Recommended Cash Acquisition of Kin and Carta plc
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
19 December 2023
RECOMMENDED CASH ACQUISITION
of
Kin and Carta plc
by
Ken Bidco Limited
(a newly formed company controlled indirectly by funds advised by BC Partners)
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of directors of Ken Bidco Limited ("Valtech") (a newly formed company owned indirectly by Valtech Topco, which in turn is controlled indirectly by funds advised by BC Partners), and Kin and Carta plc ("Kin and Carta") are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash acquisition by Valtech of the entire issued, and to be issued, ordinary share capital of Kin and Carta (the "Acquisition").
· It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the 2006 Act. Valtech reserves the right to elect to implement the Acquisition by way of an Offer as an alternative to the Scheme, subject to the Panel's consent and the terms of the Cooperation Agreement.
· Under the terms of the Acquisition, each Kin and Carta Shareholder will be entitled to receive:
for each Kin and Carta Share held: 130 pence in cash (the "Offer Price")
· The Offer Price represents a premium of approximately:
o 8.3 per cent. to the offer price of 120 pence per Kin and Carta Share under the terms of the Revised Apax Offer;
o 66.7 per cent. to the Closing Price of 78 pence per Kin and Carta Share on 17 October 2023 (being the last Business Day before the commencement of the Offer Period);
o 66.2 per cent. to the volume-weighted average price of 78 pence per Kin and Carta Share for the three-month period ended 17 October 2023 (being the last Business Day before the commencement of the Offer Period); and
o 79.0 per cent. to the volume-weighted average price of 73 pence per Kin and Carta Share for the six-month period ended 17 October 2023 (being the last Business Day before the commencement of the Offer Period).
· The Acquisition values Kin and Carta's entire issued, and to be issued, ordinary share capital at approximately £239 million on a fully diluted basis.
· If, on or after the date of this announcement and prior to the Acquisition becoming Effective, any dividend and/or other distribution and/or other return of capital or value is announced, declared, made, paid or becomes payable in respect of the Kin and Carta Shares, Valtech reserves the right to reduce the Offer Price by an amount up to the amount per share of such dividend and/or distribution and/or other return of capital or value, in which case any reference in this announcement to the Offer Price shall be deemed to be a reference to the Offer Price as so reduced. In such circumstances, Kin and Carta Shareholders shall be entitled to retain any such dividend, distribution and/or other return of capital or value declared, made, or paid. Any exercise by Valtech of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Acquisition or the Scheme.
· The Kin and Carta Directors have withdrawn their recommendation of the Revised Apax Offer, and intend to adjourn the Apax Offer Shareholder Meetings. A separate announcement will be made by Kin and Carta in this regard.
Background to and reasons for the Acquisition
· Valtech views Kin and Carta as a high-quality business, led by a strong team, with a reputation for providing innovative digital transformation services to a blue-chip roster of clients. However, a combination of the ongoing pace of change in the digital transformation sector and a more uncertain economic backdrop, has highlighted the importance of scale and diversification.
· Kin and Carta and Valtech are highly complementary businesses in terms of their geographic presence, service line offerings, vendor relationships and regional industry strengths. As a result, Valtech believes there is compelling strategic and business logic in pursuing an acquisition of Kin and Carta to create a Combined Group that will support customers in all their digital needs, including enterprise digital transformation and data at scale, across a full suite of complementary offerings.
· Valtech believes that a combination will create a geographically diverse digital leader, with a broader suite of services, technology vendor relationships and end-market capabilities than each business individually. The Combined Group's breadth and scale will offer a unique combination of: accelerated growth; the efficiencies afforded by a global platform of shared functions and service delivery; and greater resilience in a sector where scale matters.
· The employees of both Kin and Carta and Valtech are the true assets of each business. Valtech believes that employees of the Combined Group will benefit from a more globally diverse business and shared culture with the prospect of being exposed to more challenging career opportunities through radical and disruptive digital transformation projects.
· In addition, Valtech believes that the Combined Group will be well supported in its next phase of growth by its existing investors, BC Partners and its co-investors, which are leading international investment firms with significant experience and track record within this sector. BC Partners intends to provide operational expertise, and the BC Partners Funds intend to provide capital to support the business to maximise its potential. Valtech believes a partnership with BC Partners and its co-investors away from the public markets will, along with the benefits associated with being part of a larger group, better position Kin and Carta to create long-term value for the benefit of its customers, employees and other stakeholders.
Recommendation
· On 18 October 2023, the boards of directors of Kin and Carta and Kelvin announced that they had agreed the terms and conditions of an acquisition of the entire issued and to be issued ordinary share capital of Kin and Carta by Kelvin, to be implemented by way of a scheme of arrangement (the "Original Apax Offer"). Under the terms of the Original Apax Offer, each Kin and Carta Shareholder was entitled to receive 110 pence in cash for each Kin and Carta Share held. The scheme document in respect of the Original Apax Offer was published on 9 November 2023 and included a unanimous recommendation from the Kin and Carta Directors to the Kin and Carta Shareholders to vote in favour of the Original Apax Offer at the Apax Offer Shareholder Meetings.
· On 6 December 2023, the boards of directors of Kin and Carta and Kelvin announced that they had reached agreement on the terms of an increased and Final cash offer by Kelvin for the entire issued and to be issued share capital of Kin and Carta (the "Revised Apax Offer"). Under the terms of the Revised Apax Offer, each Kin and Carta Shareholder is entitled to receive 120 pence in cash for each Kin and Carta Share held. The announcement of the Revised Apax Offer also included a unanimous recommendation from the Kin and Carta Directors to the Kin and Carta Shareholders to vote in favour of the Revised Apax Offer at the Apax Offer Shareholder Meetings.
· In light of the superior proposal per Kin and Carta Share put forward by Valtech in comparison to the Revised Apax Offer, the Kin and Carta Directors, who have been so advised by Citi as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Citi has taken into account the commercial assessments of the Kin and Carta Directors. Citi is providing independent financial advice to the Kin and Carta Directors for the purposes of Rule 3 of the Takeover Code.
· Accordingly, the Kin and Carta Directors intend to recommend unanimously that Kin and Carta Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, each to be convened in due course. The Kin and Carta Directors have withdrawn their recommendation of the Revised Apax Offer and intend to adjourn the Apax Offer Shareholder Meetings. A separate announcement will be made by Kin and Carta in this regard.
· Valtech has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from Coast Capital Management, LP, Sand Grove Capital Management LLP and Samson Rock Capital LLP in respect of a total of 39,409,916 Kin and Carta Shares in aggregate (representing approximately 22.1 per cent. of the issued ordinary share capital of Kin and Carta as at 18 December 2023, being the Business Day prior to the date of this announcement). Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.
Information on Valtech and BC Partners
· Ken Bidco Limited is a private limited company incorporated in England and Wales. Ken Bidco Limited is a newly formed company owned indirectly by Valtech Topco, which is in turn controlled indirectly by funds advised by BC Partners. Ken Bidco Limited was formed for the purposes of the Acquisition and has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Acquisition.
· BC Partners is a leading international investment firm with approximately €40 billion of assets under management in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market. Today, BC Partners executives operate across markets as an integrated team through the firm's offices in North America and Europe, and are aligned across four core sectors: Healthcare, TMT, Business Services & Industrials, and Consumer. Since inception, BC Partners has completed over 126 private equity investments in companies in 18 countries with a total enterprise value of over €160 billion. BC Partners is currently investing its eleventh private equity buyout fund, BC Partners XI, with total commitments of approximately €7 billion.
· Valtech Group is the "experience innovation company", helping companies become leaders in a digital world.
· By blending crafts, skills, and cultures, Valtech Group's global team of over 5,400 professionals in more than 60 offices in over 20 countries, helps brands to unlock value in a digitally accelerated world. With a focus on delivering exceptional business results, Valtech Group empowers brands to leap ahead of the competition through experience elevation, commerce acceleration, enterprise transformation, marketing creativity & performance, and data evolution. By focusing on the human experience, Valtech Group creates exceptional solutions that deliver value in a rapidly changing and connected world.
Information on Kin and Carta
· Kin and Carta is a global digital transformation consultancy, serving businesses across the healthcare, financial services, industrial and agriculture, retail and distribution, transportation and public sectors, among others.
· Previously known as St Ives plc, Kin and Carta has evolved from a printing and marketing services group into a digital transformation consultancy focused on delivering connected outcomes for clients through digital innovation, cloud modernisation, data enablement and digital optimisation.
· Kin and Carta is a certified B Corp and became the first publicly traded business on the London Stock Exchange to earn this accreditation. B Corp certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits to supply chain practices and input materials.
· Kin and Carta's headquarters are in London, with US headquarters in Chicago, and it has over 1,800 consultants, engineers and data scientists globally.
Timetable and conditions
· It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the 2006 Act (although Valtech reserves the right to effect the Acquisition by way of an Offer, subject to the consent of the Panel and the terms of the Cooperation Agreement).
· The terms of the Acquisition will be put to Kin and Carta Shareholders at the Court Meeting and the General Meeting. The Court Meeting and the General Meeting are required to enable Kin and Carta Shareholders to consider and, if thought fit, vote in favour of the Scheme and the Resolutions to implement the Scheme. In order to become Effective, the Scheme must be approved by a majority in number of Kin and Carta Shareholders, present and voting at the Court Meeting, whether in person or by proxy, representing 75 per cent. or more in value of the Kin and Carta Shares voted. In addition, a special resolution implementing the Scheme must be passed by Kin and Carta Shareholders representing at least 75 per cent. of votes cast at the General Meeting.
· The Conditions to the Acquisition are set out in full in Appendix 1 to this announcement along with certain other terms. The full terms and conditions will be provided in the Scheme Document.
· It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with the associated forms of proxy, will be posted to Kin and Carta Shareholders as soon as practicable and in any event within 28 days of this announcement (or such later date as Kin and Carta, Valtech and the Panel agree) and the Meetings will be held as soon as reasonably practicable thereafter, giving the required notice for such meetings. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on Kin and Carta's website at https://investors.kinandcarta.com and on Valtech's website at https://www.valtech.com/offer-announcement/.
· The Acquisition is currently expected to complete by the end of April 2024, subject to the satisfaction or (where applicable) waiver of the Conditions. An expected timetable of key events relating to the Acquisition will be set out in the Scheme Document.
· Commenting on the Acquisition, John Kerr, the Chair of Kin and Carta, said:
"Kin and Carta has successfully repositioned itself as a pure-play digital transformation consultancy business working with global clients across a range of sectors. While as a standalone business we have built an impressive client base, we believe the offer from Valtech will bring expertise, capital resources and investment enabling the Combined Group to build upon the strong foundations we have laid.
The Kin and Carta Board is pleased to unanimously recommend Valtech's offer, which provides our shareholders with even greater value for their shares. We believe the Combined Group will deliver positive outcomes both now and in the long-term for our stakeholders: the clients and the communities we serve, the people who deliver our high-quality services, and our investors."
· Commenting on the Acquisition, Raymond Svider, Chair of BC Partners, said:
"During our interactions over the last three years, we have developed a huge amount of respect and admiration for the business that Kelly, Chris and the broader team of over 1,800 talented technologists have created.
We are excited to support Valtech in their ambition to bring together two outstanding organisations to the benefit of both customers and employees. Digital transformation is a large and fast changing sector. Together, Kin and Carta and Valtech will benefit from each-others' distinct but complementary capabilities, with the reach and support afforded by a combined group with approximately 7,800 talented individuals, approximately $1bn in revenue, operating globally in 24 geographies across 10 sectors.
BC Partners and our co-investors will continue to support Valtech with capital and expertise to continue to grow and adapt, both organically and inorganically."
· Commenting on the Acquisition, Kelly Manthey, Chief Executive Officer of Kin and Carta, said:
"Having spent time with the Valtech management team, I am excited about the increased scale and scope of the combined Valtech and Kin and Carta businesses and Valtech's commitment to Kin and Carta's B Corp re-certification. I believe the combination will further accelerate the career growth of our people and bring more to the clients we serve."
· Commenting on the Acquisition, Olivier Padiou, Chief Executive Officer of Valtech, said:
"From my earliest conversations with Kelly, Chris and their team, I have been deeply appreciative of the common values on which both of our companies have been built. This foundation is critical for our joint success and future collaboration.
I have been very impressed by the skills, experience and commitment of Kin and Carta's management and employees and believe that they will be fundamental to maximising long-term success for our combined businesses.
The quality of the services Kin and Carta provides to its clients is second-to-none in so many dimensions. From data and product development to cloud engineering and beyond, I can't wait to see the impact we will make together as a driving force of change.
With our unique ability to activate every level of global enterprises, we'll continue to deliver digital experiences that leap beyond best practice and unlock a better way to experience the world."
This summary should be read in conjunction, and is subject to, the full text of this announcement and the Appendices. The Acquisition will be subject to the Conditions, further terms set out in Appendix 1 to this announcement and the full terms and conditions which will be set out in the Scheme Document. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2. Details of the irrevocable undertakings received by Valtech are set out in Appendix 3. Certain definitions and terms used in this announcement are set out in Appendix 4.
The person responsible for arranging release of this announcement on behalf of Kin and Carta is Lucy Maxwell, Company Secretary.
Enquiries:
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Europa Partners Limited (Financial Adviser to BC Partners and Valtech) |
+44 20 7451 4542 |
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Montfort Communications (PR Adviser to BC Partners and Valtech) |
+44 7739 701 634 +44 7812 345 205 |
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Kin and Carta |
+44 20 7928 8844 |
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Kelly Manthey, Chief Executive Officer |
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Chris Kutsor, Chief Financial Officer and Chief Operating Officer |
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Citigroup Global Markets Limited (Financial Adviser to Kin and Carta) |
+44 20 7986 4000 |
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Robert Farrington |
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David Fudge |
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Avinash Patel |
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Deutsche Numis (Joint Corporate Broker to Kin and Carta) |
+44 20 7260 1000 |
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Nick Westlake |
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Tejas Padalkar |
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Peel Hunt LLP (Joint Corporate Broker to Kin and Carta) |
+44 20 7418 8900 |
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John Welch |
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Paul Gillam |
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Powerscourt (PR Adviser to Kin and Carta) |
+44 (0) 7841 658 163 |
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Elly Williamson |
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Pete Lambie |
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Linklaters LLP is acting as legal adviser to BC Partners and Valtech. Herbert Smith Freehills LLP is acting as legal adviser to Kin and Carta.
Further information
Europa Partners Limited ("Europa"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting exclusively for BC Partners and Valtech and for no one else in connection with the Acquisition and will not be responsible to anyone other than BC Partners and Valtech for providing the protections afforded to its clients or for providing advice in connection with the Acquisition. Neither Europa, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Europa in connection with the Acquisition, this announcement, any statement contained herein or otherwise.
