REG - Kite UK Bidco Ltd Kitwave Group PLC - Update on Financing Arrangements

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RNS Number : 8378V  Kite UK Bidco Limited  09 March 2026

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.

FOR IMMEDIATE RELEASE

9 March 2026

RECOMMENDED CASH ACQUISITION

of

Kitwave Group plc

by

Kite UK Bidco Limited

a newly-incorporated company indirectly wholly-owned by funds managed or
advised by

OEP Capital Advisors, L.P.

to be implemented by means of a scheme of arrangement

under Part 26 of the Companies Act 2006

 

UPDATE ON FINANCING ARRANGEMENTS

Introduction

On 22 January 2026, the boards of directors of Kite UK Bidco Limited, a
newly-formed company to be indirectly wholly-owned by funds managed or advised
by OEP Capital Advisors, L.P. and incorporated under the laws of England and
Wales with registered number 16972693 ("BidCo"), and Kitwave Group plc
("Kitwave") announced that they had reached agreement on the terms of a
recommended cash acquisition for the entire issued, and to be issued, share
capital of Kitwave by Bidco at a price of 295 pence per Kitwave Share (the
"Acquisition") to be effected by means of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act 2006 (the "Scheme"). Kitwave
published the circular relating to the Scheme on 5 February 2026 (the "Scheme
Document").

On 26 February 2026, Kitwave announced that at the Court Meeting and General
Meeting held on 26 February 2026 in connection with the Acquisition, the
necessary resolutions had been duly passed to implement the Acquisition and
that the Acquisition remained subject to the satisfaction (or, where
applicable, waiver) of the remaining Conditions set out in the Scheme
Document, including the sanction of the Scheme by the Court at the Sanction
Hearing.

Capitalised terms used but not defined in this announcement have the meanings
given to them in the Scheme Document, unless the context requires otherwise.

Financing

The Scheme Document explained that the Cash Consideration payable by BidCo
under the terms of the Acquisition was to be funded from equity to be invested
by the OEP Funds pursuant to the terms of the Equity Commitment Letter.

Entry into Term Facilities Agreement and amendment to the Equity Commitment
Letter

On 6 March 2026, BidCo and Kite UK MidCo Limited, a newly-formed company to be
indirectly wholly-owned by funds managed or advised by OEP Capital Advisors,
L.P., ("MidCo") entered into a senior secured term facilities agreement with,
among others, MSD Investment Corp. and MSD UK Holdings Limited (together the
"Original Lenders") in relation to the financing of the Cash Consideration
payable by Bidco under the terms of the Acquisition (the "Term Facilities
Agreement").  A summary of the Term Facilities Agreement is set out in the
Appendix to this announcement.

On 6 March 2026, BidCo and MidCo entered into an intercreditor agreement with,
among others, MSD Admin Services, LLC initial senior agent and senior security
agent (the "Intercreditor Agreement").

In view of the entry into the Term Facilities Agreement, BidCo and the OEP
Funds have entered into an amendment to the Equity Commitment Letter (the
"Amended Equity Commitment Letter") to reduce the OEP Funds' equity commitment
to BidCo.

Consequently, the Cash Consideration payable by BidCo under the terms of the
Acquisition will now be funded from a combination of equity to be invested by
the OEP Funds pursuant to the terms of the Equity Commitment Letter and debt
to be provided pursuant to the terms of the Term Facilities Agreement.

Moelis, in its capacity as financial adviser to BidCo, confirms that it is
satisfied that sufficient resources are available to BidCo to satisfy in full
the Cash Consideration payable under the terms of the Acquisition.

Availability of documents

The Term Facilities Agreement and the Amended Equity Commitment Letter will
(subject to any applicable restrictions relating to persons in, or resident
in, Restricted Jurisdictions) be made available for inspection free of charge,
on Kitwave's website at https://www.kitwave.co.uk/investors
(https://www.kitwave.co.uk/investors) no later than 12 noon on the date of
this announcement and will be available until the end of the Offer Period. The
contents of Kitwave's website are not incorporated into, and do not form part
of, this announcement.

Enquiries

 OEP                                          +1 (212) 277 1500
 Ori Birnboim

 Steve Lunau

 Moelis (Financial Adviser to OEP and BidCo)  +44 (0) 20 7634 3500
 Andrew Welby

 Simon Chaudhuri

 Max Hunt

Norton Rose Fulbright LLP is acting as legal adviser to BidCo.

