REG - Revolution Beauty Gp - Directorate changes and settlement agreement

Revolution BeautyAnnouncement

13/12/2023 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231213:nRSM5627Wa&default-theme=true

RNS Number : 5627W  Revolution Beauty Group PLC  13 December 2023

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

For immediate release

 

13 December 2023

 

Revolution Beauty Group plc

("Revolution Beauty", the "Group" or the "Company")

 

Directorate Changes

 

Settlement of claims with Tom Allsworth and related arrangements

 

 

Directorate Changes

 

Revolution Beauty Group plc (AIM: REVB), the multi-channel mass beauty
innovator, today announces that Elizabeth Lake has decided to stand down from
the Board with immediate effect. Elizabeth will, however, remain with the
business as Chief Financial Officer ("CFO") until 31 December 2023.
 Elizabeth will be replaced as CFO by current non-executive director Neil
Catto with effect from 1 January 2024.

 

During her 18 months as CFO, Elizabeth has strengthened the Group finance
function, completed the signing of historical accounts, and successfully
overseen the lifting of the suspension and restoration in trading of the
Group's shares on AIM.

 

Neil Catto will become CFO on 1 January 2024, having joined the Group Board in
July 2023 as a non-executive director. He is an experienced CFO, having
previously been Group CFO of boohoo Group PLC, a position he held for 11
years. Prior to this, he held senior finance roles at BT, Carphone Warehouse
and EY.

 

The Company is also pleased to announce the appointment of Erin Brookes to the
Board as an independent non-executive director with immediate effect. Erin is
a Managing Director with Alvarez & Marsal ("A&M") in London, where she
leads the European Retail and Consumer Practice, specialising in retail
turnaround and transformation. Prior to joining A&M, Erin spent five years
at The Body Shop International, a leading global cosmetics retailer, where she
held a range of senior commercial roles.

 

Alistair McGeorge, Chairman, commented: "Neil has been a trusted member of the
Board since joining five months ago, and I am pleased that he is now becoming
CFO. I have no doubt that his considerable and relevant experience will prove
a real asset as Revolution Beauty embarks on its next phase of growth. We are
also delighted to welcome Erin. She brings a highly relevant skill set and I
am confident she will make a significant contribution to our future success.

 

At the same time, and on behalf of the Board, I would like to express my
sincere thanks to Elizabeth. Her leadership of the finance team over the past
18 months has proven invaluable in returning the business to a steady state. I
wish her every success for the future."

 

Elizabeth Lake, outgoing CFO, stated: "My focus over the past 18 months has
been on addressing the well-documented issues the business has faced. During
that time, we have significantly strengthened the Group's financial position,
improved internal controls and implemented a full set of accounting policies
that enabled the filing of the Group's financial statements and the resumption
in trading of Revolution Beauty's shares. With the business back to
profitability and well placed for sustainable profitable growth, it is the
right time for me to explore new opportunities. I would like to thank my
colleagues for their hard work and dedication, and I wish them all the best as
they continue to drive the business forwards."

 

Neil Catto, incoming CFO, added: "As a Board member since July, I have been
hugely impressed with the inherent strength of the Revolution Beauty business,
across its brands, its people and its products. I believe we have a
considerable opportunity within a large and attractive beauty market, and I
look forward to building on the strong foundations put in place by Elizabeth
as the Group targets long-term sustainable growth."

 

Settlement of claims with Tom Allsworth and related arrangements

 

Revolution Beauty also announces that it has come to an agreement with Tom
Allsworth, the former Executive Chairman and co-founder of Revolution Beauty,
regarding (i) the settlement of certain claims between Revolution Beauty and
Tom Allsworth, (ii) the timing of future payments relating to the prior
acquisition of Medichem Manufacturing Limited (now called Revolution Beauty
Labs Ltd) ("Medichem") from Tom Allsworth by Revolution Beauty Holdings
Limited (the "Buyer") and (iii) Tom Allsworth's future role within Medichem.

 

Settlement Agreement

 

On 12 December 2023, Tom Allsworth and Revolution Beauty entered into a
settlement agreement (the "Settlement Agreement"), pursuant to which they
agreed to the full and final settlement of certain claims between them, with
no admission or acceptance of liability by either party.

 

Pursuant to the Settlement Agreement, Revolution Beauty has agreed to pay Tom
Allsworth an ex gratia payment of £270,000 net (£490,000, when grossed up
for taxes) in respect of certain historical legal fees incurred by Tom
Allsworth in connection with, among other things, the investigation of matters
related to the Medichem SPA (as defined below).

