REG - SigmaRoc PLC - Acquisition, Placing, REX Offer & Notice of GM
22/11/2023 07:15
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RNS Number : 3016U SigmaRoc PLC 22 November 2023
THIS ANNOUNCEMENT (INCLUDING ITS APPENDICES) AND THE INFORMATION CONTAINED
HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR JAPAN OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD
BREACH ANY APPLICABLE LAW OR REGULATION.
THIS ANNOUNCEMENT IS NOT AN ADMISSION DOCUMENT OR A PROSPECTUS AND DOES NOT
CONSTITUTE OR FORM PART OF AN OFFER TO SELL OR ISSUE OR A SOLICITATION OF AN
OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES WHERE SUCH OFFER WOULD BREACH ANY
APPLICABLE LAW OR REGULATION. INVESTORS SHOULD NOT PURCHASE OR SUBSCRIBE FOR
ANY TRANSFERRABLE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT NOR SHOULD THEY
RELY ON THIS ANNOUNCEMENT IN CONNECTION WITH ANY CONTRACT OR COMMITMENT
WHATSOEVER EXCEPT IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS ON THE BASIS
OF THE INFORMATION IN THE ADMISSION DOCUMENT TO BE PUBLISHED BY THE COMPANY IN
CONNECTION WITH THE PLACING OF ORDINARY SHARES BY THE COMPANY AND THE PROPOSED
ADMISSION OF ITS ISSUED AND TO BE ISSUED ORDINARY SHARES TO TRADING ON AIM, A
MARKET OPERATED BY LONDON STOCK EXCHANGE PLC. BEFORE ANY PURCHASE OR
SUBSCRIPTION OF SHARES, PERSONS VIEWING THIS ANNOUNCEMENT SHOULD ENSURE THAT
THEY FULLY UNDERSTAND AND ACCEPT THE RISKS WHICH ARE SET OUT HEREIN AND WILL
BE SET OUT IN THE ADMISSION DOCUMENT WHEN PUBLISHED.
COPIES OF THE ADMISSION DOCUMENT WILL, FOLLOWING PUBLICATION, BE AVAILABLE
DURING NORMAL BUSINESS HOURS ON ANY DAY (EXCEPT SATURDAYS, SUNDAYS AND PUBLIC
HOLIDAYS) FROM THE REGISTERED OFFICE OF THE COMPANY AND ON THE COMPANY'S
WEBSITE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED.
22 November 2023
SIGMAROC PLC
("SigmaRoc", the "Company" and, together with its subsidiaries, the "Existing
Group")
Acquisition of the Deal 1 Targets from CRH
Entry into Call Options in respect of the Call Option Targets
Placing of, in aggregate, up to 421,052,631 new Ordinary Shares at 47.5 pence
per share
REX Intermediaries Offer of, in aggregate up to 10,526,315 new Ordinary Shares
at 47.5 pence per share
Reverse Takeover
Suspension of Trading
Admission of the Enlarged Share Capital to trading on AIM
and
Notice of General Meeting
SigmaRoc, the AIM quoted lime and limestone group, is pleased to announce that
it has today entered into an agreement pursuant to which it has conditionally
agreed to acquire certain European lime businesses from CRH plc ("CRH"), a
global diversified building materials business, that CRH has deemed non-core
comprising of standalone businesses in Germany, Czech Republic and Ireland
(the "Deal 1 Targets").
The Deal 1 Targets comprise: (i) the entire issued share capital of Fels
Holding GmbH including its fully owned (direct or indirect) subsidiaries
Fels-Werke GmbH, Fels Netz GmbH and Fels Vertriebs und Service GmbH & Co.
KG (together, the "German Target") from the German Seller; (ii) 75% of the
issued share capital of Vápenka Vitošov s.r.o. (the "Czech Target") from the
Czech Seller; and (iii) the entire issued share capital of Clogrennane Lime
Limited (the "Irish Target") from the Irish Seller.
In addition, the Company has entered into the Call Options pursuant to which,
subject to certain conditions, it has been granted the right (but not the
obligation) to acquire, separately, the Deal 2 Target (the UK Target) and the
Deal 3 Target (the Polish Target), being the UK and Polish lime operations of
CRH. The assets and businesses which will in due course constitute the UK
Target and Polish Target are at present integrated within other CRH businesses
and need to be carved out into standalone entities before they can be
acquired. Subject to the Company exercising the relevant Call Option, the
Company currently expects to complete the acquisition of the UK Target and the
Polish Target by 28 March 2024 and 30 September 2024, respectively.
The Targets (being both the Deal 1 Targets and the Call Options Targets) are
part of the CRH group, a leading provider of building materials solutions with
c. 75,800 employees across 29 countries. The Existing Group as enlarged by the
Deal 1 Targets and Call Option Targets emerges as one of the largest lime
producers in Europe.
Consideration payable
Deal 1 Targets
The total consideration payable by SigmaRoc for the Deal 1 Targets only is
€745 million (c £645 million) (including c.€211.5 million in connection
with the assignment of the German Intercompany Loan Receivables) (subject to
customary adjustments in respect of the target entities' net debt and working
capital position as at 1 January 2024).
The consideration for the Deal 1 Targets, following customary purchase price
adjustments, will be satisfied by a combination of €230 million (c.£200
million) from the gross proceeds of the Placing, the drawdown of €350
million (c. £300 million) under new €750 million banking facilities (the
"New Facilities"), €75 million (c.£65 million) of deferred consideration.
The Call Option Targets
The Call Options have been granted to the Company for nil consideration. The
aggregate consideration payable by the Company pursuant to the Call Options
(if both are exercised) is c.€255 million (c.£220 million).
All Targets
In the event that both Call Options are exercised, the total consideration
payable by SigmaRoc for all of the Targets is c.€1 billion (c.£870
million).
The consideration, following customary purchase price adjustments, will be
satisfied by a c.€230 million (c.£200 million) equity raise, c.€175
million (c.£155 million) of deferred consideration, with the balance c.€505
million (c.£435 million) to be financed via debt.
The Fundraising
The Company intends to raise c.£200 million (before expenses) via the issue
of up to 421,052,631 new ordinary shares of £0.01 each in the capital of the
Company ("Ordinary Shares") at a price of 47.5 pence per share (the "Placing
Price") (the "Placing"). Of the Placing Shares, up to 10,526,315 will be made
available through the REX Intermediaries Offer (see below).
As part of the Placing, a CRH Group company intends to conditionally subscribe
for Placing Shares.
In addition, the Directors intend to subscribe for, in aggregate, 831,577
Placing Shares in the Placing.
The Company values its retail investor base and will therefore be providing
its existing shareholders who cannot participate in the Placing the
opportunity to participate on the same terms as other subscribers in the
Placing, via the REX Intermediaries Offer (the "REX Intermediaries Offer").
The REX Intermediaries Offer is a separate offer and will launch shortly
hereafter, pursuant to a separate announcement.
Shareholder approval
Due to its size, the acquisition of the Deal 1 Targets comprises a reverse
takeover of the Company pursuant to Rule 14 of the AIM Rules for Companies and
completion of the Deal 1 Acquisition is therefore conditional on, inter alia,
the approval of Shareholders at the General Meeting.
In accordance with Rule 14 of the AIM Rules for Companies, the Company's
Ordinary Shares will be suspended from trading on AIM with effect from 7:30
a.m. today. The Company's Ordinary Shares will remain suspended until such
time as either an admission document is published, expected to be on Thursday
23 November 2023, or an announcement is released confirming that the
Acquisitions are not proceeding.
The exercise of each of the Call Options (and subsequent acquisitions of each
of the Deal 2 Target and the Deal 3 Target) is not expected to comprise a
reverse takeover of the Company pursuant to Rule 14 of the AIM Rules for
Companies. The General Meeting will be held at 11 a.m. on 11 December 2023 at
the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London, EC4R
3TT.
The Company is also seeking Shareholder approval to adopt a New Option Plan in
order to incentivise the executives and senior management and align their
interests with those of the Shareholders. The exercise price per New Option is
proposed be set at 60 pence. The New Options are expected to vest and become
exercisable on the third anniversary of grant and remain exercisable until the
tenth anniversary subject to the terms of the New Option Plan. Further
information on the New Option Plan is set out below.
