TIDMEXO TIDMTTM
RNS Number : 6852C
Element Materials Tech Group Ltd
19 April 2017
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
19 April 2017
RECOMMED CASH ACQUISITION
of
EXOVA GROUP PLC
by
ELEMENT MATERIALS TECHNOLOGY GROUP LIMITED
to be effected
by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
-- The boards of directors of Exova Group plc ("Exova") and
Element Materials Technology Group Limited ("Element") are pleased
to announce that they have reached agreement on the terms of a
recommended cash acquisition of Exova by Element pursuant to which
a wholly-owned indirect subsidiary of Element, Greenrock Bidco
Limited ("Element Bidco"), will acquire the entire issued and to be
issued ordinary share capital of Exova. The Acquisition will be
implemented by way of a scheme of arrangement.
-- Scheme Shareholders will be paid a price of 240 pence per
share in cash by Element Bidco. In addition, Scheme Shareholders
who are on the register of members of Exova as at the close of
business on 26 May 2017 will be entitled, conditional on approval
by Exova Shareholders at the annual general meeting of Exova, to
receive and retain a final dividend for the period to 31 December
2016 of 2.35 pence per Exova Share, which is expected to be paid on
9 June 2017. Therefore, with the intended dividend payment, Scheme
Shareholders at the Scheme Record Time will be entitled to
receive:
242.35 pence in cash per Exova Share (the "Cash Value")
The Cash Value of 242.35 pence in cash represents a premium of
approximately:
-- 26.0 per cent. to the volume weighted average Closing Price
of approximately 192.37 pence per Exova Share for the twelve month
period ended on 24 March 2017 (being the last Dealing Day prior to
the start of the Offer Period);
-- 18.9 per cent. to the volume weighted average Closing Price
of approximately 203.87 pence per Exova Share for the six month
period ended on 24 March 2017 (being the last Dealing Day prior to
the start of the Offer Period); and
-- 10.7 per cent. to the Closing Price per Exova Share of 218.88
pence on 24 March 2017 (being the last Dealing Day prior to the
start of the Offer Period) .
-- The Cash Value implies an enterprise value multiple of
approximately 16.0 times Exova's Adjusted EBITA and 12.5 times
Exova's Adjusted EBITDA for the 12 months ended 31 December
2016.
-- The Cash Value values the entire issued and to be issued
ordinary share capital of Exova at approximately GBP620.3 million
on the basis of a fully diluted share capital of 256,009,630 Exova
Shares, calculated on the basis described in paragraph 5 of
Appendix II.
-- Element Bidco confirms that the offer price of 240 pence per
share is final and will not be increased, except that Element Bidco
reserves the right to increase the amount of the offer price if
there is an announcement on or after the date of this announcement
of an offer or a possible offer for Exova by a third party offeror
or potential offeror.
-- The Exova Directors, who have been so advised by Goldman
Sachs and Investec as to the financial terms of the Acquisition,
consider the terms of the Acquisition to be fair and reasonable. In
providing advice to the Exova Directors, Goldman Sachs and Investec
have taken into account the commercial assessments of the Exova
Directors. Investec is providing independent financial advice to
the Exova Directors for the purposes of Rule 3 of the Code.
-- Element Bidco has received irrevocable undertakings to vote
in favour of the Scheme at the Court Meeting and in favour of the
General Meeting Resolutions in respect of a total of 138,938,011
Exova Shares, representing approximately 55.47 per cent. of the
ordinary share capital of Exova in issue on 18 April 2017 (being
the latest practicable date prior to this announcement).
-- Element is a leading global materials and product
qualification testing provider with a strong focus on the
aerospace, oil and gas and automotive end markets. Element is
majority owned by BEV, the latest fund of Bridgepoint and was
acquired by BEV in March 2016. Element Bidco is a wholly owned
indirect subsidiary of Element, established for the purpose of
making the Acquisition.
-- The cash consideration payable by Element Bidco under the
Acquisition will be funded, in part, through equity commitments to
subscribe for securities in Element and its indirect wholly owned
subsidiary Element Midco, which will be underwritten by BEV. The
remainder of the cash consideration payable under the Acquisition
will be funded from the proceeds of a debt finance facility entered
into by Element Bidco and other members of the Element Group which
has been arranged and fully underwritten by HSBC, HSBC Securities
(USA) Inc., Bank of America, N.A., Bank of America Merrill Lynch
International Limited, ING Bank N.V. and Barclays Bank plc.
-- It is intended that the Acquisition will be implemented by
means of a Court-sanctioned scheme of arrangement under Part 26 of
the 2006 Act, further details of which are contained in the full
text of this announcement. However, Element Bidco reserves the
right, subject to the consent of the Panel and the terms of the
Cooperation Agreement, to effect the Acquisition by way of a
Takeover Offer.
-- The Acquisition will be subject to the satisfaction or waiver
of the Conditions set out in Appendix I to this announcement and in
the Scheme Document. The Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting
and General Meeting, together with the Forms of Proxy, will be
posted to Exova Shareholders within 28 days of the date of this
announcement and, subject to satisfaction or waiver of the
Conditions, it is expected that the Scheme will be effective during
the third quarter of 2017.
Commenting on the Acquisition, Charles Noall, CEO of Element,
said:
"We are very excited about the potential of combining these two
great businesses to better serve our customers and support their
growth. This transaction will create a truly global product and
materials testing business, increasing Element's operational reach
across key markets in U.S., Europe and Asia. The combined UK
headquartered group will benefit from deep pools of technical
talent, very significant testing capacity and a strong network of
facilities to support our customers' global supply chains. We
believe that this acquisition will facilitate greater flexibility
to invest further in capacity and technology, driving further
opportunities across the Combined Group."
Commenting on the Acquisition, Allister Langlands, Chairman of
Exova, said:
"This represents a good outcome for shareholders and the
combination of Exova and Element creates a global leader in the
testing market. Since the IPO, the Exova management team have made
significant progress driving organic growth across many of our
businesses and developing an attractive acquisition strategy. The
offer represents 16 times Exova's 2016 Adjusted EBITA and a premium
of 26 per cent. to our average share price over the last 12 months.
It follows a full and thorough process with interested parties and
provides all Exova shareholders with liquidity and the ability to
realise the value of the group's opportunities with certainty."
This summary should be read in conjunction with, and is subject
to, the accompanying full text of this announcement which sets out
further details of the Acquisition and which forms an integral part
of this announcement (including Appendices). The Acquisition will
be subject to Appendix I to this announcement, which contains the
Conditions to, and certain further terms of, the Acquisition and to
the full terms and conditions which will be set out in the Scheme
Document. Appendix II contains further details of the sources of
information and bases of calculations set out in this announcement.
Appendix III contains further details of the irrevocable
undertakings received by Element Bidco. Appendix IV contains a
confirmation by the directors of Exova in the terms required by
Rule 28.1(c)(i) of the Code for a statement made by Exova as part
of its results announcement for the year ended 31 December 2016
which is confirmed in paragraph 10 of this announcement. Appendix V
contains definitions of certain expressions used in this summary
and in this announcement.
Enquiries:
------------------------------------- --------------
Element Materials Technology
Group Limited
------------------------------------- --------------
Charles Noall Tel: +44 (0)
Jo Wetz 20 3540 1825
Tel: +44 (0)
20 3540 1820
------------------------------------- --------------
Bridgepoint Advisers Limited
------------------------------------- --------------
James Murray Tel: +44 (0)
20 7034 3555
------------------------------------- --------------
BofA Merrill Lynch (joint financial Tel: +44 (0)
adviser to Bridgepoint, Element 20 7628 1000
and Element Bidco)
------------------------------------- --------------
Eamon Brabazon
Justin Anstee
Geoff Iles
Adam Tinsley
------------------------------------- --------------
HSBC (joint financial adviser Tel: +44 (0)
to Bridgepoint, Element and 20 7991 8888
Element Bidco and corporate
broker to the Acquisition)
------------------------------------- --------------
Omar Faruqui
Andrew Owens
Simon Alexander (corporate broking)
Greg Hely Hutchinson
------------------------------------- --------------
Finsbury (public relations adviser Tel: +44 (0)
to Bridgepoint, Element and 20 7251 3801
Element Bidco)
------------------------------------- --------------
Jenny Davy
Charles O'Brien
------------------------------------- --------------
Exova Group plc
------------------------------------- --------------
Andrew Pickup, Corporate Affairs Tel: +44 (0)
Director 79 2024 3393
------------------------------------- --------------
Goldman Sachs International Tel: +44 (0)
(financial adviser and corporate 20 7774 1000
broker to Exova)
------------------------------------- --------------
Anthony Gutman
Nick Harper
Jose Barreto
Alex Garner
Duncan Stewart (corporate broking)
------------------------------------- --------------
Investec Bank plc (financial Tel: +44 (0)
adviser and corporate broker 20 7597 5970
to Exova)
------------------------------------- --------------
Keith Anderson
Chris Sim
Jonathan Wynn
------------------------------------- --------------
Powerscourt Group (public relations
adviser to Exova)
------------------------------------- --------------
Peter Ogden Tel: +44 (0)
Andy Jones 20 7549 0997
Tel: +44 (0)
20 7549 0747
------------------------------------- --------------
Merrill Lynch International ("BofA Merrill Lynch"), which is
authorised by the Prudential Regulation Authority and regulated by
the FCA and the Prudential Regulation Authority in the United
Kingdom, is acting for Bridgepoint, Element and Element Bidco and
no one else in connection with the Acquisition and will not be
responsible to anyone other than Bridgepoint, Element and Element
Bidco for providing the protections afforded to clients of BofA
Merrill Lynch, or for giving advice in connection with the
Acquisition or any matter referred to herein.
HSBC Bank plc ("HSBC"), which is authorised by the Prudential
Regulation Authority and regulated by the FCA and the Prudential
Regulation Authority in the United Kingdom, is acting for
Bridgepoint, Element and Element Bidco and no one else in
connection with the Acquisition and will not be responsible to
anyone other than Bridgepoint, Element and Element Bidco for
providing the protections afforded to clients of HSBC, or for
providing advice in connection with the Acquisition or any matter
described in this announcement or any transaction or arrangement
referred to herein.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the FCA and the
Prudential Regulation Authority in the United Kingdom, is acting
exclusively for Exova and no one else in connection with the
Acquisition and will not be responsible to anyone other than Exova
for providing the protections afforded to clients of Goldman Sachs
International or for providing advice in connection with the
Acquisition or in relation to matters described in this
announcement or any transaction or arrangement referred to
herein.
Investec Bank plc, which is authorised by the Prudential
Regulation Authority and regulated by the FCA and the Prudential
Regulation Authority in the United Kingdom, is acting exclusively
for Exova and no one else in connection with the Acquisition and
will not be responsible to anyone other than Exova for providing
the protections afforded to clients of Investec Bank plc or for
providing advice in connection with the Acquisition or in relation
to matters described in this announcement or any transaction or
arrangement referred to herein.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or otherwise dispose of or invitation to purchase or otherwise
acquire any securities or the solicitation of any vote or approval
in any jurisdiction, nor shall there be any sale, issue or transfer
of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law. The Acquisition
will be made solely through the Scheme Document and the
accompanying Forms of Proxy, which will together 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.
Overseas Shareholders and Notice to US Investors
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any
applicable requirements. In particular, the ability of persons who
are not resident in the United Kingdom to vote their Exova Shares
with respect to the Scheme at the Court Meeting, or to appoint
another person as proxy to vote at the Court Meeting 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. This announcement has
been prepared for the purposes of complying with English law and
the Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside of
England.
The Acquisition relates to the shares of an English company and
is proposed to be effected by means of a scheme of arrangement
under the laws of England and Wales. Neither the proxy solicitation
rules nor (unless implemented by means of a Takeover Offer) the
tender offer rules under the US Securities Exchange Act of 1934, as
amended, will apply to the Acquisition. Moreover, the Acquisition
is subject to the disclosure requirements and practices applicable
in the United Kingdom and under the City Code to schemes of
arrangement, which differ from the disclosure requirements of the
US proxy solicitation rules and tender offer rules. Financial
information included in this announcement has been prepared, unless
specifically stated otherwise, in accordance with accounting
standards applicable in the UK and thus may not be comparable to
the financial information of US companies or companies whose
financial statements are prepared in accordance with generally
accepted accounting principles in the US. If Element Bidco
exercises its right to implement the Acquisition of the Exova
Shares by way of a Takeover Offer, the Takeover Offer will be made
in compliance with applicable US securities laws and
regulations.
It may be difficult for US holders of Exova Shares to enforce
their rights and claims arising out of the US federal securities
laws, since Element Bidco and Exova are located in countries other
than the United States, and some or all of their officers and
directors may be residents of countries other than the United
States. US holders of Exova Shares may not be able to sue a non-US
company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
Unless otherwise determined by Element Bidco or required by the
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 form within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, 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,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Exova Shareholders who
are not resident in the United Kingdom may be affected by the laws
of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Forward Looking Statements
This announcement, oral statements made regarding the
Acquisition and other information published by Element Bidco and
Exova contains statements that are or may 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 Element Bidco and
Exova 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 Element Bidco and Exova, the expected timing and
scope of the Acquisition and other statements other than historical
facts. All statements other than statements of historical facts
included in this announcement may be forward looking statements.
Without limitation, any statements preceded or followed by or that
include the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "should", "could", "would", "may",
"anticipates", "estimates", "synergy", "cost-saving", "projects",
"goal", "strategy", "budget", "forecast" or "might" or, words or
terms of similar substance or the negative thereof, are forward
looking statements. Forward looking statements 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 Element Bidco's or Exova's operations and
potential synergies resulting from the Acquisition; and (iii) the
effects of government regulation on Element Bidco's or Exova's
business.
