REG - Tern PLC Pires Investments - Notice of Tern General Meeting
28/06/2022 17:00
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RNS Number : 5292Q Tern PLC 28 June 2022
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INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
FOR IMMEDIATE RELEASE
28 June 2022
Recommended All-Share Offer
for
Pires Investments plc ("Pires")
by
Tern plc ("Tern")
to be implemented by means of a Court-sanctioned scheme of arrangement under
Part 26 of the Companies Act 2006
Notice of Tern General Meeting and posting of a circular to Tern Shareholders
On 1 June 2022, it was announced that the Tern Directors and Pires Directors
had reached agreement on the terms of a recommended all-share offer by Tern
for the issued and to be issued share capital of Pires, to be effected by
means of a court-sanctioned scheme of arrangement between Pires and Pires
Shareholders under Part 26 of the Companies Act 2006 (the "Acquisition")(the
"2.7 Announcement").
Pires has announced that it will be posting the Scheme Document to Pires
Shareholders later today. The Scheme Document includes notices of the Court
Meeting and the General Meeting to be held on 21 July 2022.
The Tern Directors announce that a circular (the "Circular") will be sent to
Tern Shareholders later today which will include a notice of a general meeting
to be held at 11.00 a.m. on 21 July 2022 at the offices of Reed Smith LLP at
The Broadgate Tower, 20 Primrose Street, London, EC2A 2RS, at which the
Resolution will be proposed. The Resolution, which will be proposed as an
ordinary resolution, is to authorise the Directors to allot up to 98,865,712
New Tern Shares (£19,773.14 in nominal value) in connection with the
Acquisition. This authority will expire on the date that all consideration due
pursuant to the terms of the Acquisition has been satisfied.
A copy of the Circular will be available from Tern's website at
www.ternplc.com (http://www.ternplc.com) shortly.
Words and expressions defined in the Circular shall, unless the context
provides otherwise, have the same meanings in this announcement.
The full text of Part 1 of the Circular, which includes detailed information
on the Pires investment portfolio and the Tern network of companies, is set
out below:
Dear Shareholder,
Recommended all-share offer for Pires Investments plc
and
Notice of General Meeting
1. Introduction
On 1 June 2022, the boards of directors of Pires and Tern announced that they
had reached agreement on the terms of a recommended all-share offer whereby
Tern will acquire the entire issued and to be issued share capital of Pires in
exchange for the issue of New Tern Shares. The Acquisition is to be
implemented by means of a court-sanctioned scheme of arrangement under Part 26
of the Act.
The implementation of the Acquisition is, among other things, subject to
Shareholders approving the Resolution to grant authority to the Directors to
issue the New Tern Shares as consideration under the Acquisition.
The full text of the Resolution is set out within the Notice of General
Meeting at the end of this document.
The purpose of this document is to provide you with information about the
Acquisition and also to explain why the Directors consider that the
Acquisition is in the best interests of the Company and Shareholders as a
whole, and why the Directors recommend that you vote in favour of the
Resolution to be proposed at the General Meeting, notice of which is set out
at the end of this document, as the Directors have irrevocably undertaken to
do in respect of their own beneficial holdings of Tern Shares.
The Acquisition has also been unanimously recommended to Pires Shareholders by
the Pires Board.
Shareholders are advised to read this document in its entirety.
The information contained in this document does not purport to be complete and
should be read in conjunction with the full text of the Scheme Document which
will be available at www.piresinvestments.com and www.ternplc.com and in hard
copy at the registered offices of Pires and Tern until the time of the General
Meeting. Shareholders should read the whole of the Scheme Document, in
particular the Letter of Recommendation from a Non-Executive Director of Pires
in Part One and the Explanatory Statement in Part Two.
2. Summary of the terms and conditions of the Acquisition
2.1 Terms of the Acquisition
Under the terms of the Acquisition, which is subject to the Conditions and the
other terms set out in Part Three (Conditions to the implementation of the
Scheme and to the Acquisition) of the Scheme Document, Scheme Shareholders on
the register of members of Pires at the Scheme Record Time will receive:
For each Pires Share held, 0.51613 New Tern Shares
Based on the Closing Price of 15.5 pence per Tern Share on 31 May 2022 (being
the last Business Day before the date of the Announcement), the Acquisition
valued:
· each Pires Share at 8.0 pence, a premium of 53.8 per cent. to
Pires' closing share price of 5.2 pence on 31 May 2022 (being the last
Business Day prior to the commencement of the Offer Period) and a 31.1 per
cent. premium to the average closing share price of 6.1 pence per Pires Share
for the six months ended 31 May 2022;
· the entire issued and to be issued share capital of Pires at
approximately £14.9 million; and
· the Enlarged Group at a combined market capitalisation of
approximately £69.5 million (assuming completion of the Acquisition).
Based on the Closing Price of 12.75 pence per Tern Share on the Last
Practicable Date, the Acquisition values each Pires Share at 6.58 pence and
Pires' issued ordinary share capital on a fully diluted basis at approximately
£12.30 million, representing a premium of:
· 26.6 per cent. to the Closing Price of 5.2 pence per Pires Share
on 31 May 2022 (being the last Business Day prior to the commencement of the
Offer Period); and
· 32.9 per cent. to the Closing Price of 4.95 pence per Pires Share
on the Last Practicable Date.
The New Tern Shares will be issued credited as fully paid and will rank pari
passu in all respects with the Tern Shares already in issue, including the
right to receive and retain dividends and other distributions declared, made
or paid by reference to a record date falling after completion of the
Acquisition. Application will be made to the London Stock Exchange for the New
Tern Shares to be admitted to trading on AIM.
Upon completion of the Acquisition, Pires Shareholders will own approximately
21.39 per cent. of the Estimated Enlarged Share Capital.
If any dividend or other distribution or return of value is proposed,
declared, made, paid or becomes payable in respect of Pires Shares on or after
the date of the Scheme Document and prior to the Acquisition becoming
effective, Tern will have the right to reduce the value of the consideration
payable for each Pires Share by up to the amount per Pires Share of such
dividend, distribution or return of value.
The New Tern Shares to be issued and allotted to Scheme Shareholders in
accordance with the Exchange Ratio will be rounded up to the nearest whole
number. Under the terms of the Acquisition, Scheme Shareholders will receive
0.51613 New Tern Shares for every Pires Share held. If a Scheme Shareholder
holds only one Pires Share, then one New Tern Share will be allotted and
issued to such Scheme Shareholder. If a Scheme Shareholder holds more than one
Pires Share, then the Scheme Shareholder will receive such number of New Tern
Shares as is equal to such number of Pires Shares the Scheme Shareholder holds
multiplied by 0.51613 and rounded up to the nearest whole number. By way of
illustration, if a Scheme Shareholder holds 2,500 Pires Shares, they will
receive 1,291 New Tern Shares calculated as follows: 2,500 Pires Shares
multiplied by 0.51613 equates to 1,290.325 New Tern Shares and 1,291 New Tern
Shares when rounded up to the nearest whole number.
2.2 Conditions of the Acquisition
Further details of the Conditions and further terms of the Acquisition are set
out in Part Three (Conditions to the implementation of the Scheme and to the
Acquisition) of the Scheme Document.
3. Background to and reasons for the Acquisition
The Board believes that combining the two businesses by way of the Acquisition
has compelling strategic and financial rationale, will be value accretive to
Shareholders and will provide the opportunity for the Enlarged Group to:
(a) establish a company of greater scale and potential interest
to institutional investors;
(b) provide investors with increased diversity of exposure to
specialist technology businesses at different stages of development;
(c) aid the development of the companies within each businesses'
portfolio given their synergistic nature;
(d) further enhance the existing Sure Valley Ventures
relationship through the businesses' combined investment;
(e) create a leadership position as the 'go to' investor in the
IoT sector and other deep technology sectors that include AI, Machine Learning
(ML) and Natural Language Processing (NLP);
(f) provide clear corporate synergistic benefits and cost
savings, most notably Pires' public company costs, benefiting from the
efficiencies created by the Enlarged Group;
(g) provide Pires and its portfolio companies with a greater
ability to expand outside of the UK, particularly given Tern's North American
presence, connections and history; and
(h) facilitate increased access to capital from a variety of
sources as part of a larger group, in addition to the proceeds from potential
exits of investments held by each business.
