REG - GRC Intnl.Group PLC Bloom Equity Prtnrs. - Recommended Offer by Bloom Seed Bidco Limited
05/06/2024 17:00
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RNS Number : 2913R GRC International Group PLC 05 June 2024
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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 THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) NO.596/2014 AS IT FORMS PART OF ENGLISH LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION WILL BE CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
5 June 2024
RECOMMENDED CASH ACQUISITION
of
GRC International Group plc
by
Bloom Seed Bidco Limited
(a newly formed company indirectly owned by
investment funds advised by Bloom Equity Partners Management, LLC.)
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
The boards of Bloom Seed Bidco Limited ("Bidco") and GRC International Group
plc ("GRC") are pleased to announce that they have reached agreement on the
terms and conditions of a recommended all cash offer by Bidco for the entire
issued, and to be issued, ordinary share capital of GRC (the "Acquisition").
It is intended that the Acquisition will be implemented by way of a
court-sanctioned scheme of arrangement under Part 26 of the 2006 Act.
Under the terms of the Acquisition, each GRC Shareholder will be entitled to
receive:
for each GRC Share: 8.0 pence in cash
The Acquisition price per GRC Share represents a premium of approximately:
· 66.7 per cent. to the Closing Price of 4.8 pence per GRC Share on 4
June 2024 (being the Business Day before the commencement of the Offer
Period);
· 66.7 per cent. to the average price of 4.8 pence per GRC Share for
the one-month period ended 4 June 2024 (being the Business Day before the
commencement of the Offer Period); and
· 44.4 per cent. to the average price of 5.5 pence per GRC Share for
the six-month period ended 4 June 2024 (being the Business Day before the
commencement of the Offer Period).
The Acquisition values GRC's entire issued, and to be issued, ordinary share
capital at approximately £8.6 million on a fully diluted basis.
Bidco has received irrevocable commitments and a letter of intent to vote in
favour of the resolutions relating to the Scheme and the Acquisition at the
Meetings (or in the event that the Acquisition is implemented by an Offer, to
accept such Offer), in respect of, in aggregate, 71,210,415 GRC Shares
(representing approximately 66.0 per cent. of the existing issued ordinary
share capital of GRC as at 4 June 2024, being the Business Day prior to the
date of this announcement). Further details are set out in in Appendix 3 to
this announcement.
If, on or after the date of this announcement and prior to the Acquisition
becoming Effective, any dividend and/or other distribution and/or other return
of capital or value is announced, declared, made or paid or becomes payable in
respect of the GRC Shares, Bidco reserves the right to reduce the
consideration payable under the terms of the Acquisition for the GRC Shares by
an amount up to the aggregate amount of such dividend and/or distribution
and/or other return of capital or value, in which case any reference in this
announcement to the consideration payable under the terms of the Acquisition
will be deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall be the
subject of an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the terms of the Scheme
or the Acquisition. In such circumstances, GRC Shareholders would be entitled
to retain any such dividend, distribution and/or other return of capital or
value.
It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the 2006 Act. However,
Bidco reserves the right to elect to implement the Acquisition by way of an
Offer (subject to the consent of the Panel).
Recommendation
The GRC Directors, who have been so advised by Singer Capital Markets as to
the financial terms of the Acquisition, consider the terms of the Acquisition
to be fair and reasonable. In providing advice to the GRC Directors, Singer
Capital Markets have taken into account the commercial assessments of the GRC
Directors. Singer Capital Markets are providing independent financial advice
to the GRC Directors. Singer Capital Markets is providing independent
financial advice for the purposes of Rule 3 of the Takeover Code.
Accordingly, the GRC Directors intend to recommend unanimously that GRC
Shareholders vote in favour of the Scheme at the Court Meeting and the
Resolution to be proposed at the General Meeting as the GRC Directors who hold
GRC Shares have irrevocably undertaken to do in respect of their own
beneficial holdings totalling 44,002,640 GRC Shares (representing
approximately 40.8 per cent. of the existing issued ordinary share capital of
GRC as at 4 June 2024, being the Business Day prior to the date of this
announcement). Further details of these undertakings and the letter of intent,
including the circumstances in which they cease to be binding, are set out in
Appendix 3 to this announcement.
Background to and reasons for the Acquisition
Bidco has been monitoring the cybersecurity sector for potential investment
opportunities as it believes that this is a sector that has excellent growth
credentials.
Bidco has identified GRC as a business with a solid offering in the
cybersecurity space and Bidco believes that with its operating resources, GRC
can realise more growth opportunities within the market. GRC is a
well-established player in the governance, risk management and compliance
market, with a broad offering across its three divisions and a product range
that is regularly updated based on the changing needs and standards in the
market.
Bloom Equity has had significant successes as investors, board members and
operating executives in tech-enabled services and software businesses and
believes that this experience and its network in the cybersecurity sector
could be of great advantage to help scale GRC to the next level. In addition,
most of Bloom Equity's investments are U.S./Europe cross-border businesses,
and Bloom Equity believes there is the potential to help the GRC management
team grow the GRC business in the U.S.
Bidco believes it can not only provide GRC with a stronger platform for growth
but that it can also support GRC in delivering against its growth potential by
providing access to additional capital, expertise and resources. Bidco plans
to make future investments to capitalise on the market opportunity and help
GRC achieve its strategic growth agenda of expanding its global footprint and
enhancing the service and product offerings GRC provides to its customers.
Background to and reasons for the recommendation
The GRC Directors believe that the GRC Group is well positioned to capture the
significant opportunity in the global Governance, Risk Management and
Compliance and Cyber RegTech market.
Whilst the outlook for its key target markets is favourable in the medium term
given global market needs and demand, GRC will require both scale and
geographical reach to take full advantage of these opportunities. To fulfil
its potential and deliver on GRC's accelerated growth plan, the GRC Directors
believe that GRC will need access to additional growth capital and to
strengthen its balance sheet. Given the current financial market conditions,
the GRC Directors do not believe that access to such additional capital is
readily available to GRC via the capital markets at a price that would enable
it to deliver shareholder value in the short to medium term.
The GRC Directors believe that the Acquisition will provide the necessary
resources and support required to scale GRC's business, whilst also removing
the significant cost and regulatory burden and constraints of being a UK
publicly quoted company.
Prior to agreeing the terms of the Acquisition, the GRC Directors, with the
input of its advisers, ran a process designed to elicit expressions of
interest in a purchase of the GRC Group with a view to securing the best deal
for GRC Shareholders. The GRC Directors confirm that following this process
they received no other indications of interest at levels deemed to be
acceptable by the GRC Directors and are not as at the date of this
announcement in discussions with any other party.
The market for GRC Shares is relatively illiquid, making it challenging for
GRC Shareholders to monetise their holdings should they so wish. The
Acquisition provides GRC Shareholders with the opportunity for an immediate
and certain realisation of cash.
Irrevocable undertakings and letter of intent
In total, including the irrevocable undertakings from the GRC Directors noted
below, Bidco has received irrevocable commitments and a letter of intent to
vote in favour of the resolutions relating to the Scheme and the Acquisition
at the Meetings (or in the event that the Acquisition is implemented by an
Offer, to accept or procure acceptance of such Offer), in respect of, in
aggregate, 71,210,415 GRC Shares (representing approximately 66.0 per cent. of
existing issued ordinary share capital of GRC as at 4 June 2024, being the
Business Day prior to the date of this announcement).
These comprise of the following irrevocable undertakings and a non-binding
letter of intent:
· Bidco has received irrevocable undertakings from the GRC Directors
who hold GRC Shares to: (i) vote (or, where applicable, procure voting) in
favour of the resolutions relating to the Scheme and the Acquisition at the
Meetings (or in the event that the Acquisition is implemented by an Offer, to
accept or procure acceptance of such Offer); and (ii) vote against any
competing proposal, in respect of, in aggregate, 44,002,640 GRC Shares
(representing approximately 40.8 per cent. of the existing issued ordinary
share capital of GRC as at 4 June 2024, being the Business Day prior to the
date of this announcement). The undertaking from the GRC Directors will remain
binding in the event that a higher competing offer for GRC is made.
· In addition to the irrevocable undertakings received from the GRC
Directors described above, Bidco has received an irrevocable undertaking to
vote (or, where applicable, procure voting) in favour of the resolutions
relating to the Scheme and the Acquisition at the Meetings (or in the event
that the Acquisition is implemented by an Offer, to accept or procure
acceptance of such Offer), from Nigel Wray in respect of, in aggregate,
12,217,775 GRC Shares (representing approximately 11.3 per cent. of the
existing issued ordinary share capital of GRC as at 4 June 2024, being the
Business Day prior to the date of this announcement).
· In addition Bidco has received a letter of intent from Canaccord
Genuity Asset Management Limited to instruct their custodian to vote in favour
of the Acquisition in respect of, in aggregate, 14,990,000 GRC Shares
(representing approximately 13.9 per cent. of the existing issued ordinary
share capital of GRC as at 4 June 2024, being the Business Day prior to the
date of this announcement).
Further details of these irrevocable undertakings (including the circumstances
in which they cease to be binding) and the letter of intent are set out in
Appendix 3 to this announcement.
Information on Bidco and Bloom Equity
Bidco
Bidco is a private limited company incorporated in England and Wales for the
purposes of the Acquisition.
Bloom Equity
Bloom Equity is a global private equity firm headquartered in New York, USA
that invests exclusively in lower middle market B2B technology, software and
tech-enabled business service companies in North America, Western Europe and
Australia. Bloom Equity has an operating model that is focused on working with
its portfolio companies to help them to deliver against their growth
strategies in a capital-efficient manner.
Bloom Equity's investment and in-house operations team have strong credentials
in unlocking growth and scaling software and tech-enabled services companies
(both organically and through a considered M&A strategy).
Information on GRC
GRC is an international governance, risk management and compliance company
whose main business is cyber defence in depth. GRC is an integrated cyber
security service provider focussed on delivering results and exceeding
clients' expectations.
Earlier today, GRC separately announced a trading update for the period to 31
March 2024 in which it stated that FY24 was a third year of solid progress in
improving revenue, margins and productivity.
A summary of the key highlights from the trading update include:
o Revenue expected to be up 4% to £15.3m (FY23: £14.7m).
o Contracted and recurring revenue expected to be up 3% to £11.0m (FY23:
£10.7m).
o Annualised Recurring Revenue ('ARR') expected to be £11.0m (FY23: £10.9m).
o Gross Margin expected to increase to 62% (FY23: 61%).
o Continued Gross Margin improvement from 52% in FY21 to 62% in FY24
o Underlying EBITDA expected to be not less than £1.0m (FY23: £0.3m)
o Year-end cash of £0.2m (FY23: £0.1m).
o Total borrowings at 31 March 2024 (excluding capitalised lease obligations)
of £1.7m (FY23: £1.3).
While the GRC Directors anticipate that the UK general election will affect
short term sales, trading in April was in line with expectations.
The FY24 numbers detailed above are unaudited and actual outturn for the
financial year may be subject to adjustment through the audit process.
Underlying EBITDA is earnings before interest, tax, depreciation and
amortisation, adjusted to remove exceptional administrative costs not part of
normal trading.
The GRC Directors have considered the profit estimate and confirm that the
profit estimate made in the trading update, and included above, remains valid
at the date of this announcement. The GRC Directors confirm that the profit
estimate was properly compiled based on GRC's unaudited financial information
and the basis of accounting used is consistent with GRC's current accounting
policies, which are in accordance with IFRS.
Timetable and conditions
It is intended that the Acquisition will be implemented by way of a
court‑sanctioned scheme of arrangement under Part 26 of the 2006 Act
(although Bidco reserves the right to effect the Acquisition by way of an
Offer, subject to the consent of the Panel).
The terms of the Acquisition will be put to GRC Shareholders at the Court
Meeting and the General Meeting. The Court Meeting and the General Meeting are
required to enable GRC Shareholders to consider and, if thought fit, vote in
favour of the Scheme and the Resolution to implement the Scheme. In order to
become Effective, the Scheme must be approved by a majority in number of GRC
Shareholders, present and voting at the Court Meeting, whether in person or by
proxy, representing 75 per cent. or more in value of the Scheme Shares voted.
In addition, a special resolution implementing the Scheme GRC must be passed
by GRC Shareholders representing at least 75 per cent. of votes cast at the
General Meeting.
The Conditions to the Acquisition are set out in full in Appendix 1 to this
announcement along with certain other terms; the full terms and conditions
will be provided in the Scheme Document.
It is expected that the Scheme Document, containing further information about
the Acquisition and notices of the Court Meeting and General Meeting, together
with the associated Forms of Proxy, will be posted to GRC Shareholders as soon
as practicable and in any event within 28 days of this announcement (or such
later time as GRC, Bidco and the Panel agree) and the Meetings are expected to
be held as soon as reasonably practicable thereafter. Subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, the
Scheme Document will also be made available on GRC's website at
www.grci.group/investors (http://www.grci.group/investors) .
The Acquisition is currently expected to complete during the third quarter of
2024, subject to the satisfaction or (where applicable) waiver of the
Conditions. An expected timetable of key events relating to the Acquisition
will be set out in the Scheme Document.
This summary should be read in conjunction with the following announcement and
the Appendices. The conditions to, and certain further terms of, the
Acquisition are set out in Appendix 1. The bases and sources for certain
financial information contained in this announcement are set out in
Appendix 2. Details of undertakings and the letter of intent received by
Bidco are set out in Appendix 3. Certain definitions and terms used in this
announcement are set out in Appendix 4.
The person responsible for arranging release of this announcement on behalf of
GRC is Chris Hartshorne, Group Finance Director.