These forward looking statements are not guarantees of future
financial performance. Except as expressly provided in this
announcement, they have not been reviewed by the auditors of
Element Bidco or Exova or their respective financial advisers. Such
forward looking statements involve known and unknown risks and
uncertainties that could significantly affect expected results and
are based on certain key assumptions. Many factors could cause
actual results to differ materially from those projected or implied
in any forward looking statements. These factors include the
satisfaction of the Conditions, as well as additional factors, such
as: fluctuations in the capital markets; fluctuations in interest
and exchange rates; increased regulation or regulatory scrutiny;
the occurrence of unforeseen disasters or catastrophes; political
or economic instability in principal markets; adverse outcomes in
litigation; and general, local and global economic, political,
business and market conditions. Other unknown or unpredictable
factors could cause actual results to differ materially from those
in the forward-looking statements. Such forward-looking statements
should therefore be construed in the light of such factors. Neither
Element Bidco nor Exova, 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. Due to such uncertainties and risks, readers
are cautioned not to place undue reliance on such forward looking
statements. All subsequent oral or written forward looking
statements attributable to Element Bidco or Exova or any of their
respective members, directors, officers or employees or any persons
acting on their behalf are expressly qualified in their entirety by
the cautionary statement above. Element Bidco and Exova disclaim
any obligation to update or revise any forward looking or other
statements contained herein other than in accordance with their
legal and regulatory obligations.
Profit Forecast
Paragraph 10 of this announcement contains a statement which is
a profit forecast for the purposes of Rule 28 of the Code. Appendix
IV contains a confirmation by the directors of Exova in the terms
required by Rule 28.1(c)(i) of the Code in relation to that
statement.
Other than as described above, no statement in this announcement
is intended as a profit forecast or estimate for any period and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share for Exova, for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share for Exova.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the 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 paper 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 paper
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 paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the 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 paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper 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 paper offeror, 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 pm (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 paper
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.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
Information Relating to Exova Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Exova Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Exova may be provided to Element Bidco during
the offer period as requested under Section 4 of Appendix 4 of the
Code to comply with Rule 2.11(c).
Publication on Website
A copy of this announcement will be available free of charge
(subject to any applicable restrictions with respect to persons
resident in Restricted Jurisdictions) on Exova's and Element's
websites (www.exova.com and www.element.com respectively) by no
later than 12 noon (London time) on 20 April 2017.
The contents of the websites referred to in this announcement
are not incorporated into and do not form part of this
announcement.
You may request a hard copy of this announcement by contacting
Jo Wetz on +44 (0) 20 3540 1820. You may also request that all
future documents, announcements and information to be sent to you
in relation to the Acquisition should be in hard copy form.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
19 April 2017
RECOMMED CASH ACQUISITION
of
EXOVA GROUP PLC
by
ELEMENT MATERIALS TECHNOLOGY GROUP LIMITED
to be effected
by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1 Introduction
The boards of directors of Exova and Element are pleased to
announce that they have reached agreement on the terms of a
recommended cash acquisition of Exova by Element pursuant to which
a wholly-owned subsidiary of Element, Greenrock Bidco, will acquire
the entire issued and to be issued ordinary share capital of Exova.
It is intended that the Acquisition be implemented by means of a
Court-sanctioned scheme of arrangement under Part 26 of the 2006
Act.
2 The Acquisition
Under the terms of the Acquisition, which will be subject to the
Conditions and further terms set out in Appendix I to this
announcement and to be set out in the Scheme Document, Scheme
Shareholders will be paid a price of 240 pence per share in cash by
Element Bidco. In addition, Scheme Shareholders who are on the
register of members of Exova as at the close of business on 26 May
2017 will still be entitled, conditional on approval by Exova
Shareholders at the annual general meeting of Exova, to receive and
retain a final dividend for the period to 31 December 2016 of 2.35
pence per Exova Share, which is expected to be paid on 9 June 2017.
Therefore, with the intended dividend payment, Scheme Shareholders
at the Scheme Record Time will be entitled to receive:
242.35 pence in cash per Scheme Share
The Cash Value of 242.35 pence in cash represents a premium of
approximately:
-- 26.0 per cent. to the volume weighted average Closing Price
of approximately 192.37 pence per Exova Share for the twelve month
period ended on 24 March 2017 (being the last Dealing Day prior to
the start of the Offer Period);
-- 18.9 per cent. to the volume weighted average Closing Price
of approximately 203.87 pence per Exova Share for the six month
period ended on 24 March 2017 (being the last Dealing Day prior to
the start of the Offer Period); and
-- 10.7 per cent. to the Closing Price per Exova Share of 218.88
pence on 24 March 2017 (being the last Dealing Day prior to the
start of the Offer Period).
The Cash Value implies an enterprise value multiple of
approximately 16.0 times Exova's Adjusted EBITA and 12.5 times
Exova's Adjusted EBITDA for the 12 months ended 31 December
2016.
The Cash Value values the entire issued and to be issued
ordinary share capital of Exova at approximately GBP620.3 million
on the basis of a fully diluted share capital of 256,009,630 Exova
Shares, assuming that all rights in respect of in-the-money options
under the Exova Share Schemes are exercised on the basis explained
in this announcement. This assumes that the shares under option or
award under the Exova Share Schemes will not be eligible to receive
the final dividend of 2.35 pence per Exova Share but will be taken
into account for purposes of determining dividend equivalent rights
under the Exova Group plc Long Term Incentive Plan.
Element Bidco confirms that the offer price of 240 pence per
share is final and will not be increased, except that Element Bidco
reserves the right to increase the amount of the offer price if
there is an announcement on or after the date of this announcement
of an offer or a possible offer for Exova by a third party offeror
or potential offeror.
If, after the date of this announcement, any dividend and/or
other distribution and/or other return of capital, other than the
final dividend for the period to 31 December 2016 of 2.35 pence per
Exova Share is announced, declared or paid in respect of Exova
Shares, Element Bidco reserves the right to reduce the offer
consideration by an amount up to the amount of such dividend and/or
distribution and/or return of capital so announced, declared or
paid.
3 Background to and reasons for the Acquisition
Bridgepoint acquired Element in March 2016, in conjunction with
Element's management team. While it has a strong standalone
critical mass and an attractive investment case, Element management
and Bridgepoint have always considered that it also offers a strong
platform for pursuing larger acquisitions in strategic testing
sectors. Element believes that the Acquisition of Exova will allow
the Combined Group to:
-- enhance its presence in the aerospace, oil and gas, transport
and industrials laboratory based testing segments;
-- benefit from geographic and end market diversification, with
Element's sector exposure broadened to include fire, health
sciences and infrastructure, as well as calibration;
-- create a global platform of increased scale whose broader
range of highly technical capabilities will allow the Combined
Group to better address the challenges which face our customers;
and
-- become the employer of choice for technical talent in the laboratory based testing market.
4 Recommendation
The Exova Directors, who have been so advised by Goldman Sachs
and Investec as to the financial terms of the Acquisition, consider
the terms of the Acquisition to be fair and reasonable. In
providing advice to the Exova Directors, Goldman Sachs and Investec
have taken into account the commercial assessments of the Exova
Directors. Investec is providing independent financial advice to
the Exova Directors for the purposes of Rule 3 of the Code.
Accordingly, the Exova Directors intend unanimously to recommend
Exova Shareholders to vote in favour of the Scheme at the Court
Meeting and the General Meeting Resolutions, as each Exova Director
has irrevocably undertaken to do in respect of his own beneficial
holdings of Exova Shares (further details of these irrevocable
undertakings are contained in paragraph 6 below).
5 Background to and reasons for the Exova Directors' recommendation
Exova is a global testing, calibration and advisory services
provider. Until 2008, Exova was the testing and inspection division
of Bodycote plc. In 2008, Exova was acquired by Clayton, Dubilier
& Rice Fund VII, LP and, following a period of significant
growth and development, Exova was listed on the London Stock
Exchange in 2014 (the "IPO").
Since the completion of its IPO, Exova has made meaningful
strategic and financial progress as a standalone company. This
progress has been characterised by strong organic growth across all
its businesses (with the exception of its oil and gas business),
substantial progress on its value accretive acquisition strategy
with the completion of 14 acquisitions, and the successful
implementation of a new market facing organisation structure.
However, during this period, the deterioration in the oil price,
and the consequential reduction in investment and activity levels
by customers in the oil and gas sector, has presented significant
challenges. The deterioration in the oil and gas environment has
had a negative impact on a number of companies, including Exova,
for which the oil and gas industry is an end market. Exova has
taken decisive action to mitigate the impact of this downturn and
to re-balance the portfolio to the other end markets that it
serves. In 2016, oil and gas represented approximately 9 per cent.
of Group revenue compared with 18 per cent. at the time of the IPO.
However, a combination of Exova's continuing exposure to the oil
and gas sector and the relatively small free float in its shares,
which has impacted trading liquidity, has weighed upon its share
price.
Since the IPO, the Group's progress has been derived from
organic growth complemented by an active acquisition strategy.
Taking into account the continuing challenges in the oil and gas
sector, the Exova Directors expect the Group to deliver modest
organic growth at constant currency in 2017. Beyond the current
financial year and in the event that the Group is successful in
completing its current pipeline of anticipated acquisitions, the
level of financial leverage within the Group may constrain its
ability to finance further material acquisitions with
borrowings.
CD&R has been a long term, supportive investor in Exova.
Following the completion of the IPO, CD&R had intended to
realise its full investment in Exova over time and return the
proceeds to its investors in line with its typical approach to
investments. CD&R has considered a number of options to realise
its investment, including the sale of its shareholding in multiple
placings in the public market over time. However, the limited
liquidity in the trading of Exova's shares has restricted the
opportunities for CD&R to undertake a sale of shares to public
investors and, given the reasons set out above, there is continued
uncertainty as to whether and when this could be achievable.
The Exova Directors believe that Exova's strategy and business
model remain capable of delivering growth and sustained
profitability going forward. However, for the reasons set out above
and given the receipt of unsolicited interest from a number of
parties, the Exova Directors decided to investigate whether a third
party would make a proposal to shareholders to acquire Exova that
would provide all Exova Shareholders with immediate and certain
value which would reflect Exova's prospects as a standalone
company.
In January 2017, the Exova Directors contacted a number of
parties who had expressed an interest in Exova and provided them
with access to limited due diligence information. Initial proposals
were received and access was provided to selected interested
parties to further due diligence information. Following media
speculation, the Exova Directors announced on 26 March 2017 that
they were in discussions with three interested parties. Although
any further third parties that had an interest in making a proposal
to acquire Exova had an opportunity to contact the Exova Directors,
no further interest was received.
Following consideration of the detailed due diligence
information by the three interested parties, the Exova Directors
received a proposal from Element which represented the most
attractive proposal. The Exova Directors considered the proposal
and the terms of the Acquisition in relation to the value of Exova
as a standalone company and believe the Acquisition recognises
Exova's prospects and growth potential. The Exova Directors have
carefully considered the terms of the Acquisition in the context of
the dynamics of the global markets in which Exova operates, in
particular the continued uncertainty in the oil and gas sector, as
well as the competitive landscape for future acquisitions. In
considering the terms of the Acquisition, the Exova Directors have
taken into account a number of factors including that:
-- the Acquisition represents an opportunity for Exova
Shareholders to realise their investment in Exova for cash at a
fair and reasonable value;
-- the Cash Value, comprising an Acquisition price of 240 pence
for each Exova Share and the proposed final dividend of 2.35 pence
per Exova Share for the year ended 31 December 2016, implies an
enterprise value multiple of approximately 16.0 times Exova's
Adjusted EBITA and 12.5 times Exova's Adjusted EBITDA for the 12
months ended 31 December 2016;
-- the Cash Value represents a premium of approximately 26.0 per
cent. to the volume weighted average Closing Price of 192 pence per
Exova Share for the 12 month period ended 24 March 2017 (being the
last Business Day prior to the start of the Offer Period);
-- the certainty of the Acquisition should be weighed against
the inherent uncertainty of the delivery of future value that
exists in the business;
-- the Acquisition delivers more value to Exova Shareholders
than any other proposals received by Exova from interested parties
following a thorough and extensive process; and
-- the Exova Directors recognise Exova's ownership structure and
the irrevocable undertaking from Exova's majority shareholder,
CD&R, representing approximately 54 per cent of the ordinary
share capital of Exova, to vote in favour of the Acquisition.
Furthermore, the Exova Directors believe Exova's employees,
customers and other stakeholders will benefit from the
opportunities provided by a combination with Element given the
global scale and diversification across sectors of the combined
business to support its future growth and development.
Following careful consideration of the above factors, the Exova
Directors intend unanimously to recommend the Acquisition to Exova
Shareholders. The Exova Directors who hold or are beneficially
entitled to Exova Shares have each irrevocably undertaken to vote
in favour of the Scheme at the Court Meeting and in favour of the
General Meeting Resolutions to be proposed at the Exova General
Meeting in respect of all their Exova Shares, being in aggregate a
total of 2,513,414 Exova Shares (representing approximately 1.00
per cent. of the ordinary share capital of Exova).
6 Irrevocable undertakings
Element Bidco has received irrevocable undertakings from each of
the Exova Directors that holds Exova Shares to vote in favour of
the Scheme at the Court Meeting and in favour of the General
Meeting Resolutions, in respect of a total of 2,513,414 Exova
Shares, representing approximately 1.00 per cent. of the ordinary
share capital of Exova in issue on 18 April 2017 (being the latest
practicable date prior to this announcement). The irrevocable
undertakings given by the Exova Directors will remain in full force
and effect if the Acquisition is effected by way of a Takeover
Offer (provided such Takeover Offer is made on terms at least as
favourable as the terms of the Scheme) and will cease to be binding
if: (i) Element Bidco announces, with the consent of the Panel,
that it does not intend to make or proceed with the Acquisition and
no new, revised or replacement scheme of arrangement or takeover
offer is announced by Element Bidco in accordance with Rule 2.7 of
the Code at the same time; (ii) the Scheme or Takeover Offer lapses
or is withdrawn (which, for the avoidance of doubt, in either case
shall not include any suspension of the timetable applicable to the
Scheme) and no new, revised or replacement scheme of arrangement or
takeover offer by Element Bidco has been announced, in accordance
with Rule 2.7 of the Code, in its place or is announced, in
accordance with Rule 2.7 of the Code, within 10 Business Days of
such lapsing or withdrawal; or (iii) any competing offer for the
entire issued and to be issued share capital of Exova (other than
that already held by Element Bidco or a subsidiary of Element Bidco
or any person acting in concert with Element Bidco) is made which
is declared wholly unconditional or, if proceeding by way of scheme
of arrangement, becomes effective.