Important notices

Moelis, which is regulated by the FCA in the United Kingdom, is acting
exclusively for OEP and BidCo and no one else in connection with the
Acquisition and other matters set out in this announcement and will not be
responsible to anyone other than OEP and BidCo for providing the protections
afforded to clients of Moelis, or for providing advice in connection with the
Acquisition or any matter referred to herein. Neither Moelis nor any of its
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Moelis in connection with this
announcement, any statement contained herein or otherwise.

Further information

You should read this announcement and the Scheme Document and if you are in
any doubt as to the Acquisition or the action you should take, you are
recommended to seek your own independent financial advice immediately from
your stockbroker, solicitor, accountant, bank manager or other 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 you are not
so resident, from another appropriately authorised independent financial
adviser. If you have any questions about the Scheme Document, the Court
Meeting or the General Meeting or are in any doubt as to how to complete the
Forms of Proxy, please contact MUFG Corporate Markets on the number set out
above.

This announcement, the Scheme Document and the accompanying documents do not
constitute or form part of an offer or an invitation to purchase or subscribe
for any securities, or a solicitation of an offer to buy any securities,
whether pursuant to this announcement or otherwise, in any jurisdiction in
which such offer, invitation or solicitation is or would be unlawful.

Neither this announcement or the Scheme Document comprise a prospectus or a
prospectus-equivalent document or an exempted document.

The contents of this announcement and the Scheme Document do not amount to,
and should not be construed as, legal, tax, business or financial advice.

The statements contained in this announcement are made as at the date of this
announcement, unless some other date is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.

This announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval in any jurisdiction pursuant to
the Acquisition or otherwise. The Acquisition will be made solely through the
Scheme Document (or, if the Acquisition is implemented by way of a Takeover
Offer, the Takeover Offer document), which, together with the accompanying
Forms of Proxy, will contain the full terms and conditions of the Acquisition,
including details of how to vote in respect of the Acquisition. Any decision
in respect of the Acquisition should be made only on the basis of the
information in the Scheme Document (or, if the Acquisition is implemented by
way of a Takeover Offer, the Takeover Offer document).

This announcement has been prepared for the purpose of complying with English
law, the UK Market Abuse Regulation and the Code and the information disclosed
may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of jurisdictions
outside England.

The Acquisition will be subject to the applicable requirements of English law,
the Code, the Panel, the London Stock Exchange, the Court and the FCA.

Overseas Shareholders

The release, publication or distribution of this announcement, the Scheme
Document and any formal documentation relating to the Acquisition in, into or
from jurisdictions other than the United Kingdom, and the availability of the
Acquisition to Kitwave Shareholders who are not resident in the United
Kingdom, may be restricted and therefore any persons who are not resident in
the United Kingdom or who are subject to the laws of any jurisdiction other
than the United Kingdom (including Restricted Jurisdictions) should inform
themselves about, and observe, any applicable legal or regulatory
requirements.

In particular, the ability of persons who are not resident in the United
Kingdom or who are subject to the laws of another jurisdiction to participate
in the Acquisition or to vote their Kitwave Shares in respect of the Scheme at
the Court Meeting or the Resolution at the General Meeting, or to execute and
deliver Forms of Proxy appointing another person to vote at the Court Meeting
or the General Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located or to which they are subject.
Any failure to comply with applicable legal or regulatory requirements of any
jurisdiction may constitute a violation of securities laws in that
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.

Unless otherwise determined by Kitwave or required by the Code, and permitted
by applicable law and regulation, the Acquisition shall not be made available,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Accordingly, copies
of this announcement, the Scheme Document 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 or any jurisdiction where to do so would
constitute a violation of the laws of such jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported vote in
respect of acceptance of the Acquisition.

If the Acquisition is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made directly or indirectly, in or into, or by the use of mails or any means
or instrumentality (including, but not limited to, facsimile, 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 Takeover Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities. 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.

As noted above, the Acquisition is subject to the applicable requirements of
English law, the Code, the Panel, the London Stock Exchange, the Court, the
Financial Conduct Authority and the AIM Rules.