Enquiries
Bloom Equity c/o Cavendish
Bart Macdonald
Jeff Hsiang
Cavendish (Sole Financial Adviser to Bloom Equity) +44 20 7220 0500
Henrik Persson
Marc Milmo
Fergus Sullivan
Rory Sale
GRC +44 33 0999 0222
c/o Wyvern Partners
Wyvern Partners (Financial Adviser to GRC) +44 20 7097 5205
Andrew Robinson
Anthony Gahan
Singer Capital Markets (Rule 3 Adviser, Nominated Adviser and Joint Broker to +44 20 7496 3000
GRC)
Phil Davies
James Fischer
Dowgate Capital Limited (Joint Broker to GRC) +44 (0)20 3903 7715
James Serjeant
Russell Cook
Fladgate LLP is acting as legal adviser to Bloom Equity.
Mills & Reeve LLP is acting as legal adviser to GRC.
Further information
Cavendish Capital Markets Limited ("Cavendish"), which is authorised and
regulated in the United Kingdom by the FCA, is acting as financial adviser to
Bloom Equity and Bidco and no one else in connection with the matters
described in this announcement and will not be responsible to anyone other
than Bloom Equity and Bidco for providing the protections offered to clients
of Cavendish or for providing advice in connection with any matter referred to
in this announcement. Neither Cavendish nor any of its affiliates (nor their
respective directors, officers, employees or agents) 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 Cavendish in connection with this announcement, any statement
contained herein, the Offer or otherwise. No representation or warranty,
express or implied, is made by Cavendish as to the contents of this
announcement.
Wyvern Partners Limited ("Wyvern"), which is authorised and regulated in the
United Kingdom by the FCA, is acting as financial adviser exclusively to GRC
and no-one else in connection with the matters described in this announcement
and will not be responsible to anyone other than GRC for providing the
protections afforded to clients of Wyvern nor for providing advice in
connection with the subject matter of this announcement. Neither Wyvern nor
any of its affiliates (nor any of their respective directors, partners,
officers, employees or agents) 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 Wyvern in connection with this announcement, any statement contained
herein, the Offer or otherwise. No representation or warranty, express or
implied, is made by Wyvern as to the contents of this announcement.
Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as
financial adviser and nominated adviser exclusively to GRC and no-one else in
connection with the matters described in this announcement and will not be
responsible to anyone other than GRC for providing the protections afforded to
clients of Singer Capital Markets nor for providing advice in connection
with the subject matter of this announcement. Neither Singer Capital
Markets nor any of its affiliates (nor any of their respective directors,
partners, officers, employees or agents) 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 Singer Capital Markets in connection with this announcement, any
statement contained herein, the Offer or otherwise. No representation or
warranty, express or implied, is made by Singer Capital Markets as to the
contents of this announcement.
Dowgate Capital Limited ("Dowgate"), which is authorised and regulated in the
United Kingdom by the FCA, is acting as joint broker exclusively to GRC and
no-one else in connection with the matters described in this announcement and
will not be responsible to anyone other than GRC for providing the protections
afforded to clients of Dowgate nor for providing advice in connection with the
subject matter of this announcement. Neither Dowgate nor any of its affiliates
(nor any of their respective directors, partners, officers, employees or
agents) 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 Dowgate in connection with
this announcement, any statement contained herein, the Offer or otherwise. No
representation or warranty, express or implied, is made by Dowgate as to the
contents of this announcement.
This announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of GRC in any
jurisdiction in contravention of applicable law. The Acquisition will be
implemented solely pursuant to the terms of the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the offer document), which will
contain the full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any vote in respect of the Scheme
or other response in relation to the Acquisition should be made only on the
basis of the information contained in the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the offer document).
This announcement does not constitute a prospectus, prospectus equivalent
document or exempted document.
Bidco reserves the right to elect to implement the Acquisition by way of an
Offer as an alternative to the Scheme (subject to the Panel's consent). In
such event, the Acquisition will be implemented on substantially the same
terms, so far as applicable, as those which will apply to the Scheme, subject
to appropriate amendments to reflect, among other things, the change in method
of effecting the Acquisition (including, without limitation: (i) the inclusion
of an acceptance condition set at 75 per cent. of the GRC Shares to which such
Offer relates (or such other percentage as Bidco may, subject to the rules of
the Takeover Code and with the consent of the Panel, decide); and (ii) those
required by, or deemed appropriate by, Bidco under applicable law). Further,
if sufficient acceptances of such Offer are received and/or sufficient GRC
Shares are otherwise acquired, it is the intention of Bidco to apply the
provisions of Chapter 3 of Part 28 of the 2006 Act to acquire compulsorily any
outstanding GRC Shares to which such Offer relates.
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. This announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code, the
AIM Rules, the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of jurisdictions outside
England.
The availability of the Acquisition to GRC Shareholders who are not resident
in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons
who are not resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their GRC Shares with respect to the Scheme at the Court Meeting, or
to appoint another person as proxy to vote at the Court Meeting on their
behalf, may be affected by the laws of the relevant jurisdictions in which
they are located. Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and persons involved
in the Acquisition disclaim any responsibility or liability for the violation
of such restrictions by any person. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.
Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into, from, or by the use of mails or
any means or instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or of any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction where to do so would violate the laws
in that jurisdiction and no person may vote in favour of the Scheme by any
such use, means, instrumentality or from within a Restricted Jurisdiction or
any other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction. Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and may not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in or into or
from any Restricted Jurisdiction and persons receiving such documents
(including, without limitation, agents, custodians, nominees and trustees) may
not mail or otherwise forward, distribute or send it in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of an Offer (unless otherwise permitted by applicable law and regulation), the
Offer may not be made directly or indirectly, in, into, from, or by the use of
mails or any means or instrumentality (including, but not limited to,
facsimile, e-mail or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any Restricted Jurisdiction and the Offer may
not be capable of acceptance by any such use, means, instrumentality or
facilities.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Notice to U.S. GRC Shareholders
GRC Shareholders in the United States should note that the Acquisition relates
to the securities of a company organised under the laws of England and Wales
and is proposed to be effected by means of a scheme of arrangement under the
2006 Act. This Announcement, the Scheme Document and certain other documents
relating to the Acquisition have been or will be prepared in accordance with
English law, the AIM Rules, the Takeover Code and UK disclosure requirements,
and the format and style applicable to a scheme of arrangement under the 2006
Act, all of which differ from those in the United States. A transaction
effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act.
Accordingly, the Scheme is subject to the disclosure requirements of and
practices applicable in the United Kingdom to schemes of arrangement, which
differ from the disclosure requirements and practices of the United States
tender offer and proxy solicitation rules.
None of the securities referred to in this announcement nor the information
contained in this announcement has been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission in the
United States or any other US regulatory authority, nor have such authorities
passed upon the fairness or merits of the proposal contained in this
announcement or determined the adequacy or accuracy of the information
contained herein. Any representation to the contrary is a criminal offence in
the United States.
GRC's financial statements, and all financial information that is included in
this announcement or that may be included in the Scheme Document, or any other
documents relating to the Acquisition, have been prepared in accordance with
the UK adopted International Accounting Standards and may not be comparable to
financial statements of companies in the United States or other companies
whose financial statements are prepared in accordance with US generally
accepted accounting principles. US generally accepted principals differ in
certain respects from the UK adopted International Accounting Standards. None
of the financial information in this announcement has been audited in
accordance with the auditing standards generally accepted in the US or the
auditing standards of the Public Company Accounting Oversight Board of the US.
It may be difficult for US holders of GRC Shares to enforce their rights and
any claims they may have arising under US federal securities laws in
connection with the Acquisition, since GRC is organised under the laws of a
country other than the United States, and some or all of its officers and
directors may be residents of countries other than the United States, and most
of the assets of GRC are located outside of the United States. US holders of
GRC Shares may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US federal securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or judgment.
If Bidco were to elect to implement the Acquisition by means of an Offer, such
Offer may be made in compliance with applicable US securities laws and
regulations, including to the extent applicable, Section 14(e) of the US
Exchange Act and Regulation 14E thereunder, and will be made in accordance
with the Takeover Code. Such an Offer may be made in the United States by
Bidco and no one else. Accordingly, the Acquisition may be subject to
disclosure and other procedural requirements, including with respect to
withdrawal rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic tender
offer procedures and law.
The receipt of cash pursuant to the Acquisition by a GRC Shareholder in the
United States as consideration for the transfer of its GRC Shares pursuant to
the Scheme will likely be a taxable transaction for United States federal
income tax purposes and under any applicable United States state and local
income tax laws. Each GRC Shareholder in the United States is urged to consult
its independent professional tax or legal adviser immediately regarding the US
federal, state and local income and non-income tax consequences of the
Acquisition applicable to it, as well as any consequences arising under the
laws of any other taxing jurisdiction.
Forward Looking Statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and GRC contain statements which are, or may be
deemed to be, "forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but rather on
current expectations and projections of the management of Bidco and GRC about
future events, and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements.
The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on Bidco and
GRC (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should", "would", "might"
or "will" be taken, occur or be achieved. Forward looking statements may
include statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's,
Bloom Equity's, the Bloom Funds' or any member of the GRC Group's operations
and potential synergies resulting from the Acquisition; and (iii) the effects
of global economic conditions and governmental regulation on Bidco's, GRC's,
Bloom Equity's, the Bloom Funds' or any member of the GRC Group's business.
Although Bidco and GRC believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and GRC can give no assurance
that such expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of changes in
general economic and market conditions in the countries in which Bidco, Bloom
Equity, the Bloom Funds and GRC operate, weak, volatile or illiquid capital
and/or credit markets, changes in tax rates, interest rate and currency value
fluctuations, the degree of competition in the geographic and business areas
in which Bidco, Bloom Equity, the Bloom Funds and GRC operate and changes in
laws or in supervisory expectations or requirements. Other unknown or
unpredictable factors could cause actual results to differ materially from
those expected, estimated or projected in the forward-looking statements. If
any one or more of these risks or uncertainties materialises or if any one or
more of the assumptions proves incorrect, actual results may differ materially
from those expected, estimated or projected. Such forward-looking statements
should therefore be construed in the light of such factors. Neither Bloom
Equity, the Bloom Funds, Bidco nor GRC, 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. You are
cautioned not to place any reliance on these forward-looking statements.
Specifically, statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the GRC Group, there may be additional changes
to the GRC Group's operations. As a result, and given the fact that the
changes relate to the future, the resulting cost synergies may be materially
greater or less than those estimated.
Other than in accordance with their legal or regulatory obligations, neither
Bidco, Bloom Equity, the Bloom Funds, nor GRC is under any obligation, and
Bidco, Bloom Equity, the Bloom Funds and GRC expressly disclaim any intention
or obligation, to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
Dealing and Opening Position Disclosure Requirements
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) of the Takeover Code
applies GRC be made by no later than 3.30 pm (London time) on the 10(th)
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10(th) 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 Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
will be made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on GRC's website at
https://www.GRC.group/investors (https://www.GRC.group/investors) by no later
than 12 noon (London time) on the Business Day following this announcement.
For the avoidance of doubt, neither the content of this website nor of any
website accessible from hyperlinks set out in this announcement is
incorporated by reference or forms part of this announcement.
No profit forecasts, estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for GRC for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per share for
GRC.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, GRC Shareholders, persons
with information rights and participants in the GRC Share Plan may request a
hard copy of this announcement, free of charge, by contacting the Company's
registrars, Equiniti Limited, during business hours on +44 (0)371 384 2050 or
in writing to Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA,
United Kingdom. Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. For persons who receive a copy of this
announcement in electronic form or via a website notification, a hard copy of
this announcement will not be sent unless so requested. In accordance with
Rule 30.3 of the Takeover Code, such persons may also request that all future
documents, announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other
information provided by GRC Shareholders, persons with information rights and
other relevant persons for the receipt of communications from GRC may be
provided to Bidco during the offer period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.
General
If the Acquisition is effected by way of an Offer, and such an Offer becomes
or is declared unconditional in all respects and sufficient acceptances are
received, Bidco intends to exercise its rights to apply the provisions of
Chapter 3 of Part 28 of the 2006 Act so as to acquire compulsorily the
remaining GRC Shares in respect of which the Offer has not been accepted.
Investors should be aware that Bidco may purchase GRC Shares otherwise than
under any Offer or the Scheme, including pursuant to privately negotiated
purchases.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, GRC confirms that, as at 4
June 2024, it had in issue 107,826,246 ordinary shares of 0.1 pence each. The
ISIN for the shares is GB00BG06MV41.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) NO.596/2014 AS IT FORMS PART OF ENGLISH LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION WILL BE CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
5 June 2024
RECOMMENDED CASH ACQUISITION
of
GRC International Group plc
by
Bloom Seed Bidco Limited
(a newly formed company indirectly owned by
investment funds advised by Bloom Equity Partners Management, LLC.)
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1 Introduction
The boards of directors of Bidco and GRC are pleased to announce that they
have reached agreement on the terms and conditions of a recommended all cash
offer to be made by Bidco for the entire issued, and to be issued, ordinary
share capital of GRC.
It is intended that the Acquisition will be implemented by way of a
court‑sanctioned scheme of arrangement under Part 26 of the 2006 Act
(although Bidco reserves the right to effect the Acquisition by way of an
Offer, subject to the consent of the Panel). The Conditions to the Acquisition
are set out in full in Appendix 1 to this announcement.