Element Bidco has also received irrevocable undertakings to vote
in favour of the Scheme at the Court Meeting and the General
Meeting Resolutions from each of (i) CD&R, in respect of a
total of 135,045,958 Exova Shares and (ii) Anne Thorburn in respect
of 1,378,639 Exova Shares, together representing approximately
54.46 per cent. of the ordinary share capital of Exova in issue on
18 April 2017 (being the latest practicable date prior to this
announcement)
The irrevocable undertaking received from CD&R will remain
in full force and effect if the Acquisition is effected by way of a
Takeover Offer (provided such Takeover Offer is made on terms at
least as favourable as the terms of the Scheme) and will cease to
be binding if: (i) Element Bidco announces that it does not intend
to make or proceed with the Acquisition; (ii) the Scheme or
Takeover Offer lapses or is withdrawn and Element Bidco announces
that it does not intend to make or proceed with the Acquisition; or
(iii) the Scheme or Takeover Offer lapses or is withdrawn (which,
for the avoidance of doubt, shall not include any suspension of the
timetable applicable to the Scheme) and no new, revised or
replacement scheme of arrangement or takeover offer has been
announced by Element Bidco, in accordance with Rule 2.7 of the
Code, in its place or is announced by Element Bidco, in accordance
with Rule 2.7 of the Code, within 10 Business Days of such lapsing
or withdrawal. The irrevocable undertaking received from Anne
Thorburn has been provided on substantially similar terms to those
given by the Exova Directors.
In aggregate, therefore, Element Bidco has received irrevocable
undertakings in respect of a total of 138,938,011 Exova Shares,
representing approximately 55.47 per cent. of the share capital of
Exova in issue on 18 April 2017 (being the latest practicable date
prior to this announcement).
Further details of the irrevocable undertakings are set out in
Appendix III to this announcement.
Copies of the irrevocable undertakings will be on display on
Exova's and Element's websites (www.exova.com and www.element.com
respectively) from 12 noon on 20 April 2017 until the end of the
Acquisition.
7 Information on Element and Element Bidco
Element
Element is a leading global materials and product qualification
testing provider with a strong focus on the aerospace, oil and gas
and automotive end markets. Element provides solutions to complex
technical challenges facing its customers on a daily basis through
employing and developing a highly technical work force and focusing
on excellent operational delivery.
Element has a highly diverse customer base with over 25,000
customers across a global network of 61 laboratories strategically
located across the US, Europe and China. Element has a strong track
record of M&A with 13 acquisitions completed and fully
integrated within the last five years.
Element is majority owned by BEV, the latest fund of Bridgepoint
and was acquired by BEV in March 2016.
Element Bidco
Element Bidco is a wholly owned indirect subsidiary of Element,
established for the purpose of making the Acquisition.
8 Information on Bridgepoint and BEV
Bridgepoint
Bridgepoint is a leading pan-European private equity firm which
has current assets under management of over EUR12 billion and has a
30-year track record of investing in growth businesses.
Independently owned and with a team including over 100 investment
professionals, Bridgepoint has eight offices across Europe, as well
as offices in New York and Shanghai.
Business services is a core sector for Bridgepoint, having
completed over 40 investments in the last 20 years in the sector.
Bridgepoint has invested significant capital in the global testing
industry, across 5 transactions. Bridgepoint's track record in the
testing space, and across the variety of end markets it covers,
enables it to draw from a wide range of experience to complete
transactions efficiently and provide strategic support to
businesses throughout the period of ownership.
BEV
BEV is the latest Bridgepoint pan-European fund and held its
final close in 2015 with total commitments of EUR4bn primarily
raised from leading institutional investors globally. Since its
inception BEV has committed over EUR2bn to a total of 11
assets.
9 Information on Exova
Exova is a leading provider of laboratory-based testing and
related advisory services, operating 136 laboratories and offices
in 33 countries worldwide. The Group focuses on providing customers
with technically demanding, value-added testing for a broad range
of advanced materials, components, products and systems to ensure
compliance with safety, performance and quality standards imposed
by customers, accreditation bodies and regulatory authorities. As
at 18 April 2017, the Group had around 4,200 employees and served
approximately 25,000 customers.
Exova manages its business through three divisions: i)
Industries (35% of the Group's revenue in 2016), ii) Products (36%
of the Group's revenue in 2016), iii) Infrastructure, Health and
Environment (29% of the Group's revenue in 2016). The geographic
split for Group's revenue in 2016 was Europe (52%), Americas (32%)
and Rest of World (16%).
Industries
The Industries Division includes two sectors: Aerospace and Oil
& Gas and Industrials.
Aerospace
The Group's Aerospace sector provides destructive and
non-destructive testing to determine the physical and mechanical
properties of materials used in airframes and engines. The sector
also provides production-related testing of engine components and
raw materials, aircraft structural materials and components, as
well as research and development-related testing of engine and
airframe raw materials to customers in the aerospace industry,
including the key aircraft manufacturers and many of their supply
chain partners.
Oil & Gas and Industrials
The Group's Oil & Gas and Industrials sector provides
materials testing and advisory services to off-shore and on-shore
oil and gas customers, who require qualification of materials and
processes used in the construction of up-and mid-stream oil and gas
infrastructure, such as pipelines, rigs and subsea systems, and
testing of downstream refinery components. In addition, Exova
provides a range of environmental testing and analysis services to
oil and gas clients related to on-shore production and drilling
waste. The sector also provides materials testing, advisory
services and some non-destructive testing to a range of industrial
segments, including the utilities, nuclear and rail sectors and
steel forgers.
Products
The Products Division includes three sectors: Fire, Building
Products & Certification; Transportation and Calibration.
Fire, Building Products & Certification
The Group's Fire, Building Products and Certification sector
provides laboratory-based testing of large and small scale
specimens of materials and products to establish their resistance
to fire or reaction to fire. The sector also offers the mechanical,
physical and acoustic testing of building products for durability
and security, as well as fire engineering and fire consulting.
Certification services assess fitness for purpose or compliance
with standards and span management systems, chain of custody,
personnel and products and structures for the built
environment.
Transportation
The Group's Transportation sector provides routine and
specialised materials testing and product qualification testing for
automotive OEMs and suppliers. Services include vehicle refinement;
component / system testing; instrumentation & data acquisition;
vehicle structure testing; and road services simulation, with
particular expertise in full vehicle testing. The sector also
provides engine quality control testing via embedded operations at
or near client sites.
Calibration
The Group's calibration sector provides accredited calibration
and metrology services to a wide range of customers operating in
industries such as energy, life sciences, telecoms, aerospace and
defence. Services cover most instrument types and extend to
life-cycle services for these devices including procurement
support, on-site services, repairs, technical support, disposal,
requirement analysis, sourcing, and instrument administration.
Infrastructure, Health and Environment
The Infrastructure, Health and Environment Division includes
three sectors: Infrastructure, Health and Environment.
Infrastructure
The Group's Infratructure sector provides construction materials
testing, safety performance and consultancy services, covering
building materials, structures, sub-assemblies and components
through a combination of permanent and purpose built temporary
laboratories at client sites. A multidisciplinary laboratory system
delivers physical and mechanical testing in parallel with
environmental chemistry, microbiology, environmental field services
and high-end metallurgical testing.
Health
The Group's health sciences sector delivers pharmaceutical
testing services which include analytical development and
validation, preformulation development, raw materials testing and
regulated substances control and physical characterisation and
stability studies. Exova's food testing capabilities include
microbiology testing, nutritional composition and preservatives
analysis.
Environment
The Group provides a wide range of environmental testing
services, which include stack emissions testing; contaminated land
testing and forensic analysis (including oil, gas, soil, water and
waste); asbestos testing and air surveying; and occupational
hygiene assessments and monitoring.
The expertise of the Group across each division is underpinned
by its core technical disciplines, which comprise calibration;
chemistry & microbiology; construction engineering and
technology; corrosion & protection; fire, building products,
and certification; metal technology; polymers & composites; and
structures & systems.
In its annual results for the year ended 31 December 2016, Exova
announced revenue of GBP328.6m, Adjusted EBITA of GBP50.3m,
operating profit of GBP43.5m and a profit before tax of
GBP36.6m.
10 Exova current trading
As announced on 28 February 2017, the Exova board expects the
Group to deliver modest organic revenue growth at constant currency
in 2017. This will be driven by Exova's diversified exposure and
good growth in most sectors, moderated by continuing pressure in
oil & gas, and a lower point in the project cycle of Exova's
engines testing business. Organic growth is expected to be weighted
towards the second-half, partly as a result of more favourable
like-for-like comparisons. Exova's acquisitions programme should
continue to contribute to overall revenue growth. Exova expects
that recent actions it has taken to reduce cost will offset general
pressure on group margins in the current financial year.
Exova's medium-term revenue expectation remains mid-single digit
organic growth, and continued expansion through acquisitions.
Appendix IV of this announcement contains a confirmation of the
statements in this paragraph 10 by the directors of Exova in the
terms required by Rule 28.1(c)(i) of the Code.
11 Management and employees
Element considers the principal rationale for Acquisition to be
strategic in nature, particularly in relation to achieving scale
and driving further geographic and sector diversification. From an
employment perspective, as a global testing platform there is scope
to become the 'employer of choice' for technical experts in the
sector. Following the Acquisition, Element intends to remain fully
committed to the development of operational and technical talent of
the Combined Group.
Element has confirmed that, following completion of the
Acquisition, the existing employment rights of, and pension
obligations owed to, all Exova employees will be fully
safeguarded.
Element has confirmed that all bonus-eligible employees will
remain eligible to receive annual cash bonuses for the 2017
financial year in accordance with current contractual entitlements,
policies or practices or substantially equivalent arrangements
(including substantially similar performance metrics). In addition,
should the employment of a member of Exova's executive committee be
terminated on the grounds of redundancy (including resignation as a
result of a place of work relocation of more than 50 miles),
Element will procure that such employee shall be paid a cash bonus
on termination equal to 100% of the personal objectives element of
the total bonus opportunity and a pro-rated percentage of the
financial/strategic objectives element, based on performance to the
end of the month immediately preceding the Effective Date (pro
rated for such employee's period of employment during the 2017
financial year). Element intends to enter into discussions with
senior management of Exova in due course regarding their continuing
involvement in the Combined Group. Element has agreed that if the
employment of a member of Exova's executive committee is terminated
on the grounds of redundancy (including where such Exova employee
resigns in response to their place of work being relocated by more
than 50 miles) within 12 months of the Effective Date, it will
(subject to the relevant Exova employee agreeing to provide
handover assistance) not require the Exova employee to serve their
contractual notice period and shall arrange for the employee to
receive a payment of lieu of notice in a single lump sum on the
date of termination of employment. There are no other agreements or
arrangements in place between Element and the senior management of
Exova and, in particular, no discussions have taken place in
relation to the terms of any management incentivisation
arrangements. The non-executive directors of Exova have confirmed
that they intend to resign upon completion of the Acquisition.
12 Exova Share Schemes
The Acquisition will affect participants in the Exova Share
Schemes. In summary, Element Bidco and Exova have agreed that, in
relation to the options and awards to acquire Exova Shares granted
under the Exova Share Schemes, Element Bidco, in agreement with
Exova, will make appropriate proposals to the holders of such
options and awards in accordance with Rule 15 of the Code, and each
grant of such options and awards shall be treated in accordance
with the rules applicable to it. Further details of these
arrangements will be communicated to participants in due
course.
13 Financing of the Acquisition
The cash consideration payable in connection with the
Acquisition is being financed by a combination of: (a) equity and
shareholder debt which is fully underwritten by BEV; and (b) debt
financing arranged and fully underwritten by HSBC, HSBC Securities
(USA) Inc., Bank of America, N.A., Bank of America Merrill Lynch
International Limited, ING Bank N.V. and Barclays Bank plc.
Equity Financing Arrangements
Pursuant to a subscription agreement entered into between (among
others) Element, Element Bidco and BEV dated 18 April 2017 (the
"Subscription Agreement"), BEV has entered into commitments to
subscribe for securities in Element and its indirect wholly owned
subsidiary Element Midco conditional upon the Acquisition
completing. Each of Element, Element Midco and certain of their
subsidiaries have given corresponding commitments to ensure that
the cash proceeds of such commitments are provided to Element
Bidco.
Pursuant to the terms of the Subscription Agreement Element
Bidco has also undertaken (amongst other things) that: (a) it shall
not waive and/or amend any term or condition relating to the
Acquisition or treat any condition as satisfied; and (b) in the
event that the Acquisition is implemented by way of Takeover Offer,
it shall not reduce the acceptance threshold below 90 per cent., in
each case except to the extent: (i) that BEV consents or directs;
or (ii) such action is required by the Code, the Panel, the Court
and/or any applicable law or regulation. Element Bidco has also
agreed in the Subscription Agreement not to increase or decrease
the amount, or make any amendment to the form of, the consideration
offered for the Exova Shares and not to implement the Acquisition
by way of Takeover Offer except to the extent that BEV consents or
directs.
Debt Financing Arrangements
The debt financing for the Acquisition is to be provided under a
new first lien credit agreement and a new second lien credit
agreement (together the "Credit Agreements") to be entered into by,
amongst others, Element Midco.
Under the terms of the Credit Agreements, Element Midco has
agreed that it shall procure that, save as required by the Panel,
the Court or any other applicable law, regulation or regulatory
body or with the consent of the respective Administrative Agent (as
defined in each of the Credit Agreements) Element Bidco will not
amend, vary, waive or otherwise modify the terms and conditions of
the Acquisition to the extent such amendment, variance, waiver or
modification would be materially prejudicial to the interests of
the lenders under the Credit Agreements, other than where such
amendment would result in the price payable pursuant to the
Acquisition increasing or decreasing by certain amounts specified
therein.
Cash Confirmation
BofA Merrill Lynch and HSBC, joint financial advisers to
Bridgepoint, Element and Element Bidco, are satisfied that
sufficient cash resources are available to Element Bidco to enable
it to satisfy in full the cash consideration payable to Exova
Shareholders in connection with the Acquisition.