Citigroup Global Markets Limited ("Citi"), which is authorised by the PRA and regulated in the UK by the FCA and the PRA, is acting as financial adviser for Kin and Carta and for no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Kin and Carta for providing the protections afforded to clients of Citi nor for providing advice in connection with the contents of this announcement, or any other matters referred to in this announcement. Neither Citi nor any of its affiliates, directors or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Citi in connection with this announcement, any statement contained herein or otherwise.
Numis Securities Limited ("Deutsche Numis") which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Kin and Carta and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Kin and Carta for providing the protections afforded to clients of Deutsche Numis nor for providing advice in relation to any matter referred to in this announcement or any transaction or arrangement referred to herein. Deutsche Numis is not responsible for the contents of this announcement. Neither Deutsche Numis nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this announcement, any statement contained herein, any transaction or arrangement referred to herein, or otherwise.
Peel Hunt LLP ("Peel Hunt") which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Kin and Carta and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Kin and Carta for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to any matter referred to in this announcement or any transaction or arrangement referred to herein. Peel Hunt is not responsible for the contents of this announcement. Neither Peel Hunt nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with this announcement, any statement contained herein, any transaction or arrangement referred to herein, or otherwise.
This announcement is for information purposes only and is not intended to, and does not, constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Kin and Carta in any jurisdiction in contravention of applicable law. The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).
This announcement does not constitute a prospectus, prospectus equivalent document or exempted document.
This announcement contains inside information in relation to Kin and Carta for the purposes of Article 7 of the Market Abuse Regulation. The person responsible for arranging the release of this announcement on behalf of Kin and Carta is Lucy Maxwell, Company Secretary. Kin and Carta's Legal Entity Identifier is 213800B32KQM8CENCR16.
If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
Overseas Shareholders
The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements. Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared in accordance with and for the purpose of complying with English law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.
The availability of the Acquisition to Kin and Carta Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Kin and Carta Shares with respect to the Scheme at the Meetings, or to appoint another person as proxy to vote at the Meetings on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Further details in relation to Overseas Shareholders will be contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).
Unless otherwise determined by Valtech or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving this announcement and all documents relating to the Acquisition (including, without limitation, agents, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.
Further details in relation to Overseas Shareholders will be included in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).
Notice to US Kin and Carta Shareholders
The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under the laws of England. A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Securities Exchange Act of 1934 (the "US Exchange Act"). Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this announcement has been prepared in accordance with generally accepted accounting principles of the UK and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.
If, in the future, Valtech exercises its right to implement the Acquisition by way of an Offer, which is to be made into the United States, such Offer will be made in compliance with the applicable US laws and regulations, including any applicable exemptions under the US Exchange Act. Such a takeover would be made in the United States by Valtech and no one else.
It may be difficult for US holders of Kin and Carta Shares to enforce their rights and any claim arising out of US federal laws or the laws of any State or territory within the United States, since Valtech and Kin and Carta are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Kin and Carta Shares may not be able to effect service of process within the United States upon a non-US company or sue a non-US company or its officers or directors in a non-US court for violations of the securities laws of the United States or any State or territory within the United States. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal UK practice and, in the event of an Offer, pursuant to Rule 14e-5(b) of the US Exchange Act, BC Partners, Valtech or their nominees, or their brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Kin and Carta Shares outside of the US, other than pursuant to the Acquisition, until the date on which the Acquisition becomes Effective, lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, Europa will continue to act as exempt principal trader in Kin and Carta Shares on the London Stock Exchange. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in England, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.
US Kin and Carta Shareholders also should be aware that the transaction contemplated herein may have tax consequences in the US, and that such consequences, if any, are not described herein. US Kin and Carta Shareholders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.
Forward looking statements
This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Valtech and Kin and Carta contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Valtech and Kin and Carta about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.
The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on Valtech and Kin and Carta (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts. In some cases, these forward looking statements can be identified by the use of forward-looking words such as "prepares", "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal", "estimates", "forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Valtech's, Kin and Carta's, any member of the Valtech Group's or any member of the Kin and Carta Group's operations and potential synergies resulting from the Acquisition; and (iii) the effects of global economic conditions and governmental regulation on Valtech's, Kin and Carta's, any member of the Valtech Group's or any member of the Kin and Carta Group's business.
Although Valtech and Kin and Carta believe that the expectations reflected in such forward-looking statements are reasonable, Valtech and Kin and Carta can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; changes in the global political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or disposals; changes in general economic and business conditions, changes in the behaviour of other market participants, changes in the anticipated benefits from the Acquisition not being realised as a result of changes in general economic and market conditions in the countries in which Valtech and Kin and Carta operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Valtech and Kin and Carta operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors. Neither Valtech nor Kin and Carta, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.
Specifically, statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
The forward-looking statements speak only at the date of this announcement. All subsequent oral or written forward-looking statements attributable to any member of the Valtech Group or any member of the Kin and Carta Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.
Other than in accordance with their legal or regulatory obligations, neither Valtech nor Kin and Carta is under any obligation, and Valtech and Kin and Carta expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Opening Position Disclosure and Dealing Disclosure requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Kin and Carta's website at https://investors.kinandcarta.com and on Valtech's website at https://www.valtech.com/offer-announcement/ by no later than 12 noon (London time) on the Business Day following this announcement. For the avoidance of doubt, neither the content of these websites nor of any website accessible from hyperlinks is incorporated by reference or forms part of this announcement.
No profit forecasts, estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Kin and Carta for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Kin and Carta.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Kin and Carta Shareholders, persons with information rights and participants in Kin and Carta Share Plans may request a hard copy of this announcement by contacting Kin and Carta's receiving agents, Link Group, between 9.00 a.m. and 5.30 p.m. (London time) Monday to Friday (except UK public holidays) on 0371 664 0321 from within the UK or on +44 371 664 0321 if calling from outside the UK or by submitting a request in writing to Link Group, Corporate Actions, Central Square, 29 Wellington Street, Leeds, LS1 4DL. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.
For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain other information provided by Kin and Carta Shareholders, persons with information rights and other relevant persons for the receipt of communications from Kin and Carta may be provided to Valtech during the offer period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
General
If the Acquisition is effected by way of an Offer, and such an Offer becomes or is declared unconditional in all respects and sufficient acceptances are received, Valtech intends to exercise its rights to apply the provisions of Chapter 3 of Part 28 of the 2006 Act so as to acquire compulsorily the remaining Kin and Carta Shares in respect of which the Offer has not been accepted.
Investors should be aware that Valtech may purchase Kin and Carta Shares otherwise than under any Offer or the Scheme, including pursuant to privately negotiated purchases.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
19 December 2023
RECOMMENDED CASH ACQUISITION
of
Kin and Carta plc
by
Ken Bidco Limited
(a newly formed company controlled indirectly by funds advised by BC Partners)
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1 INTRODUCTION
The boards of directors of Ken Bidco Limited ("Valtech") (a newly formed company owned indirectly by Valtech Topco, which in turn is controlled indirectly by funds advised by BC Partners), and Kin and Carta plc ("Kin and Carta") are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash acquisition to be made by Valtech for the entire issued, and to be issued, ordinary share capital of Kin and Carta (the "Acquisition").
It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the 2006 Act (although Valtech reserves the right to effect the Acquisition by way of an Offer as an alternative to the Scheme, subject to the consent of the Panel and the terms of the Cooperation Agreement).
2 THE ACQUISITION
Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix 1 to this announcement and the full terms and conditions to be set out in the Scheme Document, each Kin and Carta Shareholder will be entitled to receive:
for each Kin and Carta Share held: 130 pence in cash (the "Offer Price")
The Offer Price represents a premium of approximately:
· 8.3 per cent. to the offer price of 120 pence per Kin and Carta Share under the terms of the Revised Apax Offer;
· 66.7 per cent. to the Closing Price of 78 pence per Kin and Carta Share on 17 October 2023 (being the last Business Day before the commencement of the Offer Period);
· 66.2 per cent. to the volume-weighted average price of 78 pence per Kin and Carta Share for the three-month period ended 17 October 2023 (being the last Business Day before the commencement of the Offer Period); and
· 79.0 per cent. to the volume-weighted average price of 73 pence per Kin and Carta Share for the six-month period ended 17 October 2023 (being the last Business Day before the commencement of the Offer Period).
The Acquisition values Kin and Carta's entire issued, and to be issued, ordinary share capital at approximately £239 million on a fully diluted basis.
The Kin and Carta Shares will be acquired pursuant to the Acquisition fully paid and free from all liens, charges, equities, encumbrances, rights of pre-emption and any other interests of any nature whatsoever and together with all rights attaching thereto, including without limitation voting rights and the right to receive and retain in full all dividends and other distributions (if any) announced, declared, made or paid with a record date on or after the Effective Date.
If, on or after the date of this announcement and prior to the Acquisition becoming Effective, any dividend and/or other distribution and/or other return of capital or value is announced, declared, made, paid or becomes payable in respect of the Kin and Carta Shares, Valtech reserves the right to reduce the Offer Price by an amount up to the amount per share of such dividend and/or distribution and/or other return of capital or value, in which case a reference in this announcement to the Offer Price shall be deemed to be a reference to the Offer Price as so reduced. In such circumstances, Kin and Carta Shareholders shall be entitled to retain any such dividend, distribution and/or other return of capital or value declared, made, or paid. Any exercise by Valtech of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Acquisition or the Scheme.
The Kin and Carta Directors have withdrawn their recommendation of the Revised Apax Offer and intend to adjourn the Apax Offer Shareholder Meetings. A separate announcement will be made by Kin and Carta in this regard.
3 BACKGROUND TO AND REASONS FOR THE ACQUISITION
Valtech views Kin and Carta as a high-quality business, led by a strong team, with a reputation for providing innovative digital transformation services to a blue-chip roster of clients. However, a combination of the ongoing pace of change in the digital transformation sector and a more uncertain economic backdrop, has highlighted the importance of scale and diversification.
Kin and Carta and Valtech are highly complementary businesses in terms of their geographic presence, service line offerings, vendor relationships and regional industry strengths. As a result, Valtech believes there is compelling strategic and business logic in pursuing an acquisition of Kin and Carta to create a Combined Group that will support customers in all their digital needs, including enterprise digital transformation and data at scale, across a full suite of complementary offerings.
Valtech believes that a combination will create a geographically diverse digital leader, with a broader suite of services, technology vendor relationships and end-market capabilities than each business individually. The Combined Group's breadth and scale will offer a unique combination of: accelerated growth; the efficiencies afforded by a global platform of shared functions and service delivery; and greater resiliency in a sector where scale matters.
The employees of both Kin and Carta and Valtech are the true assets of each business. Valtech believes that employees of the Combined Group will benefit from a more globally diverse business and shared culture with the prospect of being exposed to more challenging career opportunities through radical and disruptive digital transformation projects.
In addition, Valtech believes that the Combined Group will be well supported in its next phase of growth by its existing investors, BC Partners and its co-investors, which are leading international investment firms with significant experience and track record within this sector. BC Partners intends to provide operational expertise, and the BC Partners Funds intend to provide capital to support the business to maximise its potential. Valtech believes a partnership with BC Partners and its co-investors away from the public markets will, along with the benefits associated with being part of a larger group, better position Kin and Carta to create long-term value for the benefit of its customers, employees and other stakeholders.
4 DIRECTORS, MANAGEMENT, EMPLOYEES, PENSIONS, RESEARCH AND DEVELOPMENT AND LOCATIONS
Strategic plans for Kin and Carta
As set out in paragraph 3 above, Valtech believes there is compelling strategic and business logic in pursuing a combination of the highly complementary Kin and Carta and Valtech businesses. As a result, following the Acquisition becoming Effective, Valtech intends to combine Kin and Carta's capabilities with its own, with the aim of creating an integrated digital transformation consultancy that is stronger than the standalone Kin and Carta and Valtech businesses as they are today.
Valtech believes that the Combined Group will be a geographically diverse, global business, with a broader suite of service line offerings and capabilities for the benefit of customers. The Combined Group's scale and breadth will offer a unique combination of accelerated growth, the efficiencies afforded by shared functions and service delivery, and resilience. Valtech also believes that employees of the Combined Group will benefit from a consistent and shared culture and from being part of an enlarged, global and more product diverse group.
Prior to this announcement, consistent with market practice, Valtech has been granted access to Kin and Carta's senior management for the purposes of confirmatory due diligence. However, due to the constraints of a public offer process, Valtech has not yet had access to sufficiently detailed information to formulate detailed plans for Kin and Carta.
Following the Acquisition becoming Effective, Valtech intends to work with the management of Kin and Carta to establish a joint strategic plan that builds on the capabilities of both businesses. The first step to achieving this goal shall be to carry out a review of Kin and Carta and its business and operations. The review, which is expected to be completed within approximately six months of the Effective Date, shall be focused on:
· evaluating Kin and Carta's core capabilities and strengths across service offerings, customer segments, geographic presence and regional industry strengths;
· fostering an environment which maximises the potential of both businesses and their divisions to meet the evolving needs of existing and future customers across geographies; and
· identifying existing and new opportunities for additional investments to drive profitable growth, including continued innovation of the service offering and broadening of a global delivery footprint.
The review shall be undertaken with the aim of creating an integrated digital transformation consultancy that is stronger than the combined sum of the complementary Kin and Carta and Valtech businesses as they stand today.
Revenue and efficiency synergies
As noted above, the combination of Kin and Carta and Valtech is expected to generate the potential for both revenue synergies and improved efficiency considering the complementarity of the two businesses.
Until the review referenced above is completed, Valtech cannot be certain what synergies will be achieved and in what areas. However, potential areas of evaluation include:
· revenue synergies that may come from (i) the added scale of the go-to-market structure of the Combined Group, which will be able to offer a broader range of complementary services globally, (ii) cross-selling and up-selling the Combined Group's broader service proposition to existing customers, (iii) using each of Kin and Carta's and Valtech's key vendor partnerships across the Combined Group's footprint, and (iv) using the vertical referenceability built by each business independently; and
· the efficiencies afforded by a global organisation with global delivery capability.
Employees and management
Valtech attaches great importance and value to the skills, experience and commitment of Kin and Carta's management and employees and believes that they will be fundamental to maximising long-term success following the Acquisition becoming Effective.
Furthermore, based on preliminary integration analysis done to date, Valtech has come to the conclusion that the Kin and Carta and Valtech businesses are highly complementary, with strong cultural alignment. As a result, Valtech believes that the employees of both Kin and Carta and Valtech will benefit from enhanced employment prospects resulting from the combination and the creation of an enlarged, global and more product diverse group, as described above.
Valtech confirms that, following the Acquisition becoming Effective, the existing statutory and contractual rights and terms and conditions of employment of management and employees of the Kin and Carta Group, including in relation to pensions, will be fully safeguarded in accordance with applicable law. Valtech has no intention to make material modifications to the conditions of employment of management or employees of the Kin and Carta Group or in the balance of their skills and functions, unless otherwise agreed upon with the respective employees.
Valtech recognises that there is likely to be the potential to generate cost savings through better efficiencies. This aligns with Kin and Carta management's existing efforts to continue to improve systems and processes as well as to simplify the business to improve the scalability of the cost base. For example, once Kin and Carta ceases to be a listed company, a limited number of public company-related functions may become unnecessary and therefore be reduced in scope. Any potential headcount reductions are expected to be limited.