2 The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and further terms set out in Appendix 1 to this announcement and the full
terms and conditions to be set out in the Scheme Document, each GRC
Shareholder will be entitled to receive:
for each GRC Share: 8.0 pence in cash
The Acquisition price per GRC Share represents a premium of approximately:
· 66.7 per cent. to the Closing Price of 4.8 pence per GRC Share on 4
June 2024 (being the Business Day before the commencement of the Offer
Period);
· 66.7 per cent. to the average price of 4.8 pence per GRC Share for
the one-month period ended 4 June 2024 (being the Business Day before the
commencement of the Offer Period); and
· 44.4 per cent. to the average price of 5.5 pence per GRC Share for
the six-month period ended 4 June 2024 (being the Business Day before the
commencement of the Offer Period).
The Acquisition values GRC's entire issued, and to be issued, ordinary share
capital at approximately £8.6 million on a fully diluted basis.
The GRC Shares will be acquired pursuant to the Acquisition fully paid and
free from all liens, charges, equities, encumbrances, rights of pre‑emption
and any other interests of any nature whatsoever and together with all rights
attaching thereto, including without limitation voting rights and the right to
receive and retain in full all dividends and other distributions (if any)
announced, declared, made or paid with a record date on or after the Effective
Date.
If, on or after the date of this announcement and prior to the Acquisition
becoming Effective, any dividend and/or other distribution and/or other return
of capital or value is announced, declared, made or paid or becomes payable in
respect of the GRC Shares, Bidco reserves the right to reduce the
consideration payable under the terms of the Acquisition for the GRC Shares by
an amount up to the aggregate amount of such dividend and/or distribution
and/or other return of capital or value, in which case any reference in this
announcement to the consideration payable under the terms of the Acquisition
will be deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall be the
subject of an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the terms of the Scheme
or the Acquisition. In such circumstances, GRC Shareholders would be entitled
to retain any such dividend, distribution and/or other return of capital or
value.
3 Background to and reasons for the Acquisition
Bidco has been monitoring the cybersecurity sector for potential investment
opportunities as it believes that this is a sector that has excellent growth
credentials.
Bidco has identified GRC as a business with a solid offering in the
cybersecurity space and Bidco believes that with its operating resources, GRC
can realise more growth opportunities within the market. GRC is a
well-established player in the governance, risk management and compliance
market, with a broad offering across its three divisions and a product range
that is regularly updated based on the changing needs and standards in the
market.
Bloom Equity has had significant successes as investors, board members and
operating executives in tech-enabled services and software businesses and
believes that this experience and its network in the cybersecurity sector
could be of great advantage to help scale GRC to the next level. In addition,
most of Bloom Equity's investments are U.S./Europe cross-border businesses,
and Bloom Equity believes there is the potential to help the GRC management
team grow the GRC business in the U.S.
Bidco believes it can not only provide GRC with a stronger platform for growth
but that it can also support GRC in delivering against its growth potential by
providing access to additional capital, expertise and resources. Bidco plans
to make future investments to capitalise on the market opportunity and help
GRC achieve its strategic growth agenda of expanding its global footprint and
enhancing the service and product offerings GRC provides to its customers.
4 Recommendation
The GRC Directors, who have been so advised by Singer Capital Markets as to
the financial terms of the Acquisition, consider the terms of the Acquisition
to be fair and reasonable. In providing advice to the GRC Directors, Singer
Capital Markets have taken into account the commercial assessments of the GRC
Directors. Singer Capital Markets are providing independent financial advice
to the GRC Directors. Singer Capital Markets is providing independent
financial advice for the purposes of Rule 3 of the Takeover Code.
Accordingly, the GRC Directors intend to recommend unanimously that the GRC
Shareholders vote in favour of the Scheme at the Court Meeting and the
Resolution to be proposed at the General Meeting as the GRC Directors who hold
GRC Shares have irrevocably undertaken to do in respect of their own
beneficial holdings totalling 44,002,640 GRC Shares (representing
approximately 40.8 per cent. of the existing issued ordinary share capital of
GRC as at 4 June 2024, being the Business Day prior to the date of this
announcement). Further details of these undertakings, including the
circumstances in which they cease to be binding, are set out in Appendix 3 to
this announcement.
5 Background to and reasons for the recommendation
In the early life of the GRC Group, GRC's focus was on delivering an
integrated solution to the business problem of responding to cyber threats and
compliance requirements, thus enabling boards to have oversight of the
technology. The introduction of the General Data Protection Regulation ((EU)
2016/679) ("GDPR") led to an increased focus on data protection and privacy
compliance, underpinning GRC's initial public offering in 2018. When the
demand for GDPR related services began to recede in importance following its
adoption, the Group failed to achieve the growth it had anticipated at the
time of its listing, and this has been reflected in a reduction in the
Company's market value. The GRC Directors have therefore started to re-focus
the Company towards a SaaS business model based upon the combination of cyber
security and privacy.
Cyber risk has risen dramatically in recent times leading to an increased
corporate focus on cyber and privacy compliance. This, alongside the dramatic
increase in the cost of cyber insurance and the heightened reputational risks
associated with breaches will, the GRC Directors believe, help the Group grow
in the medium term. The GRC Directors believe that the GRC Group is well
positioned to take advantage of the significant opportunity in the global
Governance, Risk Management and Compliance and Cyber RegTech market.
However, the GRC Directors believe that, whilst the outlook for the GRC
Group's key target markets is favourable in the medium term, given global
market need and demand, GRC will require both scale and reach to take full
advantage of these opportunities. To fulfil its potential and deliver on GRC's
accelerated growth plan, the GRC Directors believe that GRC will need access
to additional growth capital and to strengthen its balance sheet. Given the
current financial market conditions, the GRC Directors do not believe that
access to such additional capital is readily available to GRC via the capital
markets at a price that would enable it to deliver shareholder value in the
short to medium term. The GRC Directors believe that the Acquisition will
provide the necessary resources and support required to scale GRC's business,
whilst also removing the significant cost and regulatory burden and
constraints of being a UK publicly quoted company.
In this context, the GRC Directors also note that, prior to agreeing the terms
of the Acquisition, they, with input from GRC's advisers, ran a process
designed to elicit expressions of interest in the GRC Group with a view to
securing the best deal for GRC Shareholders. The GRC Directors confirm that
following this process they have received no other indications of interest at
levels deemed to be acceptable by the GRC Directors and are not as at the date
of this announcement in discussions with any other party.
The GRC Directors also recognise that the market for GRC Shares is relatively
illiquid, making it challenging for GRC Shareholders to monetise their
holdings should they so wish. The Acquisition provides GRC Shareholders with
the opportunity for an immediate and certain realisation of cash.
The GRC Directors have consulted with a number of the GRC Shareholders who
have demonstrated their support for the Acquisition, as evidenced by their
provision of an irrevocable undertaking and a letter of intent to vote in
favour of the Scheme in respect of, in aggregate, 27,207,775 GRC Shares
representing approximately 25.2 per cent. of GRC's existing issued share
capital (as at 4 June 2024, being the Business Day prior to the date of this
announcement).
In addition to the financial terms of the Acquisition, in its evaluation of
Bidco as suitable owners of GRC from the perspective of all stakeholders, the
GRC Directors have also taken into account Bidco's intentions for the
business, management and employees and other stakeholders of GRC, as set out
in paragraph 12 below. In particular, the GRC Directors note that Bidco has
confirmed that it will seek to continue with the growth plan of the UK
business and the importance placed by Bidco on the existing employees and
other stakeholders of GRC.
Consequently, the GRC Directors believe that the Acquisition represents the
best opportunity for GRC to accelerate its growth strategy for the benefit of
all stakeholders.
6 Information relating to Bidco and Bloom Equity
Bidco
Bidco is a private limited company incorporated in England and Wales on 31 May
2024. Bidco is a newly-formed vehicle, indirectly owned by investment funds
advised by Bloom Equity. Bidco was formed for the purposes of the Acquisition
and has not traded since its date of incorporation, nor has it entered into
any obligations other than in connection with the Acquisition.
Bloom Equity
Bloom Equity is a global private equity firm headquartered in New York, USA
that invests exclusively in lower middle market B2B technology, software and
tech-enabled business service companies in North America, Western Europe and
Australia. Bloom Equity has an operating model that is focused on working with
its portfolio companies to help them to deliver against their growth
strategies in a capital-efficient manner. Bloom Equity's approach is to view
its team as an extension of the portfolio company's management team to help
them grow towards $100 million of revenue.
Bloom Equity's investment and in-house operations team have strong credentials
in unlocking growth and scaling software and tech-enabled services companies
(both organically and through a considered M&A strategy).
7 Information relating to GRC
GRC is an international governance, risk management and compliance company
whose main business is cyber defence in depth. GRC is a leading global,
integrated cyber security service provider delivering great value to clients.
As a group of companies, GRC provides a range of products and services to
address the cyber security governance, risk management and compliance
requirements of organisations to enable them to meet the commercial
requirements and regulatory standards that are in force, or are coming into
force, in jurisdictions across the globe.
GRC's off-the-shelf and tailored solutions help organisations manage the
increasingly complex cyber and privacy compliance demands all organisations
face today. From ISO 27001, PCI DSS and Penetration Testing to Cloud security
and DPO as a Service to Privacy by Design and Data Water marking, GRC's
specialist platforms, services and professional expertise are designed to give
clients, both large and small, peace of mind in respect of their cyber and
privacy compliance demands. As a group, the GRC Group has a broad and
integrated global portfolio of cyber and privacy platforms. GRC's combined
expertise makes it a go-to resource for building cyber resilience and managing
cyber threats while meeting global privacy requirements. As a group of
companies with nine subsidiaries operating across the compliance and cyber
security space, the GRC Group helps organisations develop and execute their
cyber resilience and defence in depth strategies.
GRC has grown from a niche information security and privacy training and
consultancy business into a broader Governance, Risk and Compliance Group with
a Cyber Defence-in-Depth model which means it is able to sell long-term
strategic relationships with clients and a service offering structured around
three divisions: e-Commerce, SaaS and Professional Services. Across these
three divisions, GRC works to improve customers' cyber resilience and
compliance postures. GRC uses its expertise to deliver broad Cyber
Defence-in-Depth solutions that are tailored to customers' risk appetites,
budgets and business goals.
Earlier today, GRC separately announced a trading update for the period to 31
March 2024 ("FY24") which stated that FY24 was a third year of solid progress
in improving revenue, margins and productivity.
o A summary of the key highlights from the trading update include Revenue
expected to be up 4% to £15.3m (FY23: £14.7m).
o Contracted and recurring revenue expected to be up 3% to £11.0m (FY23:
£10.7m).
o Annualised Recurring Revenue ('ARR') expected to be £11.0m (FY23: £10.9m).
o Gross Margin expected to increase to 62% (FY23: 61%).
o Continued Gross Margin improvement from 52% in FY21 to 62% in FY24
o Underlying EBITDA expected to be not less than £1.0m (FY23: £0.3m) up
330%.
o Year-end cash of £0.2m (FY23: £0.1m).
o Total borrowings at 31 March 2024 (excluding capitalised lease obligations)
of £1.7m (FY23: £1.3m).
While the GRC Directors anticipate that the UK general election will affect
short term sales, trading in April was in line with expectations.
The FY24 numbers detailed above are unaudited and actual outturn for the
financial year may be subject to adjustment through the audit process.
Underlying EBITDA is earnings before interest, tax, depreciation and
amortisation, adjusted to remove exceptional administrative costs not part of
normal trading.
The GRC Directors have considered the profit estimate and confirm that the
profit estimate made in the trading update, and included above, remains valid
at the date of this announcement. The GRC Directors confirm that the profit
estimate was properly compiled based on GRC's unaudited financial information
and the basis of accounting used is consistent with GRC's current accounting
policies, which are in accordance with IFRS.
8 Irrevocable undertakings
In total, including the irrevocable undertakings from the GRC Directors noted
below, Bidco has received irrevocable commitments and a letter of intent to
vote in favour of the resolutions relating to the Scheme and the Acquisition
at the Meetings (or in the event that the Acquisition is implemented by an
Offer, to accept or procure acceptance of such Offer), in respect of, in
aggregate, 71,210,415 GRC Shares (representing approximately 66.0 per cent. of
existing issued ordinary share capital of GRC as at 4 June 2024, being the
Business Day prior to the date of this announcement).
These comprise the following irrevocable undertakings and a non-binding letter
of intent:
· Bidco has received irrevocable undertakings from the GRC Directors
who hold GRC Shares to: (i) vote (or, where applicable, procure voting) in
favour of the resolutions relating to the Scheme and the Acquisition at the
Meetings (or in the event that the Acquisition is implemented by an Offer, to
accept or procure acceptance of such Offer); and (ii) vote against any
competing proposal, in respect of, in aggregate, 44,002,640 GRC Shares
(representing approximately 40.8 per cent. of the existing issued ordinary
share capital of GRC as at 4 June 2024, being the Business Day prior to the
date of this announcement). The undertaking from the GRC Directors will remain
binding in the event that a higher competing offer for GRC is made.
· In addition to the irrevocable undertakings received from the GRC
Directors described above, Bidco has received an irrevocable undertaking to
vote (or, where applicable, procure voting) in favour of the resolutions
relating to the Scheme and the Acquisition at the Meetings (or in the event
that the Acquisition is implemented by an Offer, to accept or procure
acceptance of such Offer), from Nigel Wray in respect of, in aggregate,
12,217,775 GRC Shares (representing approximately 11.3 per cent. of the
existing issued ordinary share capital of GRC as at 4 June 2024, being the
Business Day prior to the date of this announcement).
· In addition Bidco has received a letter of intent from Canaccord
Genuity Asset Management Limited to instruct their custodian to vote in favour
of the Acquisition in respect of, in aggregate, 14,990,000 GRC Shares
(representing approximately 13.9 per cent. of the existing issued ordinary
share capital of GRC as at 4 June 2024, being the Business Day prior to the
date of this announcement).