The Board believes that the terms of the Acquisition fairly reflect both
Tern's and Pires' respective standalone businesses and their prospects as well
as an appropriate sharing of the anticipated synergies resulting from the
Acquisition.
In addition, the Board believes that the issue of the New Tern Shares will be
value enhancing for Shareholders as there is considerable unlocked potential
within the Pires investment portfolio (including unrealised value in the SVV1
investment portfolio which is entering its mature stage having substantially
completed its investment stage) and that by using its hands-on approach and
wide network of connections the Tern management team will quickly have an
impact to realise such potential.
4. Information on Tern
Tern is a public limited company incorporated in England and Wales whose
shares are admitted to trading on AIM.
Tern is focused on value creation from IoT technology businesses and its
network of companies comprises Device Authority Limited, Wyld Networks AB,
InVMA Limited (trading as Konektio), FVRVS Limited (trading as FundamentalVR)
and Talking Medicines Limited.
In March 2022, Tern announced that it had agreed to participate in a new
venture capital fund, the New SVV Fund alongside the British Business Bank and
other investors.
4.1 Tern's investment strategy
Tern's investment strategy is to invest in high-potential, private, UK
software companies that solve significant real-world problems using new
methods in large global markets.
Specifically, Tern targets investments in companies that have developed
disruptive innovations to healthcare and industrial markets, employing the
following technologies: AI, Machine Learning, Next Generation IoT Networking,
Security (e.g., Information Security (InfoSec)) and Immersive Technologies
such as AR and VR for the IoT.
Tern seeks to participate at the late seed stage or 'A' round, where there is
often an equity gap, typically leading the investment round, bringing in other
syndicate partners in later rounds, to capitalise the investee company
initially and provide funding for future growth. When Tern invests in a
company, it seeks to secure a position of influence, typically a board seat as
chairperson. Subsequently, Tern provides substantial "hands on" support and
value add through the Tern team's operating expertise and network, to
accelerate the company's growth from the initial investment to a position when
it can hold a series 'B' investment round. At the appropriate time, Tern will
work to help the company secure a new lead series 'B' investor, using the Tern
team's extensive network and working with the investee company's syndicate of
third-party investors.
Ultimately Tern will seek to exit its investments at the appropriate time in
order to crystalise value for Shareholders.
4.2 Details of the Tern Network of Companies
Tern's network of companies predominantly comprises:
(a) Device Authority Limited ('Device Authority')
Tern has a 53.8 per cent. holding in Device Authority. Device Authority is a
global leader in Identity and Access Management (IAM) for the IoT; focused on
securing and automating zero trust for IoT industries in the automotive,
medical device (IoMT), industrial (IIoT) sectors and evolving government and
defence sectors.
Device Authority's KeyScaler™ platform provides zero-touch provisioning and
complete automated lifecycle management for securing IoT devices and data at
scale, with frictionless deployment across device provisioning,
authentication, credential management, policy based end-to-end data
security/encryption and secure OTA (Over the Air) and HSM (Hardware Security
Module) updates.
KeyScaler™ is system agnostic and protects Device Authority's customers'
global IoT deployments at the edge, in the cloud and integrating into complex
policy-driven requirements, independent of the customers' proprietary hardware
and software environments. KeyScaler™ is deployed both direct, and through
key cloud platform and system integrator partners such as Microsoft, Wipro,
Venafi and EnTrust.
In December 2021, as part of a US$2.9 million funding package, Device
Authority received a US$1.25 million strategic investment from Venafi Inc
("Venafi"). Venafi is a privately held cybersecurity company that develops
software to secure and protect cryptographic keys and digital certificates. In
December 2020, Thoma Bravo, a leading private equity investment firm focused
on the software and technology-enabled services sectors, with over US$114
billion of assets under management as of 31 March 2022, acquired a majority
stake in Venafi in a deal valuing Venafi at US$1.15 billion.
The transaction with Venafi, fulfilled Tern's goal of obtaining an active
strategic partner for Device Authority with solid cybersecurity credentials
and a large presence in the United States. Following the Venafi investment
Tern continues to hold a majority equity stake in Device Authority.
Device Authority has continued its reported positive business momentum
following the strategic investment from Venafi, with the business being
particularly focused on growing its monthly recurring revenues through its
subscription base and its modularised licence platform, KeyScaler™.
Particularly strong demand has come from the automotive sector, with the
retail sector and the US Government, both as a customer and as a result of the
effects of its policy, also being strong contributors to growth. The executive
order from US President Biden in May 2021 that tasked the National
Telecommunications and Information Administration (NTIA) and the Commerce
Department with defining the minimum elements of a SBOM (software bill of
materials), considered critical to improving transparency and security in the
software supply chain and securing critical infrastructure, continue to
provide sales opportunities and leads for Device Authority.
With the target of growing monthly recurring revenues, Device Authority
started selling KeyScaler™ as a SaaS (KSaaS) product in late 2021, with
initial customers on this model coming from the automotive, healthcare and
retail sectors, enabling these customers to more rapidly onboard and scale in
a secure, hosted cloud environment.
Other enhancements to Device Authority's product range include the launch of
KeyScaler™ Edge in October 2021, which Device Authority believes is the
first device identity centric IAM designed to address the complex end-to-end
challenges of IoT security lifecycle management at the network edge. It is a
lightweight version of KeyScaler™ that has been created specifically for
network edge nodes, with the ability to register, authenticate, and provision
security certificates and tokens to devices in the local network, independent
of an available internet connection. This allows organisations the ability to
automate edge deployments to drive efficiency at IoT scale and meet their
compliance and regulatory obligations for private local network deployments,
with safety, confidentiality, data theft/privacy, brand reputation, revenue
protection being important factors.
In addition to new customer wins, Device Authority also continues to enter
into further distribution partnerships. Device Authority has partnerships with
leading IoT ecosystem providers, including Avnet, AWS, DigiCert, Entrust,
Ericsson, HID Global, Microsoft, PTC, Thales, Titan Automotive Solutions,
Trusted Objects, Venafi and Wipro, amongst others.
ABI Research reported in February 2022 that they consider Device Authority as
the current industry leader in their IoT device identity lifecycle management
competitive assessment.
Device Authority's website can be found at: https://www.deviceauthority.com
(b) Wyld Networks AB ('Wyld Networks')
Tern has a 49.2 per cent. holding in Wyld Networks. Wyld Networks' shares are
quoted on the NASDAQ First North Growth Market in Stockholm following an
initial public offering in July 2021; the first for one of Tern's portfolio
companies.
Wyld Networks is a virtual satellite network operator that develops and
delivers innovative wireless technology solutions that enable affordable
connectivity for IoT devices and sensors, potentially anywhere in the world -
especially for the 85 per cent. of the world's surface where there are no
traditional cellular networks. Wyld Networks' technology also enables mesh
networks that utilise location aware technology and wirelessly mesh devices in
areas where 4G or wifi are congested or not available.
Wyld's sensor-to-satellite module suite with LoRaWAN® allows IoT sensors to
communicate directly from sensor to Low Earth Orbit satellites or in
conjunction with terrestrial LoRa networks. Wyld's modems, devices, and
embedded technology are designed to enable communication with the cloud, no
matter the location, providing global IoT coverage.
Wyld Networks is a member of the LoRa Alliance®, the global association of
companies backing the open LoRaWAN® standard for the IoT. In December 2021,
LoRaWAN® was officially approved as a standard by the International
Telecommunication Union, the United Nations specialised agency for information
and communication technologies. The LoRa Alliance® also provides a platform
for Wyld to showcase its technology to over 500 member companies. The
LoRaWAN® standard specification, developed and maintained by the LoRa
Alliance®, is a Low Power, Wide Area networking protocol designed to
wirelessly connect battery operated 'things' to the internet in regional,
national or global networks, and targets key IoT requirements such as
bi-directional communication, end-to-end security, mobility and localisation
services.