Further details in relation to Overseas Shareholders are contained in
paragraph 14 of Part 2 of the Scheme Document. All Kitwave Shareholders or
other persons (including nominees, trustees and custodians) who would
otherwise intend to or may have a contractual or legal obligation to forward
the Scheme Document and the accompanying Forms of Proxy to a jurisdiction
outside the United Kingdom should refrain from doing so and seek appropriate
professional advice before taking any action.

Additional information for U.S. investors

Kitwave Shareholders in the United States should note that the Acquisition
relates to the shares of an English company listed on AIM and is proposed to
be effected by means of a scheme of arrangement under Part 26 of the Companies
Act which will be governed by English law. A transaction effected by means of
a scheme of arrangement is not subject to the proxy solicitation or the tender
offer rules under the US Exchange Act.

Accordingly, the Acquisition is subject to the procedural and disclosure
requirements applicable to schemes of arrangement involving a target company
incorporated in England and Wales, which differ from the requirements of US
proxy solicitation and tender offer rules.

However, if BidCo were to elect, with the consent of the Panel (where
necessary) and in compliance with the Code, to implement the Acquisition by
means of a Takeover Offer, such takeover offer will be made in compliance with
all applicable United States laws and regulations, including, to the extent
applicable, Section 14(e) of the US Exchange Act and Regulation 14E
thereunder. Such a takeover would be made in the United States by BidCo and by
no one else.

In the event that the Acquisition is implemented by way of a Takeover Offer,
in accordance with normal UK practice and pursuant to Rule 14e-5(b) under the
US Exchange Act (if applicable), BidCo or its nominees or brokers (acting as
agents) may from time to time make certain purchases of, or arrangements to
purchase, shares or other securities of Kitwave outside of the US, other than
pursuant to the Takeover Offer, until the date on which the Takeover Offer
becomes Effective, lapses or is otherwise withdrawn. These purchases may occur
either in the open market at prevailing prices or in private transactions at
negotiated prices and would comply with applicable law, including the US
Exchange Act. Any information about such purchases or arrangements to purchase
will be disclosed as required in the United Kingdom, will be reported to a
Regulatory Information Service and will be available on the London Stock
Exchange website: www.londonstockexchange.com
(http://www.londonstockexchange.com) .

The receipt of consideration by a US holder (who are defined as shareholders
who are "U.S. persons" as defined under the US Internal Revenue Code) for the
transfer of its Kitwave Shares pursuant to the Scheme may have tax
consequences in the US and such consequences, if any, are not described
herein. Each Kitwave Shareholder is urged to consult its independent
professional adviser immediately regarding the tax consequences of the
Acquisition applicable to it, including under applicable United States state
and local, as well as overseas and other, tax laws.

Neither the US Securities and Exchange Commission nor any securities
commission of any state or other jurisdiction of the United States has
approved the Acquisition, passed judgment upon the fairness of the
Acquisition, or passed judgment upon the completeness, adequacy or accuracy of
the Scheme Document. Any representation to the contrary is a criminal offence
in the United States.

Financial information relating to Kitwave included in the Scheme Document has
been or shall have been prepared in accordance with accounting standards
applicable in the United Kingdom and may not be comparable to financial
information of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting principles in the
United States ("US GAAP"). US GAAP differs in certain significant respects
from accounting standards applicable in the United Kingdom. None of the
financial information in the Scheme Document has been audited in accordance
with auditing standards generally accepted in the United States or the
auditing standards of the Public Company Accounting Oversight Board (United
States).

Kitwave and BidCo are each incorporated under the laws of England & Wales.
Some or all of the officers and directors of Kitwave and BidCo, respectively,
are residents of countries other than the United States. In addition, most of
the assets of Kitwave and BidCo are located outside the United States. As a
result, it may be difficult for US shareholders of Kitwave to effect service
of process within the United States upon Kitwave and BidCo or their respective
officers or directors or to enforce against them a judgment of a US court
predicated upon the federal or state securities laws of the United States,
including judgments based upon the civil liability provisions of the US
federal securities laws. US shareholders of Kitwave may not be able to sue a
non-US company or its officers or directors in a non-US court for violations
of US securities laws. Further, it may be difficult to compel a non-US company
and its affiliates to subject themselves to a US court's jurisdiction or
judgment.

Overseas Shareholders should read paragraph 14 of Part 2 of the Scheme
Document.