No proposals have been developed as to how any such reduction will be implemented, but Valtech would approach any such plans in an open and transparent manner and would work with the Kin and Carta management team to develop the proposals with the aim of maintaining operational momentum and retaining and motivating the best talent across the Combined Group.
Upon the Acquisition becoming Effective, all of the non-executive directors of Kin and Carta will resign as directors of Kin and Carta.
Incentivisation and retention arrangements
Valtech believes that the ongoing participation of senior management of Kin and Carta is very important to the future success of the Combined Group. As described above, Valtech intends to review the management, governance and incentive structure of Kin and Carta following the Acquisition becoming Effective. Save as described below, Valtech has not entered into, nor has it had discussions on the terms of, any form of incentivisation arrangements with members of Kin and Carta's management and has no intention of entering into such discussions before the Effective Date, but may have discussions and enter into such discussions with certain members of the Kin and Carta management team following the Effective Date.
Valtech has agreed that, conditional upon the Scheme becoming Effective, Kin and Carta may, as soon as practicable following the Effective Date (and following delisting in the case of the Kin and Carta executive directors), grant cash awards (the "Rollover Retention Awards") to Kin and Carta employees who hold awards granted under the 2020 LTIP in the Kin and Carta financial years ended 31 July 2022 and 31 July 2023 (the "FY22 and FY23 LTIP Awards") and who remain in employment with the Kin and Carta Group on the date of grant of such Rollover Retention Awards to compensate them for the portion of such FY22 and FY23 LTIP Awards which does not vest as a result of the Scheme.
The value of each participant's Rollover Retention Award will be equivalent to the number of Kin and Carta Shares which do not vest under the corresponding FY22 and FY23 LTIP Awards multiplied by the Offer Price. The Rollover Retention Awards will vest and be paid on the date that is six months following the Effective Date and will only be forfeited if the individual ceases employment with the Kin and Carta Group due to resignation or dismissal for reasons of misconduct or underperformance.
Further, in order to promote the retention of certain Kin and Carta employees (including the Kin and Carta executive directors) following the Effective Date, Valtech has agreed that Kin and Carta may grant to such employees cash bonuses subject to continued employment (the "Retention Arrangements").
Individual awards under the Retention Arrangements would be granted to employees as soon as practicable following, and conditional upon, the Effective Date (and following delisting in the case of the Kin and Carta executive directors), at levels calculated by reference to the higher of (i) the value of the number of Kin and Carta Shares which did not vest under their LTIP awards granted in the Kin and Carta financial year ended 31 July 2021 (most of which vested on 27 November 2023), if any; or (ii) the value of one-third of the number of Kin and Carta Shares in respect of which they would have been granted an LTIP award in November 2023, but for the Original Apax Offer. The Retention Arrangements will vest as to 50% on the date that is six months following the Effective Date and as to the remaining 50% on the date that is 12 months following the Effective Date, and will only be forfeited if the individual ceases employment with the Kin and Carta Group due to resignation or dismissal for reasons of misconduct or underperformance.
Pensions
Valtech does not intend to make any changes to any defined contribution schemes operated by Kin and Carta. Valtech does not intend to make any changes to the current employer contribution rates to those defined contribution schemes, the accrual of benefits for existing members or the rights of admission of new members.
Valtech recognises the importance of upholding Kin and Carta's legacy defined benefit pension scheme obligations and ensuring that its legacy pension scheme, the St Ives Pension Scheme (the "DB Scheme"), is appropriately funded in accordance with legal requirements (including statutory and regulatory requirements and those under the DB Scheme's governing documents). The DB Scheme has been closed to future accrual of benefits since 2008.
Valtech has held constructive discussions with the Trustee of the DB Scheme in advance of this announcement and has entered into a legally binding Pensions Agreement with the Trustee dated 15 December 2023 relating to the future funding and investment strategy of the DB Scheme. The key terms of the Pensions Agreement, to come into effect upon the Acquisition becoming Effective, are that:
· Valtech will procure that Kin and Carta as principal employer will make a one-off cash contribution to the DB Scheme of £7.5 million within 10 Business Days of the Effective Date, and in consideration for such contribution the Trustee will:
- agree to the termination of all current funding arrangements of the DB Scheme in force at that date other than Kin and Carta's committed contributions of £0.4 million per annum towards the Trustee's expenses;
- not require any further payments to be made to the DB Scheme in connection with the Acquisition;
- confirm that it does not intend to take any action that would trigger the winding-up of the DB Scheme as a result of or in connection with the Acquisition;
- de-risk the DB Scheme's investment strategy;
· the Trustee will provide regular updates of the DB Scheme's funding position and corrective action may be required (which could include Kin and Carta paying additional contributions contingent on the outcome of those regular updates); and
· Valtech Luxco, as the immediate parent of Valtech, will grant the Trustee a limited guarantee on terms to be agreed.
Intentions in respect of Kin and Carta's B Corp status
Valtech recognises the importance that Kin and Carta places on being a certified B Corp, being the first publicly traded business on the London Stock Exchange to gain this accreditation. Valtech intends to support the re-certification of the Kin and Carta business as a B Corp as soon as practicable following completion of the Acquisition.
Headquarters, locations, fixed assets and research and development
Valtech has no intention to make material changes to the headquarters, locations and fixed assets of Kin and Carta, except that it may seek to consolidate operations in cities where the Combined Group has more than one office.
Kin and Carta does not currently have a research and development function and Valtech has no plans in this regard.
Trading facilities
Kin and Carta Shares are currently listed on the Official List and admitted to trading on the London Stock Exchange. As set out in paragraph 14, applications will be made for the cancellation of the listing of Kin and Carta Shares on the Official List and the cancellation of trading of Kin and Carta Shares on the London Stock Exchange, in each case with effect from or shortly after the Effective Date. It is further intended that dealings in Kin and Carta Shares will be suspended by 7.30 a.m. on the second Business Day after the Sanction Hearing and that Kin and Carta will be re-registered as a private company as soon as practicable on or following the Effective Date.
Statements
None of the statements in this paragraph 4 are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.
5 RECOMMENDATION
On 18 October 2023, the boards of directors of Kin and Carta and Kelvin announced that they had agreed the terms and conditions of a cash acquisition of the entire issued and to be issued ordinary share capital of Kin and Carta by Kelvin, to be implemented by way of a scheme of arrangement (the "Original Apax Offer"). Under the terms of the Original Apax Offer, each Kin and Carta Shareholder was entitled to receive 110 pence in cash for each Kin and Carta Share held. The scheme document in respect of the Original Apax Offer was published on 9 November 2023 and included a unanimous recommendation from the Kin and Carta Directors to the Kin and Carta Shareholders to vote in favour of the Original Apax Offer at the Apax Offer Shareholder Meetings.
On 6 December 2023, the boards of directors of Kin and Carta and Kelvin announced that they had reached agreement on the terms of an increased and Final cash offer by Kelvin for the entire issued and to be issued share capital of Kin and Carta (the "Revised Apax Offer"). Under the terms of the Revised Apax Offer, each Kin and Carta Shareholder is entitled to receive 120 pence in cash for each Kin and Carta Share held. The announcement of the Revised Apax Offer also included a unanimous recommendation from the Kin and Carta Directors to the Kin and Carta Shareholders to vote in favour of the Revised Apax Offer at the Apax Offer Shareholder Meetings.
In light of the superior proposal put forward by Valtech in comparison to the Revised Apax Offer, the Kin and Carta Directors, who have been so advised by Citi as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Citi has taken into account the commercial assessments of the Kin and Carta Directors. Citi is providing independent financial advice to the Kin and Carta Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, the Kin and Carta Directors intend to recommend unanimously that Kin and Carta Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting, each to be convened in due course. The Kin and Carta Directors have withdrawn their recommendation of the Revised Apax Offer and intend to adjourn the Apax Offer Shareholder Meetings. A separate announcement will be made by Kin and Carta in this regard.
Valtech has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting from Coast Capital Management, LP, Sand Grove Capital Management LLP and Samson Rock Capital LLP in respect of a total of 39,409,916 Kin and Carta Shares in aggregate (representing approximately 22.1 per cent. of the issued ordinary share capital of Kin and Carta as at 18 December 2023, being the Business Day prior to the date of this announcement). Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.
6 BACKGROUND TO AND REASONS FOR THE RECOMMENDATION
Background
Kin and Carta has transformed from its heritage as a publishing company founded in 1964 in St Ives, to a pure-play digital transformation consultancy delivering connected outcomes for clients through digital innovation, cloud modernisation, data enablement and digital optimisation.
The Kin and Carta Group has undergone significant change to unify a collection of acquired boutique consultancies into a coherent and focused organisation. In the last three years this change has included: the disposals of Edit, Relish, Incite, Pragma and Hive; the acquisitions of Forecast Data, Melon and Frakton, Loop, Datorium (which comprised of Octain, an artificial intelligence platform that enhances Kin and Carta's data and artificial intelligence services), Spire Digital and Cascade Data Labs; the implementation of a new go-to-market strategy; the evolution of the client base to focus on high quality customers; the expansion into new markets in Colombia, Bulgaria, Kosovo and North Macedonia through the creation of nearshore delivery centres in those jurisdictions and the strategic growth of its data and artificial intelligence capabilities and technology partner relationships.
Whilst the Kin and Carta Board is pleased with the progress made and believes Kin and Carta is strategically positioned to benefit from the digital transformation market opportunity following its repositioning, it also recognises there are several challenges in achieving its standalone strategy.
Within the context of the digital transformation competitor landscape, Kin and Carta is a relatively small-scale player. In order to compete successfully in the future, the Kin and Carta Board believes that Kin and Carta will need to expand its capabilities, resources and access to capital in a way which is challenging to achieve on a standalone basis. Additionally, as seen over the last 12 months, there continue to be significant market headwinds across the digital transformation industry driven by hesitance among enterprise clients to commit to large programmes of work in the current macro environment, which impacts Kin and Carta's future new business growth. This in turn has resulted in significant volatility in the company's financial performance, share price, and ability to execute on its strategy. Finally, whilst Kin and Carta has successfully grown its client base in recent years, it remains relatively concentrated such that any 'churn' within this revenue base can have a material impact on the profitability of the Kin and Carta Group, given the size of the business today.
Apax
On 18 October 2023, the boards of directors of Kin and Carta and Kelvin announced that they had reached agreement on the terms and conditions of the Original Apax Offer. Under the terms of the Original Apax Offer, each Kin and Carta Shareholder was entitled to receive 110 pence in cash for each Kin and Carta Share held. The scheme document in respect of the Original Apax Offer was published on 9 November 2023 and included a unanimous recommendation from the Kin and Carta Directors to the Kin and Carta Shareholders to vote in favour of the Original Apax Offer at the Apax Offer Shareholder Meetings.
On 6 December 2023, the boards of directors of Kin and Carta and Kelvin announced that they had reached agreement on the terms of the Revised Apax Offer. Under the terms of the Revised Apax Offer, each Kin and Carta Shareholder is entitled to receive 120 pence in cash for each Kin and Carta Share held. The announcement of the Revised Apax Offer also included a unanimous recommendation from the Kin and Carta Directors to the Kin and Carta Shareholders to vote in favour of the Revised Apax Offer at the Apax Offer Shareholder Meetings. Kin and Carta subsequently adjourned the Apax Offer Shareholder Meetings that were scheduled for 7 December 2023 to allow Kin and Carta Shareholders more time to consider the Revised Apax Offer.
Valtech
Following the announcement of the Original Apax Offer, Valtech requested access to certain due diligence information in order to assess a possible offer for Kin and Carta. Kin and Carta has subsequently engaged in discussions with Valtech in the interest of delivering the best value to Kin and Carta Shareholders. Kin and Carta is not currently in discussions with, nor is it providing due diligence access to, any other parties other than Valtech and to Apax pursuant to the Revised Apax Offer.
At the time of the Original Apax Offer the Kin and Carta Directors concluded that the Original Apax Offer provided Kin and Carta Shareholders with a compelling opportunity to realise their investment. Kin and Carta had also engaged in discussions with several other parties prior to the announcement of the Original Apax Offer and none of these discussions resulted in an offer which was capable of being recommended to shareholders. The Acquisition is a material increase to the Revised Apax Offer and represents a higher cash price per share to Kin and Carta Shareholders. The Kin and Carta Board believes the certain value represented by the Acquisition is a superior outcome for Kin and Carta Shareholders compared to continuing to pursue the independent strategy of Kin and Carta and to the Revised Apax Offer.
In particular, the Offer Price represents a premium of:
· 8.3 per cent. to the offer price of 120 pence per Kin and Carta Share under the terms of the Revised Apax Offer;
· 66.7 per cent. to the Closing Price of 78 pence per Kin and Carta Share on 17 October 2023 (being the last Business Day before the commencement of the Offer Period);
· 66.2 per cent. to the volume-weighted average price of 78 pence per Kin and Carta Share for the three-month period ended 17 October 2023 (being the last Business Day before the commencement of the Offer Period); and
· 79.0 per cent. to the volume-weighted average price of 73 pence per Kin and Carta Share for the six-month period ended 17 October 2023 (being the last Business Day before the commencement of the Offer Period).
As a certified B Corp, and in accordance with Kin and Carta's constitution and their statutory duties, the Kin and Carta Directors have taken into account the interests of all stakeholders in their evaluation of the Acquisition.
Accordingly, in addition to the financial terms of the Acquisition, the Kin and Carta Directors have also considered Valtech's stated intentions for the business, management, employees, pension schemes and other stakeholders of Kin and Carta. The Kin and Carta Board is encouraged and reassured by Valtech's confirmation that it attaches great importance to the skills, experience and commitment of the Kin and Carta management team and employees.
The Kin and Carta Board is pleased to note that Valtech intends to support Kin and Carta in maintaining its B Corp status following completion of the Acquisition.
Accordingly, following careful consideration of the above factors, the Kin and Carta Directors have decided to withdraw their recommendation of the Revised Apax Offer and intend to recommend unanimously the Acquisition to Kin and Carta Shareholders as set out in paragraph 5 above. In light of their recommendation of the Acquisition, the Kin and Carta Directors intend to adjourn the Apax Offer Shareholder Meetings and a separate announcement will be made by Kin and Carta in this regard.
7 INFORMATION ON VALTECH AND BC PARTNERS
Ken Bidco Limited
Ken Bidco Limited is a private limited company incorporated in England and Wales. Ken Bidco Limited is a newly formed company, owned indirectly by Valtech Topco, which is in turn controlled indirectly by funds advised by BC Partners. Ken Bidco Limited was formed for the purposes of the Acquisition and has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Acquisition.
The current directors of Ken Bidco Limited are Olivier Padiou and Mark Richards. Further details in relation to Ken Bidco Limited will be contained in the Scheme Document.