 

Variation to terms of Medichem SPA

 

On 26 October 2021, Tom Allsworth and the Buyer entered into an agreement for
the sale and purchase of the entire issued share capital of Medichem for a
total consideration of up to £27.5 million (the "Medichem SPA").  As
announced on 7 March 2023, the Buyer and Tom Allsworth varied the Medichem SPA
on 6 March 2023, such that the outstanding consideration payable to Tom
Allsworth would be paid in annual instalments of up to £5.125 million between
October 2025 and October 2028, with interest accruing on outstanding balances
at a rate of 2.5% per annum. Both transactions constituted related party
transactions under the AIM Rules.

 

The Board is pleased to announce it has now concluded negotiations with Tom
Allsworth regarding a revised payment schedule for the outstanding
consideration under the Medichem SPA.

 

On 12 December 2023, Tom Allsworth and the Buyer entered into a deed of
variation to the Medichem SPA (the "Deed of Variation"), pursuant to which the
total remaining consideration under the Medichem SPA of £19.0 million (the
"Remaining Consideration") will now be repaid in instalments on a revised
payment schedule.

 

The Buyer now will pay, on or around 31 October of each year beginning in
2025, an amount equal to the higher of (i) £600,000 in the first year of
payment, increasing in subsequent years of payment by the higher of (a) 5% and
(b) "CPI 12-month rate" (as published by the UK Office for National
Statistics) for February of the year in which the applicable payment occurs
and (ii) 75% of Medichem's EBITDA for the preceding financial year.  Medichem
generated EBITDA of c.£1 million for the year ended 28 February 2023.

 

In the event of a sale or disposal of Medichem, or a takeover of Revolution
Beauty, within five years of the date of the Deed of Variation, the payments
to Tom Allsworth will be accelerated and the Remaining Consideration then
still outstanding will be payable in five equal annual instalments beginning
on the first scheduled payment date following completion of such sale or
takeover.

 

Tom Allsworth's future role

 

As part of the arrangements summarised in this announcement, Tom Allsworth
will continue in the management team of Revolution Beauty Labs with the title
"Founder & Director of Revolution Labs" (though he will not be a statutory
director), on terms which are substantively similar to those which applied to
him previously.

 

Related party transactions

 

The signing of the Settlement Agreement, the Deed of Variation and the
arrangement regarding Tom Allsworth's future role with Medichem constitute a
related party transaction under Rule 13 of the AIM Rules for Companies (the
"AIM Rules"), by virtue of Tom Allsworth being a substantial shareholder, as
defined in the AIM Rules, of Revolution Beauty, holding approximately 15.34%
of the ordinary shares in Revolution Beauty. The directors of Revolution
Beauty consider, having consulted with Revolution Beauty's nominated adviser,
Liberum Capital Limited, that the terms of these related party transaction are
fair and reasonable insofar as shareholders of Revolution Beauty are
concerned.

 

Adam Minto legal proceedings

 

Separately, and as originally announced on 20 June 2023, the Group is
continuing to seek a settlement agreement with Adam Minto relating to the
events that led to the delay of the audit of Revolution Beauty's FY22 results
and the suspension of trading of the Group's shares on AIM during his time as
Chief Executive. Should an agreement be reached, the settlement with Adam
Minto would likely be treated as a related party transaction under Rule 13 of
the AIM Rules and an appropriate announcement made at that time.

 

For further information please contact:

 

Investor Relations

Lauren Brindley, CEO

Investor.Relations@revolutionbeautyplc
(mailto:Investor.Relations@revolutionbeautyplc) .com

 

Joint Corporate Brokers

Liberum (NOMAD): Edward Thomas / Dru Danford / John More

Tel: +44 (0) 203 100 2222

 

Zeus: Nick Cowles / Jamie Peel / Jordan Warburton

Tel: +44 (0) 161 831 1512

 

Media enquiries

Headland Consultancy: Matt Denham / Will Smith / Antonia Pollock

Tel: +44 (0)20 3805 4822

Revolutionbeauty@headlandconsultancy.com
(mailto:Revolutionbeauty@headlandconsultancy.com)

 

The person responsible for arranging the release of this announcement on
behalf of the Company is Lauren Brindley, the Chief Executive Officer of the
Company.

 

Notes

The following information regarding the appointment of Erin Brookes, aged 44,
is disclosed under Schedule Two, paragraph (g) (i)-(viii) of the AIM Rules:

 

Current directorships and partnerships

Alvarez & Marsal Corporate Transformation Services LLP

Retail Trust

Retail Trust Events Limited

Retail Trust Wellbeing Services Limited

 

Erin currently holds no shares in the Company.

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  BOALLLLFXLLEFBB