Publication on website

A copy of this announcement will be available, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, for inspection on
Kitwave's website at https://www.kitwave.co.uk/investors
(https://www.kitwave.co.uk/investors) by no later than 12 noon (London time)
on the date of this announcement.

Save as expressly referred to in this announcement or the Scheme Document,
neither the contents of Kitwave's website nor the content of any other website
accessible from hyperlinks on such website is incorporated into, or forms part
of, this announcement.

Availability of hard copies

In accordance with Rule 30.3 of the Code, Kitwave Shareholders, persons with
information rights and participants in the Kitwave Share Plan may request a
copy of this announcement or the Scheme Document (and any accompanying
documents and any information incorporated into it by reference to another
source) in hard copy form free of charge. 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. For persons who have
received a copy of this announcement in electronic form or via a website
notification, neither a hard copy of this announcement nor the Scheme Document
will be sent to you unless you have previously notified Kitwave's registrar,
MUFG Corporate Markets, that you wish to receive all documents in hard copy
form or unless requested in accordance with the procedure set out below.

If you would like to request a hard copy of this announcement, please contact
Kitwave's registrar, MUFG Corporate Markets, at MUFG Corporate Markets,
Central Square, 29 Wellington Street, Leeds, LS1 4DL, or call on 0371 664 0321
or from overseas +44 (0) 371 664 0321. Calls are charged at the standard
geographical rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. Lines are open between
9.00 a.m. and 5.30 p.m. (London time), Monday to Friday (excluding public
holidays in England and Wales). Please note that MUFG Corporate Markets cannot
provide any financial, legal or tax advice. Calls may be recorded and
monitored for security and training purposes.

 

Appendix

Summary of the Term Facilities Agreement

Under the terms of the Term Facilities Agreement, the Original Lenders agreed
to make available certain term loans described more particularly below. The
Term Facilities Agreement contemplates that the Original Lenders may transfer
their rights and obligations under the Term Facilities Agreement to other
banks, financial institutions, trusts, funds or other entities which are
regularly engaged in or established for the purpose of making, purchasing or
investing in loans, securities or other financial assets, in each case (other
than whilst an event of default is continuing or such transfer is to another
Original Lender, an affiliate or a related fund of that Original Lender), with
the prior written consent of MidCo.

Capitalised terms used but not defined in this Appendix have the meanings
given to them in the Term Facilities Agreement, unless the context requires
otherwise.

The Term Facility, amounts and documentation process

There is a senior secured term loan facility in an aggregate principal amount
equal to GBP 117,500,000 (the "Term Facility"). The Term Facility is available
to be drawn down by BidCo, subject to satisfaction of the conditions precedent
set out in the Term Facilities Agreement (which are summarised below).

The proceeds of the Term Facility are to be applied in accordance with clause
3.1(a) of the Term Facilities Agreement as follows:

(a)        the Company shall apply all amounts received by it from the
drawdown of the Term Facility in or towards (directly or indirectly) financing
or refinancing:

(i)         any amounts payable under or in connection with the
Acquisition and the acquisition of any Target Shares to be acquired after the
Acquisition closing date pursuant to a squeeze-out;

(ii)         (including by way of one or more intercompany loans) any
repayment, purchase or other discharge of any indebtedness of the Group or
Target Group (together with payment of any breakage costs, redemption or
prepayment premium and other costs, fees and expenses incurred or payable in
connection with such repayment, purchase or discharge);

(iii)        the Transaction Costs; and/or

(iv)        the general corporate purposes and/or working capital
requirements of the Group.

Repayment terms - maturity

Once drawn, the Term Facility must be repaid in instalments on the last day of
each quarter date commencing on the last day of the financial quarter ending
30 September 2026 in an amount equal to 1.00% of the term commitments and the
term loans. The final maturity date of the Term Facility is the date falling
66 months after the Closing Date.

Prepayment and repayment terms - voluntary/mandatory

BidCo may voluntarily cancel and prepay the loans under the Term Facility in
whole or in part at any time subject to the giving of three business days'
prior notice. Mandatory prepayment and cancellation rights shall apply (and/or
may be exercised by the applicable lenders) in respect of illegality, change
of control or a sale of all or substantially all of the assets of BidCo and
its subsidiaries from time to time (taken as a whole) (the "BidCo Group") to
persons who are not members of the BidCo Group. Additionally, mandatory
prepayment rights shall apply (subject to various exceptions and exclusions)
in respect of net cash proceeds received by BidCo or certain other members of
the BidCo Group as a result of the disposal of certain assets, any insurance
claim and a listing of a member of the BidCo Group.