BC Partners
BC Partners is a leading international investment firm with approximately €40 billion of assets under management in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market. Today, BC Partners executives operate across markets as an integrated team through the firm's offices in North America and Europe, and are aligned across four core sectors: Healthcare, TMT, Business Services & Industrials, and Consumer. Since inception, BC Partners has completed over 126 private equity investments in companies in 18 countries with a total enterprise value of over €160 billion. BC Partners is currently investing its eleventh private equity buyout fund, BC Partners XI, with total commitments of approximately €7 billion.
Valtech Group
Valtech Group is the "experience innovation company", helping companies become leaders in a digital world.
By blending crafts, skills, and cultures, Valtech Group's global team of over 6,000 professionals in more than 60 offices in over 20 countries, helps brands to unlock value in a digitally accelerated world. With a focus on delivering exceptional business results, Valtech Group empowers brands to leap ahead of the competition through experience elevation, commerce acceleration, enterprise transformation, marketing creativity & performance, and data evolution. By focusing on the human experience, Valtech Group creates exceptional solutions that deliver value in a rapidly changing and connected world.
8 INFORMATION ON KIN AND CARTA
Kin and Carta is a global digital transformation consultancy, serving businesses across the healthcare, financial services, industrial and agriculture, retail and distribution, transportation and public sectors, among others.
Previously known as St Ives plc, Kin and Carta has evolved from a printing and marketing services group into a digital transformation consultancy focused on delivering connected outcomes for clients through digital innovation, cloud modernisation, data enablement and digital optimisation, including:
· helping the C-Suite better understand market shifts and how digital products and services need to evolve;
· utilising emerging technologies to create new digital products and platforms; and
· amplifying digital investments and experiences through modern marketing technology and data platforms.
Kin and Carta is a certified B Corp and became the first publicly traded business on the London Stock Exchange to earn this accreditation. B Corp certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits to supply chain practices and input materials.
Kin and Carta's headquarters are in London, with US headquarters in Chicago, and it has over 1,800 consultants, engineers and data scientists globally.
9 FINANCING OF THE ACQUISITION
The cash consideration payable to Kin and Carta Shareholders under the terms of the Acquisition will be financed by a combination of equity and debt financing. Equity investment into Valtech will be provided from the BC Partners Funds. The remaining funding is to be provided under the Additional Facility Notice with the Lenders.
In respect of the Additional Facility Notice, Valtech has agreed with the Lenders (among others) that it shall not amend, waive or supplement the conditions contained in Appendix 1 to this announcement without the consent of the Lenders, other than in certain circumstances as set out in the Additional Facility Notice.
Europa, in its capacity as financial adviser to BC Partners and Valtech, is satisfied that sufficient resources are available to Valtech to satisfy in full the cash consideration payable to Kin and Carta Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the Scheme Document.
10 OFFER-RELATED ARRANGEMENTS
Confidentiality Agreement
On 27 October 2023, Valtech Topco and Kin and Carta entered into a confidentiality agreement in relation to the Acquisition (the "Confidentiality Agreement"), pursuant to which, amongst other things, Valtech Topco has undertaken to: (i) subject to certain exceptions, keep information relating to Kin and Carta and the Acquisition confidential and not to disclose it to third parties; and (ii) use such confidential information only in connection with the Acquisition.
These confidentiality obligations will remain in force until the earlier of: (i) completion of the Acquisition; and (ii) the date which is 18 months from the date of the Confidentiality Agreement.
The Confidentiality Agreement also contains undertakings from Valtech that:
(i) from the date of the Confidentiality Agreement and until the date 12 months after the date of the Confidentiality Agreement, Valtech Topco will not solicit or entice away any person: (a) who is employed or directly or indirectly engaged by Kin and Carta or its affiliates in an executive or senior managerial capacity; and (b) with whom Valtech Topco or any of its related persons have had contact, or about whom Kin and Carta or any of its related persons have made confidential information available to Valtech Topco or its related persons, in each case with a view to inducing that person to leave such employment or engagement; and
(ii) from the date of the Confidentiality Agreement until the date six months after the date on which the discussions between the parties regarding the Acquisition are terminated, solicit, entice away, canvass or approach any person: (a) who is or was during such period known to Valtech Topco to be a customer or supplier of Kin and Carta or any of its affiliates; and (b) about whom Kin and Carta or any of its related persons has made confidential information available to Valtech Topco or any of its related persons, for the purpose of offering to that person, or receiving from that person, goods or services of the same type as or similar to any goods or services supplied by or to Kin and Carta or any of its affiliates,
and in the case of each of (i) and (ii), subject to customary carve-outs.
Clean Team Agreement
On 24 November 2023, Kin and Carta and Valtech Topco entered into a clean team agreement (the "Clean Team Agreement"), the purpose of which is to ensure that certain materials relating to Kin and Carta are disclosed only to certain individuals or parties identified in the Clean Team Agreement, and that those identified individuals or parties comply with the terms of the Clean Team Agreement to keep that information confidential and secure, and ensure it is used only for the purposes of evaluating the Acquisition and undertaking relevant regulatory and antitrust analysis in respect of the Acquisition. The Clean Team Agreement will terminate on the earlier of: (i) the Effective Date; and (ii) 24 November 2025.
Cooperation Agreement
Valtech and Kin and Carta entered into a cooperation agreement (the "Cooperation Agreement") on 19 December 2023, pursuant to which: (i) Valtech agreed to use its reasonable endeavours to secure the regulatory clearances and authorisations necessary to satisfy the Conditions; (ii) Valtech and Kin and Carta agreed to certain undertakings to co-operate and provide each other with information, assistance and access in relation to the filings, submissions and notifications to be made in relation to such regulatory clearances and authorisations; (iii) Valtech agreed to provide Kin and Carta with certain information for the purposes of the Scheme Document and to otherwise assist with the preparation of the Scheme Document; and (iv) Valtech and Kin and Carta agreed certain arrangements in respect of the Kin and Carta Share Plans and certain other employee incentive arrangements.
The Cooperation Agreement also records Valtech's and Kin and Carta's intention to implement the Acquisition by way of the Scheme, subject to the ability of Valtech to proceed by way of an Offer in accordance with and subject to the terms of the Cooperation Agreement.
The Cooperation Agreement will terminate in certain circumstances, including if: (i) the Acquisition is withdrawn or lapses prior to the Long Stop Date; (ii) prior to the Long Stop Date any Condition becomes incapable of satisfaction; (iii) the Kin and Carta Directors withdraw their recommendation of the Acquisition; (iv) a Competing Proposal (as defined in the Cooperation Agreement) is recommended by the Kin and Carta Directors or completes, becomes effective or is declared or becomes unconditional; (v) the Scheme does not become effective in accordance with its terms by the Long Stop Date; or (vi) otherwise as agreed between Valtech and Kin and Carta.
11 DISCLOSURE OF INTERESTS IN KIN AND CARTA SECURITIES
Except for the irrevocable undertakings referred to in paragraph 5 above and Appendix 3, as at 18 December 2023 (being the last Business Day prior to the date of this announcement) neither Valtech, nor any of its directors, nor, so far as Valtech is aware, any person treated as acting in concert (within the meaning of the Takeover Code) with it for the purposes of the Acquisition: (i) had any interest in or right to subscribe for or had borrowed or lent any Kin and Carta Shares or securities convertible or exchangeable into Kin and Carta Shares; (ii) had any short positions in respect of relevant securities of Kin and Carta (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; (iii) has borrowed or lent any relevant securities of Kin and Carta (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 3 on Rule 4.6 of the Takeover Code) save for any borrowed shares which have been either on-lent or resold; or (iv) is a party to any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Takeover Code in relation to Kin and Carta Shares or in relation to securities convertible or exchangeable into Kin and Carta Shares.
"Interests in securities" for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person shall be treated as having an "interest" by virtue of their ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.
It has not been practicable for Valtech to make enquiries of all of its concert parties in advance of the release of this announcement. Therefore, all relevant details in respect of Valtech's concert parties will be included in its Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code.
12 KIN AND CARTA SHARE PLANS
Participants in the Kin and Carta Share Plans will be contacted regarding the effect of the Acquisition on their options and awards under the Kin and Carta Share Plans and appropriate proposals will be made to such participants which reflect their options and awards under the Kin and Carta Share Plans in due course. Details of the impact of the Scheme on each of the Kin and Carta Share Plans and such proposals will be set out in the Scheme Document.
13 SCHEME PROCESS
It is intended that the Acquisition will be implemented by means of a court-sanctioned scheme of arrangement of Kin and Carta under Part 26 of the 2006 Act (although Valtech reserves the right to effect the Acquisition by way of an Offer, subject to the consent of the Panel and the terms of the Cooperation Agreement).
The purpose of the Scheme is to provide for Valtech to become the registered holder of the entire issued and to be issued share capital of Kin and Carta. In order to achieve this, the Kin and Carta Shares will be transferred to Valtech under the Scheme. In consideration for this transfer, the Kin and Carta Shareholders will receive cash on the basis set out in paragraph 2 of this announcement. The transfer to Valtech of the Kin and Carta Shares will result in Kin and Carta becoming a wholly-owned subsidiary of Valtech.
The Acquisition is subject to the Conditions and certain further terms referred to in Appendix 1 to this announcement and to the full terms and conditions to be set out in the Scheme Document, and will only become Effective if, among other things, the following events occur on or before the Long Stop Date (or such later date as Valtech and Kin and Carta may, with the consent of the Panel, agree and, if required, the Court may approve):
(i) a resolution to approve the Scheme is passed by a majority in number of Kin and Carta Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing 75 per cent. or more in value of each class of Kin and Carta Shares held by those Kin and Carta Shareholders;
(ii) the Resolutions necessary to implement the Scheme are passed by the requisite majority of Kin and Carta Shareholders at the General Meeting;
(iii) certain antitrust, foreign investment, regulatory approvals and clearances having been obtained, including: (a) the receipt of merger control clearance in the United States, under the Hart Scott Rodino Antitrust Improvements Act of 1976; (b) the receipt of merger control clearance in the Republic of North Macedonia; (c) the receipt of merger control clearances in Bulgaria; (d) the receipt of merger control clearances in Kosovo; (e) in the UK the CMA not having opened a merger investigation at the time that the other Conditions have been satisfied or, if so, no reference to a CMA Phase 2 Investigation having been being made; and (f) the receipt of foreign investment clearance in the UK under the National Security and Investment Act 2021;
(iv) following the Court Meeting and General Meeting and satisfaction and/or waiver (where applicable) of the other Conditions, the Scheme is sanctioned by the Court (without modification, or with modification on terms agreed by Valtech and Kin and Carta); and
(v) following such sanction, an office copy of the Scheme Court Order is delivered to the Registrar of Companies.
The Conditions in paragraphs 1 and 2 of Appendix 1 to this announcement provide that the Scheme will lapse (under the authority of Rule 13.5(b) of the Takeover Code) if:
(i) the Court Meeting and the General Meeting are not held by the 22nd day after the expected date of the Court Meeting and the General Meeting (which are currently expected to be held on 8 February 2024) to be set out in the Scheme Document in due course (or such later date as may be agreed between Valtech and Kin and Carta, and (if required) the Court may allow);
(ii) the Sanction Hearing to approve the Scheme is not held by the 22nd day after the expected date of the Sanction Hearing to be set out in the Scheme Document in due course (or such later date as may be agreed between Valtech and Kin and Carta, and (if required) the Court may allow); or
(iii) the Scheme does not become Effective by 11.59 p.m. on the Long Stop Date (or such later date as Valtech and Kin and Carta may, with the consent of the Panel, agree and (if required) the Court may allow).
If any Condition in paragraph 2 of Part A of Appendix 1 to this announcement is not capable of being satisfied by the date specified therein, Valtech shall make an announcement through a Regulatory Information Service as soon as practicable and, in any event, by not later than 8.00 a.m. on the Business Day following the date so specified, stating whether Valtech has invoked that Condition, (where applicable) waived that Condition or, with the agreement of Kin and Carta, specified a new date by which that Condition must be satisfied.
Once the necessary approvals from Kin and Carta Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived and the Scheme has been approved by the Court, the Scheme will become Effective upon delivery of a copy of the Court Order to the Registrar of Companies. Subject to the satisfaction of the Conditions, the Scheme is expected to become Effective by the end of April 2024.
Upon the Scheme becoming Effective: (i) it will be binding on all Kin and Carta Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Kin and Carta Shares will cease to be valid and entitlements to Kin and Carta Shares held within the CREST system will be cancelled. In accordance with the applicable provisions of the Takeover Code, the consideration for the transfer of the Kin and Carta Shares to Valtech will be dispatched no later than 14 days after the Effective Date.
Any Kin and Carta Shares issued before the Scheme Record Time will be subject to the terms of the Scheme. The resolution(s) to be proposed at the General Meeting will, amongst other matters, provide that the Articles be amended to incorporate provisions requiring any Kin and Carta Shares issued after the Scheme Record Time (other than to Valtech and/or their nominees) to be automatically transferred to Valtech on the same terms as the Acquisition (other than terms as to timings and formalities). The provisions of the Articles (as amended) will avoid any person (other than Valtech and its nominees) holding shares in the capital of Kin and Carta after the Effective Date.
Further details of the Scheme, including expected times and dates for each of the Court Meeting, the General Meeting and the Sanction Hearing, together with notices of the Court Meeting and the General Meeting, will be set out in the Scheme Document. It is expected that the Scheme Document and the forms of proxy accompanying the Scheme Document will be published as soon as practicable and in any event within 28 days of this announcement (or such later date as Valtech and Kin and Carta may, with the consent of the Panel, agree and, if required, the Court may approve).
14 DE-LISTING, CANCELLATION OF TRADING AND RE-REGISTRATION
It is intended that the London Stock Exchange and the FCA will be requested respectively to cancel trading in Kin and Carta Shares on the London Stock Exchange's market for listed securities and the listing of the Kin and Carta Shares from the Official List on or shortly after the Effective Date.
It is expected that the last day of dealings in Kin and Carta Shares on the Main Market of the London Stock Exchange is expected to be the Business Day immediately prior to the Effective Date and no transfers will be registered after 6.00 p.m. (London time) on that date.
On the Effective Date, share certificates in respect of Kin and Carta Shares shall cease to be valid and should be destroyed. In addition, entitlements to Kin and Carta Shares held within the CREST system shall be cancelled on the Effective Date.
It is intended that Kin and Carta will be re-registered as a private limited company and for this to take effect as soon as practicable on or following the Effective Date.
15 DOCUMENTS AVAILABLE ON WEBSITE
Copies of the following documents will be available promptly, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Kin and Carta's website at https://investors.kinandcarta.com and on Valtech's website at https://www.valtech.com/offer-announcement/ and in any event by no later than noon on the Business Day following this announcement and will remain so available until the Effective Date:
(i) this announcement;
(ii) the Confidentiality Agreement;
(iii) the Cooperation Agreement;
(iv) the Clean Team Agreement;
(v) the Pensions Agreement;
(vi) the irrevocable undertakings referred to in paragraph 5 above and summarised in Appendix 3 to this announcement;
(vii) documents entered into for the financing of the Acquisition referred to in paragraph 9 above; and
(viii) the consent letters from the financial advisers to being named in this announcement.