Further details of these irrevocable undertakings (including the circumstances
in which they cease to be binding) and the letter of intent are set out in
Appendix 3 to this announcement.
9 Financing of the Acquisition
The cash consideration payable by Bidco under the terms of the Acquisition
will be financed by an equity investment indirectly into Bidco from the Bloom
Funds.
Cavendish, in its capacity as financial adviser to Bidco, is satisfied that
sufficient resources are available to Bidco to satisfy in full the cash
consideration payable to GRC Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
10 Offer‑related arrangements
Confidentiality Agreement
GRC and Bloom Equity entered into the confidentiality agreement on 28 November
2023 pursuant to which Bloom Equity has undertaken to keep certain information
relating to the GRC Group confidential and not to disclose such information to
third parties except to certain permitted disclosees for the purposes of
evaluating the Acquisition or if required by applicable laws or regulations.
The Confidentiality Agreement also contains customary non-solicit and
standstill provisions (subject to customary carve-outs).
11 Disclosure of interests in GRC securities
Except for the irrevocable undertakings and the letter of intent referred to
in paragraph 8 above and Appendix 3, as at 4 June 2024 (being the Business
Day prior to the date of this announcement) neither Bidco, nor any of its
directors, nor, so far as Bidco is aware, any person treated as acting in
concert (within the meaning of the Takeover Code) with it for the purposes of
the Acquisition (i) had any interest in or right to subscribe for or had
borrowed or lent any GRC Shares or securities convertible or exchangeable into
GRC Shares, or (ii) had any short positions in respect of relevant securities
of GRC (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to purchase
or take delivery, or (iii) has borrowed or lent any relevant securities of GRC
(including, for these purposes, any financial collateral arrangements of the
kind referred to in Note 4 on Rule 4.6 of the Takeover Code) save for any
borrowed shares which have been either on-lent or resold, or (iv) is a party
to any dealing arrangement of the kind referred to in Note 11 on the
definition of acting in concert in the Takeover Code.
It has not been practicable for Bidco to make enquiries of all of its concert
parties in advance of the release of this announcement. Therefore, if Bidco
becomes aware, following the making of such enquiries, that any of its concert
parties have any additional interests in the relevant securities of GRC, all
relevant details in respect of Bidco's concert parties will be included in
Bidco's Opening Position Disclosure in accordance with Rule 8.1(a) and Note
2(a)(i) on Rule 8 of the Takeover Code which must be made on or before 12 noon
(London time) on 19 June 2024.
12 Directors, management, employees, pensions, research and development and locations
Strategic plans for GRC
As set out in paragraph 3 of this Announcement, Bidco believes that the
Acquisition represents an attractive opportunity to support GRC with its
growth plans. Bidco believes that in a private company setting, with access to
additional capital and the expertise and resources of Bloom Equity, GRC will
be able to strengthen its platform and be better positioned to capitalise on
future growth opportunities.
Bidco plans to support the GRC management team to enable them to capitalise on
the market opportunity. Bidco agrees with the GRC management team's belief
that to capitalise on the market opportunity in the cyber security sector GRC
needs to expand its global footprint and enhance the service and product
offerings GRC provides to its customers. Bidco believes that it will be able
to assist GRC, with its sector knowledge and the team at Bloom Equity's
experience with helping companies grow. In addition, Bidco has confirmed that
it can provide GRC with access to additional financing should that be required
to deliver GRC's growth strategy.
Bidco has only been granted access to GRC's senior management for the purposes
of confirmatory due diligence. Whilst this has been sufficient to formulate
its intention to support GRC's ongoing strategy following completion of the
Acquisition, Bidco will work with GRC's management to evolve the strategy as
GRC is no longer burdened by a listing and its current capital constraints.
Bidco expects to conclude this strategic review within approximately six
months from the Effective Date.
This evaluation will involve an assessment of the opportunity across the
business to enhance its strategic positioning, accelerate development and
deliver its long-term objectives. Bidco expects the review to include, among
other topics:
· assessing GRC's public company related headcount and the appropriate
employee structure to deliver against Bidco's growth ambitions;
· evaluating customer opportunities to continue to scale in
international markets, in particular the U.S.;
· identifying, evaluating and executing acquisition opportunities; and
· identifying areas to invest in to support the future product and
R&D roadmap.
Employees and management
Bidco recognises the significant contribution made by GRC's management team
and employees to GRC's development to date and attaches great importance to
their skills and experience. Bidco is looking forward to working with GRC's
management team and employees to ensure that the business thrives as a private
company, thereby offering greater opportunities for GRC's staff, particularly
in terms of activities that pertain to developing and expanding its position
on a global basis.
Bidco intends to complete a detailed evaluation of GRC to inform the process
and scope for any cost base rationalisation including that of headcount. As
part of this review, Bidco intends to discuss with, and further draw upon, GRC
management's experience to gain a detailed understanding of the GRC
organisation, and the roles and responsibilities of employees within the
business. Bidco is looking to acquire GRC to support the growth of GRC, rather
than being focused on cost rationalisation. Therefore, should there be any
headcount reductions it is not intended that these will be greater than 10 per
cent. of the GRC employee numbers.
Bidco confirms the existing contractual and statutory rights and terms and
conditions of employment, including pension obligations, of the management and
employees of GRC will be fully safeguarded in accordance with applicable law.
Bidco has no intention to make any material change to the conditions of
employment of GRC employees or in the balance of the skills and functions of
the employees and management of GRC.
Bidco expects that GRC's non-executive directors will resign from the GRC
Board upon completion of the Acquisition.
Management incentive arrangements
Bidco intends to review the management, governance and incentive structure of
GRC. Bidco intends to put in place incentivisation arrangements for managers
and employees of GRC. However, Bidco has not entered into any form of
incentivisation arrangement with any member of GRC's management or with any
GRC employee, and nor has it had discussions on the terms of any such
incentivisation arrangement. Bidco does not intend to enter into such
discussions prior to the completion of the Acquisition.
Pension schemes
No member of the Group participates in any defined benefit pension schemes.
As described above, Bidco intends that the existing contractual and statutory
rights of members of GRC's defined contribution pension schemes will be fully
safeguarded in accordance with applicable law.
Headquarters, headquarter functions, locations, fixed assets and research and
development
Consistent with the post-completion evaluation outlined above, and mindful of
virtual working practices, Bidco intends to review GRC's operating location
and headquarter requirements. Bidco does not intend to change the location of
GRC's headquarters and office locations. Bidco has no intention to make any
changes to GRC's fixed asset base at this time.
Bidco does not intend to make any changes to GRC's research and development
functions, except for potential investments to strengthen these capabilities.
Trading Facilities
GRC Shares are currently admitted to trading on the London Stock Exchange's
AIM market, and, subject to the Scheme becoming Effective, an application will
be made to the London Stock Exchange to cancel the admission of GRC Shares to
trading on AIM on or shortly after the Effective Date.
As soon as practicable after the Effective Date, it is intended that GRC will
be re-registered as a private limited company under the relevant provisions of
the 2006 Act.
None of the statements in this paragraph 12 are "post-offer undertakings" for
the purposes of Rule 19.5 of the Takeover Code.
13 GRC Share Plan
Participants in the GRC Share Plan will be contacted regarding the effect of
the Acquisition on their options and awards under the GRC Share Plan. Details
of the impact of the Scheme on the GRC Share Plan and the proposals will be
set out in the Scheme Document. Options under the GRC Share Plan have a higher
exercise price than the Acquisition price per share and therefore no proposals
are required to be made for any options under the GRC Share Plan pursuant to
Rule 15 of the Takeover Code. Accordingly, no such Rule 15 proposals will be
made to option holders in connection with the Acquisition.
14 Scheme process
The Acquisition is subject to the Conditions and certain further terms
referred to in Appendix 1 to this announcement and to the full terms and
conditions to be set out in the Scheme Document, and will only become
Effective if, among other things, the following events occur on or before the
Long Stop Date (or such later date, if any, (a) as Bidco and GRC may agree or
(b) (in a competitive situation) as may be specified by Bidco with the consent
of the Panel, and in each case that (if so required) the Court may allow):
· a resolution to approve the Scheme is passed by a majority in number
of GRC Shareholders present and voting (and entitled to vote) at the Court
Meeting, either in person or by proxy, representing 75 per cent. or more in
value of each class of the Scheme Shares held by those GRC Shareholders;
· the Resolution necessary to implement the Scheme and the Acquisition
is passed by the requisite majority of GRC Shareholders at the General
Meeting;
· following the Court Meeting and General Meeting and satisfaction
and/or waiver (where applicable) of the other Conditions, the Scheme is
sanctioned by the Court (without modification, or with modification on terms
agreed by the Bidco and GRC); and
· following such sanction, an office copy of the Scheme Court Order is
delivered to the Registrar of Companies.
The Conditions in paragraphs 1 and 2 of Appendix 1 to this announcement
provide that the Scheme will lapse (under the authority of Rule 13.5(b) of the
Takeover Code) if:
· the Court Meeting and the General Meeting are not held by the 22(nd)
day after the expected date of the Court Meeting and the General Meeting to be
set out in the Scheme Document in due course (or such later date, if any, (a)
as Bidco and GRC may agree or (b) (in a competitive situation) as may be
specified by Bidco with the consent of the Panel, and in each case that (if so
required) the Court may allow);
· the Sanction Hearing to approve the Scheme is not held by the 22(nd)
day after the expected date of the Sanction Hearing to be set out in the
Scheme Document in due course (or such later date as Bidco may determine with
the agreement of GRC or with the consent of the Panel and the approval of the
Court, if such approval is required); or
· the Scheme does not become Effective by 11.59 p.m. on the Long Stop
Date (or such later date as Bidco may determine with the agreement of GRC or
with the consent of the Panel and the approval of the Court, if such approval
is required).
If any Condition in paragraph 2 of Part A of Appendix 1 to this announcement
is not capable of being satisfied by the date specified therein, Bidco shall
make an announcement through a Regulatory Information Service as soon as
practicable and, in any event, by not later than 8.00 a.m. on the Business Day
following the date so specified, stating whether Bidco has invoked that
Condition, (where applicable) waived that Condition or, with the agreement of
GRC, specified a new date by which that Condition GRC be satisfied.
Once the necessary approvals from GRC Shareholders have been obtained and the
other Conditions have been satisfied or (where applicable) waived and the
Scheme has been approved by the Court, the Scheme will become Effective upon
delivery of a copy of the Court Order to the Registrar of Companies. Subject
to the satisfaction of the Conditions, the Scheme is expected to become
Effective during the third quarter of 2024.
Upon the Scheme becoming Effective: (i) it will be binding on all GRC
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the General Meeting (and if they attended and voted, whether
or not they voted in favour); and (ii) share certificates in respect of GRC
Shares will cease to be valid and entitlements to GRC Shares held within the
CREST system will be cancelled. In accordance with the applicable provisions
of the Takeover Code, the consideration for the transfer of the Scheme Shares
to Bidco will be despatched no later than 14 days after the Effective Date.
Any GRC Shares issued before the Scheme Record Time will be subject to the
terms of the Scheme. The Resolution to be proposed at the General Meeting
will, amongst other matters, provide that the Articles be amended to
incorporate provisions requiring any GRC Shares issued after the Scheme Record
Time (including in satisfaction of any options exercised under the GRC Share
Plan, and other than to Bidco and/or their nominees) to be automatically
transferred to Bidco on the same terms as the Acquisition (other than terms as
to timings and formalities). The provisions of the Articles (as amended) will
avoid any person (other than Bidco and their nominees) holding shares in the
capital of GRC after the Effective Date.
Further details of the Scheme, including expected times and dates for each of
the Court Meeting, the General Meeting and the Sanction Hearing, together with
notices of the Court Meeting and the General Meeting, will be set out in the
Scheme Document. It is expected that the Scheme Document and the Forms of
Proxy accompanying the Scheme Document will be published as soon as
practicable and in any event within 28 days of this announcement (or such
later date as the Bidco and GRC may, with the consent of the Panel, agree and,
if required, the Court may approve).
15 Delisting, and cancellation of trading and re‑registration
Prior to the Acquisition becoming Effective, GRC will make an application to
the London Stock Exchange for the cancellation of the admission to trading of
GRC Shares on AIM, to take effect from or shortly after the Effective Date.
The last day of dealings in the GRC Shares on AIM is expected to be the
Business Day immediately prior to the Effective Date and no transfers will be
registered after 6.00 p.m. (London time) on that date.
On the Effective Date, all of the GRC Shares will become owned by Bidco and
the share certificates in respect of those GRC Shares will cease to be valid
and of value and should be destroyed. In addition, entitlements to GRC Shares
held within the CREST system will be cancelled.
It is intended that GRC will be re-registered as a private limited company as
part of the Scheme and for this to take effect as soon as practicable on or
following the Effective Date.
16 Documents
Copies of the following documents will be available promptly on GRC's website,
subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, at www.grci.group/investors (http://www.grci.group/investors)
and in any event by no later than noon on the Business Day following this
announcement:
· this announcement;
· the Confidentiality Agreement;
· the irrevocable undertakings and the letter of intent referred to in
paragraph 8 above and summarised in Appendix 3 to this announcement; and
· the consents from financial advisers to being named in this
announcement.
Neither the content of the website referred to in this announcement, nor any
website accessible from hyperlinks set out in this announcement, is
incorporated into or forms part of this announcement.
17 General
Bidco reserves the right to elect (with the consent of the Panel) to implement
the acquisition of the GRC Shares by way of an Offer as an alternative to the
Scheme. In such event, the Offer will be implemented on substantially the same
terms, so far as is applicable, as those which would apply to the Scheme.
