Equipmake Holdings - Strategic Review, Formal Sale Process & Other
06/12/2024 07:01
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RNS Number : 0530P Equipmake Holdings PLC 06 December 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
This is not an announcement of a firm intention by any party to make an offer
under Rule 2.7 of the City Code on Takeovers and Mergers (the "Takeover
Code"). There can be no certainty that an offer will be made for Equipmake
Holdings PLC, nor as to the terms on which any offer may be made.
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR"). With the publication of
this announcement, this inside information is now considered to be in the
public domain.
6 December 2024
Equipmake Holdings PLC
("Equipmake" or the "Company" or the "Group")
Strategic Review, Formal Sale Process, Update on Potential Licence Agreement
and
Appointment of Joint Financial Adviser
Equipmake, a market leader in engineering-driven differentiated
electrification technologies, products and solutions across the automotive,
truck, bus and speciality vehicle industries, provides an update on progress
of securing a potentially significant licence agreement and commencing a
strategic review ("Strategic Review") and Formal Sale Process.
Update on Potential Licence Agreement
As reported initially in the Company's Preliminary Results as announced on 25
October 2024, and as updated in the Company's Final Results announced on 29
November 2024, the Group has been in advanced discussions with a major
automotive supplier in relation to it licensing the Group's functional safety
technology and systems integration capability for its commercial vehicle
business ("Potential Licence Agreement"). These discussions have been underway
for some time. The Potential Licence Agreement currently envisages a total of
$6 million (equivalent to approximately £4.6 million) of milestone payments
over two years, as well as future volume-based royalty revenues. There have
been regular ongoing discussions with the potential licensee on matters
pertaining to the Company's operations and technology. However, as at the date
of this announcement, the Company does not have confirmation from the
potential licensee as to when the Potential Licence Agreement will be entered
into (if at all).
Launch of Strategic Review and Formal Sale Process
As highlighted both in the Preliminary Results and the Final Results, if the
Potential Licence Agreement is not signed, the Board expects the cash
resources of the Group to last approximately until March 2025. The Group's
current cash balances as at the date of this announcement total approximately
£1.9 million and the Group has no debt, other than a number of equipment
finance lease agreements.
Whilst the Board remains hopeful that the Potential Licence Agreement referred
to above will be entered into, it must plan for all eventualities. The Board
has therefore been considering the Company's strategic options in light of its
limited cash resources.
The Board has therefore determined that it is now appropriate to undertake a
formal review of its corporate strategy and options to maximise value for its
shareholders and other stakeholders. This Strategic Review will cover a range
of options with a number of potential outcomes including but not limited to:
· raising additional equity capital from the Company's existing
shareholders and new investors;
· seeking a strategic partner to support the Company's growth and
provide additional balance sheet strength;
· the sale of the Company or a merger with another public entity, which
will be conducted under the framework of a "Formal Sale Process" in accordance
with Note 2 on Rule 2.6 of the Takeover Code; and
· the continued review of the Company's strategy, cost base and
allocation of cash resources.
Formal Sale Process and Takeover Code considerations
The Strategic Review will be undertaken under the mechanism referred to in the
Takeover Code as a "Formal Sale Process".
The Company has appointed PwC as Joint Financial Adviser for the purpose of
the Formal Sale Process. Parties interested in submitting an expression of
interest should contact PwC using the contact details below. It is currently
expected that any party interested in submitting any form of proposal for
consideration in connection with the Strategic Review (including within the
Formal Sale Process) will, at the appropriate time, enter into a
non-disclosure agreement and standstill arrangement with the Company on terms
satisfactory to the Board and on the same terms, in all material respects, as
other interested parties before being permitted to participate in the process.
The Company will provide such interested parties with certain information on
its business, following which interested parties will be invited to submit
their proposals. The Company will update the market in due course.
The Board will undertake the Strategic Review in a timely but structured
manner, evaluating merits of each of the outcomes above, and potentially
others that may arise, in defining the future corporate strategy for the
Company.
The Board reserves the right to alter or terminate any aspect of the process
as outlined above at any time, and to reject any approach or terminate
discussions with any interested party at any time, and in such cases will make
an announcement as appropriate.
The Company is not currently in discussions with, or in receipt of an approach
from, any potential offeror at the date of this announcement. The Company will
make further announcements as appropriate. The Takeover Panel has granted a
dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the
Takeover Code such that any party participating in the Formal Sale Process
will not be required to be publicly identified under Rules 2.4(a) or (b) and
will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the
Takeover Code for so long as it is participating in the process.
Following this announcement, the Company is now considered to be in an "offer
period" as defined in the Takeover Code, and the dealing disclosure
requirements will apply.
Shareholders are advised that this announcement does not represent a firm
intention by any party to make an offer under Rule 2.7 of the Takeover Code
and there can be no certainty that any offers will be made as a result of the
Formal Sale Process, that any sale, strategic investment or other transaction
will be concluded, nor as to the terms on which any offer, strategic
investment or other transaction may be made.
Progress in relation to the Formal Sale Process and further details of the
outcome of the Strategic Review will be announced as appropriate.