14 Offer-related Arrangements
Confidentiality Agreement
Exova and BEV (acting by its manager Bridgepoint) entered into a
confidentiality agreement on 13 February 2017 (the "Confidentiality
Agreement"), pursuant to which, amongst other things, BEV has
undertaken, (i) to keep confidential information relating to the
Acquisition and Exova; (ii) use such information only for the
purposes of evaluating, negotiating, advising upon or implementing
the Acquisition; and (iii) not to disclose such information unless
permitted by the terms of the Confidentiality Agreement. The
confidentiality obligations will remain in force for a period of 24
months from the date of the Confidentiality Agreement.
The Confidentiality Agreement also contains undertakings from
BEV that for a period of 12 months, BEV or any of its group
undertakings shall not, without the prior written consent of Exova,
acquire or offer to acquire any interest in share or other
securities of Exova (which undertaking ceases as at the date of
this announcement) and that, for a period of 12 months, BEV shall
not, without Exova's prior written consent, solicit certain
employees, officers, suppliers or customers of Exova, subject to
customary carve-outs.
Cooperation Agreement
Exova and Element Bidco entered into a cooperation agreement on
19 April 2017 with respect to the Acquisition (the "Cooperation
Agreement"). Under the terms of the Cooperation Agreement, Exova
and Element Bidco have agreed, among other things, that (in
summary):
-- Exova and Element Bidco will cooperate with each other, and
provide certain information to each other, in order to assist in
obtaining clearance from competition and other regulatory bodies in
order to satisfy the Conditions relating to such clearances;
-- Element Bidco will provide Exova with certain information and
assistance in preparing the Scheme Document and implementing the
Acquisition;
-- Element and Exova will agree to the implementation of certain
matters relating to the treatment of options and awards under the
Exova Shares Schemes and certain other employee related
arrangements;
-- Exova and Element Bidco intend to implement the Acquisition
by way of the Scheme, subject to the ability of Element Bidco, with
the consent of the Panel, to proceed by way of a Takeover
Offer;
-- Element Bidco will pay Exova a break payment of GBP6.203
million if: (i) on or prior to the Longstop Date, Element Bidco
invokes any of the Regulatory Conditions so as to cause the
Acquisition not to proceed, lapse or be withdrawn; (ii) a Rule 12
Event takes place on or prior to the Longstop Date; or (iii) any
Regulatory Condition has not been satisfied or waived by Element
Bidco by 11.59 p.m. on the date which is 14 days prior to the
Longstop Date;
-- the Cooperation Agreement shall terminate (save in respect of
certain surviving provisions) if: (i) Exova and Element Bidco so
agree in writing; (ii) the Acquisition is, with the permission of
the Panel, withdrawn or lapses in accordance with its terms prior
to the Longstop Date (other than where (i) such lapse or withdrawal
is as a result of the exercise of Element Bidco's right to effect a
switch; or (ii) it is otherwise to be followed within ten Business
Days by an announcement under Rule 2.7 of the Code made by Element
Bidco or a person acting in concert with Bidco to implement the
Acquisition by a different offer or scheme on substantially the
same or improved terms); or (iii) the Effective Date has not
occurred on or before the Longstop Date, unless otherwise agreed in
writing between Element Bidco and Exova;
-- Element Bidco may terminate the Cooperation Agreement (save
in respect of certain surviving provisions) if: (i) the Exova
Directors withdraw or adversely modify their recommendation of the
Acquisition; (ii) Exova announces it will not convene the Court
Meeting or General Meeting or it intends not to post the Scheme
Document or (if different) the document convening the General
Meeting; or (iii) any Condition is not satisfied or waived or
becomes incapable of satisfaction or waiver by the Longstop Date
(in each case if invocation of each Condition is permitted by the
Panel);
-- Element Bidco may also terminate the Cooperation Agreement
(save in respect of certain surviving provisions) if a competing
proposal is recommended by the Exova Directors or completes,
becomes effective or is declared unconditional in all respects;
and
-- either Element Bidco or Exova may terminate the Cooperation
Agreement (save in respect of certain surviving provisions) if the
requisite resolutions are not passed at either or both of the Court
Meeting and the General Meeting.
15 Conditions
The Acquisition is subject to the Conditions and further terms
set out in Appendix I to this announcement and to be set out in the
Scheme Document including, amongst other things, the receipt of the
relevant clearances from competition authorities in the United
States, Sweden and Germany and certain notifications being made and
applicable notification and/or waiting periods having expired in
respect of ITAR and the Canadian Controlled Goods Regulations. In
particular, it should be noted that the condition relating to
United States competition clearance will not be satisfied if the
Acquisition is the subject of a Second Request from the Antitrust
Division of the United States Department of Justice or the United
States Federal Trade Commission.
The Acquisition is also conditional upon the satisfaction of the
formal conditions required to be satisfied in connection with the
Scheme as set out in paragraph 2 of Appendix I to this
announcement, which provide that the Acquisition is conditional
on:
-- the approval of the Scheme by a majority in number of the
Scheme Shareholders present and voting (and entitled to vote),
representing not less than 75 per cent. in value of the Scheme
Shares voted, either in person or by proxy, at the Court
Meeting;
-- the approval of the General Meeting Resolutions by the Exova
Shareholders by the requisite majorities at the General Meeting;
and
-- the sanction of the Scheme by the Court (in either case, with
or without modification but subject to any modification being on
terms acceptable to Exova and Element Bidco) and the registration
of the Sanction Court Order with the Registrar of Companies.
The Scheme shall lapse if:
(i) the Court Meeting and the General Meeting are not held by
the 22(nd) day after the expected date of such meetings as set out
in the Scheme Document (or such later date as may be agreed between
Element Bidco and Exova); or
(ii) the Scheme does not become effective by 18 October
2017,
provided however that the deadlines for the timing of the Court
Meeting and the General Meeting and the deadline for the Scheme to
become effective may be extended by agreement between Element Bidco
and Exova, with the consent of the Court or Panel if required.
The Acquisition will also lapse if the acquisition of Exova by
Element Bidco is referred to the chair of the CMA for the
constitution of a group under Schedule 4 to the Enterprise and
Regulatory Reform Act 2013, or the European Commission either
initiates proceedings under Article 6(1)(c) of the Council
Regulation or makes a referral to a competent authority of the
United Kingdom under Article 9(1) of the Council Regulation and
there is then a reference to the chair of the Competition and
Markets Authority for the constitution of a group under Schedule 4
to the Enterprise and Regulatory Reform Act 2013, before the date
of the Court Meeting.
16 Structure of the Acquisition
It is intended that the Acquisition will be effected by means of
a Court-sanctioned scheme of arrangement under Part 26 of the 2006
Act. The Scheme is an arrangement between Exova and the Scheme
Shareholders and is subject to the approval of the Court.
The purpose of the Scheme is to provide for Element Bidco to
become the holder of the entire issued and to be issued ordinary
share capital of Exova. Scheme Shareholders will receive cash
consideration on the basis set out in paragraph 2 of this
announcement in consideration for the transfer of such Scheme
Shares to Element Bidco.
The Scheme requires the approval of Scheme Shareholders at the
Court Meeting. The resolution to approve the Scheme at the Court
Meeting must be approved by a majority in number of the Scheme
Shareholders present and voting (and entitled to vote), either in
person or by proxy, representing not less than 75 per cent. in
value of the Scheme Shares held by such Scheme Shareholders.
Implementation of the Scheme will also require the passing of the
special resolution to approve the Scheme (requiring approval by the
requisite majority at the General Meeting).
Once the necessary approvals from Exova Shareholders have been
obtained and the other Conditions have been satisfied or (where
applicable) waived, the Scheme must be sanctioned (with or without
modification), on terms agreed by Element Bidco and Exova. The
Scheme will then become effective upon delivery of the Court
Order(s) and the Statement of Capital as approved by the Court to
the Registrar of Companies.
Upon the Scheme becoming effective:
-- it will be binding on all Scheme Shareholders, irrespective
of whether or not they attended or voted at the Court Meeting or
the General Meeting (and, if they attended, whether or not they
voted in favour); and
-- share certificates in respect of Exova Shares will cease to
be valid and entitlements to Exova Shares held within the CREST
system will be cancelled.
Further details of the Scheme, including an indicative timetable
for the Acquisition and notices of the Court Meeting and the
General Meeting, will be set out in the Scheme Document, which will
be despatched by Exova to Exova Shareholders and, for information
only, to persons with information rights and to holders of options
granted under the Exova Share Schemes, as soon as practicable and,
in any event, within 28 days of the date of this announcement.
Subject, amongst other things, to the satisfaction or waiver of the
Conditions, it is expected that the Scheme will become effective in
the third quarter of 2017.
If the Scheme does not become effective, it will lapse and the
Acquisition will not proceed (unless the Panel otherwise consents).
Element Bidco reserves the right, subject to Panel consent, to
elect to implement the Acquisition by way of a Takeover Offer on
terms more fully described in paragraph 19 below.
17 Disclosure of interests in Exova Shares
As at the close of business on 18 April 2017, being the last
practicable date prior to the publication of this announcement,
save for: (i) the disclosures in this paragraph 17; and (ii) the
irrevocable undertakings referred to in paragraph 6 above, none of
Element Bidco or any of its respective directors or any member of
the Element Group or, so far as Element Bidco is aware, any person
acting, or deemed to be acting, in concert with Element Bidco:
-- has an interest in, or right to subscribe for or has borrowed
or lent any Exova Shares or any securities convertible or
exchangeable into Exova Shares (including pursuant to any long
exposure, whether conditional or absolute, to changes in the price
of securities);
-- has the right to subscribe for or purchase the same or hold
any options (including traded options) in respect of or has any
right to acquire any Exova Shares or holds any derivatives
referenced to Exova Shares;
-- has any short position in (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 in relation to Exova Shares or derivatives referenced to
Exova Shares; or
-- has procured an irrevocable commitment or letter of intent to
vote in favour of the Acquisition in respect of Exova Shares or
derivatives referenced to Exova Shares.
Furthermore, no arrangement exists with Element Bidco or Exova
or any person acting in concert with Element Bidco or Exova in
relation to Exova Shares. For these purposes, an "arrangement"
includes any indemnity or option arrangement, any agreement or any
understanding, formal or informal, of whatever nature, relating to
Exova Shares which may be an inducement to deal or refrain from
dealing in such securities.
18 Delisting and re-registration
It is intended that dealings in Exova Shares will be suspended
at 5.00 p.m. London time on the Business Day prior to the Effective
Date. It is further intended that an application will be made to
the UK Listing Authority on the Effective Date for the cancellation
of trading in Exova Shares on the London Stock Exchange's main
market for listed securities and the UK Listing Authority will be
requested to cancel the listing of Exova Shares on the Official
List to take effect as of or shortly after the Effective Date.
On the Effective Date, share certificates in respect of Exova
Shares will cease to be valid and should be destroyed. In addition,
entitlements to Exova Shares held within the CREST system will be
cancelled.
It is also intended that, following the Effective Date and after
its shares are delisted, Exova will be re-registered as a private
limited company pursuant to the relevant provisions of the 2006
Act.
19 General
Element Bidco reserves the right, subject to Panel consent, to
elect to implement the Acquisition by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Acquisition will be
implemented on substantially the same terms as those which would
apply to the Scheme (subject to appropriate amendments) and, in
particular, the acceptance condition applicable to the Acquisition
shall be set at not more than 75 per cent. of the issued Exova
Shares, or, where any of the circumstances set out in Note 2 of
Section 8 of Appendix 7 of the Code applies, 90 per cent., of the
Exova Shares to which the Takeover Offer relates (or such lesser
percentage, being more than 50 per cent. of the Exova Shares to
which the Takeover Offer relates) as Element Bidco may decide with,
to the extent necessary, the consent of the Panel.
The Acquisition will be subject to the Conditions and other
terms set out in Appendix I to this announcement and set out in the
Scheme Document and the Forms of Proxy, when issued. The Scheme
Document will include full details of the Scheme, together with
notices of the Court Meeting and the General Meeting and the
indicative timetable of the Acquisition.
The Acquisition will be governed by English law and will be
subject to the jurisdiction of the courts of England and Wales and
subject to the applicable requirements of the Code, the Panel, the
London Stock Exchange and the FCA.
The bases and sources of certain financial information contained
in this announcement are set out in Appendix II. Certain terms used
in this announcement are defined in Appendix V.
20 Documents on display
Copies of the following documents will be made available on
Exova's and Element's websites at www.exova.com and www.element.com
respectively by no later than 12 noon (London time) on 20 April
2017 until the end of the Acquisition:
-- the irrevocable undertakings referred to in paragraph 6 above
and summarised in Appendix III to this announcement;
-- the documentation relating to the financing of the Acquisition described in paragraph 13;
-- the Confidentiality Agreement referred to in paragraph 14 above; and
-- the Cooperation Agreement referred to in paragraph 14 above.
Enquiries:
Element Materials Technology
Group Limited
Charles Noall Tel: +44 (0)
Jo Wetz 20 3540 1825
Tel: +44 (0)
20 3540 1820
Bridgepoint Advisers Limited
James Murray Tel: +44 (0)
20 7034 3555
BofA Merrill Lynch (joint financial Tel: +44 (0)
adviser to Bridgepoint, Element 20 7628 1000
and Element Bidco)
Eamon Brabazon
Justin Anstee
Geoff Iles
Adam Tinsley
HSBC (joint financial adviser Tel: +44 (0)
to Bridgepoint, Element and 20 7991 8888
Element Bidco and corporate
broker to the Acquisition)
Omar Faruqui
Andrew Owens
Simon Alexander (corporate broking)
Greg Hely Hutchinson
Finsbury (public relations adviser Tel: +44 (0)
to Bridgepoint, Element and 20 7251 3801
Element Bidco)
Jenny Davy
Charles O'Brien
Exova Group plc
Andrew Pickup, Corporate Affairs Tel: +44 (0)
Director 79 2024 3393
Goldman Sachs International Tel: +44 (0)20
(financial adviser and corporate 7774 1000
broker to Exova)
Anthony Gutman
Nick Harper
Jose Barreto
Alex Garner
Duncan Stewart (corporate broking)
Investec Bank plc (financial Tel: +44 (0)
adviser and corporate broker 20 7597 5970
to Exova)
Keith Anderson
Chris Sim
Jonathan Wynn
Powerscourt Group (public relations
adviser to Exova)
Peter Ogden Tel: +44 (0)
Andy Jones 20 7549 0997
Tel: +44 (0)
20 7549 0747
Merrill Lynch International ("BofA Merrill Lynch"), which is
authorised by the Prudential Regulation Authority and regulated by
the FCA and the Prudential Regulation Authority in the United
Kingdom, is acting for Bridgepoint, Element and Element Bidco and
no one else in connection with the Acquisition and will not be
responsible to anyone other than Bridgepoint, Element and Element
Bidco for providing the protections afforded to clients of BofA
Merrill Lynch, or for giving advice in connection with the
Acquisition or any matter referred to herein.