If the Acquisition is effected by way of an Offer, and such an Offer becomes
or is declared unconditional in all respects and sufficient acceptances are
received, Bidco intends to: (i) make a request to the London Stock Exchange to
cancel the admission to trading of GRC Shares on AIM; and (ii) exercise its
rights to apply the provisions of Chapter 3 of Part 28 of the 2006 Act so as
to acquire compulsorily the remaining GRC Shares in respect of which the Offer
has not been accepted.
Investors should be aware that Bidco may purchase GRC Shares otherwise than
under the Scheme or any Offer, including pursuant to privately negotiated
purchases.
The Acquisition will be on the terms and subject to the conditions set out
herein and in Appendix 1, and to be set out in the Scheme Document. The bases
and sources for certain financial information contained in this announcement
are set out in Appendix 2. Details of undertakings received by Bidco are set
out in Appendix 3. Certain definitions and terms used in this announcement
are set out in Appendix 4. The formal Scheme Document will be sent to GRC
Shareholders within 28 days of this announcement (or on such later date as may
be agreed with GRC and the Panel).
Cavendish (as sole financial adviser to Bidco), Wyvern Partners (as financial
adviser to GRC) and Singer Capital Market (as Rule 3 adviser to GRC) have each
given and not withdrawn their consent to the publication of this announcement
with the inclusion herein of the references to their names in the form and
context in which they appear.
This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.
Enquiries
Bloom Equity c/o Cavendish
Bart Macdonald
Jeff Hsiang
Cavendish (Sole Financial Adviser to Bloom) +44 20 7220 0500
Henrik Persson
Marc Milmo
Fergus Sullivan
Rory Sale
GRC +44 33 0999 0222
c/o Wyvern Partners
Wyvern Partners (Financial Adviser to GRC) +44 20 7097 5205
Andrew Robinson
Anthony Gahan
Singer Capital Markets (Rule 3 Adviser, Nominated Adviser and Corporate Broker +44 20 7496 3000
to GRC)
Phil Davies
James Fischer
Dowgate Capital Limited (Joint Broker to GRC) +44 (0)20 3903 7715
James Serjeant
Russell Cook
Fladgate LLP is acting as legal adviser to Bloom Equity.
Mills & Reeve LLP is acting as legal adviser to GRC.
Further information
Cavendish Capital Markets Limited ""Cavendish""), which is authorised and
regulated in the United Kingdom by the FCA, is acting as financial adviser to
Bloom Equity and Bidco and no one else in connection with the matters
described in this announcement and will not be responsible to anyone other
than Bloom Equity and Bidco for providing the protections offered to clients
of Cavendish or for providing advice in connection with any matter referred to
in this announcement. Neither Cavendish nor any of its affiliates (nor their
respective directors, officers, employees or agents) 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 Cavendish in connection with this announcement, any statement
contained herein, the Offer or otherwise. No representation or warranty,
express or implied, is made by Cavendish as to the contents of this
announcement.
Wyvern Partners Limited ("Wyvern"), which is authorised and regulated in the
United Kingdom by the FCA, is acting as financial adviser exclusively to GRC
and no-one else in connection with the matters described in this announcement
and will not be responsible to anyone other than GRC for providing the
protections afforded to clients of Wyvern nor for providing advice in
connection with the subject matter of this announcement. Neither Wyvern nor
any of its affiliates (nor any of their respective directors, partners,
officers, employees or agents) 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 Wyvern in connection with this announcement, any statement contained
herein, the Offer or otherwise. No representation or warranty, express or
implied, is made by Wyvern as to the contents of this announcement.
Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as
financial adviser and nominated adviser exclusively to GRC and no-one else in
connection with the matters described in this announcement and will not be
responsible to anyone other than GRC for providing the protections afforded to
clients of Singer Capital Markets nor for providing advice in connection
with the subject matter of this announcement. Neither Singer Capital
Markets nor any of its affiliates (nor any of their respective directors,
partners, officers, employees or agents) 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 Singer Capital Markets in connection with this announcement, any
statement contained herein, the Offer or otherwise. No representation or
warranty, express or implied, is made by Singer Capital Markets as to the
contents of this announcement.
Dowgate Capital Limited ("Dowgate"), which is authorised and regulated in the
United Kingdom by the FCA, is acting as joint broker exclusively to GRC and
no-one else in connection with the matters described in this announcement and
will not be responsible to anyone other than GRC for providing the protections
afforded to clients of Dowgate nor for providing advice in connection with the
subject matter of this announcement. Neither Dowgate nor any of its affiliates
(nor any of their respective directors, partners, officers, employees or
agents) 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 Dowgate in connection with
this announcement, any statement contained herein, the Offer or otherwise. No
representation or warranty, express or implied, is made by Dowgate as to the
contents of this announcement.
This announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of GRC in any
jurisdiction in contravention of applicable law. The Acquisition will be
implemented solely pursuant to the terms of the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the offer document), which will
contain the full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any vote in respect of the Scheme
or other response in relation to the Acquisition should be made only on the
basis of the information contained in the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the offer document).
This announcement does not constitute a prospectus, prospectus equivalent
document or exempted document.
Bidco reserves the right to elect to implement the Acquisition by way of an
Offer as an alternative to the Scheme (subject to the Panel's consent). In
such event, the Acquisition will be implemented on substantially the same
terms, so far as applicable, as those which will apply to the Scheme, subject
to appropriate amendments to reflect, among other things, the change in method
of effecting the Acquisition (including, without limitation: (i) the inclusion
of an acceptance condition set at 75 per cent. of the GRC Shares to which such
Offer relates (or such other percentage as Bidco may, subject to the rules of
the Takeover Code and with the consent of the Panel, decide); and (ii) those
required by, or deemed appropriate by, Bidco under applicable law). Further,
if sufficient acceptances of such Offer are received and/or sufficient GRC
Shares are otherwise acquired, it is the intention of Bidco to apply the
provisions of Chapter 3 of Part 28 of the 2006 Act to acquire compulsorily any
outstanding GRC Shares to which such Offer relates.
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. This announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code, the
AIM Rules, the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of jurisdictions outside
England.
The availability of the Acquisition to GRC Shareholders who are not resident
in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons
who are not resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their GRC Shares with respect to the Scheme at the Court Meeting, or
to appoint another person as proxy to vote at the Court Meeting on their
behalf, may be affected by the laws of the relevant jurisdictions in which
they are located. Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and persons involved
in the Acquisition disclaim any responsibility or liability for the violation
of such restrictions by any person. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.
Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into, from, or by the use of mails or
any means or instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or of any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction where to do so would violate the laws
in that jurisdiction and no person may vote in favour of the Scheme by any
such use, means, instrumentality or from within a Restricted Jurisdiction or
any other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction. Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in or into or
from any Restricted Jurisdiction and persons receiving such documents
(including, without limitation, agents, custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send it in or into or from
any Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of an Offer (unless otherwise permitted by applicable law and regulation), the
Offer may not be made directly or indirectly, in, into, from, or by the use of
mails or any means or instrumentality (including, but not limited to,
facsimile, e-mail or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any Restricted Jurisdiction and the Offer may
not be capable of acceptance by any such use, means, instrumentality or
facilities.
Further details in relation to Overseas Shareholders will be included in the
Scheme Document.
Notice to U.S. GRC Shareholders
GRC Shareholders in the United States should note that the Acquisition relates
to the securities of a company organised under the laws of England and Wales
and is proposed to be effected by means of a scheme of arrangement under the
2006 Act. This Announcement, the Scheme Document and certain other documents
relating to the Acquisition have been or will be prepared in accordance with
English law, the AIM Rules, the Takeover Code and UK disclosure requirements,
and the format and style applicable to a scheme of arrangement under the 2006
Act, all of which differ from those in the United States. A transaction
effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act.
Accordingly, the Scheme is subject to the disclosure requirements of and
practices applicable in the United Kingdom to schemes of arrangement, which
differ from the disclosure requirements and practices of the United States
tender offer and proxy solicitation rules.
None of the securities referred to in this announcement nor the information
contained in this announcement has been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission in the
United States or any other US regulatory authority, nor have such authorities
passed upon the fairness or merits of the proposal contained in this
announcement or determined the adequacy or accuracy of the information
contained herein. Any representation to the contrary is a criminal offence in
the United States.
GRC's financial statements, and all financial information that is included in
this announcement or that may be included in the Scheme Document, or any other
documents relating to the Acquisition, have been prepared in accordance with
the UK adopted International Accounting Standards and may not be comparable to
financial statements of companies in the United States or other companies
whose financial statements are prepared in accordance with US generally
accepted accounting principles. US generally accepted principals differ in
certain respects from the UK adopted International Accounting Standards. None
of the financial information in this announcement has been audited in
accordance with the auditing standards generally accepted in the US or the
auditing standards of the Public Company Accounting Oversight Board of the US.
It may be difficult for US holders of GRC Shares to enforce their rights and
any claims they may have arising under US federal securities laws in
connection with the Acquisition, since GRC is organised under the laws of a
country other than the United States, and some or all of its officers and
directors may be residents of countries other than the United States, and most
of the assets of GRC are located outside of the United States. US holders of
GRC Shares may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US federal securities laws.
Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or judgment.
If Bidco were to elect to implement the Acquisition by means of an Offer, such
Offer may be made in compliance with applicable US securities laws and
regulations, including to the extent applicable, Section 14(e) of the US
Exchange Act and Regulation 14E thereunder, and will be made in accordance
with the Takeover Code. Such an Offer may be made in the United States by
Bidco and no one else. Accordingly, the Acquisition may be subject to
disclosure and other procedural requirements, including with respect to
withdrawal rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic tender
offer procedures and law.
The receipt of cash pursuant to the Acquisition by a GRC Shareholder in the
United States as consideration for the transfer of its GRC Shares pursuant to
the Scheme will likely be a taxable transaction for United States federal
income tax purposes and under any applicable United States state and local
income tax laws. Each GRC Shareholder in the United States is urged to consult
its independent professional tax or legal adviser immediately regarding the US
federal, state and local income and non-income tax consequences of the
Acquisition applicable to it, as well as any consequences arising under the
laws of any other taxing jurisdiction.
Forward Looking Statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and GRC contain statements which are, or may be
deemed to be, "forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but rather on
current expectations and projections of the management of Bidco and GRC about
future events, and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements.
The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on Bidco and
GRC (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should", "would", "might"
or "will" be taken, occur or be achieved. Forward looking statements may
include statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's,
GRC's, the Bloom Funds', Bloom Equity or any member of the GRC Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of global economic conditions and governmental regulation on
Bidco's, GRC's, the Bloom Funds', Bloom Equity or any member of the GRC
Group's business.
Although Bidco and GRC believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and GRC can give no assurance
that such expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of changes in
general economic and market conditions in the countries in which Bidco, Bloom
Equity, the Bloom Funds and GRC operate, weak, volatile or illiquid capital
and/or credit markets, changes in tax rates, interest rate and currency value
fluctuations, the degree of competition in the geographic and business areas
in which Bidco, , Bloom Equity, the Bloom Funds and GRC operate and changes in
laws or in supervisory expectations or requirements. Other unknown or
unpredictable factors could cause actual results to differ materially from
those expected, estimated or projected in the forward-looking statements. If
any one or more of these risks or uncertainties materialises or if any one or
more of the assumptions proves incorrect, actual results may differ materially
from those expected, estimated or projected. Such forward-looking statements
should therefore be construed in the light of such factors. Neither Bidco, ,
Bloom Equity, the Bloom Funds nor GRC, 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. You are
cautioned not to place any reliance on these forward-looking statements.
Specifically, statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the GRC Group, there may be additional changes
to the GRC Group's operations. As a result, and given the fact that the
changes relate to the future, the resulting cost synergies may be materially
greater or less than those estimated.
Other than in accordance with their legal or regulatory obligations, neither
Bidco, Bloom Equity, the Bloom Funds nor GRC is under any obligation, and
Bidco, Bloom Equity, the Bloom Funds and GRC expressly disclaim any intention
or obligation, to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
Dealing and Opening Position Disclosure Requirements
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) of the Takeover Code
applies must be made by no later than 3.30 pm (London time) on the 1(0t)h
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 1(0t)h 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 GRC 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 Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
will be made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on GRC's website at
https://www.GRC.group/investors (https://www.GRC.group/investors) by no later
than 12 noon (London time) on the Business Day following this announcement.
For the avoidance of doubt, neither the content of this website nor of any
website accessible from hyperlinks set out in this announcement is
incorporated by reference or forms part of this announcement.
No profit forecasts, estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for GRC for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per share for
GRC.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, GRC Shareholders, persons
with information rights and participants in the GRC Share Plan may request a
hard copy of this announcement, free of charge, by contacting the Company's
registrars, Equiniti Limited, during business hours on +44 (0)371 384 2050 or
in writing to Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA,
United Kingdom. Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. For persons who receive a copy of this
announcement in electronic form or via a website notification, a hard copy of
this announcement will not be sent unless so requested. In accordance with
Rule 30.3 of the Takeover Code, such persons may also request that all future
documents, announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other
information provided by GRC Shareholders, persons with information rights and
other relevant persons for the receipt of communications from GRC may be
provided to Bidco during the offer period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.
General
If the Acquisition is effected by way of an Offer, and such an Offer becomes
or is declared unconditional in all respects and sufficient acceptances are
received, Bidco intends to exercise its rights to apply the provisions of
Chapter 3 of Part 28 of the 2006 Act so as to acquire compulsorily the
remaining GRC Shares in respect of which the Offer has not been accepted.