Wyld Networks, together with Eutelsat Communications, Senet Inc and
TrakAssure, is also a founder member of the Multimodal IoT Infrastructure
Consortium™ ("MMIIC"). The consortium was set up to bring integrated and
interoperable terrestrial and satellite LoRaWAN® IoT connectivity to
customers across the globe, as announced by Wyld Networks and Tern on 11
January 2022. The MMIIC consortium is focused on integrating the parties'
platforms, and innovative sensor and hardware designs, coupled with providing
collaborative service delivery and compelling pricing, to target the global
supply chain, with container logistics and related asset tracking, as the
first and anchor applications. Eutelsat will provide LoRaWAN® coverage via
low earth orbiting satellites, while Senet, which owns and operates the
largest publicly available LoRaWAN® network in the United States, is
providing terrestrial LoRaWAN® network connectivity.
Wyld Networks continues its focus on the development of Wyld Connect (a
satellite IoT terminal and module) and Wyld Fusion (a provisioning and payment
platform). In particular, Wyld has completed the hardware development of Wyld
Connect, the world's first Long Range-Frequency Hopping Spread Spectrum
(LR-FHSS) sensor-to-satellite modem, to enable satellites to connect to
devices/sectors across remote areas around the globe. Wyld is also continuing
with the development of Wyld Fusion in preparation for the commercial launch
of Wyld's end-to-end satellite IoT solution, planned for later in 2022.
Wyld Networks has signed agreements with customers in a number of market
areas, including energy and agriculture with customers such as Chevron, Bayer,
AgriSound, Treevia, as well as with system integrators such as Fujitsu and
Wezen. These include revenue generating contracts, for example, the 23 March
2022 announced purchase order for its Wyld Connect IoT module from a Brazilian
company for deployment in the forestry sector. This purchase order had a total
value of SEK 11.3 million (approximately £900,000) over a three-year period,
starting in 2022. On 10 March 2022 Wyld Networks announced purchase orders
for its Wyld Connect IoT modules with a total value of US$1.7 million over a
four-year period, starting in April 2022. The Wyld Connect solution being
supplied in this instance will allow the customer, a South African company, to
deploy IoT sensors in the agricultural sector to collect data directly from
satellites.
Wyld Networks' website can be found at: https://wyldnetworks.com
(c) FVRVS Limited (trading as 'FundamentalVR')
Tern has a 20.0 per cent. holding in FundamentalVR. FundamentalVR is a leading
virtual reality training and data analysis technology platform with its
initial applications being in surgical training.
FundamentalVR is led by surgical training experts and leading technologists
with a mission to revolutionise surgical training by bringing simulation into
the hands of medical professionals around the world, using low cost and easily
accessible technology.
FundamentalVR's software platform takes advantage of readily available virtual
reality software and devices, such as the Facebook owned Oculus Quest, and
combines it with cutting edge haptics (being technology based on the sense of
touch) to create a simulation system that can be used on any modern computer
set up. Using computer learning, the software platform works together with
haptic hardware devices to simulate the physical sensation of operating on
human tissue. It also has the capability to provide artificial intelligence
(AI) driven real-time feedback, procedure correction data and best practice
insight. The result is a simulation system that provides surgeons with a more
hands-on experience and aims to better prepare them for real life situations,
resulting in better patient outcomes.
As previously announced by Tern, the adoption of FundamentalVR's haptics
virtual reality simulation solutions, as a credible alternative to in-person
and on human learning, has accelerated as a result of the challenges of social
distancing and the reduction in elective surgeries due to the Covid-19
pandemic. The business is maintaining its focus on the strategic areas of the
market where they see high growth potential, in particular ophthalmology,
interventional, robotics and regenerative, and where their platform is most
differentiated. The sales and marketing efforts are making steady progress
within all these areas.
Tern has announced a number of new contract wins for FundamentalVR over the
past year, including: a £0.6 million, four year contract in the area of
interventional medicine, a strategically important area for FundamentalVR, to
create a simulation platform in an area that can directly benefit from the
fidelity and realism of the FundamentalVR platform; a £1 million four year
contract with a new client within the fast-moving Robotics Assisted Surgical
Systems (RASS) sector; and a £0.3 million contract with a major US medical
institution with a globally renowned virtual hospital and hands-on clinical
training facility to create a virtual education facility.
On 31 May 2022 it was announced that FundamentalVR had raised a total of £7
million in a Series B fund raising from existing investors and a new
institutional investor, with an additional £1.2 million of convertible loan
notes being converted, including the approximately £570,000 in loan notes
held by Tern. The FundamentalVR Series B is intended to provide FundamentalVR
with funding to enable to grow in line with its strategy, including expanding
its US activities.
The quality of FundamentalVR's technology was recognised at a number of awards
in 2021 and more recently. At the UK National Technology Awards 2021
FundamentalVR won both 'Virtual or Augmented Reality Product of the Year' and
'Healthcare Tech of the Year'. The business was also the recipient of the
'Frost & Sullivan Entrepreneurial Company of the Year' award in 2021. In
May 2020, FundamentalVR's Fundamental Surgery platform won 'Best Mixed Reality
Solution' at the XR Awards.
Validation work with partners is additionally being published, with New York
University Langone issuing a validation study in September 2021 highlighting
the improved skills transfer of FundamentalVR's HapticVR service over normal
VR. This was backed up by a smaller study by the NHS.
FundamentalVR's website can be found at: https://www.fundamentalvr.com
(d) InVMA Limited (trading as Konektio) ('Konektio')
Tern has a 36.8 per cent. holding in Konektio. Konektio helps industrial and
manufacturing companies prosper by converging their physical assets with new
transformational digital insights.
Konektio provides an Industrial IoT SaaS platform to original equipment
manufacturers (OEMs) and aftermarket customers, as well as the connected
product market. The software enables remote asset monitoring and management to
drive productivity improvements. Their primary product, AssetMinder®, is
machine agnostic and allows manufacturers to diagnose issues and proactively
prescribe services plans, ultimately reducing downtime and improving
operational efficiency.
Konektio's AssetMinder® is a modular, industry 4.0, IoT SaaS platform, using
a wide range of analytical tools and AI and machine learning algorithms to
connect up whole factory floors and processes, as well as managing resources
into and out of the factory. AssetMinder® assesses the effectiveness and
efficiencies of entire operations, putting customers in control of their
assets and therefore directly impacting productivity, efficiency and business
outcomes.
AssetMinder® captures usage and performance data from smart sensors,
providing advanced insights to unlock data-driven intelligence that optimises
processes, condition monitoring, machine uptime and profitability across a
range of industries including manufacturing, transportation, utilities, smart
infrastructure, and food processing. AssetMinder's technology is already
deployed across thousands of assets, providing valuable insights and
recommendations to people maintaining and managing critical devices and
infrastructure.
The business rebranded from InVMA to Konektio in December 2021. The name
change reflected its ambition to be a company that creates true connected
Industrial IoT communication and collaboration solutions for a wide range of
businesses, taking advantage of the industrial sector's desire for digital
transformation. This is being achieved by rolling out AssetMinder® with
customisable features to allow customers to choose what is right for them.
Konektio enjoyed a significant increase in sales of AssetMinder® in 2021.
This business growth led to the recent recruitment of additional staff in the
UK and the USA, accelerated product development, an increased channel and
partner sales network, a material investment in new branding and the strategic
decision to open its first overseas office in North Carolina, in the USA.
Konektio completed a £2,125,000 equity fund raise in December 2021, including
£1,925,000 from institutional investors Mercia and Foresight and the
founders, and £200,000 from Tern, to fund their future development.
Konektio is continuing to build momentum, with AssetMinder being in demand
from customers who are looking for contactless monitoring of factory and
remote assets. In particular, Konektio has benefited from Covid-19
accelerating the need and demand for contactless monitoring of factory and
remote assets. Konektio has a strong sales pipeline, including opportunities
in Europe and North America, and is continuing to build its recurring revenue
base.