Neither the content of the websites referred to in this announcement, nor any website accessible from hyperlinks, is incorporated into or forms part of this announcement.
16 GENERAL
Valtech reserves the right to elect (with the consent of the Panel and subject to the terms of the Cooperation Agreement) to implement the acquisition of the Kin and Carta Shares by way of an Offer as an alternative to the Scheme. In such event, the Offer will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent., or such lesser percentage (being more than 50 per cent.) as Valtech may decide after, to the extent necessary, consultation with the Panel or as required by the Panel, of the Kin and Carta Shares.
Investors should be aware that Valtech may purchase Kin and Carta Shares otherwise than under the Scheme or any Offer, including pursuant to privately negotiated purchases.
The Acquisition will be on the terms and subject to the Conditions set out herein and in Appendix 1, and to be set out in the Scheme Document. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2. Details of the irrevocable undertakings received by Valtech are set out in Appendix 3. Certain definitions and terms used in this announcement are set out in Appendix 4. The formal Scheme Document will be sent to shareholders of Kin and Carta within 28 days of this announcement (or such later date as Kin and Carta, Valtech and the Panel agree).
Europa (as financial adviser to BC Partners and Valtech) and Citi (as financial adviser to Kin and Carta) have each given and not withdrawn their consent to the publication of this announcement with the inclusion herein of the references to their names in the form and context in which they appear.
This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.
Enquiries:
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Europa Partners Limited (Financial Adviser to BC Partners and Valtech) |
+44 20 7451 4542 |
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Montfort Communications (PR Adviser to BC Partners and Valtech) |
+44 7739 701 634 +44 7812 345 205 |
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Kin and Carta |
+44 20 7928 8844 |
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Kelly Manthey, Chief Executive Officer |
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Chris Kutsor, Chief Financial Officer and Chief Operating Officer |
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Citigroup Global Markets Limited (Financial Adviser to Kin and Carta) |
+44 20 7986 4000 |
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Robert Farrington |
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David Fudge |
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Avinash Patel |
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Deutsche Numis (Joint Corporate Broker to Kin and Carta) |
+44 20 7260 1000 |
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Nick Westlake |
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Tejas Padalkar |
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Peel Hunt LLP (Joint Corporate Broker to Kin and Carta) |
+44 20 7418 8900 |
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John Welch |
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Paul Gillam |
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Powerscourt (PR Adviser to Kin and Carta) |
+44 (0) 7841 658 163 |
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Elly Williamson |
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Pete Lambie |
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Further information
Europa Partners Limited ("Europa"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting exclusively for BC Partners and Valtech and for no one else in connection with the Acquisition and will not be responsible to anyone other than BC Partners and Valtech for providing the protections afforded to its clients or for providing advice in connection with the Acquisition. Neither Europa, nor any of its affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Europa in connection with the Acquisition, this announcement, any statement contained herein or otherwise.
Citigroup Global Markets Limited ("Citi"), which is authorised by the PRA and regulated in the UK by the FCA and the PRA, is acting as financial adviser for Kin and Carta and for no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Kin and Carta for providing the protections afforded to clients of Citi nor for providing advice in connection with the contents of this announcement, or any other matters referred to in this announcement. Neither Citi nor any of its affiliates, directors or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Citi in connection with this announcement, any statement contained herein or otherwise.
Numis Securities Limited ("Deutsche Numis") which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Kin and Carta and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Kin and Carta for providing the protections afforded to clients of Deutsche Numis nor for providing advice in relation to any matter referred to in this announcement or any transaction or arrangement referred to herein. Deutsche Numis is not responsible for the contents of this announcement. Neither Deutsche Numis nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this announcement, any statement contained herein, any transaction or arrangement referred to herein, or otherwise.
Peel Hunt LLP ("Peel Hunt") which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Kin and Carta and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Kin and Carta for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to any matter referred to in this announcement or any transaction or arrangement referred to herein. Peel Hunt is not responsible for the contents of this announcement. Neither Peel Hunt nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with this announcement, any statement contained herein, any transaction or arrangement referred to herein, or otherwise.
This announcement is for information purposes only and is not intended to, and does not, constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Kin and Carta in any jurisdiction in contravention of applicable law. The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).
This announcement does not constitute a prospectus, prospectus equivalent document or exempted document.
This announcement contains inside information in relation to Kin and Carta for the purposes of Article 7 of the Market Abuse Regulation. The person responsible for arranging the release of this announcement on behalf of Kin and Carta is Lucy Maxwell, Company Secretary. Kin and Carta's Legal Entity Identifier is 213800B32KQM8CENCR16.
If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
Overseas Shareholders
The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves of, and observe, any applicable legal or regulatory requirements. Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared in accordance with and for the purpose of complying with English law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.
The availability of the Acquisition to Kin and Carta Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Kin and Carta Shares with respect to the Scheme at the Meetings, or to appoint another person as proxy to vote at the Meetings on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Further details in relation to Overseas Shareholders will be contained in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).
Unless otherwise determined by Valtech or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving this announcement and all documents relating to the Acquisition (including, without limitation, agents, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.
Further details in relation to Overseas Shareholders will be included in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the offer document).
Notice to US Kin and Carta Shareholders
The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under the laws of England. A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Securities Exchange Act of 1934 (the "US Exchange Act"). Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this announcement has been prepared in accordance with generally accepted accounting principles of the UK and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.
If, in the future, Valtech exercises its right to implement the Acquisition by way of an Offer, which is to be made into the United States, such Offer will be made in compliance with the applicable US laws and regulations, including any applicable exemptions under the US Exchange Act. Such a takeover would be made in the United States by Valtech and no one else.
It may be difficult for US holders of Kin and Carta Shares to enforce their rights and any claim arising out of US federal laws or the laws of any State or territory within the United States, since Valtech and Kin and Carta are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Kin and Carta Shares may not be able to effect service of process within the United States upon a non-US company or sue a non-US company or its officers or directors in a non-US court for violations of the securities laws of the United States or any State or territory within the United States. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.
In accordance with normal UK practice and, in the event of an Offer, pursuant to Rule 14e-5(b) of the US Exchange Act, BC Partners, Valtech or their nominees, or their brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Kin and Carta Shares outside of the US, other than pursuant to the Acquisition, until the date on which the Acquisition becomes Effective, lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, Europa will continue to act as exempt principal trader in Kin and Carta Shares on the London Stock Exchange. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in England, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.
US Kin and Carta Shareholders also should be aware that the transaction contemplated herein may have tax consequences in the US, and that such consequences, if any, are not described herein. US Kin and Carta Shareholders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.
Forward looking statements
This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Valtech and Kin and Carta contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Valtech and Kin and Carta about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.
The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on Valtech and Kin and Carta (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts. In some cases, these forward looking statements can be identified by the use of forward-looking words such as "prepares", "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal", "estimates", "forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Valtech's, Kin and Carta's, any member of the Valtech Group's or any member of the Kin and Carta Group's operations and potential synergies resulting from the Acquisition; and (iii) the effects of global economic conditions and governmental regulation on Valtech's, Kin and Carta's, any member of the Valtech Group's or any member of the Kin and Carta Group's business.
Although Valtech and Kin and Carta believe that the expectations reflected in such forward-looking statements are reasonable, Valtech and Kin and Carta can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; changes in the global political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or disposals; changes in general economic and business conditions, changes in the behaviour of other market participants, changes in the anticipated benefits from the Acquisition not being realised as a result of changes in general economic and market conditions in the countries in which Valtech and Kin and Carta operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Valtech and Kin and Carta operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors. Neither Valtech nor Kin and Carta, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.
Specifically, statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated.
The forward-looking statements speak only at the date of this announcement. All subsequent oral or written forward-looking statements attributable to any member of the Valtech Group or any member of the Kin and Carta Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.
Other than in accordance with their legal or regulatory obligations, neither Valtech nor Kin and Carta is under any obligation, and Valtech and Kin and Carta expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Opening Position Disclosure and Dealing Disclosure requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Kin and Carta's website at https://investors.kinandcarta.com and on Valtech's website at https://www.valtech.com/offer-announcement/ by no later than 12 noon (London time) on the Business Day following this announcement. For the avoidance of doubt, neither the content of these websites nor of any website accessible from hyperlinks is incorporated by reference or forms part of this announcement.
No profit forecasts, estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Kin and Carta for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Kin and Carta.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Kin and Carta Shareholders, persons with information rights and participants in Kin and Carta Share Plans may request a hard copy of this announcement by contacting Kin and Carta's receving agents, Link Group, between of 9.00 a.m. and 5.30 p.m. (London time) Monday to Friday (except UK public holidays) on 0371 664 0321 from within the UK or on +44 371 664 0321 if calling from outside the UK or by submitting a request in writing to Link Group, Corporate Actions, Central Square, 29 Wellington Street, Leeds, LS1 4DL. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.
For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain other information provided by Kin and Carta Shareholders, persons with information rights and other relevant persons for the receipt of communications from Kin and Carta may be provided to Valtech during the offer period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
General
If the Acquisition is effected by way of an Offer, and such an Offer becomes or is declared unconditional in all respects and sufficient acceptances are received, Valtech intends to exercise its rights to apply the provisions of Chapter 3 of Part 28 of the 2006 Act so as to acquire compulsorily the remaining Kin and Carta Shares in respect of which the Offer has not been accepted.
Investors should be aware that Valtech may purchase Kin and Carta Shares otherwise than under any Offer or the Scheme, including pursuant to privately negotiated purchases.
Appendix 1
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
Part A: Conditions to the Scheme and Acquisition
1 The Acquisition will be conditional upon the Scheme becoming unconditional and becoming Effective, subject to the provisions of the Takeover Code, by no later than 11.59 p.m. on the Long Stop Date or such later date (if any) as Valtech and Kin and Carta may agree, with the consent of the Panel, and the Court may allow.
2 The Scheme will be subject to the following Conditions:
2.1 (i) its approval by a majority in number of the Kin and Carta Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. or more in value of the Kin and Carta Shares voted by those Kin and Carta Shareholders; and (ii) such Court Meeting being held on or before the 22nd day after the expected date of the Court Meeting (which is currently expected to be held on 8 February 2024) to be set out in the Scheme Document in due course (or such later date as may be agreed between Valtech and Kin and Carta with the consent of the Panel (and that the Court may approve if required));
2.2 (i) the Resolutions being duly passed at the General Meeting (or any adjournment thereof); and (ii) such General Meeting being held on or before the 22nd day after the expected date of the General Meeting (which is currently expected to be held on 8 February 2024) to be set out in the Scheme Document in due course (or such later date as may be agreed between Valtech and Kin and Carta with the consent of the Panel (and that the Court may approve if required)); and
2.3 (i) the sanction of the Scheme by the Court (with or without modification (but subject to such modification being acceptable to Valtech and Kin and Carta)) and the delivery of a copy of the Court Order to the Registrar of Companies; and (ii) the Sanction Hearing being held on or before the 22nd day after the expected date of the Sanction Hearing to be set out in the Scheme Document in due course (or such later date as may be agreed between Valtech and Kin and Carta with the consent of the Panel (and that the Court may approve)).