Further information on Targets is set out in the Further Information section
below.
Transaction Highlights:
· The Acquisitions are expected to be earnings enhancing in
the first full year post completion, assuming exercise of the Call Options.
· Assuming exercise of the Call Options: pro forma underlying
revenue surpasses £1 billion in FY22, with underlying EBITDA at £211
million, Operating in 14 countries with minerals reserves of c.2.7 billion
tonnes, the Existing Group as enlarged by the Deal 1 and Call Option Targets
emerges as the largest lime producer in key Northern European markets, namely
Finland, Sweden, Norway, the UK and Ireland.
· Upfront consideration of €825 million and €175 million
deferred consideration financed through a combination of €505 million from
the New Facilities, €230 million ordinary equity raise and purchase price
adjustments.
· The Placing is being conducted through an accelerated
bookbuild process which will be launched immediately following this
announcement in accordance with the terms of conditions set out in Appendix
III to this announcement. Liberum Capital, Peel Hunt, Redburn, BNP Paribas and
Santander are together acting as joint bookrunners (the "Joint Bookrunners")
to the Placing. Liberum Capital is also acting as Nominated and Financial
Adviser to the Company. Munegu Partners is acting as Lead M&A Adviser.
· The net proceeds of the Fundraising will be used to part
satisfy the cash consideration due on Deal 1 Completion.
· As part of the Placing, a CRH Group company intends to
conditionally subscribe for Placing Shares.
· Certain Directors of SigmaRoc intend to participate in the
Fundraising for c.£395,000 in aggregate, respectively, of Placing Shares in
the Placing at the Placing Price. Other senior management intend to
participate for c.£555,000 in aggregate, respectively, of new Ordinary Shares
in the Placing at the Placing Price.
Benefits of the Acquisitions:
· The Acquisitions represent an opportunity to become
Northern Europe's leader in lime, combining high quality businesses and
complementary footprints with pro forma FY22 revenue of £1 billion and
underlying EBITDA of £211 million (assuming exercise of the Call Options).
Following the Acquisitions, the Enlarged Group will be positioned as either
the number one or number two participant of the lime market in all of its key
markets.
· The Targets, together, have an excellent and consistent
performance track record delivering FY22 revenue of €579.7 million and
EBITDA of €133.7 million and EBITDA margin in excess of 20 per cent. The
Acquisitions are expected to be earnings enhancing in the first full year of
ownership subject to the Call Options being exercised.
· The Acquisitions are expected to deliver revenue growth
opportunities and cost synergies resulting in at least €30 million of EBITDA
contribution by the end of 2027. Revenue opportunities include expansion into
adjacent applications and new geographic markets including entry into the
Baltic region. Cost synergies are anticipated to be realised from site network
optimisation, operational improvements, savings from procurement and SG&A.
· CRH and SigmaRoc will cooperate in future through
reciprocal supply agreements across several mutually strategic sites in the
UK, Ireland and Poland, providing both parties with the long term benefits.
· The lime market is expected to continue to grow and to be
worth €1.9 billion in 2031 across the Enlarged Group's markets. This is
expected to be driven by increased demand from the construction and steel
industries as well as a move towards greener industrial processes for which
lime is a key input.
· Lime and limestone are key resources in the transition to a
more sustainable economy and lime products are natural carbon sinks. New
applications for lime and limestone products as part of a drive for
sustainability include the production and recycling of lithium batteries as
part of increasing electrification, the decarbonisation of construction
including though substitution of cementitious material, and new building
materials, and environmental applications including lake liming, air pollution
control and direct air capture.
· SigmaRoc has built a track record of acquiring and
improving asset-and-reserves-backed businesses, successfully delivering both
organic and external growth. This has been shown through the Existing Group's
long-term growth track record with EBITDA CAGR of over 80 per cent. and EPS
CAGR of over 170 per cent. from FY16 to FY22.
· The Enlarged Group is expected to be significantly cash
generative with a targeted cash conversion ratio of c.95 per cent., resulting
in a free cash flow target for the Enlarged Group in excess of £100 million
per annum. The Board believe that operational efficiencies and cost savings
offer the potential to improve cash generation.
· The strong balance sheet and cash generation are expected
to enable the Enlarged Group to de-gear at a rate of >0.5x per year with
target leverage of less than 1.0x and €180 million of debt amortised in the
first four years post completion of the Acquisitions (assuming the exercise of
the Call Options and acquisition of the UK Target and the Polish Target). In
addition, the Board will review the potential to divest non-core assets to
further reduce leverage, as it intends the Enlarged Group to focus on core
lime and limestone operations.
· Further acquisitions are expected to be funded from the
Enlarged Group's resources and the free cash flow generated from the combined
operations. The Board also will, subject to the circumstances of the Enlarged
Group at the time and subject to their statutory duties, consider paying
dividends once leverage falls below 1.5x.
· The Targets are aligned with SigmaRoc's ESG and net zero
ambitions and the Enlarged Group will be well positioned to be part of carbon
capture utilisation and storage ("CCUS") hubs and to have a strategic role in
the decarbonisation of key industries such as steel and chemicals. CCUS hubs
are planned in a number of the Enlarged Group's operating countries and sit
alongside the Group's existing actions including its JV with ArcelorMittal in
Dunkirk and its Aqualung pilot study in Sweden.
Defined and technical terms used throughout this announcement have the
meanings set out in Appendix I to this announcement unless the context
requires otherwise. Appendix II to this announcement contains certain Risk
Factors in relation to the Acquisition and the Enlarged Group which should be
carefully considered.
Information on SigmaRoc is available on the Company's website
at: www.sigmaroc.com (http://www.sigmaroc.com/) .
For further information, please contact:
SigmaRoc plc Tel: +44 (0) 207 002 1080
Max Vermorken (Chief Executive Officer) ir@sigmaroc.com
Garth Palmer (Chief Financial Officer)
Tom Jenkins (Head of Investor Relations)
Liberum Capital Limited (Nominated and Financial Adviser, Joint Bookrunner and Tel: +44 (0) 203 100 2000
Co-Broker)
Dru Danford / Ben Cryer / Mark Harrison / John More / Anake Singh
Tel: +44 (0) 20 7418 8900
Peel Hunt (Joint Bookrunner and Co-Broker)
Investment Banking
Mike Bell / Ed Allsopp / Ben Harrington
ECM Syndicate & Broking
Sohail Akbar / Jock Maxwell Macdonald / Tom Ballard
Rothschild & Co acting through Redburn Atlantic (Joint Bookrunner and Tel: +44 (0) 20 7000 2020
Financial Adviser)
Adam Young / Ben Glaeser
BNP Paribas (Joint Bookrunner and Financial Adviser) Tel: +44 (0) 20 7595 9523
Tom Snowball / Matt Randall / Lauren Davies / Deepak Sran
Santander Group (Joint Bookrunner and Financial Adviser) Tel: +34 912572388
Javier Mata / Oliver Tucker
Walbrook PR Ltd (Public Relations)
Tom Cooper / Nick Rome Tel: +44 20 7933 8780 / sigmaroc@wallbrookpr.com
Mob: +44 7971 221972 (Nick)
About SigmaRoc plc
SigmaRoc is an AIM quoted lime and limestone group targeting quarried
materials assets in the UK and Northern Europe. It seeks to create value by
purchasing assets in fragmented materials markets and extracting efficiencies
through active management and by forming the assets into larger groups. It
seeks to de-risk its investments via strong asset backing at its projects
through the selection of projects with strong asset-backing.
IMPORTANT INFORMATION
This announcement and the information contained herein is not for release,
publication or distribution, directly or indirectly, in whole or in part, in
or into the United States (including its territories and possessions, any
state of the United States and the District of Columbia (the "United States"
or "US")), Canada, Australia, New Zealand, the Republic of South Africa,
Japan, any member state of the EEA or any other jurisdiction where to do so
might constitute a violation of the relevant laws or regulations of such
jurisdiction.