Konektio appointed Dr Ron Black as its Non-Executive Chairman in January
2022. Dr Black, who has recently taken on the role of Chief Executive
Officer at Codasip, a leading supplier of processing solutions for integrated
circuit designers, brings with him a wealth of technology, innovation, and
global business scale-up experience, through his previous roles which have
included Chief Executive Officer of Imagination Technologies and Chief
Executive Officer of Rambus.
Konektio's website can be found at: https://konektio.com
(e) Talking Medicines Limited ('Talking Medicines')
Tern has a 23.8 per cent. holding in Talking Medicines, the most recent
company to join the Tern portfolio in November 2020.
Talking Medicines, based in Glasgow and London, and with a recently opened US
office, is a social intelligence company designed specifically for the
pharmaceutical industry. Through a combination of artificial intelligence
and industry expertise, Talking Medicines has developed a next generation data
platform, PatientMetRx®, to deliver social listening for pharmaceutical
companies. Its PatientMetRx® platform is driven by artificial intelligence
models that use machine learning and natural language processing to scale real
world data collection to a scale that is transformational versus traditional
research. By structuring and translating the patient's voice into a Patient
Confidence Score (PCS), Talking Medicines helps pharmaceutical companies
understand patient confidence in their medicines, allowing marketing to be
targeted and ultimately with the goal of delivering better patient outcomes.
Talking Medicines welcomed Boston based life science investor Mark Bamforth in
January 2022, when his family office joined existing investors to invest in
the £1.59 million funding round. This provided Talking Medicines with the
funds to support its expansion, particularly in the United States. This has
already enabled them to gain further US recognition for their PatientMetRx
platform, launched in February 2021, and continue to build their subscription
base.
The company is focusing on expanding its PatientMetRx® subscription base
amongst pharma brand teams and pharma marketing agencies. Talking Medicines
has established an office in New Jersey, USA, to support these plans.
The business has been awarded a number of accolades, being included in the
First 100 UK Digital Health Companies by the UK Government's Department of
Trade and Industry.
Talking Medicines website can be found at: https://talkingmedicines.com
(f) The New SVV Fund
In March 2022, Tern announced that it had agreed to participate in the New SVV
Fund alongside the British Business Bank and other investors. The New SVV Fund
will invest in a range of private UK software companies with a focus on
companies in the immersive technology and metaverse sectors, including
augmented and virtual reality, artificial intelligence, the IoT and security.
Tern believes its participation in the New SVV Fund is an excellent way to
broaden Tern's exposure to exciting early-stage private UK technology
companies with a modest capital commitment, whilst delivering a number of
other potentially significant benefits in addition to the attractive financial
returns it envisages from its participation. Tern believes its participation
in the New SVV Fund will provide important technology insights, assist with
business development and increase its network, thereby significantly enhancing
the Tern ecosystem.
Tern has committed to invest up to £5.0 million in total over the 10 year
life of the New SVV Fund, which would result in an interest in the New SVV
Fund of approximately 5.9 per cent. The Tern Directors believe they will be
able to fund investments into the New SVV Fund from Tern's ongoing available
resources.
5. Information on Pires
Pires is an investment company quoted on AIM focused on investment in next
generation technologies. It invests both directly and through certain
investment funds.
Pires' current investment portfolio can be analysed as follows:
(a) Sure Valley Ventures Fund 1
Pires originally invested in SVV1 in November 2019. The fund is a venture
capital fund focused on investing in the software technology sector,
specifically focused on the high growth AI, AR/VR and IoT sectors. This will
enable investors to gain access to potentially high growth companies through a
publicly listed company.
In February 2021, Pires increased its exposure to SVV1 through the purchase of
1.5 million shares in SV, a listed specialist fund, from existing SV
shareholders using new Pires Shares as consideration. As a result of this
transaction, Pires achieved an aggregate (direct and indirect) interest in
SVV1 of around 20 per cent., which comprises its original direct 13 per cent.
interest in SVV1 and an indirect interest through its 28 per cent.
shareholding in SV plc.
As at the date of this document, SVV1 had a portfolio of 14 investee companies
at different stages of development spanning a range of sectors. The portfolio
provides Pires with exposure to a number of key, cutting-edge and rapidly
growing technology sectors. Further details of the portfolio companies and
recent developments are set out below:
Artificial intelligence
Ambisense Provides an AI platform to deliver environmental risk assessment to allow
real-time gas and environmental monitoring using both IoT and sensor
(Ambisense Limited) solutions. The company has already been awarded a number of major contracts
and has a substantial pipeline of opportunities.
Buymie An artificial intelligence-based same day grocery delivery company operating
in both the UK and Ireland working with companies such as Tesco, Lidl, Asda
(Buymie Technologies) and the Co-op. Also recently announced a partnership with Asda in Leeds and
Bristol.
Security
Nova Leah An artificial intelligence cyber-security assessment and protection platform
for connected medical devices.
(Nova Leah Limited)
Getvisibility An artificial intelligence security company addressing the substantial problem
faced by corporations in storing, sorting, accessing and protecting data.
(Visibility Blockchain Limited) Recently raised additional funds at a significant premium and has been voted
as one of Ireland's top 18 start-ups.
PreCog A security solution platform company that provides data intelligence to combat
crime, terrorism and protect vulnerable people. The company completed a £1
(Polence Limited) million fundraising round in March 2021. Customers include leading law
enforcement and security agencies, and transport infrastructure groups.
Smarttech247 A global artificial intelligence based cyber security cloud business that
protects enterprises as they migrate to cloud-based IT operations. The company
(Zefone Limited) has recently won a major new contract with a Fortune Global 1000 company
employing over 100,000 staff and already has a purchase order under this
contract for €6 million. It is also currently pursuing a listing by way of a
reverse takeover process.
Immersive Technologies
Engage XR A developer of virtual reality and immersive experiences with a specific focus
on education and enterprise learning and development. The company is quoted on
(Engage XR Holdings plc) AIM, has over 100 commercial customers and is rapidly growing revenue and
margins. It recently raised €9 million in new funds.
Admix A platform enabling the monetisation of interactive programmatic brand
placements in, for example, video games and other AR/VR applications. The
(WAM Group Limited) company is rapidly growing revenues and numbers of active users.
Warducks A game development studio known for the production of leading games and is
soon to launch an AR game that could be the next Pokémon Go.
(Warducks Limited)
VividQ A deep tech software company which has developed a framework for real - time
3D holographic displays for use in heads - up displays and AR headsets and
(VividQ Limited) glasses. The company recently completed an £11 million funding round at a
significant premium.
Volograms A deep learning company that uses AI to create 3D AR from 2D photos and
videos. The company has launched a consumer AR Camera app called Volu and has
(Volograms Limited) pro - user and enterprise versions in development.
Virtex A company building a platform for the next-generation of live, immersive
entertainment within the VR gaming and e-sports industries. It is actively
(Virtex Limited) developing its new Stadium app.
Internet of things
CameraMatics A platform enabling transport fleet managers to reduce risk, increase driver
safety and comply with growing industry governance and compliance. It recently
(MySafe Drive Limited) raised €4 million at a 300 per cent. uplift in valuation. The company is
growing revenues considerably and building its presence in the very
significant US market where it has already won a number of new contracts.
Wia Provides a platform solution for smart buildings. Its platform provides full
device and application management, security, data capture and storage,
(WIA Technologies Limited) analysis and control.
The investment in SVV1 has already proven successful for Pires with a
realisation and a cash distribution being achieved soon after the investment.
This was as a result of the sale of one of the portfolio companies, Artomatix,
in 2019 at a valuation of nearly 500 per cent. of the price of SVV1's original
investment in the company. Following the progress made by Engage XR, which is
quoted on AIM, in 2020, SVV1 also realised the value of its original
investment through the partial disposal of its holding. This was the second
cash realisation to be made from Pires' investment in SVV.
The success of the direct SVV1 investment provided the rationale to increase
Pires' exposure to this portfolio by acquiring a shareholding in SV in
February 2021, particularly when it was possible to do so on attractive terms.
SVV1 has now substantially completed its deployment phase and is moving more
towards a realisation phase which should lead to further returns to Pires and
its shareholders.