3 In addition, subject as stated in Part B of this Appendix 1 below and to the requirements of the Panel, Valtech and Kin and Carta have agreed that the Acquisition will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:
Antitrust and regulatory
3.1 United States
All filings having been made and any applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976 (as amended) and the regulations made thereunder relating to the Acquisition has expired, lapsed or been terminated;
3.2 North Macedonia
Notification having been made by Valtech to the Macedonian Competition Commission in respect of the Acquisition and either:
3.2.1 the Macedonian Competition Commission having cleared the Acquisition unconditionally; or
3.2.2 the Macedonian Competition Commission having cleared the Acquisition subject to conditions in terms satisfactory to Valtech; or
3.2.3 the statutory waiting periods having expired; or
3.2.4 the Macedonian Competition Commission having decided that the Acquisition does not fall within the scope of its applicable merger control regulation provided within the Macedonian Competition Act;
3.3 United Kingdom
Confirmation having been received in writing by Valtech from the CMA that:
3.3.1 in a response to a briefing paper it has no further questions at that stage in relation to the Acquisition; or
3.3.2 it does not intend to refer the Acquisition or any part of it under section 33 EA 2002 ("CMA Phase 2 Investigation"), such confirmation being in terms satisfactory to Valtech, or the statutory period within which the CMA is required by section 34ZA of the EA 2002 to decide whether to refer the Acquisition for a CMA Phase 2 Investigation having expired without such a decision having been made, provided that sections 100(1)(a), (d) and (f) of the EA 2002 do not apply in relation to any merger notice given by Valtech under section 96 of the EA 2002,
provided that if, including subsequent to the CMA providing the confirmation in paragraph 3.3.1 of this Appendix 1, but prior to completion of the Acquisition, the CMA: (A) requests submission of a merger notice for the Acquisition; (B) gives notice to either party that it intends to commence an investigation into the Acquisition; or (C) indicates that the statutory review period in which the CMA has to decide whether to make a reference under section 34ZA of the EA 2002 has begun in relation to the Acquisition, then Condition 3.3 shall be satisfied only on the CMA having provided the confirmations in paragraph 3.3.2 of this Appendix 1;
3.4 Kosovo
Notification having been made by Valtech to the Kosovan Competition Authority in respect of the Acquisition and either:
3.4.1 the Kosovan Competition Authority having cleared the Acquisition unconditionally; or
3.4.2 the Kosovan Competition Authority having cleared the Acquisition subject to conditions in terms satisfactory to Valtech; or
3.4.3 the statutory waiting periods having expired; or
3.4.4 the Kosovan Competition Authority having decided that the Acquisition does not fall within the scope of its applicable merger control regulation provided within the Kosovan Competition Act;
3.5 Bulgaria
Approval, consent or clearance has been obtained by Valtech from the Bulgarian Commission enabling Valtech to conclude the Acquisition. For the purpose of the Offer, this Condition shall be deemed fulfilled if:
3.5.1 the Bulgarian Commission issues a final and effective decision confirming that the Acquisition does not require an approval, consent or clearance under Bulgarian competition law;
3.5.2 the Bulgarian Commission issues a final, effective and unconditional decision for the approval, consent or clearance of the Acquisition in Bulgaria in terms satisfactory to Valtech; or
3.5.3 the Bulgarian Commission issues a final, effective decision for the approval, consent or clearance of the Acquisition in Bulgaria, subject to conditions in terms satisfactory to Valtech;
3.6 NSIA
To the extent that a mandatory notification is required in relation to the Acquisition under the NSIA, or Valtech acting reasonably considers that a voluntary notification under the NSIA is advisable with respect to the Acquisition, the requisite notification having been accepted and:
3.6.1 the Secretary of State confirming before the end of the review period that no further action will be taken in relation to the Acquisition; or
3.6.2 if, prior to the date on which all other Conditions are satisfied or waived, the Secretary of State issues a call-in notice within the meaning of the NSIA in relation to the Acquisition, the parties receiving confirmation that the Secretary of State will take no further action in relation to the call-in notice and the Acquisition under the NSIA; or
3.6.3 the Secretary of State making a final order in relation to the Acquisition in terms satisfactory to Valtech (and, to the extent relevant, all conditions or obligations contained in such an order necessary for completion of the Acquisition having been satisfied or complied with or any restriction preventing completion having been lifted or released); or
3.6.4 as at the date on which all other Conditions are satisfied or waived, the Secretary of State not having instituted or indicated (whether formally or informally) that it may institute any action, investigation, enquiry or reference, or made or proposed any order or decision prohibiting the Acquisition or imposing material additional conditions or obligations with respect thereto;
3.7 if and to the extent that any or all of Conditions 3.1 to 3.6 (inclusive) are waived or are not invoked by Valtech, all authorisations, orders, grants, recognitions, determinations, confirmations, consents, licences, clearances, permissions, exemptions and approvals from the authorities referred to in Conditions 3.1 to 3.6 (inclusive) (for the purposes of this Condition 3.7 each a "Clearance") including, without limitation, any Clearance in connection with any "phase 2" or similar "in depth" review by any of the authorities referred to in Conditions 3.1 to 3.6 (inclusive) or any other Clearance deemed necessary or appropriate by Valtech or any member of the Wider Valtech Group for or in respect of the Acquisition (including, without limitation, its implementation and financing or the proposed direct or indirect acquisition of any securities in, or control of, Kin and Carta or any member of the Wider Kin and Carta Group by any member of the Wider Valtech Group) having been obtained in terms and in a form satisfactory to Valtech and all such Clearances remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Acquisition becomes otherwise unconditional;
Other Third Party clearances
3.8 other than in relation to the matters referred to in Conditions 3.1 to 3.6 (inclusive), no central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or any other body or person whatsoever in any jurisdiction (each a "Third Party") having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:
3.8.1 make the Acquisition, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, any member of the Wider Kin and Carta Group by any member of the Wider Valtech Group void, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise directly or indirectly prevent, prohibit, or restrain, restrict, impede, challenge, delay or otherwise interfere with the implementation of, or impose material additional conditions or obligations with respect to, the Acquisition or the acquisition of any shares or other securities in, or control or management of, any member of the Wider Kin and Carta Group by any member of the Wider Valtech Group or require amendment of the Scheme;
3.8.2 require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider Valtech Group or by any member of the Wider Kin and Carta Group of all or any part of their businesses, assets or property or impose any limitation on the ability of all or any of them to conduct their respective businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof) to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.8.3 impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Valtech Group directly or indirectly to acquire or hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in Kin and Carta (or any member of the Wider Kin and Carta Group) or on the ability of any member of the Wider Kin and Carta Group or any member of the Wider Valtech Group directly or indirectly to hold or exercise effectively any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Kin and Carta Group to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.8.4 other than pursuant to the implementation of the Scheme or, if applicable, sections 974 to 991 of the 2006 Act, require any member of the Wider Valtech Group or the Wider Kin and Carta Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider Kin and Carta Group or any asset owned by any third party which is material in the context of the Wider Kin and Carta Group or the Wider Valtech Group, in either case taken as a whole;
3.8.5 require, prevent or delay a divestiture by any member of the Wider Valtech Group of any shares or other securities (or the equivalent) in any member of the Wider Kin and Carta Group;
3.8.6 result in any member of the Wider Kin and Carta Group ceasing to be able to carry on business under any name under which it presently carries on business to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.8.7 impose any limitation on the ability of any member of the Wider Valtech Group or any member of the Wider Kin and Carta Group to conduct, integrate or co-ordinate all or any part of their respective businesses with all or any part of the business of any other member of the Wider Valtech Group and/or the Wider Kin and Carta Group in a manner which is adverse and material to the Wider Valtech Group and/or the Wider Kin and Carta Group, in either case, taken as a whole or in the context of the Acquisition; or
3.8.8 except as Disclosed, otherwise affect the business, assets, value, profits, prospects or operational performance of any member of the Wider Kin and Carta Group or any member of the Wider Valtech Group in each case in a manner which is adverse to and material in the context of the Wider Kin and Carta Group taken as a whole or of the financing of the Acquisition,
and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Kin and Carta Shares or otherwise intervene having expired, lapsed or been terminated;
3.9 all necessary notifications, filings or applications having been made in connection with the Acquisition and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with and all Authorisations which are deemed by Valtech to be necessary or reasonably considered to be appropriate in any jurisdiction for or in respect of the Acquisition or the proposed acquisition of any shares or other securities in, or control of, Kin and Carta by any member of the Wider Valtech Group having been obtained on terms and in a form reasonably satisfactory to Valtech (acting reasonably) from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Kin and Carta Group or the Wider Valtech Group has entered into contractual arrangements in each case where the direct consequence of a failure to make such notification or filing or to wait for the expiry, lapse or termination of any such waiting or other time period or to comply with such obligation or obtain such Authorisation would be unlawful in any relevant jurisdiction or have a material adverse effect on the Wider Kin and Carta Group, any member of the Valtech Group or the ability of Valtech to implement the Scheme and all such Authorisations remaining in full force and effect at the time at which the Scheme becomes otherwise unconditional in all respects and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;
3.10 no temporary restraining order, preliminary or permanent injunction, preliminary or permanent enjoinment, or other order issued and being in effect by a court or other Third Party which has the effect of making the Acquisition or any acquisition or proposed acquisition of any shares or other securities or control or management of, any member of the Wider Kin and Carta Group by any member of the Wider Valtech Group, or the implementation of either of them, void, voidable, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise directly or indirectly prohibiting, preventing, restraining, restricting, delaying or otherwise interfering with the completion or the approval of the Acquisition or any matter arising from the proposed acquisition of any shares or other securities in, or control or management of, any member of the Wider Kin and Carta Group by any member of the Wider Valtech Group;
Absence of certain adverse circumstances
3.11 except as Disclosed, there being no provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Kin and Carta Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or be subject or any event or circumstance which, as a consequence of the Acquisition or the proposed acquisition by any member of the Wider Valtech Group of any shares or other securities in Kin and Carta or because of a change in the control or management of any member of the Wider Kin and Carta Group or otherwise, would or might reasonably be expected to result in, in each case to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole or to the financing of the Acquisition:
3.11.1 any monies borrowed by, or any other indebtedness, actual or contingent of, or any grant available to, any member of the Wider Kin and Carta Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
3.11.2 the rights, liabilities, obligations, interests or business of any member of the Wider Kin and Carta Group or any member of the Wider Valtech Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider Kin and Carta Group or any member of the Wider Valtech Group in or with any other firm or company or body or person (or any agreement or arrangement relating to any such business or interests) being or likely to become terminated or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken or arising thereunder;
3.11.3 any member of the Wider Kin and Carta Group ceasing to be able to carry on business under any name under which it presently carries on business to an extent which is material in the context of the Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.11.4 any assets or interests of, or any asset the use of which is enjoyed by, any member of the Wider Kin and Carta Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Wider Kin and Carta Group otherwise than in the ordinary course of business;
3.11.5 other than in the ordinary course of business, the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Kin and Carta Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen), becoming enforceable;
3.11.6 the business, assets, value, financial or trading position, profits, prospects or operational performance of any member of the Wider Kin and Carta Group being prejudiced or adversely affected;
3.11.7 the creation or acceleration of any material liability (actual or contingent) by any member of the Wider Kin and Carta Group other than trade creditors or other liabilities incurred in the ordinary course of business; or
3.11.8 any liability of any member of the Wider Kin and Carta Group to make any severance, termination, bonus or other payment to any of its directors or other officers other than in the ordinary course of business;
No material transactions, claims or changes in the conduct of the business of the Kin and Carta Group
3.12 except as Disclosed, no member of the Wider Kin and Carta Group having since 31 July 2023:
3.12.1 save as between Kin and Carta and its wholly-owned subsidiaries or between such wholly-owned subsidiaries and save for the issue or transfer out of treasury of Kin and Carta Shares on the exercise of options or vesting of awards granted in the ordinary course under the Kin and Carta Share Plans, issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities;
3.12.2 recommended, declared, paid or made or agreed to recommend, declare, pay or make any bonus issue, dividend or other distribution (whether payable in cash or otherwise) other than to Kin and Carta or one of its wholly-owned subsidiaries;
3.12.3 save as between Kin and Carta and its wholly-owned subsidiaries or between such wholly-owned subsidiaries, merged with (by statutory merger or otherwise) or demerged from or acquired any body corporate, partnership or business or acquired or disposed of, or, other than in the ordinary course of business, transferred, mortgaged or charged or created any security interest over, any assets or any right, title or interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to do so, in each case to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole;
3.12.4 save as between Kin and Carta and its wholly-owned subsidiaries or between such wholly-owned subsidiaries, made, authorised, proposed or announced an intention to propose any change in its loan capital other than in the ordinary course of business and to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole;
3.12.5 issued, authorised or proposed the issue of, or made any change in or to the terms of, any debentures or (save in the ordinary course of business and save as between Kin and Carta and its wholly-owned subsidiaries or between such wholly-owned subsidiaries) incurred or increased any indebtedness or become subject to any contingent liability to an extent which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.12.6 entered into, varied, authorised or proposed entry into or variation of, or announced its intention to enter into or vary, any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) (otherwise than in the ordinary course of business) which is of a long-term, unusual or onerous nature, or which involves or could reasonably be expected to involve an obligation of a nature or magnitude which is or is likely to be materially restrictive on the business of any member of the Wider Kin and Carta Group to an extent which is or is reasonably likely to be material to the Wider Kin and Carta Group taken as a whole;
3.12.7 entered into or varied to a material extent the terms of, any contract, commitment, arrangement or any service agreement with any director or senior executive of the Wider Kin and Carta Group save for salary increases, bonuses or variations of terms in the ordinary course;
3.12.8 proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme, or other benefit relating to the employment or termination of employment of any employee of the Wider Kin and Carta Group which, taken as a whole, are material in the context of the Wider Kin and Carta Group taken as a whole;
3.12.9 (i) (excluding the trustee of any pension scheme(s) established by a member of the Wider Kin and Carta Group other than Kin and Carta itself) made, agreed or consented to or procured any significant change to: (a) the terms of any existing trust deeds, rules, policy or other governing documents, or entered into or established any new trust deeds, rules, policy or other governing documents, constituting any pension scheme or other retirement or death benefit arrangement established for the directors, former directors, employees or former employees of any entity in the Wider Kin and Carta Group or their dependants and established by a member of the Wider Kin and Carta Group (a "Relevant Pension Plan"); (b) the basis on which benefits accrue, pensions which are payable or the persons entitled to accrue or be paid benefits, under any Relevant Pension Plan; (c) the basis on which the liabilities of any Relevant Pension Plan are funded or valued; (d) the basis or rate of employer contribution to a Relevant Pension Plan, in each case to the extent which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition and other than as required in accordance with applicable law; or (ii) enter into or propose to enter into one or more bulk annuity contracts in relation to any Relevant Pension Plan; or (iii) carried out any act: (a) which would or could reasonably be expected to lead to the commencement of the winding up of any Relevant Pension Plan; (b) which would or is reasonably likely to create a material debt owed by an employer to any Relevant Pension Plan; (c) which would or might accelerate any obligation on any employer to fund or pay additional contributions to any Relevant Pension Plan; or (d) which would, having regard to the published guidance of the Pensions Regulator give rise directly or indirectly to a liability in respect of a Relevant Pension Plan arising out of the operation of sections 38 and 38A of the Pensions Act 2004 in relation to a Relevant Pension Plan, in each case to the extent which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition and other than as required in accordance with applicable law;
3.12.10 changed the trustee or trustee directors or other fiduciary of any Relevant Pension Plan;
3.12.11 entered into, implemented or effected, or authorised, proposed or announced its intention to implement or effect, any joint venture, asset or profit sharing arrangement, partnership, composition, assignment, reconstruction, amalgamation, commitment, scheme or other transaction or arrangement (other than the Scheme) otherwise than in the ordinary course of business which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.12.12 purchased, redeemed or repaid any of its own shares or other securities or reduced or, save in respect of the matters mentioned in sub-paragraph 3.12.1 above, made any other change to any part of its share capital to an extent which (other than in the case of Kin and Carta) is material in the context of the Wider Kin and Carta Group taken as a whole;
3.12.13 other than with respect to claims between Kin and Carta and its wholly owned subsidiaries (or between such subsidiaries), waived, compromised or settled any claim otherwise than in the ordinary course of business which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.12.14 made any alteration to its articles of association or other constitutional documents (in each case, other than in connection with the Scheme) which is material in the context of the Acquisition;
3.12.15 (other than in respect of a member of the Wider Kin and Carta Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of any administrator, receiver, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.12.16 been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business which is material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.12.17 entered into any contract, commitment, agreement or arrangement which would be materially restrictive on the business of any member of the Wider Kin and Carta Group or the Wider Valtech Group and otherwise than in the ordinary course of business;
3.12.18 terminated or varied the terms of any agreement or arrangement between any member of the Wider Kin and Carta Group and any other person in a manner which would or might be expected to have a material adverse effect on the financial position of the Wider Kin and Carta Group taken as a whole; or
3.12.19 taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Kin and Carta Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Takeover Code;
No material adverse change
3.13 since 31 July 2023, and except as Disclosed, there having been:
3.13.1 no adverse change and no circumstance having arisen which would be expected to result in any adverse change or deterioration in the business, assets, value, financial or trading position, profits, prospects or operational performance of any member of the Wider Kin and Carta Group to an extent which is material to the Wider Kin and Carta Group taken as a whole or to the financing of the Acquisition;
3.13.2 no litigation, arbitration proceedings, prosecution or other legal proceedings including, without limitation, with regard to intellectual property rights used by the Wider Kin and Carta Group having been threatened, announced or instituted by or against or remaining outstanding against any member of the Wider Kin and Carta Group or to which any member of the Wider Kin and Carta Group is or may become a party (whether as claimant or defendant or otherwise) which, in any such case, might be expected to have a material adverse effect on the Wider Kin and Carta Group taken as a whole, and no enquiry, review, investigation or enforcement proceedings by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Kin and Carta Group having been threatened, announced or instituted by or against, or remaining outstanding in respect of, any member of the Wider Kin and Carta Group which, in any such case, might be expected to have a material adverse effect on the Wider Kin and Carta Group taken as a whole;
3.13.3 no contingent or other liability having arisen, increased or become apparent (other than in the ordinary course of its business) which is reasonably likely to adversely affect the business, assets, financial or trading position, profits, prospects or operational performance of any member of the Wider Kin and Carta Group to an extent which is material to the Wider Kin and Carta Group taken as a whole;
3.13.4 no steps having been taken and no omissions having been made which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Kin and Carta Group, which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which is material and reasonably likely to have a material adverse effect on the Wider Kin and Carta Group taken as a whole; and
3.13.5 no member of the Wider Kin and Carta Group having conducted its business in material breach of any applicable laws and regulations which in any case is material in the context of the Wider Kin and Carta Group taken as a whole;
3.14 since 31 July 2023, except as Disclosed, Valtech not having discovered:
3.14.1 that any financial, business or other information concerning the Wider Kin and Carta Group publicly announced or disclosed to any member of the Wider Valtech Group at any time prior to the date of this announcement by or on behalf of any member of the Wider Kin and Carta Group or to any of their advisers is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading and which was not subsequently corrected before the date of this announcement by disclosure either publicly or otherwise to Valtech or its professional advisers and which is, in any case, material in the context of the Wider Kin and Carta Group taken as a whole or in the context of the Acquisition;
3.14.2 that any member of the Wider Kin and Carta Group is subject to any liability, contingent or otherwise and which is material in the context of the Wider Kin and Carta Group taken as a whole; or
3.14.3 any information which affects the import of any information disclosed to Valtech at any time prior to the date of this announcement by or on behalf of any member of the Wider Kin and Carta Group which is material in the context of the Wider Kin and Carta Group taken as a whole;
Environmental liabilities
3.15 except as Disclosed, Valtech not having discovered that, in relation to any release, emission, accumulation, discharge, disposal or other similar circumstance which has impaired or is likely to impair the environment (including property) or harmed or is likely to harm the health of humans, animals or other living organisms or eco-systems, no past or present member of the Wider Kin and Carta Group, in a manner or to an extent which is material in the context of the Wider Kin and Carta Group, (i) having committed any violation of any applicable laws, statutes, regulations, Authorisations, notices or other requirements of any Third Party giving rise to a material liability; and/or (ii) having incurred any material liability (whether actual or contingent) to any Third Party; and/or (iii) being likely to incur any material liability (whether actual or contingent), or being required, to make good, remediate, repair, re-instate or clean up the environment (including any property) in each case of (i), (ii) or (iii) which such liability or requirement would be material to the Wider Kin and Carta Group taken as a whole;
Intellectual property
3.16 except as Disclosed, no circumstance having arisen or event having occurred in relation to any intellectual property owned or used by any member of the Wider Kin and Carta Group which would be reasonably likely to have a material adverse effect on the Wider Kin and Carta Group taken as a whole or is otherwise material in the context of the Acquisition;
Anti-corruption and sanctions
3.17 except as Disclosed, Valtech not having discovered that (to an extent that is material in the context of the Wider Kin and Carta Group taken as a whole):
3.17.1 any past or present member of the Wider Kin and Carta Group or any person that performs or has performed services for or on behalf of any such company is or has at any time engaged in any activity, practice or conduct (or omitted to take any action) in contravention of the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation;
3.17.2 any member of the Wider Kin and Carta Group is ineligible to be awarded any contract or business under section 23 of the Public Contracts Regulations 2006 or section 26 of the Utilities Contracts Regulations 2006;
3.17.3 any past or present member of the Wider Kin and Carta Group has engaged in any activity or business with, or made any investments in, or made any payments to any government, entity or individual covered by any of the economic sanctions administered by the United Nations or the European Union (or any of their respective member states) or the United States Office of Foreign Assets Control or any other governmental or supranational body or authority in any jurisdiction; or
3.17.4 a member of the Kin and Carta Group has engaged in a transaction which would cause the Valtech Group to be in breach of any law or regulation on completion of the Acquisition, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs or any government, entity or individual targeted by any of the economic sanctions of the United Nations, United States or the European Union or any of its member states;
No criminal property
3.18 except as Disclosed, Valtech not having discovered that any asset of any member of the Wider Kin and Carta Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition).