**ENDS**
For further information, please contact:
Equipmake Via St Brides Partners
Clive Scrivener, Non-Executive Chairman
Ian Foley, CEO
VSA Capital (Rule 3 and Joint Financial Adviser, Aquis Corporate Adviser and Tel: +44 (0) 20 7886 2500
Broker)
Andrew Raca / Simon Barton / Alexander Cabral
PricewaterhouseCoopers LLP (Joint Financial Adviser)
Jamie Peel / Jon Raggett
Tel: +44 (0) 20 7583 5000
St Brides Partners (Financial PR Adviser) Tel: +44 (0) 20 7236 1177
equipmake@stbridespartners.co.uk
Susie Geliher / Paul Dulieu / Will Turner
About Equipmake
Equipmake is a UK-based industrial technology company specialising in the
engineering, development and production of electrification products to meet
the needs of the automotive and other sectors in support of the transition
from fossil-fuelled to zero-emission drivetrains.
Equipmake is a leader in high performance technologically advanced electric
motors, inverters and complete zero-emission electric drivetrains and power
electronic systems. Equipmake has developed a vertically integrated offering
providing fully bespoke solutions to its customers. The Company is focussed on
accelerating traction with OEM and Tier 1 suppliers in relation to higher
margin component and drivetrain supply under long-term growth contracts and
securing high margin licencing transactions.
Key differentiators of the Company offerings are its advanced technology and
performance, reliability and adherence to ASIL-D(1) functional safety.
Equipmake's advanced motor and inverter technology, featuring ASIL-D
compliance, are designed to customers' highest Functional Safety standards.
With decades of experience in electric drivetrain integration and a dedicated
prototype vehicle testing facility, Equipmake can significantly accelerate
product development for customers.
(1) Automotive Safety Integrity Level ("ASIL") is a risk classification scheme
defined by the ISO 26262 - Functional Safety for Road Vehicles standard and is
a critical requirement for road vehicles. Of the four ASILs identified by the
standard, ASIL-D dictates the highest integrity requirements on the product,
which require exceptional rigour in their development.
IMPORTANT NOTICES
VSA Capital Limited, which is authorised and regulated by the FCA in the UK,
is acting as Joint Financial Adviser, Aquis Corporate Adviser and Broker
exclusively for Equipmake and no one else in connection with the matters
referred to in this announcement and will not be responsible to anyone other
than Equipmake for providing the protections afforded to its clients or for
providing advice in relation to matters referred to in this announcement.
Neither VSA Capital Limited, nor any of its affiliates, owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of VSA Capital in connection with this announcement, any
statement contained herein or otherwise.
PwC, which is authorised and regulated by the FCA in the UK, is acting as
Joint Financial Adviser exclusively for Equipmake and no one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than Equipmake for providing the protections
afforded to its clients or for providing advice in relation to matters
referred to in this announcement. Neither PwC, nor any of its affiliates, owes
or accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of PwC in connection with this announcement, any
statement contained herein or otherwise.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover 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 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 securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 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 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, (http://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.
The defined terms used in this section are defined in the Takeover Code, which
can be found on the Takeover Panel's website.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Takeover Code, Equipmake confirms that it
has in issue 1,120,074,565 ordinary shares of £0.0001 each in the capital
of the Company ("Ordinary Shares") and admitted to trading on the Aquis Apex
Exchange. The Company has no Ordinary Shares held in Treasury. The
International Securities Identification Number for the Ordinary Shares is
GB00BMBVXB73.
Publication on website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
will be available on the investor section of the Company's website
at https://equipmake.co.uk/investors/ (https://equipmake.co.uk/investors/) by
no later than 12 noon (London time) on the business day immediately following
the date of this announcement. The content of the website referred to in this
announcement is not incorporated into and does not form part of this
announcement.
Miscellaneous
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Formal Sale Process, and
other information published by Equipmake may contain statements about
Equipmake that are or may be deemed to be forward looking statements. Such
statements are prospective in nature. All statements other than historical
statements of facts may be forward looking statements. Without limitation,
statements containing the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "anticipates", "estimates", "projects" or
"considers" or other similar words may be forward looking statements. Forward
looking statements inherently contain risks and uncertainties as they relate
to events or circumstances in the future. Important factors such as business
or economic cycles, the terms and conditions of Equipmake's financing
arrangements, tax rates, or increased competition may cause Equipmake's actual
financial results, performance or achievements to differ materially from any
forward-looking statements. Due to such uncertainties and risks, readers are
cautioned not to place undue reliance on such forward-looking statements,
which speak only as of the date hereof. Equipmake disclaims any obligation
to update any forward looking or other statements contained herein, except as
required by applicable law
This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or solicitation of any offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities or the
solicitation of any vote or approval in any jurisdiction. This announcement
has been prepared in accordance with English law and the Takeover Code, and
information disclosed may not be the same as that which would have been
prepared in accordance with laws outside of the United Kingdom. The release,
distribution or publication of this announcement in jurisdictions outside of
the United Kingdom may be restricted by laws of the relevant jurisdictions,
and therefore persons into whose possession this announcement comes should
inform themselves about, and observe, any such restrictions. Any failure to
comply with the restrictions may constitute a violation of the securities law
of any such jurisdiction.
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