(b) New SVV Fund
In March 2022, Pires agreed to participate in the New SVV Fund, alongside the
British Business Bank, SV, Tern and other investors. Pires has initially
invested approximately £90,000 in the New SVV Fund and expects to invest up
to £5 million in total over the life of the New SVV Fund, which would provide
it with an interest of around 5.9 per cent. in the New SVV Fund. The New SVV
Fund will invest in a range of private UK software companies with a focus on
companies in the immersive technology and metaverse sectors, including AR and
VR, AI, the IoT and security and will be managed by the same SVV1 team.
The New SVV Fund will be managed by the same SVV team which, to date, has been
highly successful in achieving a number of cash realisations from, and upward
revaluations of, companies in the SVV1 portfolio. The profit share
arrangements within the New SVV Fund are designed to encourage the involvement
of the Private Investors alongside the BBB, meaning that Pires and the other
Private Investors would expect to receive a significantly enhanced share of
the total return generated by the fund compared to industry standards.
In March 2022, the New SVV Fund invested in RETiniZE Limited. RETìníZE is
one of Europe's fastest-growing creative-tech companies. It was founded in
2019 by father and son team, Phil Morrow (Chief Executive Officer), and Jack
Morrow (Chief Technology Officer). Their roots and reputations were formed in
high-end global film and television. The company originally spun out of Wild
Rover Productions, formerly one of Ireland's leading independent TV producers.
Until now, RETìníZE has been best known for its award-winning VR, AR and
immersive multi-screen experiences. However, since 2019 the company has been
in stealth mode, developing Animotive, its immersive animation production tool
that is harnessing the latest VR technologies to transform the 3D animation
production process. RETìníZE clients include BBC, National Geographic, World
Health Organisation, Save the Children, BMW, Tourism NI and Seagate.
(c) Sure Ventures plc
SV is a fund listed on the main market of the London Stock Exchange (ticker
SURE) whose principal investments are a 25.9 per cent. stake in SVV1 (details
of which are above), a holding in VividQ, a Cambridge-based deep-tech company
with world-leading expertise in 3D holography and holdings two listed
companies, Immotion plc and Engage XR.
Pires acquired 1.5 million shares in SV, at a price of 130 pence per share, in
February 2021. The shares held by Pires constituted a holding of 28 per cent.
of the issued share capital of SV at the date of purchase. The investment into
SV also increased Pires' total holding in SVV1 at the time of acquisition as
SV held a 25.9 per cent. interest in SVV1. Combined with Pires' direct holding
of 13 per cent. in SVV1, the purchase of the interest in SV enabled Pires to
increase its overall effective interest in SVV1 to approximately 20 per cent.
(d) Visibility Blockchain Limited ('Getvisibility')
Getvisibility is an AI security company addressing the substantial problem
faced by corporations in storing, sorting, accessing and protecting data. The
company is a leader in data visibility and control, using state-of-the-art AI
to classify and secure unstructured information. Getvisibility also provides
risk and compliance assessments as well as enforcing protection on sensitive
data.
Getvisibility has developed proprietary software that uses artificial
intelligence to discover, classify and protect unstructured data typically
contained in PDFs, spreadsheets, emails and text documents. In doing so
Getvisibility helps organisations better visualise their data footprint to
ensure more proactive management and security. Getvisibility utilises the
latest in deep learning AI enterprise architecture to provide fast and
accurate visibility of all the data within a client's environment.
The company operates across the US, Europe, the Middle East and North Africa
with a presence in several industry sectors including banking, healthcare and
the public sector. Getvisibility's clients include a number of international
blue-chip companies including leading insurance, healthcare, data provision
and finance firms as well as a leading global producer of energy and
chemicals, a major airport group, one of the largest financial institutions in
the Middle East as well as US government entities in the pharmaceutical and
manufacturing sectors.
Pires made its original investment of €250,000 into Getvisibility in March
2020, with a follow-on investment of €62,000 in June 2021, as part of a
€1.1 million funding round led by a new lead investor Herb Hribar, who has
also become Chairman of the company. A further investment was made in March
2022 when Getvisibility raised a further €10 million from new investors
including Alpha Intelligence Capital, a global venture capital firm which
invests in deep artificial intelligence/machine learning technology - based
companies and Fortino Capital Partners, a leading B2B software venture capital
and growth equity firm.
Pires has a further interest in Getvisibility through the investments made in
the company by SVV1 and SV.
(e) Polience Limited ('PreCog')
PreCog is a security solution platform company that provides data intelligence
to combat crime, terrorism and protect vulnerable people. With governments,
organisations and the owners of assets being increasingly focused on
identifying parties and individuals who may represent a security threat,
security services and organisations are investing in real time solutions that
can help provide them with additional intelligence to use their resources more
efficiently and effectively, so they can act in a more proactive and
preventative way.
PreCog provides a comprehensive security solution that, through their software
platform and IoT hardware infrastructure, can monitor people flow and detect
the movement of persons of interest thereby ensuring that locations are
protected from those who wish to cause damage. PreCog is able to collect and
analyse data to provide unique, scalable and actionable intelligence that
helps its clients to combat organised crime, human trafficking and terrorism.
PreCog was incorporated in January 2020 and has participated in and been
supported by the Microsoft for Startups programme and, through this programme,
has established a partnership with Arrow ECS, a world-leading distributor and
contract manufacturer. As part of this relationship, Arrow is manufacturing
the hardware components for the PreCog system.
Pires made an investment of £250,000 into PreCog in March 2021 as part of a
£1 million fundraising round.
(f) Low 6 Limited ('Low6')
Low6 is a leader in sports gaming technology that powers franchises with their
own branded gaming experiences to engage and monetise their digital fan bases.
The company provides a white-labelled mobile platform to sports teams and
franchises that enable them to offer a pooled sports betting experience to
users of their fan- based apps. The company's directors believe there is a
significant market opportunity for sports betting products that are designed
to enhance the excitement of watching sports whilst, at the same time, being
engaging and simple to use.
Under its B2B business model, Low6 will enter into a partnership with a sports
team or franchise which enables the Low6 product to gain access to the
partner's established fan base thereby reducing customer acquisition costs and
strengthening brand and customer loyalty, which ultimately enhances customer
retention. At the same, Low6's business model enables the underlying partner
to share in the revenue generated from the Low6 platform, an aspect which
should be particularly attractive to fans of the sports team or franchise
concerned. Low6 can either embed its platform within a partner's app or build
the app for its partners. The company believes that this partnership model is
also highly scalable and Low6 expects to generate revenue from retaining a
percentage of the stakes placed by the users of the platform.
Low6 already has several contracts with sports teams and franchises, including
football clubs in the UK Championship and Scottish Premiership leagues. In
addition, it also has partnerships with Sky Business and Yinzcam Inc.
Low6 has a three-year exclusive partnership with Yinzcam Inc, a US-based
company which provides the apps for a number of the fan bases of leading
sports teams and franchises with over 90 million installs of its mobile apps
worldwide. It is currently involved with more than 190 professional teams,
leagues and venues in the US, Canada, Spain and Australia. This relationship
provides Low6 with access to this extensive client base. Low6 has also been
working with Sky Business to develop a digitalised pub quiz product called
Pubwars.
Pires made an initial investment equity investment of £200,010 in Low6 in
December 2020 as part of a £1.5 million funding round. Subsequently, in
February 2021, Pires made a further investment of £35,000 into Low6 by way of
a convertible loan note as part of an extended funding round which raised a
total of A$6 million (approximately £3.3 million) in convertible notes. Low6
has raised over £8 million to date. In February 2022, the company announced
that is planning to achieve a listing by way of a reverse takeover of a
company listed on the TSX Venture Exchange.
(g) Pluto Digital plc ('Pluto')
In December 2020, Pires completed its first investment in the digital assets
sector through an investment of US$200,000 in De Tech Studio Limited ('De
Tech'), which was developing a decentralised finance technology platform
('YOP') and YOP tokens. Certain YOP tokens were sold to realise a cash profit
and the balance of the investment was used to subscribe for shares in Pluto.
At the time of the initial investment, Pires held a 15 per cent. equity
interest in De Tech.