Part B: Further terms of the Acquisition
1 Subject to the requirements of the Panel, Valtech reserves the right in its sole discretion to waive, in whole or in part, all or any of the Conditions set out in Part A of this Appendix 1, except Conditions 1, 2.1(i), 2.2(i) and 2.3(i) which cannot be waived. If any of Conditions 2.1(ii), 2.2(ii) or 2.3(ii) is not satisfied by the relevant deadline specified in the relevant Condition, Valtech shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked the relevant Condition, waived the relevant deadlines or agreed with Kin and Carta to extend the relevant deadline.
2 Valtech shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of the Conditions in Part A of Appendix 1 above that are capable of waiver by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.
3 Under Rule 13.5(a) of the Takeover Code and subject to paragraph 4 of this Part B of Appendix 1, Valtech may only invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn with the consent of the Panel. The Panel will normally only give its consent if the circumstances which give rise to the right to invoke the Condition are of material significance to Valtech in the context of the Acquisition. This will be judged by reference to the facts of each case at the time that the relevant circumstances arise.
4 Condition 1 (subject to Rule 12 of the Code), Conditions 2.1(i), 2.2(i) and 2.3(i) in Part A of Appendix 1 above, and, if applicable, any acceptance condition if the Acquisition is implemented by means of an Offer, are not subject to Rule 13.5(a) of the Code.
5 Any Condition that is subject to Rule 13.5(a) of the Code may be waived by Valtech.
6 If the Panel requires Valtech to make an offer or offers for Kin and Carta Shares under the provisions of Rule 9 of the Takeover Code, Valtech may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule.
7 Valtech reserves the right to elect to implement the Acquisition by way of an Offer as an alternative to the Scheme, subject to the Panel's consent and (while the Cooperation Agreement is continuing) to the terms of the Cooperation Agreement. In such event, such Offer will be implemented on the same terms and conditions so far as applicable, as those which would apply to the Scheme (subject to appropriate amendments, including an acceptance condition set at 90 per cent. of the Kin and Carta Shares (or such other percentage as Valtech may decide after, to the extent necessary, consultation with the Panel, being in any case more than 50 per cent. of the Kin and Carta Shares)). If the Acquisition is effected by way of an Offer, and such Offer becomes or is declared unconditional and sufficient acceptances are received in respect of such Offer, Valtech intends to exercise its rights to apply the provisions of Chapter 3 of Part 28 of the 2006 Act so as to acquire compulsorily the remaining Kin and Carta Shares in respect of which the Offer has not been accepted.
8 The Acquisition will be subject, inter alia, to the Conditions and certain further terms which are set out in this Appendix 1 and to the full terms which will be set out in the Scheme Document and such further terms as may be required to comply with the provisions of the Listing Rules, the provisions of the Takeover Code and the applicable requirements of the Panel and the London Stock Exchange.
9 Kin and Carta Shares will be acquired by Valtech fully paid and free from all liens, charges, encumbrances and other third party rights of any nature whatsoever and together with all rights attaching to them as at the Effective Date, including the right to receive and retain all dividends and distributions (if any) declared, made or paid after the Acquisition becomes Effective.
10 If, on or after the date of this announcement and before the Effective Date, any dividend, distribution and/or other return of capital or value is announced, declared, made or paid in respect of the Kin and Carta Shares, Valtech reserves the right to reduce the consideration payable under the terms of the Acquisition for the Kin and Carta Shares by the aggregate amount of all or part of any such dividend, distribution and/or other return of capital or value, in which case any reference in this announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. In such circumstances, Kin and Carta Shareholders would be entitled to retain any such dividend, distribution and/or return of capital or value. Any exercise by Valtech of its rights referred to in this paragraph 10 shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Acquisition.
11 The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws or regulatory requirements of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
12 The Scheme will be governed by English law and be subject to the jurisdiction of the Court, to the Conditions set out above and full terms to be set out in the Scheme Document. The Acquisition will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the FCA, the Listing Rules and the Registrar of Companies.
13 Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.
Appendix 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement, unless otherwise stated or the context otherwise requires, the following sources and bases have been used.
1 The fully diluted issued ordinary share capital of 183,546,097 Kin and Carta Shares is based on:
1.1 177,931,360 Kin and Carta Shares in issue as at 15 December 2023 (being the latest practicable date before this announcement); plus
1.2 5,614,737 Kin and Carta Shares which may be issued on or after the date of this announcement pursuant to the Kin and Carta Share Plans as at 15 December 2023 (being the latest practicable date before this announcement).
2 A value of approximately £239 million for the entire issued and to be issued share capital of Kin and Carta is based on:
2.1 an offer price of 130 pence per Kin and Carta Share; and
2.2 Kin and Carta's fully diluted issued ordinary share capital of 183,546,097 Kin and Carta Shares, as set out in paragraph 1 above.
3 The closing prices on 17 October 2023 (being the latest Business Day before the commencement of the Offer Period) are taken from the Daily Official List.
4 Unless otherwise stated, the financial information of Kin and Carta is extracted (without material adjustment) from the annual report and audited accounts of the Kin and Carta Group for the 12 months ended 31 July 2023.
5 The volume-weighted average prices have been derived from Bloomberg data and have been rounded to the nearest whole number.
6 Certain figures included in this announcement have been subject to rounding adjustments.
Appendix 3
IRREVOCABLE UNDERTAKINGS
The following holders or controllers of Kin and Carta Shares have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting:
|
Name of Kin and Carta Shareholder giving undertaking |
Number of Kin and Carta Shares in respect of which undertaking is given |
Percentage of Kin and Carta issued share capital |
|
Coast Capital Management, LP |
11,589,718 |
6.5 |
|
Sand Grove Capital Management LLP |
20,820,198 |
11.7 |
|
Samson Rock Capital LLP |
7,000,000 |
3.9 |
|
TOTAL |
39,409,916 |
22.1 |
1. Coast Capital Management, LP
The irrevocable undertaking given by Coast Capital Management, LP remains binding in the event a higher competing offer is made for Kin and Carta.
The irrevocable undertaking given by Coast Capital Management, LP prevents it from selling all or any part of its Kin and Carta Shares.
The obligations of Coast Capital Management, LP under its irrevocable undertaking shall lapse and cease to have effect on and from the following occurrences: (i) if Valtech announces, with the consent of the Panel, and before the Scheme Document is published, that it does not intend to proceed with the Acquisition and no new, revised or replacement Scheme (or Offer, as applicable) is announced by Valtech in accordance with Rule 2.7 of the Takeover Code; (ii) the Scheme (or Offer as applicable) does not become effective, is withdrawn or lapses in accordance with its terms, other than (x) solely as a result of Valtech exercising its right to implement the Acquisition by way of an Offer rather than a Scheme or vice versa; or (y) if the lapse or withdrawal either is not confirmed by Valtech or is followed within five business days by an announcement under Rule 2.7 of the Takeover Code by Valtech (or a person acting in concert with it) to implement the Acquisition either by a new, revised or replacement scheme of arrangement pursuant to Part 26 of the 2006 Act or takeover offer (within the meaning of section 974 of the 2006 Act); or (iii) any competing offer is made which is declared unconditional or otherwise becomes effective.
2. Sand Grove Capital Management LLP
The irrevocable undertaking from Sand Grove Capital Management LLP will remain binding in the event that a higher competing offer for Kin and Carta is made, unless such an offer is equal to or greater than 112.5 per cent. of the value of the Acquisition.
The irrevocable undertaking given by Sand Grove Capital Management LLP prevents it from selling all or any part of its Kin and Carta Shares unless the purchaser enters into the same irrevocable undertaking with Valtech.
The obligations of Sand Grove Capital Management LLP under its irrevocable undertaking shall lapse and cease to have effect on and from the following occurrences: (i) if Valtech announces, with the consent of the Panel, and before the Scheme Document is published, that it does not intend to proceed with the Acquisition and no new, revised or replacement Scheme (or Offer, as applicable) is announced by Valtech in accordance with Rule 2.7 of the Takeover Code; (ii) the Scheme (or Offer as applicable) does not become effective, is withdrawn or lapses in accordance with its terms, other than (x) solely as a result of Valtech exercising its right to implement the Acquisition by way of an Offer rather than a Scheme or vice versa; or (y) if the lapse or withdrawal either is not confirmed by Valtech or is followed within five business days by an announcement under Rule 2.7 of the Takeover Code by Valtech (or a person acting in concert with it) to implement the Acquisition either by a new, revised or replacement scheme of arrangement pursuant to Part 26 of the 2006 Act or takeover offer (within the meaning of section 974 of the 2006 Act); (iii) any competing offer is made which is declared unconditional or otherwise becomes effective; (iv) if the Offer cannot be fulfilled; or (v) if a higher competing offer is made and such offer is at equal to or greater than 112.5 per cent. of the value of the Acquisition and Valtech has not announced a higher revised offer on or before seven days after the date of the announcement of such higher competing offer.
3. Samson Rock Capital LLP
The irrevocable undertaking given by Samson Rock Capital LLP will remain binding in the event that a higher competing offer for Kin and Carta is made, unless such an offer is at a price equal to or above 140 pence per Kin and Carta Share.
The irrevocable undertaking given by Samson Rock Capital LLP is conditional on the Apax Offer Shareholder Meetings being adjourned by Kin and Carta.
The irrevocable undertaking given by Samson Rock Capital LLP prevents it from selling all or any part of its Kin and Carta Shares.
The obligations of Samson Rock Capital LLP under its irrevocable undertaking shall lapse and cease to have effect on and from the following occurrences: (i) if Valtech announces, with the consent of the Panel, and before the Scheme Document is published, that it does not intend to proceed with the Acquisition and no new, revised or replacement Scheme (or Offer, as applicable) is announced by Valtech in accordance with Rule 2.7 of the Takeover Code; (ii) the Scheme (or Offer as applicable) does not become effective, is withdrawn or lapses in accordance with its terms, other than if the lapse or withdrawal either is not confirmed by Valtech or is followed within two business days by an announcement under Rule 2.7 of the Takeover Code by Valtech (or a person acting in concert with it) to implement the Acquisition either by a new, revised or replacement scheme of arrangement pursuant to Part 26 of the 2006 Act or takeover offer (within the meaning of section 974 of the 2006 Act); or (iii) any competing offer is made which is declared unconditional or otherwise becomes effective; (iv) if a higher competing offer is made and such offer is at a price equal to or above 140 pence per Kin and Carta Share and Valtech has not announced a higher revised offer on or before three days after the date of the announcement of such higher competing offer; or (v) Valtech receives binding irrevocable undertakings in support of the Acquisition (excluding pursuant to the irrevocable undertaking from Samson Rock Capital LLP) in respect of an aggregate number of Kin and Carta Shares that exceeds 20 per cent. of the issued share capital of Kin and Carta at the relevant time.