The Ordinary Shares have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "US Securities Act"), or under
the applicable securities laws of any state or other jurisdiction of the
United States, and may not be offered, sold, taken up, resold, transferred or
delivered, directly or indirectly, in or into the United States, except
pursuant to an applicable exemption from the registration requirements of the
US Securities Act and in compliance with the securities laws of any relevant
state or other jurisdiction of the United States. There will be no public
offering of the Ordinary Shares in the United States. The Ordinary Shares have
not been approved or disapproved by the US Securities and Exchange Commission,
any state securities commission in the United States or any US regulatory
authority, nor have any of the foregoing authorities passed upon or endorsed
the merits of any offering of the Ordinary Shares, or the accuracy or adequacy
of this announcement. Any representation to the contrary is a criminal offence
in the United States. No money, securities or other consideration from any
person inside the United States is being solicited and, if sent in response to
the information contained in this announcement, will not be accepted.
This announcement is for information purposes only and does not constitute an
offer to sell or issue, or the solicitation of an offer to buy or subscribe
for, securities in the United States, Canada, Australia, New Zealand, the
Republic of South Africa, Japan, or in any jurisdiction in which such offer or
solicitation is unlawful. This announcement is not for publication or
distribution, directly or indirectly, in whole or in part, in or into the
United States, Canada, Australia, New Zealand, the Republic of South Africa or
Japan, nor in any country or territory where to do so may contravene local
securities laws or regulations. The distribution of this announcement (or any
part of it or any information contained within it) in other jurisdictions may
be restricted by law and therefore persons into whose possession this
announcement (or any part of it or any information contained within it) comes
should inform themselves about and observe any such restriction. Any failure
to comply with these restrictions may constitute a violation of the securities
law of any such jurisdictions. The Ordinary Shares have not been and will not
be registered under the US Securities Act nor under the applicable securities
laws of any state or other jurisdiction of the United States or any province
or territory of Canada, Australia, New Zealand, the Republic of South Africa
or Japan. Accordingly, the Ordinary Shares may not be offered or sold directly
or indirectly in or into the United States, Canada, Australia, New Zealand,
the Republic of South Africa or Japan or to any resident of the United States,
Canada, Australia, New Zealand, the Republic of South Africa or Japan except
pursuant to an exemption to applicable registration requirements.
The distribution of this announcement and other information in connection with
the Placing and Admission in certain jurisdictions may be restricted by law
and persons into whose possession this announcement, any document or other
information referred to herein comes should inform themselves about and
observe any such restriction. Any failure to comply with these restrictions
may constitute a violation of the securities laws of any such jurisdiction.
Neither this announcement nor any part of it nor the fact of its distribution
shall form the basis of or be relied on in connection with or act as an
inducement to enter into any contract or commitment whatsoever.
Liberum Capital Limited, which is authorised and regulated by the FCA in the
United Kingdom, is acting as Nominated Adviser, Financial Adviser and Joint
Bookrunner to the Company. Liberum Capital Limited, as Nominated Adviser, has
not authorised the contents of, or any part of, this announcement, and no
liability whatsoever is accepted by Liberum Capital Limited for the accuracy
of any information or opinions contained in this announcement or for the
omission of any material information. The responsibilities of Liberum Capital
Limited as the Company's Nominated Adviser under the AIM Rules for Companies
and the AIM Rules for Nominated Advisers are owed solely to London Stock
Exchange plc and are not owed to the Company or to any director or shareholder
of the Company or any other person, in respect of its decision to acquire
shares in the capital of the Company in reliance on any part of this
announcement, or otherwise. Liberum Capital Limited will not be responsible to
anyone other than the Company for providing the protections afforded to its
clients or for providing advice in relation to the Placing or any other
matters referred to in this announcement.
Peel Hunt LLP is authorised and regulated by the FCA in the United Kingdom and
is acting as Joint Bookrunner exclusively for the Company and no one else in
connection with the Placing, and Peel Hunt LLP will not be responsible to
anyone other than the Company for providing the protections afforded to its
clients or for providing advice in relation to the Placing or any other
matters referred to in this announcement.
Redburn (Europe) Limited is authorised and regulated by the FCA in the United
Kingdom and is acting exclusively as Joint Bookrunner for the Company and no
one else in connection with the Placing, and Redburn (Europe) Limited will not
be responsible to anyone other than the Company for providing the protections
afforded to its clients or for providing advice in relation to the Placing or
any other matters referred to in this announcement.
BNP PARIBAS is authorised and regulated by the FCA in the United Kingdom and
is acting exclusively as Joint Bookrunner for the Company and no one else in
connection with the Placing, and BNP Paribas will not be responsible to anyone
other than the Company for providing the protections afforded to its clients
or for providing advice in relation to the Placing or any other matters
referred to in this announcement.
Banco Santander S.A. is registered with the Bank of Spain (Banco de España)
under registration number 0049 with CIF A-39000013. Banco Santander S.A.,
London Branch is authorised by the Bank of Spain and subject to limited
regulation by the FCA and PRA and is acting as Joint Bookrunner exclusively
for the Company and no one else in connection with the Placing, and Santander
will not be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in relation to the
Placing or any other matters referred to in this announcement.
The person responsible for arranging the release of this announcement on
behalf of the Company is Garth Palmer.
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 law by
virtue of the European Union Withdrawal Act 2018 ("UK MAR"), encompassing
information relating to the Proposals described above, and is disclosed in
accordance with the Company's obligations under Article 17 of UK MAR. In
addition, market soundings (as defined in UK MAR) were taken in respect of the
Placing with the result that certain persons became aware of inside
information (as defined in UK MAR), as permitted by UK MAR. This inside
information is set out in this announcement. Therefore, upon publication of
this announcement, those persons that received such inside information in a
market sounding are no longer in possession of such inside information
relating to the Company and its securities.
This announcement does not constitute a recommendation concerning any
investor's option with respect to the Placing. Each investor or prospective
investor should conduct his, her or its own investigation, analysis and
evaluation of the business and data described in this announcement and
publicly available information. The price and value of securities can go down
as well as up. Past performance is not a guide to future performance.
No representation or warranty, express or implied, is or will be made as to,
or in relation to, and no responsibility or liability is or will be accepted
by the Nominated Adviser or Joint Bookrunners or by any of their respective
affiliates or agents as to, or in relation to, the accuracy or completeness of
this announcement or any other written or oral information made available to
or publicly available to any interested party or its advisers, and any
liability therefor is expressly disclaimed.
This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "will", or "should" or, in each case, their negative or
other variations or comparable terminology. These forward-looking statements
include matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements regarding the
directors' current intentions, beliefs or expectations concerning, among other
things, the Company's results of operations, financial condition, liquidity,
prospects, growth, strategies and the Company's markets. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances. Actual results and developments could differ
materially from those expressed or implied by the forward-looking statements.
Forward-looking statements may and often do differ materially from actual
results. Any forward-looking statements in this announcement are based on
certain factors and assumptions, including the directors' current view with
respect to future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to the Company's
operations, results of operations, growth strategy and liquidity. Whilst the
directors consider these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as required by
applicable law or regulation, the Company undertakes no obligation to release
publicly the results of any revisions to any forward-looking statements in
this announcement that may occur due to any change in the directors'
expectations or to reflect events or circumstances after the date of this
announcement.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
announcement.
Information to Distributors
UK Product Governance Requirements
Solely for the purposes of the Product Governance requirements contained
within Chapter 3 of the FCA Handbook Product Intervention and Product
Governance Sourcebook (the "UK Product Governance Requirements") and
disclaiming all and any liability, whether arising in tort, contract or
otherwise, which any "manufacturer" (for the purposes of the UK Product
Governance Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has determined
that the Placing Shares are: (i) compatible with an end target market of (a)
retail investors, (b) investors who meet the criteria of professional clients
and (c) eligible counterparties, each as defined in the FCA Handbook Conduct
of Business Sourcebook; and (ii) eligible for distribution through all
distribution channels as are permitted by UK Product Governance Requirements
(the "UK Target Market Assessment"). Notwithstanding the UK Target Market
Assessment, distributors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an investment
in the Placing Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in conjunction
with an appropriate financial or other adviser) are capable of evaluating the
merits and risks of such an investment and who have sufficient resources to be
able to bear any losses that may result therefrom.