Pluto is a crypto venture capital and technology company that connects Web 3.0
decentralised technologies to the global economy. Pluto invests in, incubates
and advises digital asset projects based on decentralised technologies
(DeTech), decentralised finance (DeFi) and networks such as Ethereum and
Polkadot. The company has a focus to bring DeFi and Metaverse (blockchain
gaming and NFTs) to the global economy. Additionally, Pluto supports the
operation of proof-of-stake networks by staking and operating validator nodes.
In 2021, Pluto invested in Maze Theory Limited ('Maze Theory'), a London-based
digital entertainment studio, with a view to developing high quality games
that incorporate token economics. As part of this arrangement, Pluto and Maze
Theory formed a new gaming blockchain and metaverse studio joint venture,
called Emergent Games. Given the experience of the team at Maze Theory and the
work that they have done, Pluto is planning to extend its relationship with
Maze Theory as it believes that this is a sector that provides an exciting
growth opportunity.
Also, during 2021 Pluto fully acquired the YOP platform and has been actively
developing this platform to help enable users to operate in and navigate the
DeFi space, which has been growing rapidly.
Pires currently holds 32,518,876 shares in Pluto and warrants over 24 million
new ordinary shares, subject to certain vesting conditions. Six million of the
warrants have already vested.
Final results for the year ended 31 December 2021
Pires released its final results for the year ended 31 December 2021 on 15
June 2022. For the period under review, Pires reported a profit before
taxation of £1,491,000 (for the 14‐month period ended 31 December 2020:
loss of £687,000). The profit or loss for Pires includes unrealised
gains/losses in their portfolio of quoted equity investments which are marked
to market, plus any return from and adjustment to the carrying value of its
unlisted investments in the technology sector.
6. Pires Warrants
The Scheme will extend to any Pires Shares which are allotted, issued or
transferred to satisfy the exercise of Pires Warrants prior to 30 June 2022
(being the date on which the Pires Warrants lapse in accordance with their
terms), save where a holder of Pires Warrants gives notice of exercise of the
Pires Warrants by 29 June 2022 conditional on the Scheme becoming Effective.
7. Intentions regarding management and locations
Following the Acquisition, Tern intends for Pires' future business to continue
to be that of an investment company. On the Effective Date, the Board intends
that the existing business activities of Pires will be transferred to Tern.
By way of background, Pires currently has three employees who are its three
directors. Tern currently has eight employees, of which six are its directors.
On the Effective Date, it is proposed that Nicholas Lee will join the Board as
a non-executive director and that John May and David Palumbo, currently the
other non-executive directors of Pires will resign from the Pires Board. Mr.
Lee's appointment to the Board is subject to approval from Tern's Nominated
Adviser after completion of the customary director due diligence process to
satisfy itself as to Board composition and independence and the suitability of
a potential director for the purposes of the AIM Rules for Nominated Advisers.
Tern has no intention to redeploy any material fixed assets of Pires. Tern
intends to move Pires' location of business and headquarters to those of Tern
as soon as practicable following completion of the Acquisition. Owing to the
nature of the business, Pires has no research and development function. Tern
has no plans to change this. Additionally, Pires has no existing pension
schemes for its employees. Tern has no plans to change this.
Notwithstanding the above, no proposals have been made on the terms of any
incentive arrangement for Nicholas Lee and there have been no discussions in
respect of the terms of these arrangements.
Following the Acquisition, Tern's business will continue to be that of an
investment company with an investment strategy that is focused on technology
businesses. Tern does not intend for the Acquisition to result in changes to
the continued employment of its current employees and all of the current
members of Tern's Board and management will remain in their positions
following completion of the Acquisition, with the only change to the Board
being the addition of Nicholas Lee as a non-executive director. Tern does not
intend for the Acquisition to bring about any material changes in the
conditions of employment or the balance of skills or functions in relation to
Tern's current employees and management. Additionally, Tern does not intend
for the Acquisition to bring about any material changes to Tern's places of
business, the location of its headquarters or its headquarters functions.
8. Scheme structure
The Acquisition is being implemented by way of a Court-sanctioned scheme of
arrangement between Pires and the Scheme Shareholders under Part 26 of the
Act, although Tern reserves the right to elect to implement the Acquisition by
way of an Offer (subject to the consent of the Panel and Pires). The procedure
involves an application by Pires to the Court to sanction the Scheme, which
will involve the Scheme Shares being transferred to Tern, in consideration for
which Scheme Shareholders will receive 0.51613 New Tern Shares for every Pires
Share held (on the basis described in paragraph 2 above).
To become Effective, the Scheme requires, among other things, the approval of
a majority in number of the Scheme Shareholders present and voting (and
entitled to vote), either virtually or by proxy at the Court Meeting,
representing 75 per cent. or more in value of the Scheme Shares held by such
Scheme Shareholders present and voting at the Court Meeting (or any
adjournment of the Court Meeting) and the passing of the Pires Special
Resolution necessary to implement the Scheme at the Pires General Meeting (or
any adjournment of the Pires General Meeting). The Scheme is also conditional
on the approval by Tern Shareholders of the Resolution at the General
Meeting to approve the issue of New Tern Shares as the consideration for the
Acquisition.
Following the Court Meeting and the Pires General Meeting and the satisfaction
(or, where applicable, waiver) of the other Conditions, the Scheme must also
be sanctioned by the Court. The Scheme will only become Effective upon a copy
of the Court Order being delivered to the Registrar of Companies for
registration.
Prior to the Scheme becoming effective, application will be made to the London
Stock Exchange for the admission to trading on AIM of the Pires Shares to be
cancelled.
If the Scheme becomes Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they voted in favour of, or
against, the Scheme at the Court Meeting or in favour of, or against, or
abstained from voting on the Pires Special Resolution at the Pires General
Meeting. On the Scheme becoming Effective, Pires will become a wholly owned
subsidiary of Tern on the Effective Date and Pires Shareholders will receive
the New Tern Shares referred to above. Application will be made to the London
Stock Exchange for the New Tern Shares to be admitted to trading on AIM. It is
expected that Admission will become effective and that trading in the New Tern
Shares will commence on AIM on the Business Day following the Effective Date.
Tern would then re-register Pires as a private company under the relevant
provisions of the Act as soon as practicable after cancellation of trading of
the Pires Shares on AIM.
Further details of the Scheme, including an indicative timetable for its
implementation together with notices of the Pires Court Meeting and Pires
General Meeting, are contained in the Scheme Document which is available at
www.piresinvestments.com and www.ternplc.com and in hard copy at the
registered offices of Pires Investments plc and Tern plc until the time of the
General Meeting.
9. Conditions of the Scheme
The Acquisition will be subject to the satisfaction (or, where applicable,
waiver) of the Conditions and to the further terms set out in Part Three
(Conditions to the implementation of the Scheme and to the Acquisition) of the
Scheme Document, including, among other things:
· the Scheme being approved by a majority in number
of the Scheme Shareholders representing not less than 75 per cent. in value of
the Scheme Shares held by such Scheme Shareholders present and voting, either
in person or by proxy, at the Court Meeting and at any separate class meeting
which may be required by the Court or at any adjournment of any such meeting;
· the sanction of the Scheme by the Court with or
without modification (but subject to any such modification being acceptable to
Tern and Pires) and the delivery of a copy of the Court Order to the Registrar
of Companies for registration;
· the Scheme becoming effective by no later than 30
September 2022 or such later date as Pires and Tern may agree with
(where applicable) the consent of the Panel and the approval of the Court (if
required), failing which the Scheme will lapse;
· approval by the Shareholders of the Resolution at
the General Meeting, to authorise the allotment of New Tern Shares to Scheme
Shareholders and otherwise pursuant to the Acquisition; and
· confirmation by the London Stock Exchange of
Admission on or before the Long Stop Date.
10. Irrevocable undertaking and lock-in agreement in relation to the
Scheme
Prior to the release of the Announcement, Tern received an irrevocable
undertaking to vote, or procure to vote, in favour of the Scheme at the Court
Meeting and the resolutions at the Pires General Meeting (or, if the
Acquisition is implemented by way of an Offer to accept, or procure the
acceptance, of the Offer) from RGO, in respect of an aggregate of 30,914,193
Pires Shares, representing approximately 19.15 per cent. of the issued
ordinary share capital of Pires as at the last Business Day prior to the
release of the Announcement.
