Proposed Acquisition, Primary & Secondary Placing
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN (TOGETHER, THIS "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (AS AMENDED) (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
2 June 2021
Brickability Group plc
Proposed acquisition of Taylor Maxwell
Proposed primary placing to raise gross proceeds of £ 55 million
and
Proposed secondary placing to raise gross proceeds of £38 million
Brickability Group plc (AIM: BRCK) ("Brickability", the "Company" or, together with its subsidiary undertakings, the "Group"), the leading construction materials distributor, is pleased to announce the conditional acquisition of Taylor Maxwell Group (2017) Limited ("Taylor Maxwell") , one of the UK's leading suppliers of timber and non-combustible cladding to the construction industry, for a consideration of up to £63 million. In order to finance the Acquisition and to help fund future bolt-on acquisitions , the Company has conditionally raised £55 million (before fees and expenses) by way of a placing of 57,894,737 new ordinary shares of one penny each ("Ordinary Shares") at a price of 95 pence per share (the "Issue Price") with new and existing institutional investors (the "Placing"). In addition, in order to meet market demand, certain selling shareholders have also conditionally raised a further £38 million through the sale of 40,000,000 existing Ordinary Shares at the Issue Price (the "Sale").
Highlights:
· Oversubscribed conditional placing comprising a £55 million primary placing on behalf of the Company and a £38 million secondary placing on behalf of certain selling shareholders, in each case with new and existing institutional shareholders.
· Cenkos Securities plc ("Cenkos") is acting as nominated adviser, sole broker and sole bookrunner in connection with the Acquisition, the Placing and the Sale.
· Issue Price of 95 pence per Placing Share, representing an 8.2 per cent. discount to the closing middle market price of 103.5 pence per Existing Ordinary Share on 1 June 2021, being the last business day before the announcement of the Proposals.
· £ 52.7 million net proceeds of the Placing will be used to fund the acquisition of Taylor Maxwell and future bolt-on acquisitions.
· Acquisition of Taylor Maxwell expected to be significantly earnings accretive and to diversify Brickability's product offering.
· Total consideration payable under the Acquisition of up to £63 million (subject to certain post-completion adjustments), consisting of:
o £40 million initial cash consideration (subject to a £1 million retention in respect of certain of the indemnities given under the Majority SPA) ;
o £10 million through the issue of 9,900,990 Consideration Shares, which will be subject to a 24 month lock in period (subject to customary exceptions) and followed by a 12 month orderly market arrangement ; and
o deferred consideration of up to £13 million, based upon future adjusted EBITDA performance targets over the 3 financial years following completion of the Acquisition.
· The Company's directors and management will retain a shareholding of approximately 28.3 per cent. in Brickability, down from approximately 54 per cent.
· The Placing and the Acquisition are conditional upon, inter alia, on the passing by Shareholders of certain Resolutions at the General Meeting to be held on 29 June 2021.
· The New Ordinary Shares are expected to be admitted to trading on AIM on 30 June 2021.
· A circular, which will provide further details of the Proposals and include a Notice of General Meeting (the "Circular") is expected to be published and sent to Shareholders later today.
Certain defined terms used in this Announcement are set out in the Appendix below.
John Richards, Chairman of Brickability, said:
"The acquisition of Taylor Maxwell is the 11th strategically significant acquisition made by Brickability since 2018 and is absolutely in line with the strategy we set out at IPO.
"As Brickability continues to grow, this acquisition marks a significant expansion in the range of solutions we can deliver for our growing client base and represents a significant value-add for our Shareholders.
"The team continues to identify and evaluate opportunities as we continue to deliver the IPO promise, retaining focus on diversification and expansion.
"Taylor Maxwell has been providing façade and timber products to the construction industry for over 60 years. The firm operates from 16 regional locations across the UK, with minimal overlap against Brickability's existing client base. Over the years, Taylor Maxwell have acquired a wealth of local market knowledge, enabling them to build strong professional relationships with a diverse range of key manufacturers.
"The acquisition of Taylor Maxwell will bolster Brickability's leading position in UK brick distribution; offering cost and revenue synergies while being transformational in terms of the group's scale and relevance in the wider materials supply industry.