The UK Target Market Assessment is without prejudice to the requirements of
any contractual, legal or regulatory selling restrictions in relation to the
Placing. Furthermore, it is noted that, notwithstanding the UK Target Market
Assessment, the Joint Bookrunners will only procure investors who meet the
criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the UK Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for the
purposes of Chapters 9A or 10A, respectively, of the FCA Handbook Conduct of
Business Sourcebook; or (b) a recommendation to any investor or group of
investors to invest in, or purchase, or take any other action whatsoever with
respect to, the Placing Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.
EU Product Governance Requirements
Solely for the purposes of the product governance requirements contained
within (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"), (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II and (c) local implementing measures
(together the "EU Product Governance Requirements") and disclaiming all and
any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the EU Product Governance Requirements)
may otherwise have with respect thereto, the Placing Shares have been subject
to product approval process, which has determined that the Placing Shares are:
(i) compatible with an end target market of (a) retail investors, (b)
investors who meet the criteria of professional clients and (c) eligible
counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by EU Product
Governance Requirements (the "EU Target Market Assessment"). Notwithstanding
the EU Target Market Assessment, distributors should note that: the price of
the Placing Shares may decline and investors could lose all or part of their
investment; the Placing Shares offer no guaranteed income and no capital
protection; and an investment in the Placing Shares is compatible only with
investors who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses that may
result therefrom.
The EU Target Market Assessment is without prejudice to the requirements of
any contractual, legal or regulatory selling restrictions in relation to the
Placing. Furthermore, it is noted that, notwithstanding the EU Target Market
Assessment, the Joint Bookrunners will only procure investors who meet the
criteria of professional clients and eligible counterparties.
Furthermore, it is noted that, notwithstanding the UK Target Market Assessment
and the EU Target Market Assessment, the Joint Bookrunners will only procure
investors who meet the criteria of professional clients and eligible
counterparties. For the avoidance of doubt, the EU Target Market Assessment
does not constitute: (a) an assessment of suitability or appropriateness for
the purposes of MiFID II; or (b) a recommendation to any investor or group of
investors to invest in, or purchase, or take any other action whatsoever with
respect to the Placing Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.
This announcement is not for publication or distribution, directly or
indirectly, in or into the United States. This announcement is not an offer
of securities for sale into the United States. The securities referred to
herein have not been and will not be registered under the U.S. Securities Act
of 1933, as amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No public
offering of securities is being made in the United States.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this announcement 22 November 2023
Latest time for receipt of proxy forms for the General Meeting 11 a.m. on 7 December 2023
General Meeting 11 a.m. on 11 December 2023
Completion of the acquisition of the Deal 1 Targets, Admission and dealings 8 a.m. on 4 January 2024
commence in the Enlarged Share Capital on AIM
Issue of Fundraising Shares 8 a.m. on 4 January 2024
CREST accounts credited by 8 a.m. on 4 January 2024
Dispatch of definitive share certificates, where applicable Within 10 business days of Admission
In respect of the Call Option Targets
Carve Out(1) of UK Target expected by 28 March 2024
Carve Out(1) of Polish Target expected by 30 June 2024
Expected timing for UK Target Completion by(2) 28 March 2024
Expected timing for Polish Target Completion by(3) 30 September 2024
( )
( )
1 The Carve Outs of the UK Target and the Polish Target are required because
the assets and businesses which will come to form the UK Target and Polish
Target are not at present standalone entities and will need to be carved-out
of existing CRH businesses such that they are standalone entities, which can
be acquired.
2 Subject to the Company electing to exercise (in its sole discretion) the UK
Call Option.
3 Subject to receipt of the Polish Competition Office Clearance and the Polish
Purchaser electing to exercise (in its sole discretion) the Polish Call
Option.
Notes:
Each of these times and dates is subject to change, particularly depending on
the timing of the Polish Competition Office Clearance and the Carve Outs. Any
changes to timing are at the absolute discretion of the Company, the Nominated
Adviser and the Joint Bookrunners. Any changes to the expected timetable will
be notified by the Company through an RIS. References to times are to London,
UK times.
FURTHER INFORMATION
BACKGROUND TO, AND REASONS FOR, THE PROPOSALS
At its inception in 2016, the Company set out its buy and build strategy in
the construction materials sector, seeking to build a diversified stream of
income, sourcing stability and growth from niche markets and sectors,
presenting what the Board believed was the opportunity to build a significant
Northern Europe-focused construction materials business. To date, the Company
has delivered on this buy and build strategy by making 21 acquisitions over
the last 7 years, applying a decentralised operating model and generating an
income stream diversified across end markets. This model allows for local
autonomy and decision making while capturing the benefits of the Existing
Group's European network. The Company's acquisition strategy is focused on
driving scale, synergies and margins, as operations are integrated, invested
in and de-risked. The proposed Acquisitions represent a significant
opportunity to create one of the leading lime producers in Northern Europe,
combining complementary footprints.
Since admission to AIM in early 2017, the Company has delivered growth by
identifying and executing suitable acquisitions at attractive valuations,
generating further value through improvements in operational efficiency,
synergies and cross-selling. Over the last five years the Existing Group has
delivered an increase in earnings per share of over 300 per cent. whilst
ensuring the gearing level was maintained at reasonable levels.
In July 2021, the Company acquired the Nordkalk Group which the Directors
believe represented a continuation of this model and a transformational step
change for SigmaRoc, adding new platforms to become a sizeable limestone and
lime operator. The acquisition of the Nordkalk Group created a market leading
Northern European quarried materials group, providing a major entry point to
attractive new end-user markets, with high value add characteristics,
supplying the construction, environmental, agricultural, metals, PPB, chemical
and food industries. The acquisition of Nordkalk was significantly earnings
enhancing in its first full year of ownership by SigmaRoc and the Directors
believe that there is continued potential to further drive earnings growth.
In continuation of this strategy, the Company has now entered into the Master
Purchase Agreement pursuant to which it (and with respect to the German
Target, the German Purchaser) has conditionally agreed to acquire the Deal 1
Targets, being:
(i) the entire issued share capital of the German Target, being Fels
Holding GmbH (including its fully owned (direct or indirect) subsidiaries
Fels-Werke GmbH, Fels Netz GmbH and Fels Vertriebs und Service GmbH & Co.
KG);
(ii) 75 per cent. of the issued share capital of the Czech Target,
being Vápenka Vitošov s.r.o.; and
(iii) the entire issued share capital of the Irish Target, being
Clogrennane Lime Limited.
The acquisition of the Deal 1 Targets represents a Reverse Takeover for the
purposes of Rule 14 of the AIM Rules for Companies. As such, it is
conditional, inter alia, upon Shareholder approval.
The Company has also entered into the UK Call Option and the Polish Call
Option. Following the incorporation of the Polish SPV, which shall occur
shortly after the date of this announcement, the Polish SPV shall accede to
the Polish Call Option and shall have the right to exercise such option.
Subject to certain conditions (including the Carve Outs being effected), the
Call Options provide the right (but not the obligation) to acquire,
separately, the UK Target and the Polish Target (as relevant), being:
(i) the entire issued share capital of the UK Target, being Tarmac
Shelfco Limited (including the business comprising CRH's lime production and
associated distribution network and assets located in the United Kingdom which
will be transferred to the UK Target prior to completion) subject to and
conditional upon the Company exercising its right under the UK Call Option;
and
(ii) the entire issued share capital of the Polish Target, being
Ovetill Investments Sp. z o.o. (including the business comprising CRH's lime
and limestone flour production and associated distribution network and assets
located in Poland which will be transferred to the Polish Target prior to
completion) subject to and conditional upon the Polish Purchaser exercising
its right under the Polish Call Option.
The acquisition of the Deal 1 Targets is expected to complete on 4 January
2024. The acquisition of the UK Target and the Polish Target will only
complete if the Company and/or the Polish Purchaser (as applicable) elects to
exercise its right pursuant to the relevant Call Option and the relevant
conditions therein (being the Conditions to the UK Call Option and the
Conditions to the Polish Call Option) being satisfied.
The Carve Outs of the UK Target and the Polish Target are required because the
assets and businesses which will come to form the UK Target and Polish Target
are not at present standalone entities and will need to be carved-out of
existing CRH businesses such that they are standalone entities, which can be
acquired. Summary details of the UK Carve Out and the Polish Carve Out are
summarised in paragraph 15 of this Part I of the document. The UK Call Option
must be exercised and the completion of the acquisition of the UK Target must
occur by 28 March 2024. The Company currently expects the Polish Carve Out to
have completed and the Polish Competition Clearance to have been received by
no later than Q3 2024, however both events are largely outside the Company's
control.