On 16 June 2022, Pires announced that it had received notifications for the
exercise of Pires Warrants over 4,939,200 Pires Shares, which included
notification of the exercise of Pires Warrants over 4,814,200 Pires Shares
held by RGO. Application was made to the London Stock Exchange to admit the
Pires Shares resulting from the warrant exercises to trading on AIM, which
occurred on 21 June 2022. Accordingly, the irrevocable undertaking from RGO is
now in respect of 35,728,393 Pires Shares representing 21.48 per cent. of
Pires's issued share capital as at the date of this document.
This undertaking will remain binding in the event of a competing offer being
made unless the value of such competing offer is an improvement of more than
10 per cent. of the value of the consideration under the Acquisition and is
not matched or bettered by Tern (where such competing offer has been announced
as a firm intention to make an offer in accordance with Rule 2.7 of the Code)
or if the Scheme Document is not published within 28 days of the Announcement
or the Scheme lapses or is otherwise withdrawn.
The irrevocable undertaking ceases to be binding if:
(a) Tern announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement scheme or offer is announced in
accordance with Rule 2.7 of the Code at the same time;
(b) the Acquisition lapses or is withdrawn; or
(c) the Acquisition has not become wholly unconditional by the Long
Stop Date.
In addition, this irrevocable undertaking also contains a contractual lock-in
arrangement with Tern and Allenby Capital in respect of up to 18,440,496 New
Tern Shares which will be issued to RGO should the Acquisition be completed,
representing, in aggregate, approximately 4.09 per cent. of the Estimated
Enlarged Share Capital. Pursuant to this lock-in agreement, RGO has agreed
that for the period of one month from Admission it will not, and will use all
its reasonable endeavours to procure that its connected persons will not,
directly or indirectly effect or agree to effect a disposal of any legal or
beneficial interest in any New Tern Shares issued to it following completion
of the Acquisition. Thereafter, for a further two months, RGO shall only
dispose of any New Tern Shares it holds in an orderly manner as Allenby
Capital shall reasonably determine.
Further details of this irrevocable undertaking are set out in paragraph 9 of
Part Seven (Additional Information) of the Scheme Document. A copy of the
undertaking is available on Tern's website at www.ternplc.com and on Pires'
website at www.piresinvestments.com, and will remain on display until
completion of the Acquisition.
11. Admission of the New Tern Shares
The New Tern Shares will be issued in registered form and will be capable of
being held in certificated and uncertificated form.
Following the completion of the Acquisition, the New Tern Shares will be
issued as fully paid and will rank pari passu in all respects with the Tern
Shares in issue at the time the New Tern Shares are issued, including in
relation to the right to receive notice of, and to attend and vote at, general
meetings of Tern, and the right to receive and retain any dividends and/or
other distributions declared, made or paid, or any other return of capital
(whether by reduction of share capital or share premium account or otherwise)
made, by Tern in respect of the Tern Shares with a record date falling after
completion of the Acquisition and to participate in the assets of Tern upon a
winding-up of Tern.
Irrespective of the date on which completion of the Acquisition falls, Pires
Shareholders will not be entitled to receive any dividend declared, made or
paid by Tern for the benefit of the Shareholders by reference to a record date
falling on or before the date on which the Acquisition completes.
Application will be made to the London Stock Exchange for the New Tern Shares
to be admitted to trading on AIM. It is expected that Admission will become
effective and that dealings for normal settlement in respect of the New Tern
Shares at 8.00 a.m. on the first Business Day following the Effective Date.
No application has been made or is currently intended to be made by Tern for
the New Tern Shares to be admitted to listing or trading on any other
exchange.
12. General Meeting
Set out at the end of this document is a notice convening the General Meeting
to be held on 21 July 2022 at the offices of Reed Smith LLP at The Broadgate
Tower, 20 Primrose Street, London, EC2A 2RS at 11.00 a.m., at which the
Resolution will be proposed. The Resolution, which will be proposed as an
ordinary resolution, is to authorise the Directors to allot up to 98,865,712
New Tern Shares (£19,773.14 in nominal value) in connection with the
Acquisition. This authority will expire on the date that all consideration due
pursuant to the terms of the Acquisition has been satisfied.
13. Action to be taken
A Form of Proxy for use at the General Meeting accompanies this document. The
Form of Proxy should be completed and signed in accordance with the
instructions thereon and returned to the Company's registrars, Share
Registrars Limited, 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9
7XX as soon as possible, but in any event so as to be received by no later
than 11.00 a.m. on 19 July 2022. Proxies can also be registered through the
online portal by logging on to www.shareregistrars.uk.com, clicking on the
"Proxy Vote" button and then following the on-screen instructions, no later
than 11.00 a.m. on 19 July 2022, or if the meeting is adjourned, not later
than 48 hours before the time fixed for the adjourned meeting. The completion
and return of a Form of Proxy will not preclude Shareholders
from attending the General Meeting and voting in person should they so wish.
14. Recommendation and irrevocable undertakings
The Directors consider the Acquisition to be in the best interests of
Shareholders as a whole and recommend unanimously that Shareholders vote in
favour of the Resolution, as those Directors who are interested in Tern Shares
have irrevocably undertaken to, or to direct (and to use all reasonable
endeavours to procure that) their nominees, do in respect of their own
beneficial holdings (and the beneficial holdings which are under their
control) of 21,100,898 Tern Shares representing, in aggregate, approximately
5.99 per cent. of Tern's issued ordinary share capital as at the Last
Practicable Date.
Yours faithfully
Ian Ritchie
Non-Executive Chairman
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2022 ((4))
Despatch of this document 28 June
Despatch of the Scheme Document 28 June
Latest time and date for lodging of Forms of Proxy for the General Meeting 11.00 a.m. on 19 July ((1))
General Meeting Voting Record Time 11.00 a.m. on 19 July
General Meeting 11.00 a.m. on 21 July
Pires Court Meeting 11.00 a.m. on 21 July
Pires General Meeting 11.10 a.m. on 21 July ((2))
Last day of dealings in, and time for registration of transfers of, and 5.00 p.m. on 28 July ((3))
disablement in CREST of, Pires Shares
Scheme Record Time 6.00 p.m. on 28 July ((3))
Scheme Court Hearing to sanction the Scheme 28 July ((3))
Expected Effective Date of the Scheme 29 July ((3))
Suspension of trading, and dealings, in Pires Shares 7.30 a.m. on 29 July ((3))
Cancellation of admission to trading of Pires Shares on AIM 7.00 a.m. on 1 August ((3))
New Tern Shares issued to Pires Shareholders By 8.00 a.m. on 1 August ((3))
Admission and commencement of dealing on AIM in New Tern Shares 8.00 a.m. on 1 August ((3))
Crediting of New Tern Shares to CREST accounts As soon as possible after 8.00 a.m. on 1 August ((3))
Despatch of definitive certificates for the New Tern Shares Within 14 days from the Effective Date ((3))
Long Stop Date 11.59 p.m. on 30 September
Notes
(1) Forms of Proxy for the General Meeting must be lodged not
later than 48 hours (excluding weekends and public holidays) prior to the time
appointed for the General Meeting.
(2) The Pires General Meeting will commence at 11.10 a.m. or, if
later, immediately after the conclusion of the Pires Court Meeting.
(3) These dates are indicative only and will depend, among other
things, on the date upon which the Court sanctions the Scheme and the dates on
which the Scheme Court Order is delivered to the Registrar of Companies. If
any of the times and/or dates above change, the revised times and/or dates
will be notified by Tern to Shareholders through a Regulatory Information
Service.
(4) References to the time of day are to London time.
KEY STATISTICS
Number of Existing Tern Shares in issue prior to the Acquisition 352,014,701 ((1))
Expected number of New Tern Shares issued pursuant to the Acquisition 98,865,712 ((2))
Expected number of Tern Shares in issue immediately following Admission 450,880,413 ((1)(2))
Expected number of New Tern Shares as a percentage of the Estimated Enlarged 21.93 per cent. ((1)(2))
Share Capital
Expected market capitalisation of the Enlarged Group on Admission £57.5 million ((3))
ISIN number GB00BFPMV798
TIDM of the Enlarged Group TERN
Notes
(1) Being the number of Tern Shares in issue as at the Last
Practicable Date.