"The Acquisition has been well supported by our existing shareholder base, and the oversubscribed Placing has benefited Brickability by welcoming a range of new institutional shareholders to the Brickability register."
Alan Simpson, Chief Executive Officer of Brickability, said:
"Taylor Maxwell is a business we have earmarked for acquisition since IPO as we believe the union will bring significant short and long-term benefits to both companies and customers.
"Access to Taylor Maxwell's longstanding relationships, distribution channels and local knowledge will greatly improve Brickability's access to the UK marketplace while also delivering procurement, revenue and structural synergies.
"We look forward to welcoming the Taylor Maxwell team to the Brickability Group and building an even stronger business in 2021."
Martin Rudge, Managing Director, Taylor Maxwell, said:
"Taylor Maxwell's management team view the transaction as an exciting new chapter in the history of the business, one that they feel will benefit its employees, customers and suppliers alike.
"We are very proud of what has been achieved over the last sixty years and how the business has developed into the company it is today. Growth in recent times has been organic and this transaction is seen as a great opportunity to develop the business further as part of a larger organisation."
An extract of the Circular which contains further information about the Acquisition, the Placing and the Sale is set out in the Appendix to this Announcement.
The person responsible for arranging the release of this Announcement on behalf of the Company is Alan Simpson, Chief Executive Officer of the Company.
For further information please contact:
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Brickability Group plc John Richards, Chairman Alan Simpson, CEO Mike Gant, CFO |
via Montfort Communications |
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Cenkos Securities plc (Nominated adviser and broker) Max Hartley / Max Gould (Corporate Finance) Julian Morse / Alex Pollen (Sales) |
+44 (0) 20 7397 8900 |
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Montfort Communications James Olley Miles McKechnie |
+44 (0)20 3770 7916 |
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Important notices
The distribution of this Announcement and any other documentation associated with the Placing and Sale into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction. In particular, such documents should not be distributed, forwarded to or transmitted, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so may constitute a violation of the securities laws or regulations of any such jurisdiction (each a "Restricted Jurisdiction").
The Placing Shares and Sale Shares have not been and will not be registered under the US Securities Act 1933 (as amended) (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within the United States except in reliance on an exemption from 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.
There will be no public offer of the Placing Shares or the Sale Shares in the United States. The Placing Shares and Sale Shares are being offered and sold outside the US in reliance on Regulation S under the US Securities Act. The New Ordinary Shares and the Sale Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US 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 Shares and Sale Shares or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the US.
The Placing Shares and the Sale Shares have not been and will not be registered under the relevant laws of any state, province or territory of any Restricted Jurisdiction and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within any Restricted Jurisdiction except pursuant to an applicable exemption from registration requirements. There will be no public offer of New Ordinary Shares in Australia, Canada, Japan, or the Republic of South Africa.
This Announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in any jurisdiction and should not be relied upon in connection with any decision to subscribe for or acquire any of the Placing Shares or any Sale Shares (as the case may be). In particular, this Announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States.
This Announcement has been issued by, and is the sole responsibility of, the Company. No person has been authorised to give any information or to make any representations other than those contained in this Announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company or Cenkos. Subject to the AIM Rules for Companies, the issue of this Announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Announcement or that the information contained in it is correct at any subsequent date.
Cenkos, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Proposals and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Proposals and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Proposals or any matters referred to in this Announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed on Cenkos by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Cenkos does not accept any responsibility whatsoever for the contents of this Announcement, and makes no representation or warranty, express or implied, for the contents of this Announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Placing Shares or the Sale Shares or the Placing or the Sale, and nothing in this Announcement is or shall be relied upon as, a promise or representation in this respect whether as to the past or future. Cenkos accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this Announcement or any such statement.
No statement in this Announcement is intended to be a profit forecast or profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share of the Company.
This Announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this Announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this Announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by applicable law or by the AIM Rules for Companies, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this Announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this Announcement.