The operations of the Targets (being both the Deal 1 Targets and the Call
Option Targets) include extracting limestone from quarries as well further
processing the limestone to, for example, produce limestone flour or burn the
limestone to produce lime.
The Directors believe that the acquisitions of the Deal 1 Targets and, if the
relevant Call Option are exercised, the Polish Target and the UK Target, have
compelling strategic rationale and will create significant and sustainable
value, allowing the Company to:
· create a sector leading industrial minerals business in
lime and limestone across Northern Europe: expanding into complementary
geographic footprints with leading market positions;
· serve diversified end-markets with lime which is
essential to a number of key industrial processes including in construction,
steel manufacturing, chemicals production and agriculture each with positive
growth outlooks;
· become a strategic partner to OEMs to help deliver future
CCUS infrastructure that will bring multi-jurisdiction OEMs and lime producers
together; and
· deliver at least €30 million of EBITDA synergies
through network optimisation, economies of scale in procurement, and
operational improvements by 31 December 2027.
Further details of the Deal 1 Targets and the Call Option Targets are set out
below.
Summary financials of the Deal 1 Targets
CAGR
€'000 FY20 FY21 FY22 H1 2022 H1 2023 (FY20-FY22)
Revenue 273,263 308,131 380,220 177,807 208,159 18.0%
EBITDA 59,759 66,744 88,312 38,056 46,636 21.6%
Operating Profit 34,314 42,993 62,880 25,439 34,935 35.4%
Net assets 378,783 419,270 417,976 414,988 436,451 5.0%
Source: HFI and Interims
Summary financials of the Call Option Targets
The UK Target
CAGR
€'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 51,129 70,472 105,352 43.5%
Operating Profit 4,557 7,502 19,550 107.1%
The Polish Target CAGR
€'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 61,642 69,039 94,138 23.6%
Operating Profit 16,495 18,266 20,041 10.2%
Source: unaudited management information
In total, the Targets (being both the Deal 1 Targets and the Call Option
Targets) operate 11 quarries and 14 production sites with kilns. The German
Target is the most significant operation, comprising 52 per cent. of FY22
revenue, this increases to 62 per cent. when the Czech Target (which it
oversees) is also included. Note these figures are based on the Deal 1 Targets
and Call Option Targets combined. Lime is the main product of the Targets,
representing c. 77 per cent. of revenue (FY22 basis) and lime and limestone
combined is 84 per cent. in FY22. Lime is priced significantly higher compared
to other products.
The revenue of the Enlarged Group together with the Call Option Targets on a
pro forma basis would have exceeded £1 billion in FY22, whilst operating
profit would have generated c. £154 million. Minerals by volume combined for
the Enlarged Group and the Call Option Targets are c. 2.7 billion tonnes (as
at 30 June 2023).
The Directors believe that the lime and limestone markets are highly
attractive and have significant positive long-term opportunities. Lime is a
critical material for numerous industrial processes across many sectors in the
economy and limestone is a versatile construction and industrial mineral with
high barriers to entry. Construction demand for lime and limestone is expected
to increase as a result of infrastructure investment, particularly in central
Europe, and demand for low CO2 alternatives including the replacement of
cement with carbonate product in concrete is also expected to increase.
Together, lime and limestone offer solutions to several emission and
environmental challenges which is expected to fuel growth across a number of
other end markets.
The Acquisitions will enhance the Existing Group's position, scale and
expertise in the limestone and lime markets with the Enlarged Group expected
to realise end market diversification benefits from the expanded platform.
This strategy is intended to see the Company grow a diversified stream of cash
flows from local markets across Europe and is consistent with the Company's
'Invest, Improve, Integrate, Innovate' strategy.
INFORMATION ON TARGETS
The Targets (being both the Deal 1 Targets and the Call Option Targets) are
part of the CRH group, a leading provider of building material solutions with
c. 75,800 employees based in 29 countries.
The Targets operate through local entities in Germany, Czech Republic and
Ireland (the Deal 1 Targets) and the UK and Poland (the Call Option Targets).
These businesses are largely stand-alone except for the UK Target and Polish
Target, which require carving out of existing CRH businesses in order to be
acquired.
The Targets are, when taken together, one of the leading lime producers in
Europe by market position, behind Lhoist. The top five customers of the
Targets averaged c. 50 per cent. of revenue from FY19 to FY22. Relationships
tend to be stable (lime is generally an important but a relatively low value
part of an end production value chain). Each Target has a well invested
footprint close to its customer base and a strong track record of resilient
growth, profitability, and successful pass through of cost increases to
customers.
The Targets' operations include extracting limestone from quarries as well as
further processing the limestone, creating for example, limestone flour or
burning the limestone to produce lime. In total, the Targets operate 11
quarries and 14 production sites with kilns. Contracts with customers have
formal price adjustment clauses ("PACs"), automatically passing through cost
inflation. In addition, the Targets have long lifetime reserves from
(predominantly) quarry ownership but also long-term supply deals. The Targets'
plants in Germany, Czech Republic and Poland are rail connected and offer
transport flexibility.
The Targets' products include: limestone which is crushed; limestone and
limestone chippings of different grain sizes; limestone flour which is
essentially washed, dried and ground limestone chippings (flours of
<0.1mm); and lime encompassing lump/ground lime (burned (calcined),
crushed, washed, and sized limestone can also be ground) and hydrated lime
(washed, dried and ground limestone chippings (flours of <0.1 mm)).
Summary financial information on the Deal 1 Targets (the German Target, Czech
Target and Irish Target) and the Call Option Targets (being the UK Target and
the Polish Target) for the year ended 31 December 2022 is set out
below:
Deal 1 Targets Call Option Targets*
German Target Czech Target Irish Target Polish Target UK Target
Revenue (€'m) (% of total) 303.0 (52.3%) 54.7 (9.4%) 22.5 (3.9%) 94.1 (16.2%) 105.4 (18.2%)
Source: unaudited management information
* Each of the UK Target and the Polish Target may be acquired by SigmaRoc
subject to and conditional upon the exercise by the Company (in its sole
discretion) of the relevant Call Option. Percentage references are of Deal1
and Call Option Targets combined.
Volumes and ASP have historically been stable (limited disruption from
COVID-19) and are supported by a lack of ready substitutes for lime product as
an input, limited alternate suppliers within an economic distance to offset
transport costs and due to lime as an input cost tending to be a low value
relative to a customer's end product.
Limestone is c. 8 per cent. of the Targets' combined revenue (but c. 44 per
cent. by volume) and the product is mainly crushed limestone and limestone
chippings of different grain sizes. Other product offerings include mortar (in
Germany and Czech Republic), as well as fertilizer and flours (Poland). All of
the Targets' products are used across a range of industry segments, mainly as
intermediary inputs as part of wider production processes. Industrial
applications is the largest segment; this includes the steel industry (the
largest end market across operating companies). This spread of applications
and the (relative) low value has tended to limit any material fluctuations in
demand, for instance during COVID-19.
History of the Targets
The Deal 1 Targets
The German Target operates predominantly as a holding company for Fels-Werke
GmbH, which was founded in the late 1930s, and Fels Netz GmbH and Fels
Vertriebs- und Service GmbH & Co. KG. Fels-Werke GmbH has been the
official trading of the main operating company name since 1971. In 1991 it
acquired Harz-Kalk GmbH, which included the Kaltes Tal, Rubeland, Hornberg,
Schraplau and Oberrohn plants. A 1999 takeover of the Rudersdorf (near Berlin)
and Saal plants made it the #2 lime producer in Germany. Eight production
plants (and 39 kilns), comprising six lime plants, one dedicated dolomitic
plant and one mortar plant. It is geographically well positioned to serve
almost the entire country and it has #1 market position in the North and East
regions.
The Czech Target has operated in the local lime market since 1872 and was
acquired as part of Fels in August 2017. There is a legacy 25 per cent.
minority interest (which are mainly private investors). The Czech Target
shares a leading local market position with Lhoist. Its operations are run
from a single production plant (3 kilns), based at Hrabova. Management of the
Czech Target is also overseen by the German Target, an arrangement which
pre-dates the CRH acquisition of Fels.