HSBC Bank plc ("HSBC"), which is authorised by the Prudential
Regulation Authority and regulated by the FCA and the Prudential
Regulation Authority in the United Kingdom, is acting for
Bridgepoint, Element and Element Bidco and no one else in
connection with the Acquisition and will not be responsible to
anyone other than Bridgepoint, Element and Element Bidco for
providing the protections afforded to clients of HSBC, or for
providing advice in connection with the Acquisition or any matter
described in this announcement or any transaction or arrangement
referred to herein.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the FCA and the
Prudential Regulation Authority in the United Kingdom, is acting
exclusively for Exova and no one else in connection with the
Acquisition and will not be responsible to anyone other than Exova
for providing the protections afforded to clients of Goldman Sachs
International or for providing advice in connection with the
Acquisition or in relation to matters described in this
announcement or any transaction or arrangement referred to
herein.
Investec Bank plc, which is authorised by the Prudential
Regulation Authority and regulated by the FCA and the Prudential
Regulation Authority in the United Kingdom, is acting exclusively
for Exova and no one else in connection with the Acquisition and
will not be responsible to anyone other than Exova for providing
the protections afforded to clients of Investec Bank plc or for
providing advice in connection with the Acquisition or in relation
to matters described in this announcement or any transaction or
arrangement referred to herein.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or otherwise dispose of or invitation to purchase or otherwise
acquire any securities or the solicitation of any vote or approval
in any jurisdiction, nor shall there be any sale, issue or transfer
of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law. The Acquisition
will be made solely through the Scheme Document and the
accompanying Forms of Proxy, which will together 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.
Overseas Shareholders and Notice to US investors
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any
applicable requirements. In particular, the ability of persons who
are not resident in the United Kingdom to vote their Exova Shares
with respect to the Scheme at the Court Meeting, or to appoint
another person as proxy to vote at the Court Meeting 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. This announcement has
been prepared for the purposes of complying with English law and
the Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside of
England.
The Acquisition relates to the shares of an English company and
is proposed to be effected by means of a scheme of arrangement
under the laws of England and Wales. Neither the proxy solicitation
rules nor (unless implemented by means of a Takeover Offer) the
tender offer rules under the US Securities Exchange Act of 1934, as
amended, will apply to the Acquisition. Moreover, the Acquisition
is subject to the disclosure requirements and practices applicable
in the United Kingdom and under the City Code to schemes of
arrangement, which differ from the disclosure requirements of the
US proxy solicitation rules and tender offer rules. Financial
information included in this announcement has been prepared, unless
specifically stated otherwise, in accordance with accounting
standards applicable in the UK and thus may not be comparable to
the financial information of US companies or companies whose
financial statements are prepared in accordance with generally
accepted accounting principles in the US. If Element Bidco
exercises its right to implement the Acquisition of the Exova
Shares by way of a Takeover Offer, the Takeover Offer will be made
in compliance with applicable US securities laws and
regulations.
It may be difficult for US holders of Exova Shares to enforce
their rights and claims arising out of the US federal securities
laws, since Element Bidco and Exova are located in countries other
than the United States, and some or all of their officers and
directors may be residents of countries other than the United
States. US holders of Exova Shares may not be able to sue a non-US
company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
Unless otherwise determined by Element Bidco or required by the
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 form within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, 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,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Acquisition
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Exova Shareholders who
are not resident in the United Kingdom may be affected by the laws
of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Forward Looking Statements
This announcement, oral statements made regarding the
Acquisition and other information published by Element Bidco and
Exova contains statements that are or may 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 Element Bidco and
Exova 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 Element Bidco and Exova, the expected timing and
scope of the Acquisition and other statements other than historical
facts. All statements other than statements of historical facts
included in this announcement may be forward looking statements.
Without limitation, any statements preceded or followed by or that
include the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "should", "could", "would", "may",
"anticipates", "estimates", "synergy", "cost-saving", "projects",
"goal", "strategy", "budget", "forecast" or "might" or, words or
terms of similar substance or the negative thereof, are forward
looking statements. Forward looking statements 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 Element Bidco's or Exova's operations and
potential synergies resulting from the Acquisition; and (iii) the
effects of government regulation on Element Bidco's or Exova's
business.
These forward looking statements are not guarantees of future
financial performance. Except as expressly provided in this
announcement, they have not been reviewed by the auditors of
Element Bidco or Exova or their respective financial advisers. Such
forward looking statements involve known and unknown risks and
uncertainties that could significantly affect expected results and
are based on certain key assumptions. Many factors could cause
actual results to differ materially from those projected or implied
in any forward looking statements. These factors include the
satisfaction of the Conditions, as well as additional factors, such
as: fluctuations in the capital markets; fluctuations in interest
and exchange rates; increased regulation or regulatory scrutiny;
the occurrence of unforeseen disasters or catastrophes; political
or economic instability in principal markets; adverse outcomes in
litigation; and general, local and global economic, political,
business and market conditions. Other unknown or unpredictable
factors could cause actual results to differ materially from those
in the forward-looking statements. Such forward-looking statements
should therefore be construed in the light of such factors. Neither
Element Bidco nor Exova, 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. Due to such uncertainties and risks, readers
are cautioned not to place undue reliance on such forward looking
statements. All subsequent oral or written forward looking
statements attributable to Element Bidco or Exova or any of their
respective members, directors, officers or employees or any persons
acting on their behalf are expressly qualified in their entirety by
the cautionary statement above. Element Bidco and Exova disclaim
any obligation to update or revise any forward looking or other
statements contained herein other than in accordance with their
legal and regulatory obligations.
Profit Forecast
Paragraph 10 of this announcement contains a statement which is
a profit forecast for the purposes of Rule 28 of the Code. Appendix
IV contains a confirmation by the directors of Exova in the terms
required by Rule 28.1(c)(i) of the Code in relation to that
statement.
Other than as described above, no statement in this announcement
is intended as a profit forecast or estimate for any period and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share for Exova, for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share for Exova.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the 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 paper 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 paper
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 paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the 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 paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper 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 paper offeror, 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 pm (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 paper
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.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0) 20 7638
0129.
Information Relating to Exova Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Exova Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Exova may be provided to Element Bidco during
the offer period as requested under Section 4 of Appendix 4 of the
Code to comply with Rule 2.11(c).
Publication on Website
A copy of this announcement will be available free of charge
(subject to any applicable restrictions with respect to persons
resident in Restricted Jurisdictions) on Exova's and Element's
websites (www.exova.com and www.element.com respectively) by no
later than 12 noon (London time) on 20 April 2017.
The contents of the websites referred to in this announcement
are not incorporated into and do not form part of this
announcement.
You may request a hard copy of this announcement by contacting
Jo Wetz on +44 (0)20 3540 1820. You may also request that all
future documents, announcements and information to be sent to you
in relation to the Acquisition should be in hard copy form.
APPIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION
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 Code, by no later than 18 October 2017 or such later date (if
any) as Element Bidco and Exova may, with the consent of the Panel,
agree and (if required) the Court may approve.
Scheme approval
2. The Scheme will be conditional upon:
(a) approval of the Scheme at the Court Meeting (or at any
adjournment thereof, provided that the Court Meeting may not be
adjourned beyond the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course or such
later date (if any) as Element Bidco and Exova may agree) by a
majority in number of the Scheme Shareholders present and voting,
either in person or by proxy, representing three-quarters or more
in value of the Scheme Shares held by those Scheme
Shareholders;
(b) all resolutions in connection with or required to approve
and implement the Scheme as set out in the notice of the General
Meeting (including, without limitation, the Special Resolution)
being duly passed by the requisite majority at the General Meeting
(or at any adjournment thereof, provided that the General Meeting
may not be adjourned beyond the 22nd day after the expected date of
the General Meeting to be set out in the Scheme Document in due
course or such later date (if any) as Element Bidco and Exova may
agree); and
(c) the sanction of the Scheme without modification or with
modification on terms acceptable to Element Bidco and Exova,
provided that the Scheme Court Hearing may not be adjourned beyond
the 22nd day after the expected date of the Scheme Court Hearing to
be set out in the Scheme Document in due course or such later date
(if any) as Element Bidco and Exova may agree) and the delivery of
an office copy of the Sanction Court Order to the Registrar of
Companies.
In addition, Element Bidco and Exova 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 such conditions (as amended, if
appropriate) have been satisfied or, where relevant, waived.
Regulatory clearances
United States
3. The initial waiting period applicable to the Acquisition
under the HSR Act shall have expired or been terminated within that
initial waiting period without a request for additional information
and documentary material pursuant to the HSR Act (a "Second
Request") having been received from the Antitrust Division of the
United States Department of Justice or the United States Federal
Trade Commission.
4. Insofar as the Acquisition is required to be notified to the
DDTC pursuant to section 122.4(b) of ITAR, all necessary
notifications and filings in relation thereto having been made and
all applicable waiting or notification periods in relation thereto
having expired, lapsed or been terminated or waived as appropriate
in each case in respect of the Acquisition.
Sweden
5. The occurrence of one of the following events:
(a) the Swedish Competition Authority (Konkurrensverket) not
commencing a special investigation pursuant to Chapter 4, Article
11 of the Swedish Competition Act (Konkurrenslag 2008:579), as
amended, in relation to the Acquisition;
(b) the Swedish Competition Authority having commenced a special
investigation pursuant to Chapter 4, Article 11 of the Swedish
Competition Act not requesting Patent and Market Court (Patent- och
marknadsdomstolen) to prohibit or suspend the closing of the
Acquisition pursuant to Chapter 4, Articles 13 and 17,
respectively, of the Swedish Competition Act; or
(c) The Patent and Market Court permitting the Acquisition to
proceed unconditionally or upon conditions or obligations pursuant
to Chapter 4, Article 2 of the Swedish Competition Act that are
reasonably satisfactory to Element Bidco.
Germany
6. The prohibition on closing contained in s.41(1) of the German
Act against Restraints of Competition (Gesetz gegen
Wettbewerbsbeschraenkungen) ("GWB") being lifted as a result of the
German Federal Cartel Office (Bundeskartellamt):
(a) after receipt of a complete notification (s.40(1) GWB),
approving the Acquisition by informing Element Bidco in writing
that the preconditions for prohibition in s.36(1) GWB are not met
and that it therefore does not intend to initiate an in--depth
investigation of the Acquisition (Hauptpruefverfahren) under
s.40(2) GWB;
(b) failing to prohibit the Acquisition within the four month
period provided for in s.40(2) sentence 2 GWB following the
initiation of an in--depth investigation (Hauptpruefverfahren);
(c) failing to prohibit the Acquisition within any extended
period to which Element Bidco has agreed pursuant to s.40(2)
sentence 3 no 1 GWB following the initiation of an in--depth
investigation (Hauptpruefverfahren); or
(d) approving the Acquisition pursuant to s.40(2) GWB following an in--depth investigation (Hauptpruefverfahren) by informing Element Bidco in writing that the preconditions for prohibition in s.36(1) GWB are not met without attaching to its decision any conditions which are not reasonably satisfactory to Element Bidco.
Canada
7. Insofar as the Acquisition is required to be notified to
Public Works and Government Services Canada pursuant to subsection
9(2) of the Canadian Controlled Goods Regulations, all necessary
notifications and filings in relation thereto having been made and
all applicable waiting or notification periods in relation thereto
having expired, lapsed or been terminated or waived as appropriate
in each case in respect of the Acquisition.
General Third Party clearances
8. All notifications to and filings with, Third Parties which
are necessary in order to allow the Acquisition to close having
been made, all appropriate waiting and other time periods
(including any extensions of such waiting and other time periods)
under any applicable legislation or regulation of any relevant
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory or regulatory obligations in any
relevant jurisdiction having been complied with in each case in
connection with the Scheme or Acquisition or the acquisition or
proposed acquisition of any shares or other securities in, or
control or management of, Exova or any other member of the Wider
Exova Group by any member of the Wider Element Group or the
carrying on by any member of the Wider Exova Group of its
business.