Information to Distributors
UK product governance
Solely for the purposes of the product governance requirements contained within of Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares and the Sale Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the Placing Shares or the Sale Shares may decline and investors could lose all or part of their investment; (b) the Placing Shares offer no guaranteed income and no capital protection; and (c) an investment in the Placing Shares and/or the Sale Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing and the Sale. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cenkos will only procure investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; 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 or the Sale Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and the Sale Shares and determining appropriate distribution channels.
Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this Announcement.
Certain figures contained in this Announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this Announcement may not conform exactly with the total figure given.
All references to time in this Announcement are to London time, unless otherwise stated.
Appendix - Extract from Circular
Introduction and Summary
The Company announced on 2 June 2021 that it had conditionally raised £55 million (before expenses) by way of a placing of 57,894,737 new Ordinary Shares at a price of 95 pence per share. The net proceeds of the Placing will be used to fund the cash consideration payable pursuant to the acquisition of Taylor Maxwell and provide additional funding for future strategic acquisitions. As part of the Acquisition, subject to the satisfaction of certain pre-conditions under the Acquisition Agreement, 9,900,990 Consideration Shares will be issued to the vendors at a deemed price of 101 pence per Consideration Share.
The Placing Shares have been conditionally placed with certain new and existing institutional investors at the Issue Price by Cenkos in accordance with the terms and conditions of the Placing Agreement.
In addition, a further 40,000,000 Sale Shares have been conditionally placed on behalf of the Selling Shareholders at the Issue Price. Accordingly, certain new and existing institutional shareholders have conditionally subscribed for and/or purchased (as the case may be) in aggregate £93 million of Ordinary Shares at the Issue Price.
Subject to the satisfaction of all relevant conditions in the Placing Agreement, it is anticipated that the New Ordinary Shares will be admitted to trading, and dealings in the New Ordinary Shares will commence, on AIM on or around 8.00 a.m. on 30 June 2021.
The purpose of this document is to outline the reasons for, and provide further information on, the Proposals, to explain why the Board believes the Proposals to be in the best interests of the Company and its Shareholders as a whole and why the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting. The General Meeting has been convened for 10.00 a.m. on 29 June 2021 and will take place at Queensgate House, Cookham Road, Bracknell, Berkshire, RG12 1RB.
The Company
Brickability is a leading specialist provider of a select range of building materials, to supply solutions to house builders and contractors. The Group which Brickability now heads was founded in 1984 in South Wales and has since grown organically and through acquisitions to have a nationwide presence, with 25 sites and sales offices throughout the UK. Brickability currently employs approximately 285 people throughout the UK.
Brickability focuses its business on three main areas: Bricks & Building Materials, Roofing, and Heating, Plumbing & Joinery. Brickability supplies over 300 million bricks annually and their products currently also includes blocks, rain screen cladding systems, architectural masonry, paving, roof tiles and slates.
Background to and reasons for the Placing
Since the Company's flotation on AIM, the Company has delivered a strong financial performance. In its most recent trading update for the year to 31 March 2021, the Company reported unaudited revenues of approximately £180 million (FY20: £187 million) and adjusted EBITDA in excess of £17 million (FY20: £19.5 million). This was ahead of previous expectations given the impact of the COVID-19 pandemic.
A weighting of the Company's growth strategy is focused on acquisitions, having completed ten bolt-on acquisitions in the previous three years. The Group continues to explore a number of new acquisitions and is therefore raising £ 55 million (before expenses) pursuant to the Placing to continue its acquisition-led growth strategy. The Placing will primarily fund the Acquisition of Taylor Maxwell, a building materials distributor with over 60 years of operating history.
Any amount raised by the Placing that is not allocated to the Acquisition will be used to fund additional strategic acquisitions. The Company has identified five further potential acquisitions made up of a renewable energy specialist, a flooring company, two roofing contractors, and a brickwork and stonework contractor.