(2) Based on the number of Tern Shares and Pires Shares in issue
as at the Last Practicable Date, and on the assumptions that: (i) all of the
Pires Warrants are exercised and the Pires Shares issued to satisfy the
exercise of the Pires Warrants are acquired by Tern pursuant to the
Acquisition and (ii) 2,419,361 New Tern Shares are issued to Cairn and
RiverFort Global Capital Limited in satisfaction of certain fees payable by
Pires in connection with the Acquisition, resulting in a total of 98,865,712
New Tern Shares being issued pursuant to the Acquisition.
(3) Based on the Closing Price of Tern Shares of 12.75 pence on
the Last Practicable Date.
Enquiries:
Tern plc via IFC Advisory
Al Sisto, Chief Executive Officer
Sarah Payne, Chief Financial Officer
Allenby Capital Limited +44 (0) 20 3328 5656
Financial Adviser, Nominated Adviser and Broker to Tern
David Worlidge / Alex Brearley / Freddie Wooding (Corporate Finance)
Matt Butlin (Sales and Corporate Broking)
IFC Advisory +44 (0) 20 3934 6630
PR advisers to Tern tern@investor-focus.co.uk
Tim Metcalfe / Graham Herring / Florence Chandler
Important notices
Neither this announcement nor any of the documents referred to herein do or
are intended to constitute or form part of any offer or invitation to
purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval pursuant to the Scheme
or otherwise, in any jurisdiction in which such offer, invitation or
solicitation is unlawful, nor shall there be any sale of any securities in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction.
The release, publication or distribution of this announcement and/or any of
the documents referred to herein (in whole or in part) in, into or from
jurisdictions other than the United Kingdom may be restricted by the laws of
those jurisdictions and therefore persons into whose possession this
announcement comes should inform themselves about, and observe, any such
restrictions. Failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction.
Allenby Capital, which is authorised and regulated by the FCA in the UK, is
acting as financial adviser, nominated adviser and joint broker exclusively
for Tern and no one else in connection with the Acquisition and this
announcement and will not be responsible to anyone other than Tern for
providing the protections afforded to clients of Allenby Capital or for
providing advice in relation to the Acquisition, the content of this
announcement or any matter referred to herein. Allenby Capital's
responsibilities as Tern's Nominated Adviser under the AIM Rules for Companies
and AIM Rules for Nominated Advisers are owed solely to London Stock Exchange
and no other person. Allenby Capital has not authorised and is not making any
representation or warranty, express or implied, as to the contents of this
announcement.
This announcement does not constitute a prospectus or prospectus equivalent
document.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of: (i) the offeree company;
and (ii) any securities exchange offeror(s). An Opening Position Disclosure
by a person to whom Rule 8.3(a) applies must be made by no later than 3.30
p.m. (London time) on the 10th business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 p.m. (London time) on
the 10th business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a securities exchange offeror
prior to the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of: (i) the offeree company;
and (ii) any securities exchange offeror, save to the extent that these
details have previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Forward-looking statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Offer, and other information
published by Pires and Tern contain certain forward-looking statements,
beliefs or opinions with respect to the financial condition, results of
operations and business of the Wider Pires Group and the Tern Group. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts.
Forward-looking statements may often, but not always, be identified by the use
of forward-looking terms such as "may", "will", "expects", "believes",
"hopes", "anticipates", "aims", "plans", "estimates", "projects", "targets",
"intends", "forecasts", "outlook", "impact", "potential", "confidence",
"improve", "continue", "optimistic", "deliver", "comfortable", "trend",
"seeks" or variations of such words and phrases or statements that certain
actions, events or results "could", "should", "would" or "might" be taken,
occur or be achieved or the negative of such terms or other variations on such
terms or comparable terminology.
Such statements are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. These statements are based on
assumptions and assessments made by Pires and/or Tern, as the case may be, in
light of their experience and their perception of historical trends, current
conditions, future developments and other factors that they believe
appropriate. By their nature, forward-looking statements involve risk and
uncertainty, because they relate to events and depend on circumstances that
will occur in the future and the factors that could cause actual results and
developments to differ materially from those expressed in or implied by such
forward-looking statements are unknown.
Although it is believed that the expectations reflected in such
forward-looking statements were reasonable at the time the statements were
made, no assurance is given by Pires and/or Tern that such expectations or the
assumptions and assessments underlying them will prove to have been correct
and the circumstances may change. You are, therefore, cautioned not to place
undue reliance on these forward-looking statements. Neither Pires nor Tern
assumes any obligation, and Pires and Tern disclaim any intention or
obligation, to update or correct the information contained in this
announcement (whether as a result of new information, future events or
otherwise), except as required by applicable law or regulation.
Save as specifically stated in this announcement, any such forward-looking
statements have not been reviewed by the auditors of Pires or Tern 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. There are many factors which
could cause actual results to differ materially from those expressed or
implied in forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements is the satisfaction of any conditions to the Offer,
as well as additional factors such as changes in global, political, economic,
business, competitive, market and regulatory forces (including as a result of
governmental, business or individual responses to the COVID-19 pandemic and
any variant thereof), future exchange and interest rates, changes in tax rates
and future business combinations or dispositions. Such forward looking
statements should, therefore, be construed in the light of such factors.
Neither Pires nor Tern, 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.
No Profit Forecasts or Estimates
No statement in this announcement (including any statement of estimated
synergies) 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 or dividend per share for Tern, Pires or the Enlarged
Group, as appropriate, for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per
share or dividend per share for Tern, Pires or the Enlarged Group, as
appropriate.
Publication on websites
Pursuant to Rule 26.1 of the Code, a copy of this announcement and other
documents in connection with the Acquisition will, subject to certain
restrictions, be available for inspection on Tern's website at www.ternplc.com
and on Pires' website at www.piresinvestments.com no later than 12 noon
(London time) on the business day following this announcement. The contents of
the websites referred to in this announcement are not incorporated into, and
do not form part of, this announcement.
Overseas jurisdictions
The release, publication or distribution of this announcement in or into
jurisdictions other than the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom should inform themselves about, and observe, any
applicable legal or regulatory requirements. Any failure to comply with the
applicable restrictions may constitute a violation of the securities laws of
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. Neither
this announcement nor any of the documents referred to herein do or are
intended to constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval pursuant to the Scheme or
otherwise, in any jurisdiction in which such offer, invitation or solicitation
is unlawful. The Scheme Document and the accompanying Forms of Proxy have been
prepared for the purposes of complying with English law, the rules of the
London Stock Exchange, the AIM Rules 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 and Wales.
Unless otherwise determined by Tern 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 Acquisition 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 the this announcement and all documents relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed, transmitted or
otherwise forwarded, distributed or sent in or into or from any Restricted
Jurisdiction or any other jurisdiction where to do so would constitute a
violation of the laws of that jurisdiction, and persons receiving such
documents (including agents, custodians, nominees and trustees) must not mail
or otherwise forward, distribute or send such documents in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related vote in
respect of the Acquisition.
The availability of the New Tern Shares under the Acquisition to Pires
Shareholders who are not resident in the United Kingdom or the ability of
those persons to hold such shares may be affected by the laws or regulatory
requirements of the relevant jurisdictions in which they are resident (which
may affect the ability of such Pires Shareholders to vote their Pires Shares
with respect to the Scheme and the Acquisition at the Meetings, or to execute
and deliver Forms of Proxy appointing another to vote at the Meetings on their
behalf). The New Tern Shares may not be offered, sold or delivered, directly
or indirectly in, into or from any Restricted Jurisdiction or to, or for the
account or benefit of, any Restricted Persons except pursuant to an applicable
exemption from, or in a transaction not subject to, applicable securities laws
of those jurisdictions, or otherwise permitted under applicable securities
laws of those jurisdictions.
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