9. No Third Party whose consent or non-intervention is required
in order to allow the Acquisition to close having intervened (as
defined below) and there not continuing to be outstanding any
statute, regulation or order of any Third Party in each case which
is or is likely to be material in the context of the Wider Element
Group or Wider Exova Group or the Acquisition which would or might
reasonably be expected to:
(a) make the Scheme or the Acquisition or, in each case, its
implementation or the acquisition or proposed acquisition by
Element Bidco or any member of the Wider Element Group of any
shares or other securities in, or control or management of, Exova
or any member of the Wider Exova Group void, illegal or
unenforceable in any jurisdiction, or otherwise directly or
indirectly materially restrain, prevent, prohibit, restrict or
delay the same or impose additional material conditions or
obligations with respect to the Scheme or the Acquisition or such
acquisition, or otherwise materially impede, challenge or interfere
with the Scheme or Acquisition or such acquisition, or require
material amendment to the terms of the Scheme or Acquisition or the
acquisition or proposed acquisition of any Exova Shares or the
acquisition of control or management of Exova or the Wider Exova
Group by Element Bidco or any member of the Element Group;
(b) materially limit or delay, or impose any material
limitations on, the ability of any member of the Wider Element
Group or any member of the Wider Exova Group to acquire or to hold
or to exercise effectively, directly or indirectly, all or any
rights of ownership in respect of shares or other securities in, or
to exercise voting or management control over, any member of the
Wider Exova Group or any member of the Wider Element Group;
(c) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for any proposed divestiture
by any member of the Wider Element Group of any shares or other
securities in Exova;
(d) require, prevent or materially delay the divestiture or
alter the terms envisaged for any proposed divestiture by any
member of the Wider Element Group or by any member of the Wider
Exova Group of all or any portion of their respective businesses,
assets or properties or materially limit the ability of any of them
to conduct any of their respective businesses or to own or control
any of their respective assets or properties or any part
thereof;
(e) except pursuant to sections 974 to 991 of the 2006 Act,
require any member of the Wider Element Group or of the Wider Exova
Group to acquire, or to offer to acquire, any shares or other
securities (or the equivalent) in any member, or repay any
indebtedness of any member of either group owned by or owed to any
third party;
(f) materially limit the ability of any member of the Wider
Element Group or of the Wider Exova Group to conduct or integrate
or co-ordinate its business, or any part of it, with the businesses
or any part of the businesses of any other member of the Wider
Element Group or of the Wider Exova Group;
(g) result in any member of the Wider Exova Group or the Wider
Element Group ceasing to be able to carry on business under any
name under which it presently does so; or
(h) otherwise materially adversely affect any or all of the
business, assets, profits, financial or trading position or
prospects of any member of the Wider Exova Group or of the Wider
Element Group,
and all applicable waiting and other time periods during which
any Third Party whose consent is required in order to allow the
Acquisition to close could intervene under the laws of any relevant
jurisdiction having expired, lapsed or been terminated.
10. All material Authorisations which are necessary in order to
allow the Acquisition to close in any relevant jurisdiction for or
in respect of the Scheme or Acquisition or the acquisition or
proposed acquisition of any shares or other securities in, or
control or management of, Exova or any other member of the Wider
Exova Group by any member of the Wider Element Group or the
carrying on by any member of the Wider Exova Group of its business
having been obtained, in terms and in a form reasonably
satisfactory to Element Bidco, from all appropriate Third Parties
or from any persons or bodies with whom any member of the Wider
Exova Group has entered into contractual arrangements in each case
where the absence of such Authorisation necessary to allow the
Acquisition to close would have a material adverse effect on the
Exova Group taken as a whole and all such Authorisations remaining
in full force and effect and there being no notice or intimation of
any intention to revoke, suspend, restrict, modify or not to renew
any of the same.
Certain matters arising as a result of any arrangement,
agreement etc.
11. Except as Fairly Disclosed, there being no provision of any
arrangement, agreement, licence, permit, franchise or other
instrument to which any member of the Wider Exova Group is a party,
or by or to which any such member or any of its assets is or are or
may be bound, entitled or subject or any circumstance, which, in
each case as a consequence of the Scheme or Acquisition or the
acquisition or proposed acquisition of any shares or other
securities in, or control of, Exova or any other member of the
Wider Exova Group by any member of the Wider Element Group or
otherwise, could or might reasonably be expected to result in, (in
any case to an extent which is or would be material in the context
of the Wider Exova Group taken as a whole):
(a) any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or any grant available to,
any member of the Wider Exova Group being or becoming repayable or
capable of being declared repayable immediately or prior to its
stated maturity date or repayment date or the ability of any member
of the Wider Exova Group to borrow monies or incur any indebtedness
being withdrawn or inhibited or becoming capable of being withdrawn
or inhibited;
(b) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property, assets or interests of any member of the Wider Exova
Group or any such mortgage, charge or other security interest
(wherever created, arising or having arisen) becoming
enforceable;
(c) any such arrangement, agreement, licence, permit, franchise
or instrument, or the rights, liabilities, obligations, interests
or business of any member of the Wider Exova Group thereunder,
being, or becoming capable of being, terminated or adversely
modified or affected or any adverse action being taken or any
obligation or liability arising thereunder;
(d) any asset or interest of any member of the Wider Exova Group
being or falling to be disposed of or charged or ceasing to be
available to any member of the Wider Exova Group 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 Exova Group otherwise than in the ordinary
course of business;
(e) any member of the Wider Exova Group ceasing to be able to
carry on business under any name under which it presently does
so;
(f) the creation of liabilities (actual or contingent) by any
member of the Wider Exova Group other than in the ordinary course
of business;
(g) the rights, liabilities, obligations or interests of any
member of the Wider Exova Group under any such arrangement,
agreement, licence, permit, franchise or other instrument or the
interests or business of any such member in or with any other
person, firm, company or body (or any arrangement or arrangements
relating to any such interests or business) being terminated or
adversely modified or affected; or
(h) the financial or trading position or the value of any member
of the Wider Exova Group being prejudiced or adversely
affected,
and no event having occurred which, under any provision of any
such arrangement, agreement, licence, permit or other instrument,
would be reasonably likely to result in any of the events or
circumstances which are referred to in paragraphs (a) to (h) of
this Condition 11 in any case to an extent which is or would be
material in the context of the Exova Group taken as a whole.
12. Since 31 December 2016 and except as Fairly Disclosed, no
member of the Wider Exova Group having:
(a) issued or agreed to issue, or authorised the issue of,
additional shares of any class, or securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for
or acquire, any such shares or convertible securities or
transferred or sold any shares out of treasury, other than as
between Exova and wholly-owned subsidiaries of Exova other than any
shares issued or shares transferred from treasury upon the exercise
of any options granted, or vesting of any awards, under any of the
Exova Share Schemes;
(b) purchased or redeemed or repaid any of its own shares or
other securities or reduced or made any other change to any part of
its share capital to an extent which (other than in the case of
Exova) is material in the context of the Exova Group taken as a
whole;
(c) recommended, declared, paid or made any dividend or other
distribution whether payable in cash or otherwise or made any bonus
issue (other than to Exova or a wholly-owned subsidiary of
Exova);
(d) except as between Exova and its wholly-owned subsidiaries or
between such wholly-owned subsidiaries, made or authorised any
change in its loan capital;
(e) (other than any acquisition or disposal in the ordinary
course of business or a transaction between Exova and a
wholly-owned subsidiary of Exova or between such wholly-owned
subsidiaries), merged with, demerged or acquired any body
corporate, partnership or business or acquired or disposed of or
transferred, mortgaged, charged or created any security interest
over any assets or any right, title or interest in any assets
(including shares in any undertaking and trade investments) or
authorised the same (in each case to an extent which is material in
the context of the Exova Group taken as a whole);
(f) issued or authorised the issue of, or made any change in or
to, any debentures or (except in the ordinary course of business or
except as between Exova and its wholly-owned subsidiaries or
between such wholly-owned subsidiaries) incurred or increased any
indebtedness or liability (actual or contingent) which in any case
is material in the context of the Exova Group taken as a whole;
(g) entered into, varied, or authorised any agreement,
transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which:
(i) is of a long term, onerous or unusual nature or magnitude or
which is reasonably likely to involve an obligation of such nature
or magnitude; or
(ii) is reasonably likely to restrict the business of any member
of the Wider Exova Group; or
(iii) is other than in the ordinary course of business,
and which in any case is material in the context of the Exova
Group taken as a whole;
(h) entered into, implemented, effected or authorised any
merger, demerger, reconstruction, amalgamation, scheme, commitment
or other transaction or arrangement in respect of itself or another
member of the Wider Exova Group otherwise than in the ordinary
course of business which in any case is material in the context of
the Exova Group taken as a whole;
(i) entered into or varied the terms of, any contract, agreement
or arrangement with any of the directors or senior executives of
any member of the Wider Exova Group which is material in the
context of the Wider Exova Group taken as a whole, save for salary
increases, bonuses or variation of terms in the ordinary
course;
(j) taken any corporate action or had any legal proceedings
instituted or threatened against it or petition presented or order
made for its winding-up (voluntarily or otherwise), striking off,
dissolution or reorganisation or for the appointment of a receiver,
administrator (including the filing of an administration
application, notice of intention to appoint an administrator or
notice of appointment of an administrator), administrative
receiver, trustee or similar officer of all or any material part of
its assets and revenues or any analogous proceedings in any
jurisdiction or appointed any analogous person in any jurisdiction
which in any case is material in the context of the Exova Group
taken as a whole;
(k) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or proposed or entered
into any composition or voluntary arrangement with its creditors
(or any class of them) or the filing at court of documentation in
order to obtain a moratorium prior to a voluntary arrangement or,
by reason of actual or anticipated financial difficulties,
commenced negotiations with one or more of its creditors with a
view to rescheduling any of its indebtedness, or ceased or
threatened to cease carrying on all or a substantial part of its
business in any case with a material adverse effect on the Exova
Group taken as a whole;
(l) waived or compromised any claim, otherwise than in the
ordinary course of business, which is material in the context of
the Exova Group taken as a whole;
(m) made any alteration to its memorandum or articles of
association which is material in the context of the
Acquisition;
(n) made or agreed or consented to:
(i) any material change:
(A) to the terms of the trust deeds constituting the pension
scheme(s) established for its directors, employees or their
dependants; or
(B) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder; or
(C) the basis on which qualification for, or accrual or
entitlement to such benefits or pensions are calculated or
determined; or
(D) the basis upon which the liabilities (including pensions) or
such pension schemes are funded, valued or made,
in each case, which has an effect that is material in the
context of the Exova Group taken as a whole, or
(ii) any change to the trustees including the appointment of a trust corporation;
(o) 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 person employed
by the Wider Exova Group in a manner which is material in the
context of the Exova Group taken as a whole; or
(p) entered into any agreement, commitment or arrangement or
passed any resolution or made any offer (which remains open for
acceptance) or proposed or announced any intention with respect to
any of the transactions, matters or events referred to in this
Condition 12.
No adverse change, litigation or regulatory enquiry
13. Since 31 December 2016 and except as Fairly Disclosed:
(a) there having been no adverse change or deterioration in the
business, assets, financial or trading positions or profit or
prospects of any member of the Wider Exova Group which in any case
is material in the context of the Exova Group taken as a whole;
(b) no contingent or other liability of any member of the Wider
Exova Group having arisen or become apparent or increased which in
any case is material in the context of the Exova Group taken as a
whole;
(c) no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider Exova Group is
or may become a party (whether as plaintiff, defendant or
otherwise) having been threatened, announced, implemented or
instituted by or against or remaining outstanding against or in
respect of any member of the Wider Exova Group which is material in
the context of the Exova Group taken as a whole; and
(d) (other than as a result of the Acquisition) no enquiry or
investigation by, or complaint or reference to, any Third Party
having been threatened, announced, implemented, instituted by or
against or remaining outstanding against or in respect of any
member of the Wider Exova Group which in any case is material in
the context of the Exova Group taken as a whole;
(e) other than with the consent of Element Bidco, no action
having been taken or proposed by any member of the Wider Exova
Group, or having been approved by Exova Shareholders or consented
to by the Panel, which falls or would fall within or under Rule
21.1 of the Code or which otherwise is or would be materially
inconsistent with the implementation by Element Bidco of the
Acquisition on the basis contemplated as at the date of this
announcement; and
(f) no member of the Wider Exova Group having conducted its
business in breach of any applicable laws and regulations which in
any case is material in the context of the Exova Group taken as a
whole.
No discovery of certain matters
14. Element Bidco not having discovered (other than as a result
of it having been Fairly Disclosed):
(a) that any financial or business or other information
concerning the Wider Exova Group disclosed at any time by or on
behalf of any member of the Wider Exova Group, whether publicly, to
any member of the Wider Element Group or to any of their advisers
or otherwise, is misleading or contains any misrepresentation of
fact or omits to state a fact necessary to make any information
contained therein not misleading and which was not subsequently
corrected before the date of this announcement by disclosure either
publicly or otherwise to Element Bidco or its professional advisers
to an extent which in any case is material in the context of the
Exova Group taken as a whole;
(b) that any member of the Wider Exova Group is subject to any
liability (actual or contingent) which is not disclosed in Exova's
annual report and accounts for the financial year ended 31 December
2016 which has not been Fairly Disclosed and which in any case is
material in the context of the Exova Group taken as a whole; or
(c) any information which has not been Fairly Disclosed and
which affects the import of any information disclosed at any time
by or on behalf of any member of the Wider Exova Group to an extent
which is material in the context of the Exova Group taken as a
whole;
(d) that any past or present member of the Wider Exova Group has
not complied with any applicable legislation or regulations of any
jurisdiction with regard to the use, treatment, handling, storage,
transport, release, disposal, discharge, spillage, leak or emission
of any waste or hazardous substance or any substance likely to
impair the environment or harm human health, or otherwise relating
to environmental matters or the health and safety of any person, or
that there has otherwise been any such use, treatment, handling,
storage, transport, release, disposal, discharge, spillage, leak or
emission (whether or not this constituted a non-compliance by any
person with any legislation or regulations and wherever the same
may have taken place) which, in any case, would be likely to give
rise to any liability (whether actual or contingent) or cost on the
part of any member of the Wider Exova Group which in any case is
material in the context of the Exova Group taken as a whole;
(e) that there is, or is likely to be, any liability, whether
actual or contingent, to make good, repair, reinstate or clean up
any property now or previously owned, occupied or made use of by
any past or present member of the Wider Exova Group or any other
property or any controlled waters under any environmental
legislation, regulation, notice, circular, order or other lawful
requirement of any relevant authority or third party or otherwise
which in any case is material in the context of the Exova Group
taken as a whole; or
(f) that circumstances exist whereby a person or class of
persons would be likely to have a claim in respect of any product
or process of manufacture or materials used therein now or
previously manufactured, sold or carried out by any past or present
member of the Wider Exova Group which is or would be material in
the context of the Exova Group taken as a whole.