Acquisition of Taylor Maxwell
Overview of Taylor Maxwell
The business that is incorporated as Taylor Maxwell was founded in 1959 by R. Taylor and Eric Mclean Maxwell. Headquartered in Clifton, UK, the company is one of the UK's leading suppliers of timber and non-combustible cladding to the construction industry. Taylor Maxwell has key relationships with global manufacturers, and holds key supply chain agreement with building contractors, developers, architects and timber merchants. Taylor Maxwell's products currently include brick, timber, non-combustible cladding, flooring, masonry, decking, offsite solutions and engineered wood. Key customers include Vistry Group, Lovell Homes, Bloor Homes, MKM Building suppliers and AVS Fencing and Landscaping Supplies. Taylor Maxwell operates from 16 office and showroom locations across the UK.
Taylor Maxwell has grown its revenue and EBITDA over the past four financial years as follows:
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March year end |
FY18 |
FY19 |
FY20 |
FY211 |
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Revenue (£ million) |
202.3 |
231.7 |
213.0 |
252.4 |
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EBITDA (£ million) |
7.6 |
8.8 |
7.5 |
10.4 |
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EBITDA Margin (%) |
3.7% |
3.8% |
3.5% |
4.1% |
1. FY21 figures unaudited .
In FY21, approximately 58 per cent. of Taylor Maxwell's revenues were derived from timber sales, while approximately 31 per cent. were from brick sales and the remaining approximate 10 per cent. from cladding, masonry and other products. The FY21 timber revenues were 40 per cent. apportioned to fencing/landscaping, 28 per cent. to use in construction, 14 per cent. for pallets, and the remainder for decking and other miscellaneous uses.
Acquisition Rationale
The Acquisition of Taylor Maxwell is expected to be significantly earnings accretive on a per share basis and puts the Group on track to reach £500 million of annual revenues in the near term.
Additionally, the Acquisition will broaden Brickability's product offering, adding timber and non-combustible cladding to the Group, and their market position in key products provides an opportunity for future organic growth. The Group believes there are margin enhancement opportunities available within Taylor Maxwell, with a focus on imports and the Repairs Maintenance & Improvement (RMI) industry. It will also provide Brickability access to Taylor Maxwell's UK and EU supplier network.
The increased product offering will lead to a broadened universe of potential future acquisitions for the Group to target, with the net Placing proceeds providing significant headroom to fund these. The Acquisition also provides the Group with access to new customers, with less than 10 per cent. existing customer overlap between Taylor Maxwell and the Company, thus the Acquisition would maximise cross selling opportunities.
The majority of employees from Taylor Maxwell will join the Group as part of the Acquisition. Key Taylor Maxwell senior management will bolster Brickability's head office operations, including divisional directors and directors from finance, marketing and IT. Approximately 190 employees will join Brickability. Those employees who are Taylor Maxwell shareholders will be receiving more than 50 per cent of their sale consideration in Consideration Shares and future earn out targets.
Acquisition Terms
The total consideration for Taylor Maxwell payable under the Acquisition is up to £63 million, consisting of the following:
· initial cash consideration of £40 million (subject to a £1 million retention in respect of certain of the indemnities given under the Majority SPA);
· share consideration of £10 million (9,900,990 Consideration Shares); and
· deferred consideration of up to £13 million, based on future adjusted EBITDA performance targets over the 3 financial years following completion of the Acquisition.
The cash consideration is subject to certain post-completion adjustments in the event that certain tax benefits are received by the Company or there is a pension surplus accruing to the Company.
The cash consideration will be financed through the net Placing proceeds. The Consideration Shares will be subject to a 24 month hard lock-in followed by a 12 month orderly market arrangement. The Consideration Shares will be issued at a deemed price of 101 pence per Consideration Share, which represents the closing mid-market price of the Existing Ordinary Shares over the ten day period ended on 28 May 2021. The Consideration Shares will represent approximately 3.3 per cent. of the Enlarged Share Capital.
Acquisition Timings
The Acquisition Agreements have been signed by the Company and the shareholders of Taylor Maxwell, with completion of the Acquisition conditional upon shareholder approval of the Placing and admission of the New Ordinary Shares to trading on AIM becoming effective. The General Meeting is being convened to take place on 29 June 2021 with Admission anticipated to become effective at 8.00 a.m. on 30 June 2021. Completion of the Acquisition is therefore anticipated to take place on 30 June 2021.