The Irish Target is the only lime producer in the Republic of Ireland and
trades as a standalone entity which dates back to 1816 and operates from two
sites, being Carlow and Toonagh.
Call Option Targets
The Polish Target was founded in 1910 and has two lime production plants
(total of 11 kilns), in Kujway and Sitkowka. Both were acquired by CRH in 2003
(as part of two separate transactions). The Sitkowka plant is located on a
quarry site, with the country head office also on site. Kujawy is the only
lime plant in Northern Poland. It is production only (no quarry). It holds a
market-leading position in what is a consolidated lime market in Poland.
The business which will be acquired as part of the UK Target was founded in
1891. It is the leading producer of lime products in the UK. The business was
acquired by CRH in 2015 as part of the Lafarge/Tarmac business. Its operations
comprise two sites, one in Tunstead and one in Hindlow (with a total of 5
permitted kilns). It is a leading player in soil revitalisation (which is
important for the civil engineering sector). Hindlow and Tunstead quarries
will be retained by CRH with material being sold to the Enlarged Group under
long term supply agreements.
Structure of the Targets
The Targets operate through 5 separate business units:
Deal 1 Targets Call Option Targets*
German Target Czech Target Irish Target Polish Target UK Target
Founded 1930s 1872 1816 1910 1891
Lime v limestone Both Both Both Lime only Lime only
Plants / kilns 8 / 39 1 / 3 2 / 2 2 / 11 2 / 5
Locations in country Lower Saxony, Saxony Anhalt, Brandenburg, Bavaria Moravia/Olomouc Region, Vitošov HQ in Carlow, also a plant in Ennis Two locations located in the Northwest and Southeast of the country HQ in Buxton, plants in Tunstead and Hindlow
* Each of the UK Target and the Polish Target may be acquired by SigmaRoc
subject to and conditional upon the exercise by the Company (in its sole
discretion) of the relevant Call Option.
Reserves and Resources of the Targets
The Deal 1 Targets
Total Reserves Total Resources Total Reserves and Resources
(Mt) (Mt) (Mt)
Combined - Germany 274 749 1023
Vitošov - Czech Republic 21 21 42
Clogrennane - Ireland 4 0 4
Total 299 770 1069
The Deal 1 Targets have long lifetime reserves from (mainly) quarry ownership
and long-term supply deals. Kilns and key plant are subject to scheduled
maintenance cycles, with no material disruption to production noted in the
three years to 31 December 2022. There are 6 active lime production plants in
Germany which are supported by quarries.
Reserves can sustain over the long-term with average life reaching up to 100+
years in certain locations (e.g. Germany). The Targets are a leading supplier
in key markets with a high-quality limestone reserve base.
The Call Option Targets
Neither the UK Target nor the Polish Target own any quarry sites and therefore
do not have any reserves or resources attributed to them. The Call Option
Targets currently purchase limestone inputs through either an inter-company
basis from CRH or from third parties. In the event that the UK Call Option is
exercised by the Company (and upon completion of the UK SPA), the UK Target
will put in place a long-term supply agreement with the UK Seller for
limestone supply to each of the Tunstead and Hindlow sites. The terms of such
agreements have been agreed between the Company and the UK Seller. In
connection with the Polish Call Option, the Polish Target will put in place a
long-term limestone supply agreement with the CRH group on the terms that have
been agreed between the Company and the Polish Seller.
SUMMARY FINANCIAL INFORMATION AND CURRENT TRADING OF THE TARGETS
Summary financials of the Deal 1 Targets
CAGR
€'000 FY20 FY21 FY22 H1 2022 H1 2023 (FY20-FY22)
Revenue 273,263 308,131 380,220 177,807 208,159 18.0%
EBITDA 59,759 66,744 88,312 38,056 46,636 21.6%
Operating Profit 34,314 42,993 62,880 25,439 34,935 35.4%
Net assets 378,783 419,270 417,976 414,988 436,451 5.0%
Source: HFI and Interims
Summary financials of the Call Option Targets
The UK Target
CAGR
€'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 51,129 70,472 105,352 43.5%
Operating Profit 4,557 7,502 19,550 107.1%
The Polish Target CAGR
€'000 FY20 FY21 FY22 (FY20-FY22)
Revenue 61,642 69,039 94,138 23.6%
Operating Profit 16,495 18,266 20,041 10.2%
Source: unaudited management information
SYNERGIES BETWEEN THE EXISTING GROUP AND THE TARGETS
The Directors believe there are clear synergy upsides through combining the
Existing Group with the Targets and the following are expected to deliver
EBITDA of at least €30m per annum by 31 December 2027 with potential for
further significant upside:
· synergy potential driven by identical business models of both entities
which makes focused synergies identification possible;
· initial outside in synergies estimation focused on pricing, procurement,
standalone plant optimisation, selling, general and administrative cost
savings, and plant network optimisation;
· both entities are also expected to benefit from standalone optimisation
since individual countries are not fully integrated;
· there are no dyssynergies expected due to no direct overlap in respective
end markets/and geographies; and
· selling, general and administrative cost upsides are expected to be more
limit
The Directors believe improved EBITDA will be generated through operational
improvement, material utilisation, commercial strategy, procurement synergies,
restructuring and strategic capital investment.
PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITION
Deal 1 Targets
The Company has conditionally agreed to acquire the Deal 1 Targets pursuant to
the Master Purchase Agreement. Details of the Deal 1 Targets are set out
below:
Target Name Seller Percentage of share capital being acquired
German Target Fels Holding GmbH, including its fully owned (direct or indirect) CRH Zehnte Vermögensverwaltungs GmbH 100%
subsidiaries:
· Fels-Werke GmbH,
· Fels Netz GmbH
· Fels Vertriebs und Service GmbH & Co KG
Czech Target Vápenka Vitošov s.r.o. CRH Europe Investments B.V. 75%
Irish Target Clogrennane Lime Limited Irish Cement Limited 100%
The total consideration payable by the Company and the German Purchaser to the
Deal 1 Sellers for the Deal 1 Targets is €745 million (approximately £645
million) subject to customary adjustments in respect of the target entities
net debt and working capital position on 4 January 2024. This will be
satisfied by a combination of proceeds of the Placing, the New Facilities and
plus use of certain cash resources.
Due to its size, the acquisition of the Deal 1 Targets comprises a reverse
takeover of the Company pursuant to Rule 14 of the AIM Rules for Companies and
completion of the Deal 1 Acquisition is therefore conditional on, inter alia,
the approval of Shareholders at the General Meeting.
Deal 1 Completion is also conditional upon, inter alia: (i) the passing of the
Resolutions numbered 1 and 2; (ii) Admission; (iii) all conditions to
SigmaRoc's equity and debt financing becoming unconditional or waived (with
the exception of conditions relating to Admission occurring or the completion
of the Master Purchase Agreement).
In the event that the Master Purchase Agreement is terminated by: (i) the Deal
1 Sellers or the Company because a final and non-appealable decision of a
governmental authority or court prohibits the Deal 1 Completion; (ii) the Deal
1 Sellers or the Company because the closing conditions have not been
fulfilled within four months after the date of the Master Purchase Agreement;
or (iii) the Deal 1 Sellers because the Company has failed to take any action
required to be taken by it to fulfill the closing conditions and closing
actions, the Company shall pay a break fee in the amount of €12,500,000 to
CRH Finance DAC.
In the event that the Master Purchase Agreement is terminated by the Company
because: the Deal 1 Sellers have failed to take any action required to be
taken by it to fulfill the closing actions fail (and such failure is not
remedied within five business days), the Deal 1 Sellers' representative shall
pay a break fee in the amount of €12,500,000 to the Company.
Call Option Targets (Deal 2 Target and Deal 3 Target)
The Company and the Polish Purchaser have respectively also entered into the
UK Call Option and the Polish Call Option pursuant to which they have been
granted the right (but not the obligation) to separately acquire the UK Target
and the Polish Target respectively. Details of the Call Option Targets are set
out below:
Target Name Seller Percentage of share capital being acquired
UK Target Tarmac Shelfco Limited Tarmac Cement and Lime Limited 100%
Polish Target Ovetill Investments Sp. Z o.o. Trzuskawica S.A. 100%
The exercise of the UK Call Option is entirely at the Company's discretion and
the exercise of the Polish Call Option is entirely at the Polish Purchaser's
discretion.