Investors should be aware that Bidco may purchase GRC Shares otherwise than
under any Offer or the Scheme, including pursuant to privately negotiated
purchases.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, GRC confirms that, as at 4
June 2024, it had in issue 107,826,246 ordinary shares of 0.1 pence each. The
ISIN for the shares is GB00BG06MV41.
Appendix 1
Conditions and Further Terms of the Transaction
Part A
Conditions to the Scheme and Acquisition
The Acquisition will be subject to the terms and conditions set out in this
Appendix and in the Scheme Document.
1. Conditions to the Acquisition
The Acquisition will be conditional on the Scheme becoming unconditional and
becoming Effective, subject to the Takeover Code, by no later than 11.59 p.m.
(London time) on the Long Stop Date, or such later date, if any, (a) as Bidco
and GRC may agree or (b) (in a competitive situation) as may be specified by
Bidco with the consent of the Panel, and in each case that (if so required)
the Court may allow.
2. Scheme Approval
The Scheme will be subject to the following conditions:
2.1 (i) its approval by a majority in
number representing 75% or more in value of Scheme Shares held by GRC
Shareholders who are on the register of members of GRC at the Voting Record
Time (or the relevant class or classes thereof, if applicable), in each case
present, entitled to vote and voting, either in person or by proxy, at the
Court Meeting or at any separate class meeting which may be required by the
Court (as applicable) or at any adjournment of any such meeting; and
(ii) the Court Meeting and any separate class meeting
which may be required by the Court (or any adjournment of any such meeting)
being held on or before the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course (or such later
date, if any, (a) as Bidco and GRC may agree or (b) (in a competitive
situation) as may be specified by Bidco with the consent of the Panel, and in
each case that (if so required) the Court may allow);
2.2 (i) the Resolution being duly
passed by the requisite majority or majorities at the General Meeting; and
(ii) the General Meeting being held on or before the 22nd
day after the expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date, if any, (a) as Bidco and GRC may
agree or (b) (in a competitive situation) as may be specified by Bidco with
the consent of the Panel, and in each case that (if so required) the Court may
allow); and
2.3 (i) the sanction of the Scheme by
the Court with or without modification (but subject to any such modification
being agreed by Bidco and GRC) and the delivery of a copy of the Court Order
to the Registrar of Companies; and
(ii) the Sanction Hearing being held on or before the
22nd day after the expected date of the Sanction Hearing to be set out in the
Scheme Document in due course (or such later date, if any, (a) as Bidco and
GRC may agree or (b) (in a competitive situation) as may be specified by Bidco
with the consent of the Panel, and in each case that (if so required) the
Court may allow).
In addition, Bidco and GRC have agreed that, subject as stated in Part B
below and to the requirements of the Panel and the Takeover Code, the
Acquisition will be conditional on the following Conditions and, accordingly,
the necessary actions to make the Scheme Effective will not be taken unless
the following Conditions (as amended if appropriate) have been satisfied or,
where relevant, waived:
3. Third Party clearances
3.1 The waiver (or non-exercise within any applicable time
limits) by any Relevant Authority or any other body or person whatsoever in
any jurisdiction (each a Third Party) of any termination right, right of
pre-emption, first refusal or similar right (which is material in the context
of the Wider GRC Group taken as a whole or in the context of the Acquisition)
arising as a result of or in connection with the Acquisition including,
without limitation, its implementation and financing or the proposed direct or
indirect acquisition of any shares or other securities in, or control or
management of, GRC by Bidco or any member of the Wider Bidco Group.
3.2 All necessary filings or applications having been made in
connection with the Acquisition and all mandatory statutory or regulatory
obligations in any jurisdiction having been complied with in connection with
the Acquisition or the acquisition by any member of the Wider Bidco Group of
any shares or other securities in, or control of, GRC and all material
Authorisations (being Authorisations where the direct consequence of a failure
to obtain such Authorisation would be unlawful in any relevant jurisdiction or
have a material adverse effect on Wider GRC Group or the ability of Bidco to
implement the Acquisition) necessary for or in respect of the Acquisition
including without limitation, its implementation or the proposed direct or
indirect acquisition of any shares or other securities in, or control of, GRC
or any member of the Wider GRC Group by any member of the Wider Bidco Group
having been obtained in terms and in a form reasonably satisfactory to Bidco
from all appropriate Third Parties or persons with whom any member of the
Wider GRC Group has entered into contractual arrangements and all such
material Authorisations necessary to carry on the business of any member of
the Wider GRC Group which is material in the context of the Wider Bidco Group
or the Wider GRC Group, in either case taken as a whole, or for or in respect
of the Acquisition, including without limitation its implementation, remaining
in full force and effect and there being no notice or intimation of any
intention to revoke or not to renew any of the same at the time at which the
Acquisition becomes otherwise unconditional.
3.3 No Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference (and, in each case, not having withdrawn the same), or
having enacted, made or proposed any statute, regulation, decision or order,
or change to published practice or having taken any other steps, and there not
continuing to be outstanding any statute, regulation, decision or order, which
in each case would or may reasonably be expected to:
3.3.1 require, prevent or materially delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture by any
member of the Wider Bidco Group or any member of the Wider GRC Group of all or
any portion of their respective businesses, assets or property or impose any
limitation on the ability of any of them to conduct their respective
businesses (or any of them) or to own, control or manage any of their
respective assets or properties or any part thereof which, in any such case,
is material in the context of the Wider Bidco Group or the Wider GRC Group in
either case taken as a whole or in the context of the Acquisition;
3.3.2 require, prevent or materially delay the proposed
divestiture by any member of the Wider Bidco Group of any shares or other
securities in GRC;
3.3.3 impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Bidco Group directly or
indirectly to acquire or to hold or to exercise effectively, directly or
indirectly, all or any rights of ownership in respect of shares or loans or
securities convertible into shares or any other securities (or the equivalent)
in any member of the Wider GRC Group or to exercise voting or management
control over any such member, in each case to an extent which is material in
the context of the Wider GRC Group taken as a whole or in the context of the
Acquisition;
3.3.4 otherwise adversely affect the business, assets, profits
or prospects of any member of the Wider Bidco Group or of any member of the
Wider GRC Group to an extent which is material in the context of the Wider
Bidco Group or the Wider GRC Group in either case taken as a whole or in the
context of the Acquisition;
3.3.5 make the Acquisition or its implementation or the
acquisition or proposed acquisition by Bidco or any member of the Wider Bidco
Group of any shares or other securities in, or control of GRC void, illegal,
and/or unenforceable under the laws of any relevant jurisdiction, or
otherwise, directly or indirectly, restrain, restrict, prohibit or materially
delay the same, or impose material additional conditions or obligations with
respect thereto;
3.3.6 require (save as envisaged in connection with the
Acquisition or, if applicable, sections 974 to 991 (inclusive) of the 2006
Act) any member of the Wider Bidco Group or the Wider GRC Group to offer to
acquire any shares or other securities (or the equivalent) or interest in any
member of the Wider GRC Group or the Wider Bidco Group owned by any third
party, in each case to an extent which is material in the context of the Wider
Bidco Group or the Wider GRC Group in either case taken as a whole or in the
context of the Acquisition;
3.3.7 impose any limitation on the ability of any member of the
Wider Bidco Group to integrate, conduct or co-ordinate its business, or any
part of it, with the businesses or any part of the businesses of any member of
the Wider GRC Group which is adverse to and material in the context of the
Wider GRC Group or the Wider Bidco Group in each case taken as a whole or in
the context of the Acquisition; or
3.3.8 result in any member of the Wider GRC Group ceasing to be
able to carry on business under any name under which it presently does so to
an extent which is material in the context of the Wider GRC Group taken as a
whole or in the context of the Acquisition,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any GRC Shares
having expired, lapsed or been terminated.
4. Certain matters arising as a result of any arrangement,
agreement, etc.
Except as Disclosed, there being no provision of any agreement, arrangement,
licence, permit or other instrument to which any member of the Wider GRC Group
is a party or by or to which any such member or any of its assets are or may
be bound, entitled or subject, or any circumstance which, in each case as a
consequence of the Acquisition or the proposed acquisition of any shares or
other securities (or equivalent) in GRC or because of a change in the control
or management of GRC or otherwise, could or might reasonably be expected to
result in (in each case to an extent which is or would be material and adverse
in the context of the Wider GRC Group, taken as a whole, or in the context of
the Acquisition):
4.1 any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any such member,
being or becoming repayable or capable of being declared repayable immediately
or earlier than their or its stated maturity date or repayment date or the
ability of any such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being withdrawn or
inhibited;
4.2 any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
obligation or liability arising or any adverse action being taken or arising
thereunder;
4.3 any assets or interests of any such member being or
failing to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
such member otherwise than in the ordinary course of business;
4.4 the creation, other than as Disclosed, or enforcement of
any mortgage, charge or other security interest over the whole or any part of
the business, property, assets or interest of any such member or any such
mortgage, charge or other security interest (whenever arising or having
arisen) becoming enforceable;
4.5 the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any person, firm,
company or body (or any arrangement or arrangements relating to any such
interest or business) being terminated, adversely modified or affected;
4.6 the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
4.7 any such member ceasing to be able to carry on business
under any name under which it presently does so;
4.8 the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax liability or any
obligation to obtain or acquire any material authorisation, notice, waiver,
concession, agreement or exemption from any Third Party or any person) other
than trade creditors or other liabilities incurred in the ordinary course of
business or in connection with the Acquisition; or
4.9 any requirement on any such member to acquire, subscribe,
pay up or repay any shares or other securities (or the equivalent),
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider GRC Group is a party or by or to which any such member or any of its
assets may be bound, entitled or subject, would or might reasonably be
expected to result in any of the events or circumstances as are referred to in
paragraphs 4.1 to 4.9 of this Condition (in each case to an extent which is or
would be material and adverse in the context of the Wider GRC Group, taken as
a whole, or in the context of the Acquisition).
5. Certain events occurring since Last Accounts Date
Except as Disclosed, no member of the Wider GRC Group having, since the Last
Accounts Date:
5.1 save as between GRC and wholly-owned subsidiaries of GRC
or for GRC Shares issued under or pursuant to the exercise of options and
vesting of awards granted under the GRC Share Plan in the ordinary course,
issued or agreed to issue, authorised or proposed the issue of additional
shares of any class;
5.2 save as between GRC and wholly-owned subsidiaries of GRC
or for the grant of options and awards and other rights under the GRC Share
Plan in the ordinary course, issued, or agreed to issue, authorised or
proposed the issue of securities convertible into shares of any class or
rights, warrants or options to subscribe for, or acquire, any such shares or
convertible securities;
5.3 other than to another member of the Wider GRC Group, sold
(or agreed to transfer or sell) any treasury shares;
5.4 other than to another member of the GRC Group, before
completion of the Acquisition, recommended, declared, paid or made or proposed
to recommend, declare, pay or make any bonus issue, dividend or other
distribution whether payable in cash or otherwise or made any bonus issue;
5.5 save for intra-GRC Group transactions, authorised,
implemented or announced any merger or demerger with any body corporate or
acquired or disposed of or transferred, mortgaged or charged or created any
security interest over any assets or any right, title or interest in any asset
(including shares and trade investments) or authorised or proposed or
announced any intention to propose any merger, demerger, acquisition or
disposal, transfer, mortgage, charge or security interest, in each case, other
than in the ordinary course of business and, in each case, to the extent which
is material in the context of the Wider GRC Group taken as a whole or in the
context of the Acquisition;
5.6 other than in the ordinary course of business, disposed of
or agreed to dispose of any property, or, other than in the ordinary course of
business, granted or entered into any agreement to grant any lien, equitable
interest, charge, encumbrance or other third party right over any such
property;
5.7 save for intra-GRC Group transactions, made or authorised
or proposed or announced an intention to propose any change in its loan
capital to the extent which is material in the context of the Wider GRC Group
taken as a whole or in the context of the Acquisition;
5.8 issued, authorised or proposed the issue of, or made any
change in or to, any debentures or (save for intra-GRC Group transactions or
save in the ordinary course of business) incurred or increased any
indebtedness or become subject to any liability (actual or contingent);
5.9 purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in paragraph 5.1 or 5.2 above,
made any other change to any part of its share capital, in each case, to the
extent which is material in the context of the Wider GRC Group taken as a
whole or in the context of the Acquisition;
5.10 other than pursuant to the Acquisition and except for
intra-GRC Group transactions, implemented, or authorised, proposed or
announced its intention to implement, any reconstruction, merger, demerger,
amalgamation, scheme, commitment or other transaction or arrangement otherwise
than in the ordinary course of business;
5.11 been unable or, or admitted in writing that it is unable, to
pay its debts as they fall due or having stopped or suspended (or threatened
to stop or suspend) payment of its debts generally or ceased or threatened to
cease carrying on all or a substantial part of its business;
5.12 (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or steps or had any
legal proceedings started or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution or reorganisation or for the appointment
of a receiver, administrative receiver, administrator, manager, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed in each case to the extent which
is material in the context of the Wider GRC Group taken as a whole or in the
context of the Acquisition;
5.13 commenced negotiations with any of its creditors or taken any
step with a view to rescheduling or restructuring any of its indebtedness or
entered into a composition, compromise, assignment or arrangement with any of
its creditors whether by way of a voluntary arrangement, scheme of
arrangement, deed of compromise or otherwise;
5.14 waived, settled or compromised any claim otherwise than in
the ordinary course of business which is material in the context of the Wider
GRC Group taken as a whole or in the context of the Acquisition;
5.15 entered into, varied or authorised, or proposed or announced
its intention to enter into or vary any agreement, contract, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which:
5.15.1 is of a long-term, onerous or unusual nature or magnitude
(save in the ordinary course of business); or
5.15.2 involves or could reasonably be expected to involve an
obligation which is materially restrictive on the business of any member of
the Wider GRC Group other than of a nature and extent which is normal in the
context of the business concerned,
and, in either case, which is or would reasonably be expected to be material
and adverse in the context of the Wider GRC Group taken as a whole or in the
context of the Acquisition;
5.16 entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to or announced any intention to, or proposed to, effect any of the
transactions, matters or events referred to in this Condition 5;
5.17 made any material alteration to its constitutional documents;
5.18 except in relation to changes made or agreed as a result of,
or arising from, law or changes to law, made or agreed or consented to any
change to:
5.18.1 the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider GRC Group for its directors,
employees or their dependents;
5.18.2 the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable thereunder;
5.18.3 the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or
5.18.4 the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made,
in each case, which has an effect that is material in the context of the Wider
GRC Group taken as a whole or in the context of the Acquisition;
5.19 proposed, agreed to provide or modified the terms of any of
the GRC Share Plan or other benefit constituting a material change relating to
the employment or termination of employment of a material category of persons
employed by the Wider GRC Group or which constitutes a material change to the
terms or conditions of employment of any senior employee of the Wider GRC
Group, save as agreed by the Panel (if required) and by Bidco, or entered into
or changed the terms of any contract with any director or senior executive;
5.20 taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the approval of GRC
Shareholders in a general meeting in accordance with, or as contemplated by,
Rule 21.1 of the Takeover Code; or
5.21 save to the extent arising as a result of any change in
applicable law, entered into or varied in a material way the terms of, any
contract, agreement or arrangement with any of the directors or senior
executives of any member of the Wider GRC Group (save for salary increases in
the ordinary course), other than as agreed by Bidco and (if required) by the
Panel.