The completion of the Acquisition is also subject to a competition condition and a pensions condition, either of which may be waived in whole or in part by the Company:
Competition Markets Authority (CMA)
The Company has submitted a briefing paper to the CMA in relation to the Acquisition, and completion of the Acquisition is subject to either (i) the CMA indicating that it has no further questions in respect of the briefing paper; (ii) the Company otherwise being satisfied that the Acquisition does not amount to a relevant merger situation under applicable legislation; or (iii) the Company receiving satisfactory confirmation that the Acquisition will not be referred for formal investigation by the CMA. The risk of a formal CMA review process therefore remains. However, this is not considered to be likely, and the Company can choose to waive these conditions in whole or in part if it has not been fully satisfied before the intended date of completion of the Acquisition.
Pension scheme buy-in
Taylor Maxwell currently has a defined benefit section of its pension scheme which, as of the latest trustee accounts, has 41 members. It is intended that a contract of long term insurance will be obtained in respect of any of the liabilities of this section of the pension scheme. The Acquisition Agreement is conditional on this buy-in policy having been obtained. Again, however, this condition may be waived by the Company if the policy has not been finalised at the intended time of completion of the Acquisition.
Current trading and outlook
In a financial year which commenced during the first national lockdown and significant operational challenges due to the COVID-19 pandemic, the Company delivered a solid trading performance for the financial year to 31 March 2021 a nd expects to deliver revenues for the period of approximately £180 million and adjusted EBITDA in excess of £17 million .
The Company has maintained a focus on margins and cost control whilst also strengthening its sales team to satisfy ongoing demand. Furthermore, Brickability has benefitted from the positive contributions of recent acquisitions, including McCann Logistics Limited. The McCann Logistics Limited acquisition has provided Brickability with its own pan-European transport network ensuring security and control of supply lines and reducing exposure to third party freight providers.
The Group has commenced the new financial year well, with strong order book levels being driven by pent up demand for houses post lockdown, and a demand for houses over flats. Long term, the Group expects the UK government's new Help to Buy scheme and the Affordable Homes programme to continue to drive demand for Brickability's products.
Details of the Placing and the Placing Agreement
The Company has conditionally raised gross proceeds of £55 million (before expenses) through the Placing of the Placing Shares at the Issue Price. The Placing comprises 57,894,737 new Ordinary Shares and will represent approximately 19.4 per cent. of the Enlarged Share Capital. The Issue Price represents an 8.2 per cent. discount to the closing middle market price of 103.5 pence per Existing Ordinary Share as at the Latest Practicable Date.
Pursuant to the terms of the Placing Agreement, Cenkos has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. Cenkos has conditionally placed the Placing Shares with certain institutional and other investors at the Issue Price. The Placing is not being underwritten by Cenkos.
The Placing is conditional, inter alia, on:
· the Placing Agreement not having been terminated in accordance with its terms prior to Admission;
· this document and the Form of Proxy having been published and an electronic copy of the Circular having been submitted to the London Stock Exchange;
· the Resolutions being passed at the General Meeting; and
· Admission becoming effective by no later than 8.00 a.m. on 30 June 2021 or such later time and/or date as the Company and Cenkos may agree (being no later than 8.00 a.m. on 9 July 2021).
The Placing Agreement contains customary warranties given by the Company to Cenkos as to matters in relation to, inter alia, the accuracy of the information in this document and other matters relating to the Group and its business. In addition, the Company has provided a customary indemnity to Cenkos in respect of liabilities arising out of or in connection with the Placing. Cenkos is entitled to terminate the Placing Agreement in certain circumstances prior to Admission including circumstances where any of the warranties are found not to be true or accurate or were misleading in any respect, the failure of the Company to comply in any material respect with any of its obligations under the Placing Agreement, the occurrence of certain force majeure events or a material adverse change affecting the condition, or the earnings or business affairs of the Group as a whole.
Details of the Sale
Cenkos has also conditionally placed 40,000,000 existing Ordinary Shares at the Issue Price on behalf of the Selling Shareholders pursuant to the Selling Shareholder Agreements as detailed below.