Appendix 4
DEFINITIONS
The following definitions apply throughout this document unless the context otherwise requires:
|
"2006 Act" |
the Companies Act 2006, as amended from time to time |
|
"2010 LTIP" |
the Kin and Carta Long Term Incentive Plan 2010, as amended from time to time |
|
"2020 LTIP" |
the Kin and Carta Long Term Incentive Plan 2020, as amended from time to time |
|
"2023 Kin and Carta Annual Report" |
the annual report and audited accounts of the Kin and Carta Group for the year ended 31 July 2023 |
|
"Acquisition" |
the proposed cash acquisition by Valtech of the entire issued, and to be issued, share capital of Kin and Carta by means of the Scheme, or should Valtech so elect (with the consent of the Panel), by means of an Offer and, where the context admits, any subsequent revision, variation, extension or renewal thereof |
|
"Additional Facility Notice" |
the additional facility notice dated on or about the date hereof between (amongst others) Ken Bidco Limited as borrower, the Lenders as lenders and GLAS USA LLC as agent in respect of the senior facilities agreement originally dated 28 September 2021 between (amongst others) Turing Lux Bidco 2 S.à r.l. as company and GLAS USA LLC as agent (as amended and/or amended and restated from time to time) |
|
"Apax" |
Apax Partners LLP |
|
"Apax Court Meeting" |
the meeting of Kin and Carta Shareholders convened by order of the Court under section 899 of the 2006 Act for the purpose of considering and, if thought fit, approving the scheme to implement the Revised Apax Offer (with or without amendment) and any adjournment or postponement thereof, originally scheduled to be held on 7 December 2023 and subsequently adjourned to be held on 21 December 2023 as described in an announcement published by Kin and Carta on 6 December 2023 |
|
"Apax General Meeting" |
the general meeting of Kin and Carta Shareholders convened in connection with the Scheme, to consider, and if thought fit, approve various matters in connection with the Revised Apax Offer, and any adjournment or postponement thereof, originally scheduled to be held on 7 December 2023 and subsequently adjourned to be held on 21 December 2023 as described in an announcement published by Kin and Carta on 6 December 2023 |
|
"Apax Offer Shareholder Meetings" |
the Apax Court Meeting and the Apax General Meeting |
|
"Articles" |
the articles of association of Kin and Carta from time to time |
|
"associated undertaking" |
shall be construed in accordance with paragraph 19 of Schedule 6 to The Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) but for this purpose ignoring paragraph 19(1)(b) of Schedule 6 to those regulations |
|
"Authorisations" |
authorisations, orders, grants, recognitions, confirmations, consents, licenses, clearances, certificates, permissions or approvals, in each case of a Third Party |
|
"BC Partners" |
BC Partners LLP of 40 Portman Square, London, W1H 6DA, United Kingdom |
|
"BC Partners Funds" |
the funds comprising BC Partners XI |
|
"Bulgarian Commission" |
The Republic of Bulgaria Commission on Protection of Competition |
|
"Business Day" |
a day, not being a public holiday, Saturday or Sunday, on which clearing banks in London are open for normal business |
|
"Citi" |
Citigroup Global Markets Limited |
|
"CK Option" |
the option granted to Chris Kutsor in respect of 358,803 Kin and Carta Shares on 17 June 2019 with an exercise price of £1.105 per Kin and Carta Share |
|
"Clean Team Agreement" |
the clean team agreement dated 24 November 2023 between Kin and Carta and Valtech Topco as described in paragraph 10 of this announcement |
|
"Closing Price" |
the closing middle market price of a Kin and Carta Share as derived from the Daily Official List on any particular date |
|
"CMA" |
the UK Competition and Markets Authority |
|
"Combined Group" |
the combined Wider Kin and Carta Group and Wider Valtech Group following the Acquisition becoming Effective |
|
"Condition" |
each of the conditions listed in Part A of Appendix 1 and any reference to a numbered Condition shall be a reference to the Condition set out in the paragraph of Part A of Appendix 1 bearing such number and to be set out in the Scheme Document |
|
"Confidentiality Agreement" |
the confidentiality agreement dated 27 October 2023 between Kin and Carta and Valtech Topco, as described in paragraph 10 of this announcement |
|
"Cooperation Agreement" |
the cooperation agreement dated on or around the date of this announcement between Kin and Carta and Valtech as described in paragraph 10 of this announcement |
|
"Court" |
the High Court of Justice in England and Wales |
|
"Court Meeting" |
the meeting of Kin and Carta Shareholders to be convened pursuant to an order of the Court under the 2006 Act for the purpose of considering and, if thought fit, approving the Scheme (with or without amendment), including any adjournment thereof, notice of which shall be contained in the Scheme Document |
|
"Court Order" |
the order of the Court sanctioning the Scheme |
|
"CREST" |
the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear |
|
"Daily Official List" |
the Daily Official List published by the London Stock Exchange |
|
"DB Scheme" |
Kin and Carta's St Ives Pension Scheme as described in paragraph 4 of this announcement |
|
"Dealing Disclosure" |
has the same meaning as in Rule 8 of the Code |
|
"Deutsche Numis" |
Numis Securities Limited |
|
"Disclosed" |
the information fairly disclosed by or on behalf of Kin and Carta: (i) in the 2023 Kin and Carta Annual Report; (ii) in this announcement; (iii) in any other announcement to a Regulatory Information Service prior to the publication of this announcement; and/or (iv) in writing (including via the virtual data room operated by or on behalf of Kin and Carta in respect of the Acquisition) or orally in meetings and calls by Kin and Carta management prior to the date of this announcement to Valtech or Valtech's advisers (in their capacity as such) |
|
"Disclosure Guidance and Transparency Rules" |
the Disclosure Guidance and Transparency Rules sourcebook issued by the FCA (as amended from time to time) |
|
"EA 2002" |
Enterprise Act 2002 |
|
"Effective" |
in the context of the Acquisition: (a) if the Acquisition is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or (b) if the Acquisition is implemented by way of an Offer, such Offer having been declared and become unconditional in accordance with the Takeover Code |
|
"Effective Date" |
the date on which either (i) the Scheme becomes effective in accordance with its terms; or (ii) if Valtech elects, and the Panel consents, to implement the Acquisition by way of the Offer, the date on which the Offer becomes or is declared unconditional |
|
"Euroclear" |
Euroclear UK & Ireland International Limited |
|
"Europa" |
Europa Partners Limited |
|
"FCA" or "Financial Conduct Authority" |
the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA |
|
"FCA Handbook" |
the FCA's Handbook of rules and guidance as amended from time to time |
|
"Final" |
final and will not be further increased, although Kelvin reserved the right to increase the offer price and/or otherwise improve the terms of the Revised Apax Offer if: (i) there is a subsequent announcement of an offer or possible offer for Kin and Carta by a third party offeror or potential offeror; or (ii) the Panel otherwise provides its consent |
|
"FSMA" |
the Financial Services and Markets Act 2000 (as amended from time to time) |
|
"FY22 and FY23 LTIP Awards" |
the awards granted under the 2020 LTIP in the Kin and Carta financial years ended 31 July 2022 and 31 July 2023 |
|
"General Meeting" |
the general meeting of Kin and Carta Shareholders to be convened to consider and if thought fit pass, inter alia, the Resolutions in relation to the Scheme including any adjournment, postponement or reconvention thereof |
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"Kelvin" |
Kelvin UK Bidco Limited, a newly formed company owned indirectly by funds advised by Apax, with registered number 15207095 |
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"Kin and Carta" |
Kin and Carta plc |
|
"Kin and Carta Board" or "Kin and Carta Directors" |
the directors of Kin and Carta |
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"Kin and Carta Group" |
Kin and Carta and its subsidiary undertakings and where the context permits, each of them |
|
"Kin and Carta Share Plans" |
the LTIPs, the Kin and Carta Restricted Stock Unit Plan, the Kin and Carta Sharesave Plan, the Kin and Carta Employee Stock Purchase Plan and the CK Option |
|
"Kin and Carta Shareholder(s)" |
holders of Kin and Carta Shares |
|
"Kin and Carta Share(s)" |
the existing unconditionally allotted or issued and fully paid ordinary shares of 10 pence each in the capital of Kin and Carta and any further shares which are unconditionally allotted or issued before the Scheme becomes Effective |
|
"Kosovan Competition Act" |
the Law on the Protection of Competition (Ligj për mbrojtjen e konkurrencës) (Official Gazette of Republic of Kosovo, no 08/L-056) |
|
"Kosovan Competition Authority" |
the Competition Authority of the Republic of Kosovo (Autoriteti i konkurrencës i Republikës së Kosovës) |
|
"Lenders" |
the Additional Facility Lenders (as defined in the Additional Facility Notice) |
|
"Listing Rules" |
the listing rules made by the FCA under Part 6 of FSMA, as amended from time to time |
|
"London Stock Exchange" |
the London Stock Exchange plc or its successor from time to time |
|
"Long Stop Date" |
19 October 2024 or such later date as may be agreed between Valtech and Kin and Carta and, if required, the Panel and the Court may allow |
|
"LTIPs" |
the 2010 LTIP and the 2020 LTIP |
|
"Macedonian Competition Act" |
the Law on Protection of Competition (Закон за заштита на конкуренцијата) (Official Gazette of the RM, nos. 145/10, 136/11, 41/14, 53/2016 and 83/2018) |
|
"Macedonian Competition Commission" |
the Commission for the Protection of Competition of the Republic of North Macedonia (Комисија за заштита на конкуренцијата) |
|
"Main Market" |
the Main Market of the London Stock Exchange |
|
"Market Abuse Regulation" |
Regulation (EU) 596/2014, as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 |
|
"Meetings" |
the Court Meeting and the General Meeting |
|
"NSIA" |
National Security and Investment Act 2021 |
|
"Offer" |
subject to the consent of the Panel and the terms of the Cooperation Agreement, should the Acquisition be implemented by way of a takeover offer as defined in Chapter 3 of Part 28 of the 2006 Act, the offer to be made by or on behalf of Valtech to acquire the entire issued, and to be issued, share capital of Kin and Carta, and, where the context admits, any subsequent revision, variation, extension or renewal of such offer |
|
"Offer Period" |
the offer period (as defined by the Takeover Code) relating to Kin and Carta which commenced on 18 October 2023 |
|
"Offer Price" |
130 pence per Kin and Carta Share |
|
"Official List" |
the official list maintained by the FCA pursuant to Part 6 of FSMA |
|
"Opening Position Disclosure" |
an announcement pursuant to Rule 8 of the Takeover Code containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to the Acquisition |
|
"Original Apax Offer" |
the cash offer of 110 pence per Kin and Carta Share made for the entire issued and to be issued ordinary share capital of Kin and Carta made by Kelvin, to be implemented by way of a scheme of arrangement and announced on 18 October 2023 |
|
"Overseas Shareholders" |
holders of Kin and Carta Shares who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom |
|
"Panel" |
the Panel on Takeovers and Mergers |
|
"Peel Hunt" |
Peel Hunt LLP |
|
"Pensions Agreement" |
the agreement dated 15 December 2023 entered into between the Trustee, Valtech and Valtech Luxco |
|
"PRA" |
Prudential Regulation Authority or its successor from time to time |
|
"Registrar of Companies" |
the Registrar of Companies in England and Wales |
|
"Regulatory Information Service" |
a regulatory information service as defined in the FCA Handbook |
|
"relevant securities" |
as the context requires, Kin and Carta Shares, other Kin and Carta share capital and any securities convertible into or exchangeable for, and rights to subscribe for, any of the foregoing |
|
"Resolutions" |
the resolution(s) to be proposed at the General Meeting necessary to implement the Scheme, including, amongst other things, a special resolution proposed in connection with, inter alia, implementation of the Scheme and certain amendments to be made to the Articles |
|
"Restricted Jurisdiction" |
any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Offer is sent or made available to Kin and Carta Shareholders in that jurisdiction |
|
"Retention Arrangements" |
the cash awards to be granted to certain Kin and Carta employees as described in paragraph 4 of this announcement |
|
"Revised Apax Offer" |
the increased and Final cash offer of 120 pence per Kin and Carta Share made for the entire issued and to be issued ordinary share capital of Kin and Carta made by Kelvin, to be implemented by scheme of arrangement and announced on 6 December 2023 |
|
"Rollover Retention Awards" |
the cash awards to be granted to certain Kin and Carta employees as described in paragraph 4 of this announcement |
|
"Sanction Hearing" |
the hearing by the Court of the application to sanction the Scheme under Part 26 of the 2006 Act |
|
"Scheme" |
the proposed scheme of arrangement under Part 26 of the 2006 Act between Kin and Carta and the holders of the Kin and Carta Shares, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Kin and Carta and Valtech |
|
"Scheme Document" |
the document to be sent to Kin and Carta Shareholders and persons with information rights containing, amongst other things, the Scheme and notices of the Meetings and proxy forms in respect of the Meetings |
|
"Scheme Record Time" |
the time and date to be specified in the Scheme Document, expected to be 6.00 p.m. on the Business Day immediately prior to the Effective Date (or such other time as Valtech and Kin and Carta may agree) |
|
"Secretary of State" |
the Secretary of State for the purposes of the UK National Security and Investment Act 2021 |
|
"subsidiary", "subsidiary undertaking" and "undertaking" |
shall be construed in accordance with the 2006 Act |
|
"Takeover Code" |
the City Code on Takeovers and Mergers |
|
"Trustee" |
St Ives Pension Scheme Trustee Limited, a company incorporated in England and Wales with registered number 02286545 having its registered office at The Spitfire Building, 71 Collier Street, London N1 9BE; |
|
"uncertificated" or "in uncertificated form" |
in relation to a share or other security, a share or other security, title to which is recorded in the relevant register of the share or security as being held in uncertificated form, in CREST, and title to which, by virtue of the Uncertificated Securities Regulations 2001 (SI 2001/3755) may be transferred by means of CREST |
|
"United Kingdom" or "UK" |
the United Kingdom of Great Britain and Northern Ireland |
|
"United States" or "US" |
the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction and any political sub-division thereof |
|
"US Exchange Act" |
the United States Securities Exchange Act 1934, as amended |
|
"Valtech" |
Ken Bidco Limited of 10-14 White Lion Street, London, United Kingdom, N1 9PD |
|
"Valtech Group" |
Valtech Topco and its subsidiary undertakings and where the context permits, each of them |
|
"Valtech Luxco" |
Turing Lux Bidco 2 S.À R.L., a company incorporated in Luxembourg with registered number B256103 having its registered office at 18, Rue Erasme L-1468 Luxembourg |
|
"Valtech Topco" |
Turing Topco Limited of Second Floor, No. 4 The Forum, Grenville Street, St. Helier, JE2 4UF, Jersey |
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"Wider Kin and Carta Group" |
Kin and Carta and associated undertakings and any other body corporate, partnership, joint venture or person in which Kin and Carta and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent (excluding, for the avoidance of doubt, Valtech and all of its associated undertakings which are not members of the Kin and Carta Group) |
|
"Wider Valtech Group" |
Valtech Group and associated undertakings and any other body corporate, partnership, joint venture or person in which Valtech and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent |
References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this announcement.
All references to "pounds", "pounds Sterling", "Sterling", "GBP", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.
All references to "EUR" or "€" are to the lawful currency of the member states of the European Union that have adopted the euro as their lawful currency.
All references to "US" "dollars" or "$" are to the lawful currency of the United States.
All times referred to are London time unless otherwise stated.
A reference to "includes" shall mean "includes without limitation", and references to "including" and any other similar term shall be construed accordingly.
References to the singular include the plural and vice versa.
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