6. No adverse change, litigation or regulatory enquiry
Except as Disclosed, since the Last Accounts Date:
6.1 no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects or
operational performance of any member of the Wider GRC Group which, in any
such case, is material in the context of the Wider GRC Group taken as a whole
or in the context of the Acquisition;
6.2 no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider GRC Group is or is
reasonably likely to become a party (whether as a plaintiff, defendant or
otherwise) and no enquiry, review or investigation by, or complaint or
reference to, any Third Party or other investigative body against or in
respect of any member of the Wider GRC Group having been instituted,
announced, implemented or threatened by or against or remaining outstanding in
respect of any member of the Wider GRC Group which in any such case has had or
might reasonably be expected to have a material adverse effect on the Wider
GRC Group taken as a whole or in the context of the Acquisition;
6.3 no contingent or other liability of any member of the
Wider GRC Group having arisen or become apparent to Bidco or increased which
has had or might reasonably be expected to have a material adverse effect on
the Wider GRC Group, taken as a whole or in the context of the Acquisition;
6.4 no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented, instituted
by or remaining outstanding against or in respect of any member by or the
Wider GRC Group which in any case is material in the context of the Wider GRC
Group taken as a whole;
6.5 no member of the Wider GRC Group having conducted its
business in breach of any applicable laws and regulations which in any case is
material in the context of the Wider GRC Group taken as a whole or in the
context of the Acquisition; and
6.6 no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or materially adverse modification
of any licence or permit held by any member of the Wider GRC Group which is
necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or materially adverse modification of which has had,
or would reasonably be expected to have, an adverse effect which is material
in the context of the Wider GRC Group taken as a whole or in the context of
the Acquisition.
7. No discovery of certain matters
Except as Disclosed, Bidco not having discovered:
7.1 that any financial, business or other information
concerning the Wider GRC Group as contained in the information publicly
disclosed at any time since the Last Accounts Date prior to the date of this
announcement by or on behalf of any member of the Wider GRC Group is
materially misleading, contains a material misrepresentation of fact or omits
to state a fact necessary to make that information not materially misleading
and which was not subsequently corrected before the date of this announcement
by disclosure either publicly or otherwise to Bidco or its professional
advisers, in each case, to the extent which is material in the context of the
Wider GRC Group taken as a whole or in the context of the Acquisition;
7.2 that any member of the Wider GRC Group or partnership,
company or other entity in which any member of the Wider GRC Group has a
significant economic interest and which is not a subsidiary undertaking of
GRC, is subject to any liability (actual or contingent) which is not disclosed
in the annual report and accounts of GRC for the financial year ended 31 March
2023, in each case, to the extent which is material in the context of the
Wider GRC Group taken as a whole or in the context of the Acquisition; or
7.3 any information which affects the import of any
information disclosed at any time by or on behalf of any member of the Wider
GRC Group and which is material in the context of the Wider GRC Group taken as
a whole or in the context of the Acquisition.
8. Anti-corruption, economic sanctions, criminal property and
money laundering
Save as Disclosed, Bidco not having discovered that:
8.1 8.1.1 any past or present member,
director, officer or employee of the Wider GRC Group is or has at any time
engaged in any activity, practice or conduct which would constitute an offence
under the Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of 1977 or
any other applicable anti-corruption or anti-bribery law, rule or regulation
or any other applicable law, rule or regulation concerning improper payments
or kickbacks; or
8.1.2 any person that performs or has performed services for or
on behalf of the Wider GRC Group is or has at any time engaged in any
activity, practice or conduct in connection with the performance of such
services which would constitute an offence under the Bribery Act 2010, the
U.S. Foreign Corrupt Practices Act of 1977 or any other applicable
anti-corruption legislation or anti-bribery law, rule or regulation or any
other applicable law, rule or regulation concerning improper payments or
kickbacks;
8.2 any asset of any member of the Wider GRC Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition) or proceeds of crime
under any other applicable law, rule or regulation concerning money laundering
or proceeds of crime or any member of the Wider GRC Group is found to have
engaged in activities constituting money laundering under any applicable law,
rule or regulation concerning money laundering;
8.3 any past or present member, director, officer or employee
of the GRC Group, or any other person for whom any such person may be liable
or responsible, is or has engaged in any conduct which would violate
applicable economic sanctions or dealt with, made any investments in, made any
funds or assets available to or received any funds or assets from:
8.3.1 any government, entity or individual in respect of which
U.S., UK or European Union persons, or persons operating in those territories,
are prohibited from engaging in activities or doing business, or from
receiving or making available funds or economic resources, by U.S., UK or
European Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control, or HMRC;
or
8.3.2 any government, entity or individual targeted by any of
the economic sanctions of the United Nations, the U.S., the UK, the European
Union or any of its member states, save that this shall not apply if and to
the extent that it is or would be unenforceable by reason of breach of any
applicable Blocking Law;
8.4 any past or present member, director, officer or employee
of the Wider GRC Group, or any other person for whom any such person may be
liable or responsible:
8.4.1 has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
U.S. Anti-Terrorism Act;
8.4.2 has engaged in conduct which would violate any relevant
anti-boycott law, rule or regulation or any applicable export controls,
including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State;
8.4.3 has engaged in conduct which would violate any relevant
laws, rules, or regulations concerning human rights, including but not limited
to any law, rule or regulation concerning false imprisonment, torture or other
cruel and unusual punishment, or child labour; or
8.4.4 is debarred or otherwise rendered ineligible to bid for or
to perform contracts for or with any Relevant Authority or found to have
violated any applicable law, rule or regulation concerning government
contracting or public procurement; or
8.5 any member of the Wider GRC Group is or has been engaged
in any transaction with any government, entity or individual targeted by any
of the economic sanctions of the United Nations, the U.S., the European Union
or any other Relevant Authority, or which would cause Bidco to be in breach of
any law or regulation upon its acquisition of GRC, including but not limited
to the economic sanctions of the United States Office of Foreign Assets
Control or HM Treasury & Customs in the UK or any other Relevant
Authority.
Part B
Further terms of the Acquisition
1. Subject to the requirements of the Panel, Bidco reserves
the right in its sole discretion to waive, in whole or in part, all or any of
the Conditions set out in Part A of Appendix 1, except Conditions 2.1(i),
2.2(i) and 2.3(i) which cannot be waived. If any of Conditions 2.1(ii),
2.2(ii) or 2.3(ii) is not satisfied by the relevant deadline specified in the
relevant Condition, Bidco shall make an announcement by 8.00 a.m. on the
Business Day following such deadline confirming whether it has invoked the
relevant Condition, waived the relevant deadlines or agreed with GRC to extend
the relevant deadline.
2. Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as fulfilled any
of the Conditions in Part A of Appendix 1 above that are capable of waiver
by a date earlier than the latest date for the fulfilment of that Condition
notwithstanding that the other Conditions of the Acquisition may at such
earlier date have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any of such Conditions may not be
capable of fulfilment.
3. Under Rule 13.5(a) of the Takeover Code and subject to
paragraph 4, Bidco may only invoke a Condition so as to cause the Acquisition
not to proceed, to lapse or to be withdrawn with the consent of the Panel. The
Panel will normally only give its consent if the circumstances which give rise
to the right to invoke the Condition are of material significance to Bidco in
the context of the Acquisition. This will be judged by reference to the facts
of each case at the time that the relevant circumstances arise.
4. Condition 1(subject to Rule 12 of the Takeover Code),
Conditions 2.1(i), 2.2(i) and 2.3(i) in Part A of Appendix 1 above, and, if
applicable, any acceptance condition if the Acquisition is implemented by
means of an Offer, are not subject to Rule 13.5(a) of the Takeover Code.
5. Any Condition that is subject to Rule 13.5(a) of the
Takeover Code may be waived by Bidco.
6. If the Panel requires Bidco to make an offer or offers for
GRC Shares under the provisions of Rule 9 of the Takeover Code, Bidco may make
such alterations to the Conditions as are necessary to comply with the
provisions of that Rule.
7. Bidco reserves the right to elect to implement the
Acquisition by way of an Offer as an alternative to the Scheme, subject to the
Panel's consent. In such event, such Offer will be implemented on the same
terms and conditions so far as is applicable, as those which would apply to
the Scheme (subject to appropriate amendments) and an acceptance condition set
at 75 per cent. of the GRC Shares (or such other percentage as Bidco and GRC
may agree and, where applicable with the consent of the Panel, being in any
case more than 50 per cent. of the GRC Shares).
8. The Acquisition will be subject, inter alia, to the
Conditions and certain further terms which are set out in this Appendix 1 and
to the full terms which will be set out in the Scheme Document and such
further terms as may be required to comply with the provisions of the
provisions of the AIM Rules, the provisions of the Takeover Code and the
applicable requirements of the Panel and the London Stock Exchange.
9. GRC Shares will be acquired by Bidco fully paid and free
from all liens, charges, encumbrances and other third party rights of any
nature whatsoever and together with all rights attaching to them as at the
Effective Date, including the right to receive and retain all dividends and
distributions (if any) declared, made or paid after the Acquisition becomes
Effective.
10. If, on or after the date of this announcement and before the
Effective Date, any dividend, distribution and/or other return of capital or
value is announced, declared, made or paid in respect of the GRC Shares, Bidco
reserves the right to reduce the consideration payable under the terms of the
Acquisition for the GRC Shares by the aggregate amount of all or part of any
such dividend, distribution and/or other return of capital or value, in which
case any reference in this announcement to the consideration payable under the
terms of the Acquisition will be deemed to be a reference to the consideration
as so reduced. In such circumstances, GRC Shareholders would be entitled to
retain any such dividend, distribution and/or return of capital or value. Any
exercise by Bidco of its rights referred to in this paragraph 10 shall be the
subject of an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the Acquisition.
11. The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws or regulatory requirements of
the relevant jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable requirements.
12. The Scheme will be governed by English law and be subject to
the jurisdiction of the Court, to the Conditions set out above and full terms
to be set out in the Scheme Document. The Acquisition will be subject to the
applicable requirements of the 2006 Act, the Takeover Code, the Panel, the
London Stock Exchange, the AIM Rules and the Registrar of Companies.
13. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
Appendix 2
Sources and Bases of Information
In this announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been used.
1. The fully diluted issued ordinary share capital of
107,826,246 GRC Shares is based on:
a) 107,826,246 GRC Shares in issue as at 4 June 2024 (being the Business
Day before this announcement); plus
b) for these purposes, it is assumed that there are no additional GRC
Shares which will be issued on or after the date of this announcement pursuant
to the GRC Share Plan, given that all of the options issued pursuant to the
GRC Share Plan as at 4 June 2024 (being the Business Day before this
announcement) have exercise prices higher than the Acquisition price per
share.
2. A value of approximately £8.6 million for the entire
issued and to be issued share capital of GRC is based on:
a) an offer price of 8.0 pence per GRC Share; and
b) GRC's fully diluted issued ordinary share capital of 107,826,246 GRC
Shares, as set out in paragraph 1 above.
3. Unless otherwise stated, the financial information of GRC
is extracted (without material adjustment) from either (i) the annual report
and audited accounts of the GRC Group for the 12 months ended 31 March 2023 or
(ii) the interim results of GRC Group for the period ended 30 September 2023
or (iii) the trading update released by GRC Group on 5 June 2024 for the year
ended 31 March 2024.
4. Unless otherwise stated, all prices for GRC Shares have
been derived from data provided by FactSet and represent Closing Prices on the
relevant date(s).
5. The average prices have been derived from FactSet data and
have been rounded to two decimal places.
6. Certain figures included in this announcement have been
subject to rounding adjustments.
7. Financial information (including estimated Revenue and
Underlying EBITDA) relating to GRC for the financial year ended 31 March 2024
has been extracted from the trading update released by the Company earlier
today on 5 June 2024.