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Selling Shareholder |
Number of Sale Shares Sold |
Ordinary Shares held on Admission |
% holding of Ordinary Shares on Admission |
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Alan Simpson |
12,624,556 |
23,970,456 |
8.0% |
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Sarah Simpson |
4,382,590 |
9,475,902 |
3.2% |
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Paul Hamilton |
10,791,600 |
20,007,298 |
6.7% |
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Clive Norman |
1,760,775 |
3,807,096 |
1.3% |
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Simon Mellor |
3,000,000 |
1,842,859 |
0.6% |
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Jennifer Overend |
1,139,946 |
1,139,946 |
0.4% |
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John Richards |
1,872,048 |
4,047,685 |
1.4% |
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Arnold Van Huet |
1,548,476 |
10,000,000 |
3.4% |
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Christopher Gardner |
991,706 |
2,313,981 |
0.8% |
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Calum Currie |
1,123,621 |
2,429,460 |
0.8% |
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Christopher Millican |
461,323 |
1,076,423 |
0.4% |
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Richard Manthorp |
303,359 |
303,359 |
0.1% |
Pursuant to the terms of the Selling Shareholders Agreements, Cenkos has conditionally agreed to use its reasonable endeavours to procure purchasers for the Sale Shares at the Issue Price. Cenkos has conditionally placed the Sale Shares with certain institutional and other investors at the Issue Price. The Sale is not being underwritten by Cenkos.
The Sale is conditional, inter alia, on:
· each of the Selling Shareholders Agreements not having been terminated in accordance with its terms prior to Admission; and
· Admission becoming effective by no later than 8.00 a.m. on 30 June 2021 or such later time and/or date as the Company and Cenkos may agree (being no later than 8.00 a.m. on 9 July 2021).
Pursuant the Selling Shareholders Agreements, the Selling Shareholders have agreed, subject to certain customary exceptions, not to dispose of any other Existing Ordinary Shares for a period of 12 months from the date of Admission. Following this period, the Selling Shareholders have agreed to customary orderly marketing arrangements for a further 12 months.
Related party transaction
Liontrust Asset Management has agreed to subscribe for 3,894,000 Placing Shares. Liontrust Asset Management currently holds approximately 11.3 per cent. of the Existing Ordinary Shares and is therefore a "substantial shareholder" under the AIM Rules. As such the subscription by Liontrust Asset Management for shares in the Placing constitute a related party transaction under the AIM Rules. The Directors, having consulted with Cenkos as the Company's nominated adviser, consider the terms of Liontrust Asset Management's participation in the Placing to be fair and reasonable insofar as the independent Shareholders of the Company are concerned.
Settlement and dealings
The New Ordinary Shares will be issued credited as fully paid and will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of Ordinary Shares after Admission. The New Ordinary Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM.
Settlement of the Placing Shares and Admission is expected to take place on or before 8.00 a.m. on 30 June 2021. The Placing is conditional upon, inter alia, the passing of the Resolutions, Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms prior to Admission. The issue of the Consideration Shares is conditional on the passing of the Resolutions.
Effect of the Placing and the issue of the Consideration Shares
Upon Admission, the Enlarged Share Capital is expected to be 298,254,548 Ordinary Shares. On this basis, the New Ordinary Shares will represent approximately 22.7 per cent. of the Enlarged Share Capital.
DEFINITIONS
The following definitions apply throughout this Announcement unless the context otherwise requires:
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EXPECTED TIMETABLE OF PRINCIPAL EVENTS
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2021 |
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Announcement of the Proposals |
7:00 a.m. 2 June |
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Publication of the Circular |
2 June |
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Latest time and date for receipt of Forms of Proxy and CREST voting instructions |
10.00 a.m. on 25 June |
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General Meeting |
10.00 a.m. on 29 June |
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Results of General Meeting announced |
29 June |
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Admission and dealings in the Placing Shares and the Consideration Shares expected to commence on AIM |
8.00 a.m. on 30 June |
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Completion of the Acquisition |
30 June |
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Where applicable, expected date for CREST accounts to be credited in respect of Placing Shares in uncertificated form |
30 June |
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Where applicable, expected date for dispatch of definitive share certificates for Placing Shares in certificated form |
within 10 business days of Admission |
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