The exercise of the UK Call Option is conditional upon (i) Deal 1 Completion
having occurred; and (ii) the Company having received notice from the UK
Seller that the UK Carve Out has completed. Once exercised, the Company will
enter into the UK SPA (an agreed form of which is attached to the UK Call
Option, subject to certain schedules being updated between the date of the UK
Call Option and the date of the completion of the UK Call Option). The last
day for the exercise of the UK Call Option is 23 March 2024 (unless extended
by the UK Seller by notification to the Company no later than 20 March 2024)
and the last day for the completion of the UK SPA is 28 March 2024 (unless
extended by the UK Seller by notification to the Company no later than 25
March 2024).
In the event that the Company exercises its option to enter into the UK SPA
and thereby to acquire the UK Target pursuant to the UK SPA, the total
consideration payable by the Company to the UK Seller for the UK Target is
€155 million (approximately £135 million) (subject to customary adjustment
in respect of the UK Target's net debt and working capital position following
completion of the UK SPA).
If the UK Call Option is terminated the Company shall pay a compensation fee
in the amount of €25,000,000 to CRH Finance DAC.
The exercise of the Polish Call Option is conditional upon (i) the Polish
Purchaser having received notice from the Polish Seller that the Polish Carve
Out has completed; and (ii) the Target operating the only burnt lime business
of the Polish Seller and its Affiliates which is located in Europe. (Once
exercised, the Company will enter into the Polish SPA (an agreed form of which
is attached to the Polish Call Option, subject to certain schedules being
updated between the date of the Polish Call Option and the date of the
completion of the Polish Call Option). Completion of the Polish SPA (if the
Polish Call Option is exercised) is conditional upon the Polish Purchaser
having received Polish Competition Office Clearance.
In the event that the Company exercises its option to enter into the Polish
SPA and thereby to acquire the Polish Target pursuant to the Polish SPA, the
total consideration payable by the Company to the Polish Seller for the Polish
Target is €100 million (approximately £87 million) (subject to customary
adjustment in respect of the Polish Target's net debt and working capital
position at the time following completion of the Polish SPA).
If the Polish Call Option is terminated the Company shall pay a compensation
fee in the amount of €25,000,000 to CRH Finance DAC.
The exercise of the UK Call Option is entirely at the Company's discretion and
the exercise of the Polish Call Option is entirely at the Polish Purchaser's
discretion. The Call Options will, once exercised, require the Company and/or
Polish Purchaser (as applicable) to acquire the UK Target and the Polish
Target on the terms of the substantially agreed form SPAs to be attached to
the relevant Call Option (subject to any changes to that agreed form as may be
required to reflect the final terms of the Carve Outs). The Company and the
Polish Purchaser (as applicable) shall have no control over either the Polish
Target or the UK Targets nor their assets or businesses until the Call Options
have been exercised and the sale and purchase under the associated SPA
completed.
THE POLISH CALL OPTION - POLISH COMPETITION OFFICE CLEARANCE
The exercise by the Polish Purchaser of its option to enter into the Polish
SPA (subject to and conditional upon, among other things, the Polish Carve Out
being effected and the Polish Purchaser exercising the Polish Call Option) and
thereby to acquire the Polish Target pursuant to the Polish SPA is
conditional, inter alia, on the Polish Purchaser receiving Polish Competition
Office Clearance, for which the Polish Purchaser will make the necessary
filings with the Polish Competition Office once the Polish SPA is executed.
The exercise by the Company of its right to acquire the UK Target pursuant to
the UK Call Option is not conditional upon the Company receiving Polish
Competition Office Clearance.
CARVE OUT OF THE CALL OPTION TARGETS
The Carve Out of the UK Target is required because the assets and businesses
which will come to form the UK Target are not at present standalone entities
and will need to be carved-out of existing CRH businesses such that they can
be acquired pursuant to the UK SPA. The UK Carve-Out will include the transfer
of contracts, information, employees, plant and equipment and other assets
relating to the UK lime business of the UK Seller.
The Carve Out of the Polish Target is required because the assets and
businesses which will come to form the Polish Target are not at present
standalone entities and will need to be carved-out of existing CRH businesses,
which can be acquired pursuant to the Polish SPA. The Polish Carve-Out shall
be effected by way of a capital contribution, and shall involve the transfer
of the assets and liabilities of the Polish Seller's burnt lime and lime
powder business to the Polish Target.
FINANCIAL EFFECTS OF THE ACQUISITION
The share capital of the Company is admitted to trading on AIM. For the
financial year ending 31 December 2022, the Company had revenues of £538
million, underlying EBITDA of £102 million, underlying profit after tax at
£54 million, underlying earnings per share of 8.03 pence and an adjusted
leverage ratio of 1.93 times. As at 31 December 2022, the Company had total
assets of £966.9 million, including tangible assets of £523.3 million, and
net assets of £469 million.
Enlarged Group underlying pro-forma income statement:
Underlying £ millions 31 December 2022 6 Months To 30 June 2023
SigmaRoc Deal 1 Targets Enlarged Group SigmaRoc Deal 1 Targets Enlarged Group
Revenue 538 324 862 290 182 472
Cost of sales (392) (238) (631) (208) (131) (339)
Gross profit 146 86 232 82 51 133
Gross margin 27% 27% 27% 28% 28% 28%
EBITDA 102 74 175 55 41 95
EBITDA margin 19% 23% 20% 19% 22% 20%
Profit after interest and tax 54 36 75 28 18 41
CURRENT TRADING AND FUTURE PROSPECTS
The Existing Group
In the 9 months to 30 September 2023 SigmaRoc delivered LFL revenue growth of
7 per cent. in Q3 2023 to £435.9 million, reflecting the benefits of
diversified market exposure together with effective pricing actions. LFL Group
volumes declined by 4 per cent., reflecting softer demand in the residential
construction sector which was largely offset by resilient conditions in
infrastructure and industrial mineral markets. Underlying EBITDA was £87.1
million and underlying margin was 20 per cent.
Operations and trading
Q3 2023 saw continued robust trading in most markets, offsetting weakness in
new build construction, some agricultural products, and the earlier weakness
in paper. Overall pricing evolved favourably, while some of the higher
pass-through costs abated, along with further operational improvements,
translating into improved margins.
The Deal 1 Targets
For the six months ended 30 June 2023, the Deal 1 Targets generated revenues
of €208.2 million and operating profit of €34.9 million, representing an
increase of 17.1 per cent. and 37.3 per cent. respectively over the same first
half period in the prior year.
The Directors are confident in the current business activities and future
prospects of the Enlarged Group and believe that, following the Acquisitions,
with the assistance of SigmaRoc, the existing management of the Targets will
be able to continue their focus on maximising profitability through sales
growth into higher margin value added products, production efficiencies and
cost savings.
In summary the Directors believe that strong cash generation and disciplined
capital allocation will be the key drivers for increasing shareholder returns.
FINANCING OF THE ACQUISITION
Deal 1 Targets
The total consideration payable to the Deal 1 Sellers under the Master
Purchase Agreement for the Deal 1 Targets is €745 million (approximately
£645 million) (including c.€211.5 million in connection with the assignment
of the German Intercompany Loan Receivables) (subject to customary adjustments
in respect of the target entities' net debt and working capital position at 1
January 2024).
The consideration for the Deal 1 Targets will be financed by the Company as
follows:
· €230 million (approximately £200 million) from the Fundraising;
· €350 million (approximately £300 million) pursuant to the drawdown
of the New Facilities; and
· deferred consideration of €75 million (approximately £65 million).
Deal 2 Target
In the event that the Company exercises its right under the UK Call Option and
enters into the UK SPA, it will acquire the UK Target. The total consideration
payable by the Company to the UK Seller for the UK Target is €155 million
(subject to customary adjustment in respect of the UK Target's net debt and
working capital position following completion of the UK SPA). This will be
satisfied by the drawdown of €155 million (approximately £135 million)
under the New Facilities.