Anti-corruption, sanctions and criminal property
15. Element Bidco not having discovered (other than as a result
of it having been Fairly Disclosed) that:
(a) (i) any past or present member, director, officer or
employee of the Wider Exova Group is or has at any time engaged in
any activity, practice or conduct which would constitute an offence
under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977 or any other anti--corruption legislation applicable to the
Wider Exova Group or (ii) any person that performs or has performed
services for or on behalf of the Wider Exova Group is or has at any
time engaged in any activity, practice or conduct in connection
with the performance of such services which would constitute an
offence under the Bribery Act 2010, the US Foreign Corrupt
Practices Act of 1977 or any other applicable anti-corruption
legislation;
(b) any asset of any member of the Wider Exova Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that
definition);
(c) any past or present member, director, officer or employee of
the Exova Group, or any other person for whom any such person may
be liable or responsible, has engaged in any business with, made
any investments in, made any funds or assets available to or
received any funds or assets from: (i) any government, entity or
individual in respect of which US or European Union persons, or
persons operating in those territories, are prohibited from
engaging in activities or doing business, or from receiving or
making available funds or economic resources, by US or European
Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control,
or HM Treasury & Customs; or (ii) any government, entity or
individual targeted by any of the economic sanctions of the United
Nations, the United States, the European Union or any of its member
states;
(d) a member of the Exova Group has engaged in any transaction
which would cause Element Bidco to be in breach of any law or
regulation upon its acquisition of Exova, including the economic
sanctions of 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,
the United States, the European Union or any of its member states;
or
(e) any member of the Wider Exova Group is ineligible to be
awarded any contract or business under section 23 of the Public
Contracts Regulations 2005 or any analogous legislation in any
material jurisdiction in which the Wider Exova Group carries on
business.
For the purpose of these Conditions:
(i) "Third Party" means any central bank, government, government
department or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body,
authority (including any national or supranational anti-trust or
merger control authority), court, trade agency, association,
institution or professional or environmental body or any other
person or body whatsoever in any relevant jurisdiction, including,
for the avoidance of doubt, the Panel;
(ii) a Third Party shall be regarded as having "intervened" if
it has decided to take, institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference or
made, proposed or enacted any statute, regulation, decision or
order or taken any measures or other steps or required any action
to be taken or information to be provided or otherwise having done
anything and "intervene" shall be construed accordingly; and
(iii) "Authorisations" means authorisations, orders, grants,
recognitions, determinations, certificates, confirmations,
consents, licences, clearances, provisions and approvals, in each
case, of a Third Party.
B. Waiver and invocation of the Conditions
The Scheme will not become effective unless the Conditions have
been fulfilled or (if capable of waiver) waived or, where
appropriate, have been determined by Element Bidco to be or remain
satisfied by no later than 18 October 2017 or such later date (if
any) as Element Bidco and Exova may, with the consent of the Panel,
agree and (if required) the Court may approve.
Subject to the requirements of the Panel, Element Bidco reserves
the right in its sole discretion to waive, in whole or in part, all
or any of Conditions in Part A above, except for Condition 2
(Scheme approval), which cannot be waived.
Element Bidco 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 Conditions in Part A above by a date earlier than
the latest date specified above for the fulfilment of that
condition, notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are, at
such earlier date, no circumstances indicating that any Condition
may not be capable of fulfilment.
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
C. Implementation by way of Takeover Offer
Element Bidco reserves the right to elect to implement the
Acquisition by way of a Takeover Offer, subject to the Panel's
consent and subject to the terms of the Co-operation Agreement. In
such event, such Takeover 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
(without limitation) an acceptance condition set at not more than
75 per cent. of the issued Exova Shares, or, where any of the
circumstances set out in Note 2 of Section 8 of Appendix 7 of the
Code applies, 90 per cent. of the Exova Shares to which the
Takeover Offer relates (or such other percentage, being more than
50 per cent. of the Exova Shares to which the Takeover Offer
relates) as Element Bidco may decide (subject to the Panel's
consent).
D. Certain further terms of the Acquisition
Under Rule 13.5(a) of the Code, Element Bidco may not invoke a
Condition to the Acquisition so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn unless the circumstances which
give rise to the right to invoke the Condition are of material
significance to Element Bidco in the context of the Acquisition.
Conditions 2 and, if applicable, any acceptance condition if the
Acquisition is implemented by means of a Takeover Offer, are not
subject to this provision of the Code.
If the Panel requires Element Bidco to make an offer or offers
for any Exova Shares under the provisions of Rule 9 of the Code,
Element Bidco may make such alterations to the Conditions as are
necessary to comply with the provisions of that Rule.
The Acquisition will lapse if the acquisition of Exova by
Element Bidco is referred to the chair of the CMA for the
constitution of a group under Schedule 4 to the Enterprise and
Regulatory Reform Act 2013, or the European Commission either
initiates proceedings under Article 6(1)(c) of the Council
Regulation or makes a referral to a competent authority of the
United Kingdom under Article 9(1) of the Council Regulation and
there is then a reference to the chair of the CMA for the
constitution of a group under Schedule 4 to the Enterprise and
Regulatory Reform Act 2013, before the date of the Court
Meeting.
Exova Shares will be acquired by Element Bidco fully paid and
free from all liens, equitable interests, charges, encumbrances,
rights of pre-emption and other third party rights of any nature
whatsoever and together with all rights attaching to them as at the
date of this announcement or subsequently attaching or accruing to
them, including the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made, paid or
payable, or any other return of capital made, on or after the date
of this announcement, other than the final dividend of 2.35 pence
(net) per Exova Share due to be paid on 9 June 2017 to Exova
Shareholders on Exova's register of members on 26 May 2017 and
conditional on approval by Exova Shareholders at a general meeting
of Exova.
If, on or after the date of this announcement, any dividend
and/or other distribution and/or other return of capital (other
than the final dividend of 2.35 pence per Exova Share) is declared,
made or paid or becomes payable in respect of the Exova Shares,
Element Bidco reserves the right (without prejudice to any right of
Element Bidco to invoke Condition 12(c) in Part A of this Appendix
I), to reduce the consideration payable under the terms of the
Acquisition for the Exova Shares by an amount up to the amount of
such dividend and/or distribution and/or return of capital, in
which case any reference in this announcement or in the Scheme
Document to the consideration payable under the terms of the
Acquisition will be deemed to be a reference to the consideration
as so reduced. To the extent that any such dividend and/or
distribution and/or other return of capital is declared, made or
paid or is payable and it is: (i) transferred pursuant to the
Acquisition on a basis which entitles Element Bidco to receive the
dividend or distribution and to retain it; or (ii) cancelled, the
consideration payable under the terms of the Acquisition will not
be subject to change in accordance with this paragraph. Any
exercise by Element Bidco 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 Acquisition.
The Acquisition will be subject, inter alia, to the Conditions
and certain further terms which are set out in this Appendix I and
those terms which will be set out in the Scheme Document and such
further terms as may be required to comply with the Listing Rules
and the provisions of the Code.
The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws of the relevant
jurisdiction. Any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about and observe any applicable requirements. Further information
in relation to Overseas Shareholders will be contained in the
Scheme Document.
This announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and any proxies will be
governed by English law and be subject to the jurisdiction of the
courts of England and Wales. The Scheme will be subject to the
applicable requirements of the Code, the Panel, the London Stock
Exchange and the FCA.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement, unless otherwise stated, or the context
otherwise requires, the following bases and sources have been
used:
1. Financial information relating to Exova is extracted (without
adjustment) from the audited consolidated financial statements for
the Exova Group for the financial year ended 31 December 2016.
2. The value of the Acquisition is calculated on the basis of
the fully diluted number of Exova Shares (at the Cash Value) in
issue referred to in paragraph 4.
3. As at the Close of Business on 18 April 2017, being the last
practicable date before the date of this announcement, Exova had in
issue 250,490,374 Exova Shares. The International Securities
Identification Number for Exova Shares is GB00BKY7HG11.
4. The fully diluted share capital of Exova (being 256,009,630
Exova Shares) is calculated on the basis of 250,490,374 Exova
Shares in issue on 18 April 2017, and in addition up to 5,519,256
further Exova Shares based on the maximum position under Scheme
rules which may be issued on or after the Announcement Date
following the exercise of options, or settled via alternative
means, which have a price of 240.00 pence or less, or via the
vesting of awards under the Exova Share Schemes on the basis
explained in this announcement, although Exova has confirmed that
no more than 4,357,982 Exova Shares will need to be issued under
the relevant Exova Share Schemes.
5. The Cash Value values the entire issued and to be issued
ordinary share capital of Exova at approximately GBP620.3 million
on the basis of a fully diluted share capital of 256,009,630 Exova
Shares, assuming that all rights in respect of in-the-money options
or vesting of awards under the Exova Share Schemes are exercised on
the basis explained in paragraph 4 above. This assumes that the
shares under option or award under the Exova Share Schemes will not
be eligible to receive the final dividend of 2.35 pence per Exova
Share but will be taken into account for purposes of determining
dividend equivalent rights under the Exova Group plc Long Term
Incentive Plan.
6. Unless otherwise stated, all prices and closing prices for
Exova Shares are closing middle market quotations derived from the
Daily Official List.
7. The reference to the implied enterprise value multiple is
based on the value of Exova's fully diluted share capital (as
calculated in note 4 above) in issue as at the Close of Business on
18 April 2017 assuming 242.35 pence per Exova Share and 240.00
pence on the further Exova Shares which may be issued on or after
the Announcement Date plus Exova's adjusted net debt at 31 December
2016 which includes GBP149.4 million of net debt, GBP20.7 million
of retirement benefit obligation, GBP8.7 million of non-controlling
interests, GBP6.9 million of contingent consideration, GBP1.7
million of deferred consideration, less GBP3.6 million in cash
proceeds from SOP awards (based on the maximum position under
Scheme rules), and less GBP0.2 million investment in joint ventures
all divided by Exova's Adjusted EBITA of GBP50.3 million and
Exova's Adjusted EBITDA of GBP64.5 million respectively for the
twelve month period to 31 December 2016.
APPIX III
IRREVOCABLE UNDERTAKINGS
The following holders or controllers of Exova Shares have given
irrevocable undertakings to vote in favour of the Scheme at the
Court Meeting and in favour of the General Meeting Resolutions:
EXOVA DIRECTORS
Number of Exova Shares under Exova Share
Name Number of Exova Shares % of Exova Shares in issue Schemes
Allister Langlands 190,909 0.07621 N/A
Ian El-Mokadem 2,050,000 0.81839 929,971
Philip Marshall 115,493 0.04611 519,508
Bill Spencer 113,636 0.04537 N/A
Helmut Eschwey 16,104 0.00643 N/A
Vanda Murray 4,545 0.00181 N/A
Andrew Simon 22,727 0.00907 N/A
TOTAL 2,513,414 1.00340 1,449,479
Element Bidco has received irrevocable undertakings from the
Exova Directors in respect of their own beneficial holdings of
Exova Shares, representing approximately 1.00340 per cent. of the
existing issued share capital of Exova:
(a) to cast (or procure the casting of) all voting rights
attaching to such Exova Shares in favour of the Scheme at the Court
Meeting and in favour of each of the General Meeting Resolutions;
and
(b) if the Acquisition is structured as a Takeover Offer, to
accept or procure the acceptance of such Takeover Offer in respect
of all such Exova Shares, provided such Takeover Offer is made on
terms at least as favourable as the terms of the Scheme.
The irrevocable undertakings given by the Exova Directors will
cease to be binding if:
(a) Element Bidco announces, with the consent of the Panel, that
it does not intend to make or proceed with the Acquisition and no
new, revised or replacement Scheme or Takeover Offer is announced
by Element Bidco in accordance with Rule 2.7 of the Code at the
same time;
(b) the Scheme or Takeover Offer lapses or is withdrawn (which,
for the avoidance of doubt, in either case shall not include any
suspension of the timetable applicable to the Scheme) and no new,
revised or replacement scheme of arrangement or takeover offer by
Element Bidco has been announced, in accordance with Rule 2.7 of
the Code, in its place or is announced, in accordance with Rule 2.7
of the Code, within 10 Business Days of such lapsing or withdrawal;
or
(c) any competing offer for the entire issued and to be issued
share capital of Exova (other than that already held by Element
Bidco or a subsidiary of Element Bidco or any person acting in
concert with Element Bidco) is declared wholly unconditional or, if
proceeding by way of scheme of arrangement, becomes effective.
OTHER INVESTORS
Number of Exova Shares under Exova Share
Name Number of Exova Shares % of Exova Shares in issue Schemes
CD&R 135,045,958 53.91 N/A
Anne Thorburn 1,378,639 0.55 66,588
TOTAL 136,424,597 54.46 66,588
Element Bidco has received an irrevocable undertaking from
CD&R in respect of 135,045,958 Exova Shares, in respect of
which it is able to exercise discretionary and voting control,
representing approximately 53.91 per cent. of the existing issued
ordinary share capital of Exova:
(a) to cast (or procure the casting of) all voting rights
attaching to such Exova Shares in favour of the Scheme at the Court
Meeting and in favour of each of the General Meeting Resolutions;
and
(b) if the Acquisition is structured as a Takeover Offer, to
accept or procure the acceptance of such Takeover Offer in respect
of all such Exova Shares, provided such Takeover Offer is made on
terms at least as favourable as the terms of the Scheme.
The irrevocable undertaking given by CD&R will cease to be
binding if:
(a) Element Bidco announces that it does not intend to make or proceed with the Acquisition;
(b) the Scheme or Takeover Offer lapses of is withdrawn or
Element Bidco announces that it does not make or proceed with the
Acquisition; or
(c) the Scheme or Takeover Offer lapses or is withdrawn (which,
for the avoidance of doubt, shall not include any suspension of the
timetable applicable to the Scheme) and no new, revised or
replacement scheme of arrangement or takeover offer has been
announced by Element Bidco, in accordance with Rule 2.7 of the
Code, in its place or is announced, by Element Bidco in accordance
with Rule 2.7 of the Code, within 10 Business Days of such lapsing
or withdrawal.
Element Bidco has received an irrevocable undertaking from Anne
Thorburn in respect of her beneficial holdings of Exova Shares,
representing approximately 0.55 per cent. of the existing issued
share capital of Exova. The irrevocable undertaking received from
Anne Thorburn has been provided on substantially similar terms to
those given by the Exova Directors, as described above.