Interest rates

The rate of interest payable on the loans under the Term Facility is the
aggregate of the applicable margin, plus applicable SONIA (subject to a 1.00%
floor).

Subject to the below, the margin in respect of the Term Facility is 5.75% per
annum.

The above margin rate shall apply from the Closing Date until 12 months
thereafter (the "Opening Margin Period"). After the end of the Opening Margin
Period, the margin rates outlined above will remain as above, provided the
total net leverage ratio is greater than 3.25:1.

Further, there is a cumulative step-down of 0.25 per cent. in the margin
(subject to a maximum of two step-downs) in the event that the total leverage
ratio reaches each of the total leverage ratios in (B) and (C) below, provided
no material default is continuing and the BidCo Group is complying with the
financial covenants:

(A) Greater than or equal to 3.25:1;

(B) Less than 3.25:1 but greater than 2.50:1;

(C) Less than or equal to 2.50:1.

From the date after the first anniversary of the Closing Date, for so long as:
(i) the receivables finance facility agreement originally dated 1 March 2016
between, amongst others, Kitwave and Barclays Bank PLC and related documents
have not been amended, supplemented, varied, restated, superseded, refinanced
or replaced, or (ii) the Intercreditor Agreement has not been amended,
supplemented, varied, restated or superseded, in each case in a manner
satisfactory to the majority lenders under the Term Facilities Agreement, each
of the margin rates specified above will be increased by 0.50 per cent.

Guarantees and security

The Original Lenders will receive the benefit of guarantees and security in
respect of the Term Facility. BidCo will guarantee the Term Facility and
provide security over certain of its assets pursuant to a security agreement
(the "Security Agreement"). BidCo's sole shareholder, MidCo, will provide
security over the shares of BidCo and certain receivables owed to MidCo by any
member of the BidCo Group. In due course after the Closing Date, other members
of the BidCo Group will also provide guarantees and security as is customary
for a transaction of this nature.

Representations, warranties, undertakings and events of default

The Term Facilities Agreement contains representations and warranties,
financial covenants, undertakings (both operational and as regards certain
information) and events of default that are customary for a financing of this
nature.

Representations and warranties have been made (subject to various exceptions
and materiality and other thresholds) regarding status, binding obligations,
non-conflict with other obligations, power and authority, no default and
accuracy of information.

The Term Facilities Agreement contains a financial covenant based on the total
net leverage ratio. The financial covenant is initially set at 5.50:1,
decreasing over time. It will be first tested as of the last day of the
financial quarter ending 30 September 2026.

The Term Facilities Agreement also contains typical operational general
undertakings (subject to various exceptions, and materiality and other
thresholds) for a secured financing of this type regarding, among other
things, due authorisations and consents, insurance, tax, intellectual
property, compliance with laws, environmental compliance, preservation of
assets, pari passu ranking, further assurance, additional guarantors and
security, arm's length transactions, pensions, lines of business, holdings
companies, joint ventures, sanctions, anti-corruption, conduct of scheme
and/or offer, centre of main interests, financial assistance, certain
restrictions on acquisitions/disposals/mergers, incurring indebtedness,
guarantees and indemnities, extending loans or credit, restrictions on
payments/dividends/share redemption/share issues, negative pledge and treasury
transactions.

In addition, certain information undertakings will be given with respect to,
amongst other things, the provision of financial statements and budgets,
compliance certificates and annual lender presentations.

The events of default are customary for a secured financing of this type and
are subject to various exceptions, materiality and other thresholds and grace
periods.

Conditions precedent

The Term Facilities Agreement sets out a number of conditions precedent to
utilisation of the Term Facility (both documentary and otherwise) which
include, among other things, the execution and delivery of the Security
Agreement, the Intercreditor Agreement and customary director's certificates
setting out various confirmations in respect of applicable conditions being
delivered.

The foregoing description is a high-level overview of key indicative terms of
the Term Facilities Agreement.

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