Appendix 3
Details of Irrevocable Undertakings
1. GRC Directors
The following GRC Directors have given irrevocable undertakings to vote (or
procure the voting, as applicable) in favour of the resolutions relating to
the Acquisition at the Meetings or, in the event that the Acquisition is
implemented by way of an Offer, to accept (or procure the acceptance of) such
Offer in respect of their own beneficial holdings of GRC Shares:
Name Total Number of Percentage of existing issued share capital Percentage of existing GRC Shares eligible to vote at Court Meeting
GRC Shares
Alan Calder* 29,699,541 27.54 27.54
Andrew Brode 13,972,108 12.96 12.96
Richard Piper 319,231 0.30 0.30
Chris Hartshorne 11,760 0.01 0.01
Total 44,002,640 40.81 40.81
*Alan Calder's shareholding above includes the shareholdings of the ITG
Pension Fund, the Alan Calder Discretionary Settlement 2018 and Olga Travlos.
These irrevocable undertakings remain binding in the event a competing offer
is made for GRC.
The obligations of the GRC Directors under the irrevocable undertakings given
by them shall lapse and cease to have effect on and from the earlier of the
following occurrences:
1.1 where the Scheme (or Offer as applicable) is withdrawn with
the consent of Bidco or lapses in accordance with its terms;
1.2 if any competing offer for the entire issued and to be issued
share capital of GRC becomes unconditional (if implemented by way of a
takeover offer) or becomes effective (if implemented by way of a scheme of
arrangement); or
1.3 if Bidco announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Offer is announced by
Bidco in accordance with Rule 2.7 of the Takeover Code at the same time.
These irrevocable undertakings also extend to any GRC Shares acquired by the
GRC Directors, whether as a result of the exercise of options under the GRC
Share Plan or otherwise.
2. GRC Shareholders
In addition to the GRC Directors, the following GRC Shareholder has given an
irrevocable undertaking to vote (or procure the voting, as applicable) in
favour of the resolutions relating to the Acquisition at the Meetings or, in
the event the Acquisition is implemented by way of an Offer, to accept (or
procure the acceptance of) such Offer if in respect of his beneficial
interests in GRC Shares:
Name Total Number of Percentage of existing issued share capital Percentage of existing GRC Shares eligible to vote at Court Meeting
GRC Shares
Nigel Wray 12,217,775 11.33 11.33
Total 12,217,775 11.33 11.33
These irrevocable undertakings remain binding in the event a competing offer
is made for GRC.
The obligations of this GRC Shareholder under the irrevocable undertaking
given by him shall lapse and cease to have effect on and from the earlier of
the following occurrences:
2.1 where the Scheme (or Offer as applicable) is withdrawn with
the consent of Bidco or lapses in accordance with its terms;
2.2 if any competing offer for the entire issued and to be issued
share capital of GRC becomes unconditional (if implemented by way of a
takeover offer) or becomes effective (if implemented by way of a scheme of
arrangement); or
2.3 if Bidco announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement Scheme or Offer is announced by
Bidco in accordance with Rule 2.7 of the Takeover Code at the same time.
3. Letter of intent
Canaccord Genuity Asset Management Limited has provided a non-binding letter
of intent confirming that it is currently their intention to instruct their
custodian to vote in favour of the Acquisition in respect of 14,990,000 GRC
Shares (representing approximately 13.9 per cent. of the existing issued
ordinary share capital of GRC as at 4 June 2024, being the Business Day prior
to the date of this announcement).
Appendix 4
Definitions
The following definitions apply throughout this document unless the context
otherwise requires:
"2006 Act" the Companies Act 2006, as amended from time to time
"2023 GRC Annual Report" the annual report and audited accounts of the GRC Group for the year ended 31
March 2023
"Acquisition" the proposed cash acquisition by Bidco of the entire issued, and to be issued,
share capital of GRC by means of the Scheme, or should Bidco so elect (subject
to the consent of the Panel), by means of an Offer
"AIM" the market of that name operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange (as amended
from time to time)
"Articles" the articles of association of GRC from time to time
"associated undertaking" shall be construed in accordance with paragraph 19 of Schedule 6 to The Large
and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(SI 2008/410) but for this purpose ignoring paragraph 19(1)(b) of Schedule 6
to those regulations
"Authorisations" authorisations, orders, grants, recognitions, determinations, confirmations,
consents, licences, clearances, permissions, exemptions or approvals, in each
case of a Third Party
"Bidco" Bloom Seed Bidco Limited
"Bidco Board" the directors of Bidco
"Bidco Group" Bidco and its subsidiary undertakings and where the context permits, each of
them
"Blocking Law" (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996
(or any law or regulation implementing such Regulation in any member state of
the European Union); or (ii) any provision of Council Regulation (EC) No
2271/1996 of 22 November 1996, as it forms part of domestic law of the United
Kingdom by virtue of the European Union (Withdrawal) Act 2018
"Bloom Equity" Bloom Equity Partners Management, LLC. acting for and on behalf of the Bloom
Funds in its capacity as manager
"Bloom Funds" Bloom Equity Fund I, LP and Bloom Equity Fund IA, LP
"Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks
in London are open for normal business
"Cavendish" Cavendish Capital Markets Limited
"certificated" or "certificated form" in relation to a share or other security, a share or other security title
which is recorded in the relevant register of the share or other security as
being held in certificated form (that is, not in CREST)
"Closing Price" the closing middle market price of a GRC Share as derived from the AIM
Appendix to the Daily Official List on any particular date
"Condition" each of the conditions listed in Part A of Appendix 1 and any reference to a
numbered Condition shall be a reference to the Condition set out in the
paragraph of Part A of Appendix 1 bearing such number
"Confidentiality Agreement" the confidentiality agreement dated 28 November 2023 between Bloom Equity and
GRC
"Court" the High Court of Justice in England and Wales
"Court Meeting" the meeting of GRC Shareholders to be convened at the direction of the Court
pursuant to Part 26 of the 2006 Act at which a resolution will be proposed to
approve the Scheme, including any adjournment thereof
"Court Order" the order of the Court sanctioning the Scheme under Part 26 of the 2006 Act
"CREST" the relevant system (as defined in the Regulations) in respect of which
Euroclear is the operator (as defined in CREST)
"Daily Official List" the daily official list of the London Stock Exchange
"Dealing Disclosure" an announcement by a party to an offer or a person acting in concert as
required by Rule 8 of the Takeover Code
"Disclosed" the information: (a) disclosed by or on behalf of GRC: (i) in the 2023 GRC
Annual Report; (ii) in this announcement; or (iii) in any other announcement
to a Regulatory Information Service prior to the publication of this
announcement; or (b) fairly disclosed in writing (including via the virtual
data room operated by or on behalf of GRC in respect of the Acquisition) or
orally in meetings and calls by GRC management prior to the date of this
announcement to Bidco or Bidco's officers, employees and advisers (in their
capacity as such)
"Disclosure Guidance and Transparency Rules" the Disclosure Guidance and Transparency Rules sourcebook issued by the FCA
"Dowgate" Dowgate Capital Limited
"Effective" in the context of the Acquisition: (i) if the Acquisition is implemented by
way of the Scheme, the Scheme having become effective pursuant to its terms;
or (ii) if the Acquisition is implemented by way of the Offer, the Offer
having been declared or having become unconditional in all respects in
accordance with the requirements of the Takeover Code
"Effective Date" the date on which the Acquisition becomes Effective
"Euroclear" Euroclear UK & International Limited
"Excluded Shares" means any (i) GRC Shares registered in the name of, or beneficially owned by
Bidco or the Wider Bidco Group (if any) at the Scheme Record Time, and (ii)
GRC Shares held as treasury shares (as defined in section 724(5) of the 2006
Act) (if any) at the Scheme Record Time
"FCA" the Financial Conduct Authority or its successor from time to time
"FCA Handbook" the FCA's Handbook of rules and guidance as amended from time to time
"Forms of Proxy" the form of proxy for use at the Court Meeting and the form of proxy for use
at the General Meeting, which will accompany the Scheme Document
"General Meeting" general meeting of GRC Shareholders to be convened to consider and if thought
fit pass, inter alia, the Resolution in relation to the Scheme including any
adjournments thereof
"GRC" GRC International Group plc
"GRC Directors", "GRC Board" or "Board of GRC" the directors of GRC
"GRC Share Plan" the GRC International Group plc share option plan 2018
"GRC Group" GRC and its subsidiary undertakings and where the context permits, each of
them
"GRC Share(s)" the existing unconditionally allotted or issued and fully paid ordinary shares
of 0.1p each in the capital of GRC and any further shares which are
unconditionally allotted or issued before the Scheme becomes Effective
"GRC Shareholder(s)" holders of GRC Shares
"Last Accounts Date" 31 March 2023
"London Stock Exchange" the London Stock Exchange plc or its successor
"Long Stop Date" 31 December 2024 or such later date, if any, (a) as Bidco and GRC may agree or
(b) (in a competitive situation) as may be specified by Bidco with the consent
of the Panel, and in each case that (if so required) the Court may allow
"Market Abuse Regulation" the Market Abuse Regulation (EU) no.596/2014 as it forms part of English law
by virtue of the European Union (Withdrawal) Act 2018
"Meetings" the Court Meeting and the General Meeting
"Offer" subject to the consent of the Panel, should the Acquisition be implemented by
way of a takeover offer as defined in Chapter 3 of Part 28 of the 2006 Act,
the offer to be made by or on behalf of Bidco to acquire the entire issued,
and to be issued, share capital of GRC, and, where the context admits, any
subsequent revision, variation, extension or renewal of such offer
"Offer Period" the offer period (as defined by the Takeover Code) relating to GRC which
commenced on 5 June 2024
"Opening Position Disclosure" an announcement pursuant to Rule 8 of the Takeover Code containing details of
interests or short positions in, or rights to subscribe for, any relevant
securities of a party to the Acquisition
"Overseas Shareholders" holders of Scheme Shares who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Registrar of Companies" the Registrar of Companies in England and Wales
"Regulatory Information Service" a regulatory information service as defined in the FCA Handbook
"Relevant Authority" any central bank, ministry, governmental, quasigovernmental (including the
European Union), supranational, statutory, regulatory or investigative body or
authority (including any national or supranational antitrust or merger control
authority, any sectoral ministry or regulator and any foreign investment
review body), national, state, municipal or local government (including any
subdivision, court, administrative agency or commission or other authority
thereof), any entity owned or controlled by them, any private body exercising
any regulatory, taxing, importing or other authority, trade agency,
association, institution or professional or environmental body in any
jurisdiction
"relevant securities" as the context requires, GRC Shares, other GRC share capital and any
securities convertible into or exchangeable for, and rights to subscribe for,
any of the foregoing
"Regulations" means the Uncertificated Securities Regulations 2001
"Resolution" the special resolution to be proposed at the General Meeting to implement the
Scheme and make certain amendments to the Articles
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Offer is sent or made available to GRC Shareholders in that jurisdiction
"Sanction Hearing" the Court hearing to sanction the Scheme
"Scheme" the proposed scheme of arrangement under Part 26 of the 2006 Act between GRC
and the holders of the Scheme Shares, with or subject to any modification,
addition or condition approved or imposed by the Court and agreed by GRC and
Bidco
"Scheme Document" the document to be sent to GRC Shareholders and persons with information
rights containing, amongst other things, the Scheme and notices of the
Meetings
"Scheme Record Time" the time and date to be specified in the Scheme Document, expected to be 6.00
p.m. on the Business Day immediately prior to the date of the Sanction Hearing
"Scheme Shareholders" holders of Scheme Shares
"Scheme Shares" all GRC Shares: (i) in issue at the date of the Scheme Document; (ii) (if
any) issued after the date of the Scheme Document but before the Voting Record
Time; and (iii) (if any) issued at or after the Voting Record Time and before
the Scheme Record Time in respect of which the original or any subsequent
holders thereof are, or shall have agreed in writing to be, bound by the
Scheme, in each case remaining in issue at the Scheme Record Time, but
excluding the Excluded Shares.
"Singer Capital Markets" Singer Capital Markets Advisory LLP
"subsidiary", "subsidiary undertaking" and "undertaking" shall be construed in accordance with the 2006 Act
"Takeover Code" the Takeover Code issued by the Panel on Takeovers and Mergers, as amended
from time to time
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"US.", "U.S." or "USA" the United States of America
"uncertificated" or "in uncertificated form" a share or other security title to which is recorded in the relevant register
of the share or security as being held in uncertificated form, in CREST, and
title to which, by virtue of the Regulations may be transferred by means of
CREST
"US Exchange Act" U.S. Securities Exchange Act of 1934
"Voting Record Time" the time and date to be specified in the Scheme Document by reference to which
entitlement to vote on the Scheme will be determined
"Wider Bidco Group" Bidco Group and associated undertakings and any other body corporate,
partnership, joint venture or person in which Bidco and such undertakings
(aggregating their interests) have an interest of more than 30 per cent. of
the voting or equity capital or the equivalent
"Wider GRC Group" GRC and associated undertakings and any other body corporate, partnership,
joint venture or person in which GRC and such undertakings (aggregating their
interests) have an interest of more than 30 per cent. of the voting or equity
capital or the equivalent (excluding, for the avoidance of doubt, Bidco, Bloom
Equity, Bloom Funds and all of its associated undertakings which are not
members of the GRC Group)
"Wyvern Partners" Wyvern Partners Limited
References to an enactment include references to that enactment as amended,
replaced, consolidated or re-enacted by or under any other enactment before or
after the date of this announcement.
All references to "pounds", "pounds Sterling", "Sterling", "GBP", "£",
"pence", "penny" and "p" are to the lawful currency of the United Kingdom.
All times referred to are London time unless otherwise stated.
A reference to "includes" shall mean "includes without limitation", and
references to "including" and any other similar term shall be construed
accordingly.
Words in the singular shall include the plural and vice versa.
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