APPIX IV
Confirmation by the Exova Directors
On 28 February 2017, Exova announced its results for the year
ended 31 December 2016. As part of that announcement the following
statement (the "Statement") regarding the outlook for the Exova was
made:
"The Board expects modest organic revenue growth at constant
currency in 2017. This will be driven by Exova's diversified
exposure and good growth in most sectors, moderated by continuing
pressure in oil & gas, and a lower point in the project cycle
of our engines testing business. Organic growth is expected to be
weighted towards the second-half, partly as a result of more
favourable like-for-like comparisons. Our acquisitions programme
should continue to contribute to overall revenue growth. We expect
that recent actions we have taken to reduce cost will offset
general pressure on group margins in the current financial
year."
The Statement is again confirmed in paragraph 10 of this
announcement.
The Statement was originally published before commencement of
the offer period triggered by the announcement by Exova on 26 March
2017 of discussions with possible offerors which could lead to an
offer being made for the entire issued and to be issued share
capital of Exova. Accordingly, the requirements of Rule 28.1(c) of
the City Code on Takeovers and Mergers apply in relation to the
Statement.
The Exova Directors confirm that the Statement remains valid and
confirm that the Statement has been properly compiled on the basis
of the assumptions stated below and that the basis of accounting
used is consistent with Exova's accounting policies.
Assumptions
The Statements were prepared on the basis of the following
assumptions, any of which could turn out to be incorrect and
therefore affect the validity of the Statements:
Factors within the influence and control of the Exova
Directors
-- There is no material change in the operational strategy of
Exova from the date of this announcement.
-- There will be no acquisitions or disposals beyond Exova's
existing acquisition strategy which will have a material impact on
Exova's results.
-- There are no material strategic investments over and above those currently planned.
Factors outside the influence or control of the Exova
Directors
-- There will be no material macroeconomic change in the
principal markets and regions in which Exova operates.
-- There will be no material adverse events which will have a
significant impact on Exova's financial results.
-- There will be no changes in interest rates, bases of
taxation, regulatory environment or legislation that have a
material impact on Exova, including in relation to operations or
accounting policies.
-- There will be no material changes in customer demand or the
competitive environment in which Exova operates.
-- There will be no material changes in the competitive
environment for acquisitions within the TIC sector that will impact
Exova's ability to continue with it existing acquisition
strategy.
-- There will be no business disruptions that materially affect Exova or its key customers.
-- There will be no significant and sustained weakening or
strengthening of the pound sterling against the currencies of the
major territories in which the Exova operates.
APPIX V
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise.
"2006 Act" the UK Companies Act 2006, as amended;
"Acquisition" the direct or indirect acquisition by
Element Bidco of the entire issued and
to be issued ordinary share capital
of Exova to be effected by means of
the Scheme (or, subject to the consent
of the Panel, a Takeover Offer) including,
where the context so requires, any subsequent
variation, revision, extension or renewal
thereof;
"Adjusted operating profit from continuing operations
EBITA" before separately disclosed items;
"Adjusted Adjusted EBITA before depreciation;
EBITDA"
"Announcement 19 April 2017;
Date"
"Annual the annual report and accounts of Exova
Report" for the year ended 31 December 2016;
"Authorisations" has the meaning set out in Part A of
Appendix I;
"BEV" means the limited partnerships comprising
the Bridgepoint Europe V Fund;
"BofA Merrill Merrill Lynch International;
Lynch"
"Bridgepoint" means Bridgepoint Advisers Limited,
its subsidiaries and subsidiary undertakings;
"Business a day (other than Saturdays, Sundays
Day" and public holidays) on which banks
are open for business in London, United
Kingdom;
"Canadian means the Controlled Goods Regulations,
Controlled SOR/2001-32, as amended from time to
Goods Regulations" time, enacted pursuant to section 43
of the Defence Production Act (Canada);
"Cash Value" has the meaning set out on page 1 of
this announcement;
"CD&R" TABASCO B.V., a company owned by Clayton,
Dubilier & Rice Fund VII, LP;
"Close 6.00 p.m. of a relevant Business Day;
of Business"
"Closing the middle market price of a Exova Share
Price" at the close of business on the day
to which such price relates, as derived
from the Daily Official List of the
London Stock Exchange for that day or
from Bloomberg in the case of average
Closing Prices for certain periods to
which such average relates to;
"CMA" the Competition and Markets Authority
of the United Kingdom;
"Code" the City Code on Takeovers and Mergers;
"Combined the enlarged group following the Acquisition,
Group" comprising the Exova Group and the Element
Group;
"Conditions" the Conditions to the Acquisition, as
set out in Appendix I of this announcement
and to be set out in the Scheme Document;
"Confidentiality has the meaning set out in paragraph
Agreement" 14 (Offer-related Arrangements) of this
announcement;
"Cooperation has the meaning set out in paragraph
Agreement" 14 (Offer-related Arrangements) of this
announcement;
"Council Council Regulation (EC) 139/2004, as
Regulation" amended;
"Court" the High Court of Justice in England
and Wales;
"Court the meeting of Scheme Shareholders (and
Meeting" any adjournment thereof) to be convened
pursuant to an order of the Court under
Part 26 of the 2006 Act, notice of which
will be set out in the Scheme Document,
for the purposes of considering and,
if thought fit, approving the Scheme
(with or without amendment);
"Credit has the meaning set out in paragraph
Agreements" 13 (Financing of the Acquisition) of
this announcement;
"CREST" the relevant system (as defined in the
Regulations) in respect of which Euroclear
is the Operator (as defined in the Regulations);
"Daily the daily official list of the London
Official Stock Exchange;
List"
"Dealing a day on which dealing in domestic securities
Day" may take place on, and with the authority
of, the London Stock Exchange;
"Dealing an announcement pursuant to Rule 8 of
Disclosure" the Code containing details of dealings
in interests in relevant securities
of a party to an offer;
"DDTC" means the United States Department of
State, Directorate of Defence Trade
Controls;
"Effective the date on which the Scheme becomes
Date" effective in accordance with its terms;
"Element" Element Materials Technology Group Limited,
a company incorporated in England and
Wales;
"Element Greenrock Bidco Limited, a company incorporated
Bidco" in England and Wales;
"Element Element, its subsidiaries and subsidiary
Group" undertakings;
"Element EMT Holdings Limited, a company incorporated
Midco" in England and Wales;
"Excluded any Exova Shares which are registered
Shares" in the name of or beneficially owned
by any member of the Element Group or
its nominee(s), any Exova Shares held
in treasury and any other Exova Shares
which Element Bidco and Exova agree
will not be subject to the Scheme;
"Exova" Exova Group plc, a company incorporated
in England and Wales;
"Exova the directors of Exova as at the date
Directors" of this announcement;
"Exova Exova, its subsidiaries and subsidiary
Group" undertakings;
or "Group"
"Exova holders of Exova Shares;
Shareholders"
"Exova ordinary shares of one penny each in
Shares" the capital of Exova;
"Exova the Exova Group plc Long Term Incentive
Share Schemes" Plan and the Exova Group plc Share Option
Plan, each as amended from time to time;
"Fairly information which has been fairly disclosed
Disclosed" by or on behalf of Exova: (i) in the
annual report and accounts of the Exova
Group for the year ended 31 December
2016; (ii) in this announcement; (iii)
in any other public announcement by,
or on behalf of, Exova in accordance
with the Listing Rules, Disclosure Guidance
and Transparency Rules of the FCA (as
applicable) prior to the date of this
announcement; (iv) in writing prior
to the date of this announcement by
or on behalf of Exova to Element Bidco
(or its respective officers, employees,
agents or advisers in their capacity
as such); or (v) in the virtual data
room operated by or on behalf of Exova
in respect of the Acquisition prior
to the date of this announcement;
"FCA" the United Kingdom Financial Conduct
Authority;
"Forms the forms of proxy for use at each of
of Proxy" the Court Meeting and the General Meeting,
which shall accompany the Scheme Document;
"FSMA" the UK Financial Services and Markets
Act 2000, as amended;
"General the general meeting of Exova Shareholders
Meeting" (including any adjournment thereof)
to be convened in connection with the
Scheme, notice of which will be set
out in the Scheme Document;
"General the resolutions to be proposed at the
Meeting General Meeting;
Resolutions"
"Goldman Goldman Sachs International;
Sachs"
"GWB" has the meaning set out in paragraph
6 of Part A of Appendix I;
"HSBC" HSBC Bank plc;
"HSR Act" the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended and the rules
and regulations promulgated thereunder;
"Investec" Investec Bank plc;
"ITAR" the US International Traffic in Arms
Regulations (22 Code of Federal Regulations
120-130);
"London London Stock Exchange plc, a company
Stock Exchange" incorporated in England and Wales;
"Longstop 18 October 2017, or such later date
Date" as may be agreed in writing by Element
Bidco and Exova (with the Panel's consent
and as the Court may approve, if such
approval(s) are required).
"Offer the offer document published by or on
Document" behalf of Element Bidco in connection
with a Takeover Offer, including any
revised offer document;
"Offer the period commencing on 27 March 2017
Period" and ending on the earlier of the date
on which the Scheme becomes effective
and/or the date on which the Scheme
lapses or is withdrawn (or such other
date as the Panel may decide);
"Opening an announcement containing details of
Position interests or short position in, or rights
Disclosure" to subscribe for, any relevant securities
of a party to the offer if the person
concerned has such a position;
"Overseas Exova Shareholders with registered addresses
Shareholders" outside the United Kingdom or who are
not resident in the United Kingdom;
"Panel" the Panel on Takeovers and Mergers;
"Registrar the Registrar of Companies in England
of Companies" and Wales;
"Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended
from time to time;
"Regulatory the Conditions set out in paragraphs
Conditions" 3 to 10 of Part A of Appendix I (inclusive);
"Regulatory a service approved by the London Stock
Information Exchange for the distribution to the
Service" public of announcements and included
within the list maintained on the London
Stock Exchange's website;
"Restricted any jurisdiction where extension or
Jurisdiction" acceptance of the proposed Acquisition
would violate the law of that jurisdiction;
"Rule 12 for the constitution of a group under
Event" Schedule 4 to the Enterprise and Reform
Act 2013 and the Acquisition lapsing
as a result under Rule 12.1(b) of the
Code; or (ii) a referral to the Chair
of the CMA for the constitution of a
group under Schedule 4 to the Enterprise
and Reform Act 2013 and the Acquisition
lapsing as a result under Rule 12.1(a)
of the Code;
"Sanction the order of the Court sanctioning the
Court Order" Scheme;
"Scheme" the proposed scheme of arrangement under
or "Scheme Part 26 of the 2006 Act between Exova
of Arrangement" and the Scheme Shareholders, the full
terms of which will be set out in the
Scheme Document with or subject to any
modification, addition or condition
which Element Bidco and Exova may agree
and, if required, the Court may approve
or impose;
"Scheme the hearing of the Court to sanction
Court Hearing" the Scheme;
"Scheme the document to be sent by Exova to
Document" Exova Shareholders, containing and setting
out the Scheme, the notices convening
the Court Meeting, the General Meeting
and the further particulars required
by Part 26 of the 2006 Act;
"Scheme the time and date specified in the Scheme
Record Document, expected to be 6.00 p.m. on
Time" the business day immediately prior to
the Effective Date;
"Scheme the Exova Shares:
Shares"
(a) in issue at the date of the Scheme
Document;
(b) if any, issued after the date of
the Scheme Document and before the Scheme
Voting Record Time; and
(c) if any, issued at or after the Scheme
Voting Record Time and before the Scheme
Record Time in respect of which the
original or any subsequent holders thereof
are, or shall have agreed in writing
to be, bound by the Scheme,
in each case other than any Excluded
Shares;
"Scheme the holders of Scheme Shares;
Shareholders"
"Scheme the date and time specified in the Scheme
Voting Document by reference to which entitlement
Record to vote at the Court Meeting will be
Time" determined, expected to be 6.00 p.m.
on the day which is 2 days before the
Court Meeting or, if the Court Meeting
is adjourned, 6.00 p.m. on the day which
is 2 days before the date of such adjourned
Court Meeting;
"Subscription has the meaning set out in paragraph
Agreement" 13 (Financing of the Acquisition) of
this announcement;
"Substantial in relation to an undertaking, a direct
Interest" or indirect interest of 20 per cent.
or more of the total voting rights conferred
by the equity share capital (as defined
in Section 548 of the 2006 Act) of such
undertaking;
"Takeover if (subject to the consent of the Panel),
Offer" Element Bidco elects to effect the Acquisition
by way of a takeover offer (as defined
in Chapter 3 of Part 29 of the 2006
Act), the offer to be made by or on
behalf of Element Bidco to acquire the
issued and to be issued ordinary share
capital of Exova on the terms and subject
to the conditions to be set out in the
related Offer Document;
"Third has the meaning set out in Part A of
Party" Appendix I;
"United the United Kingdom of Great Britain
Kingdom" and Northern Ireland;
or "UK"
"UK Listing the FCA acting in its capacity as the
Authority" competent authority for listing under
the Financial Services and Markets Act
2000;
"United the United States of America, its territories
States" and possessions, any State of the United
or "US" States of America and the District of
Columbia;
"Wider Element, its subsidiary undertakings,
Element associated undertakings and any other
Group" undertakings in which that company and
such undertakings (aggregating their
interests) have a Substantial Interest;
and
"Wider Exova, its subsidiary undertakings,
Exova Group" associated undertakings and any other
undertakings in which that company and
such undertakings (aggregating their
interests) have a Substantial Interest.
For the purposes of this announcement, "subsidiary", "subsidiary
undertaking", "parent undertaking", "undertaking" and "associated
undertaking" have the respective meanings given thereto by the 2006
Act.
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 time in this announcement are to London time unless
otherwise stated.
References to the singular include the plural and vice
versa.
"GBP" and "pence" means pounds and pence sterling, the lawful
currency of the United Kingdom.
"US$" means United States dollars, the lawful currency of United
States.
"EUR" and "Euro" means the lawful currency of the member states
of the participating member states of the European Union which have
adopted the single currency in accordance with the EC Treaty of
Rome dated 25 March 1957 (as amended by the Maastricht Treaty dated
7 February 1992).
This information is provided by RNS
The company news service from the London Stock Exchange
END
OUPGUGDSRXBBGRC
(END) Dow Jones Newswires
April 19, 2017 02:00 ET (06:00 GMT)
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