Optionholders who are willing to exercise certain of those options and sell Option Shares pursuant to the terms of a Secondary Placing as set out in the Placing and Open Offer Agreement

 

"Shareholders"   means the holders of Ordinary Shares from time to time, each individually a "Shareholder"

 

"UK" or "United Kingdom"   means the United Kingdom of Great Britain and Northern Ireland

 

"US" or "United States"   means the United States of America, its territories and possessions, any state of the United States and the District of Columbia

 

"US Securities Act"  means the US Securities Act of 1933, as amended

 

"W&I Insurance"  means warranty and indemnity insurance

 

"Zeus Capital"  means Zeus Capital Limited, a company incorporated in England and Wales with company number 04417845, authorised and regulated by the Financial Conduct Authority

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