Deal 3 Target
In the event that the Company exercises its right under the Polish Call Option
(and if Polish Competition Clearance is obtained) and the Polish Purchaser
enters into the Polish SPA, it will acquire the Polish Target. The total
consideration payable by the Company to the Polish Seller for the Polish
Target is €100 million (approximately £87 million) (subject to customary
adjustment in respect of the Polish Target's net debt and working capital
position following completion of the Polish SPA).
THE NEW FACILITIES
The New Facilities are being provided to the Company by Banco Santander S.A.
London Branch and BNP Paribas (as mandated lead arrangers, underwriters and
bookrunners), and comprises: (i) the Term Loan, which is a five year term loan
of €600 million to part finance the Acquisitions, refinance the Existing
Facility and to pay the financing costs; (ii) the Bridge Loan, which is a one
year term loan of €125 million to part finance the Acquisitions; and (iii)
the RCF, which is a revolving credit facility of €150 million to part
finance the Acquisitions and for general corporate purposes. A €100 million
uncommitted accordion can be exercised under the RCF.
The Term Loan has a 12 month capital repayment holiday and then €15 million
is repayable by the Company on the date falling one year after the draw down
of the Term Loan and each quarter following the first repayment date and on
the final termination date on at which all other amounts outstanding (if any)
under the Term Loan will be repaid.
Interest will be applied on amounts drawn down under the Term Loan and RCF at
a rate of 2.75 per cent. plus EURIBOR (or, in the case of drawings in
sterling, compounded SONIA and a credit adjustment spread) subject to the
below margin grid:
Term Loan and RCF
Adjusted Leverage Margin
% per annum
Greater than or equal to 3.25:1 3.50
Less than 3.25:1 but greater than or equal to 3.00:1 3.25
Less than 3.00:1 but greater than or equal to 2.50:1 3.00
Less than 2.50:1 but greater than or equal to 2.00:1 2.75
Less than 2.00:1 but greater than or equal to 1.50:1 2.50
Less than 1.50:1 but greater than or equal to 1.00:1 2.25
Less than 1.00:1 2.00
The Bridge Loan is repayable after 12 months and includes two 6 month
extension options.
Interest will be applied on amounts drawn under the Bridge Loan based on the
below margin grid, plus EURIBOR:
Months
Bridge Loan Margin
% per annum
0-6 2.00
7-12 3.00
13-18 4.00
19-24 5.00
In consideration for the New Facilities, the Company and its material trading
entities incorporated in England and Wales, Belgium, Finland, Sweden, Germany,
Poland, Jersey and Guernsey will grant security, including, inter alia, share
security and security over key assets in favor of Wilmington Trust, London
Branch (as Security Trustee for the secured parties under the New Facilities).
Following Deal 1 Completion, security shall also be taken from the Targets
over:
· the entire issued share capital of the German Target; and
· the entire issued share capital of the Irish Target, being
Clogrennane Lime Limited.
Pursuant to the New Facilities, the Company has also given certain financial
covenants to the Lenders that its maximum Adjusted Leverage Ratio shall not
exceed 3.95x, reducing to 3.75x for each relevant period expiring after 31
December 2024, 3.50x for each relevant period expiring after 31 December 2025
and 3.00x for each relevant period expiring after 31 December 2026 and minimum
interest cover ratio of 3.50x while the Bridge Loan remains outstanding,
increasing to 4.00x thereafter for the remaining period. It also includes a
customary suite of corporate activities which would require the Lenders'
consent.
DETAILS OF THE PLACING AND THE REX INTERMEDIARIES OFFER
The Placing is being conducted through an accelerated bookbuild process which
will be launched immediately following this announcement in accordance with
the terms of conditions set out in Appendix III to this announcement. The
Placing will raise up to £200 million (before expenses) for the Company,
through the Placing of up to 421,052,631 Placing Shares with investors at the
Issue Price conditional, inter alia, upon the passing of Resolutions numbered
1 and 2, Deal 1 Completion and Admission.
The Company values its retail investor base and will therefore be providing
private and other Shareholders the opportunity to participate on the same
terms as other subscribers in the Placing, via the REX Intermediaries Offer.
The REX Intermediaries Offer is a separate offer and will launch shortly
hereafter, pursuant to a separate announcement.
The Placing and the REX Intermediaries Offer are conditional upon, inter alia,
Shareholders passing Resolutions numbered 1 and 2 at the General Meeting, Deal
1 Completion and Admission becoming effective by not later than 8 a.m. on 4
January 2024 (or such later date as the Company, the Nominated Adviser and the
Joint Bookrunners may agree being not later than 8.30 a.m. on 18 January
2024). The Fundraising Shares will be issued as fully paid and will, upon
issue, rank pari passu with the Ordinary Shares including the right to receive
all dividends and other distributions declared, made or paid on or in respect
of such shares after their date of issue, being the date of Admission.
Following Admission, the Fundraising Shares are expected to collectively
represent approximately 37.8 per cent. of the Enlarged Share Capital.
THE NEW OPTION PLAN
In connection with the Proposals, the Company is intending to adopt the New
Option Plan (to be known as the "Sigmaroc plc Share Option Plan 2023") in
order to incentivise the executives and senior management and align their
interests with those of the Shareholders. Summary terms of the New Option Plan
are set out below.
Administration and eligibility
The Remuneration Committee will administer the operation of the New Option
Plan. Under the New Option Plan rules, any employee (including an Executive
Director) of the Company and its subsidiaries will be eligible to participate
in the New Option Plan at the discretion of the Remuneration Committee.
Additional eligibility requirements apply in respect of tax-qualified options.
Operation of the New Option Plan and terms of New Options
It is proposed that the New Option Plan will only be operated once and that
the New Options will be granted conditional on Admission. The New Options
granted will comprise a one-off grant in connection with the Proposals and it
is not expected that participants in the New Option Plan will be considered
for further grants of options under the New Option Plan in the future, unless
the Remuneration Committee determines otherwise in exceptional circumstances.
No payment is required for the grant of the New Options. The New Options are
not transferable, except on death or with the prior consent of the
Remuneration Committee (subject to any terms the Remuneration Committee
imposes).
It is proposed that New Options will be granted in respect of a total of
51,630,253 Ordinary Shares representing 4.6 per cent. of the Company's issued
share capital on Admission.
The exercise price per New Option will be set at 60 pence. The New Options
will vest and become exercisable on the third anniversary of grant and remain
exercisable until the tenth anniversary subject to the terms of the New Option
Plan.
A New Option will include a right for a participant to receive dividend
equivalents, i.e. additional cash or Ordinary Shares on exercise of an amount
equal to the dividends that would have been paid on the Ordinary Shares
subject to the New Option between the date of grant and the time the New
Options become exercisable. Due to statutory restrictions, dividend
equivalents will not be paid in respect of an New Options that are
tax-qualified.
Plan limit
The New Option Plan may operate over new issue Ordinary Shares, treasury
Ordinary Shares or Ordinary Shares purchased in the market (not being treasury
Ordinary Shares).
The New Option Plan will operate within the Company's existing 10 per cent.
dilution limits. Accordingly, in any ten-year period, the Company may not
issue (or grant rights to issue) more than 10 per cent. of the issued ordinary
share capital of the Company under the New Option Plan and any other
(executive or otherwise) share incentive plan adopted by the Company.
Treasury Ordinary Shares will count as new issue Ordinary Shares for the
purposes of this limit unless institutional investor guidelines cease to
require them to count.
The relevant issued ordinary share capital of the Company for the purposes of
the New Option Plan limit shall be the issued ordinary share capital from time
to time and, in respect of the grant of the New Options, shall be the Enlarged
Share Capital on Admission.
Timing of grants
It is proposed that the New Options will be granted immediately following
Admission. It is not intended that any further New Options will be granted
under the New Option Plan. However, in the event that the Remuneration
Committee decides exceptionally to grant subsequent New Options under the New
Option Plan, such subsequent New Options would be subject to the New Option
Plan limit above and may only be granted six weeks of the following: (i) the
end of any closed period under the Market Abuse Regulation (EU) 596/2014; (ii)
the date of the Company's annual general meeting or any general meeting; (iii)
any day on which the Remuneration Committee resolves that exceptional
circumstances exist which justify the grant of options (for example, in the
case of recruitment); (iv) any day on which changes to the legislation or
regulations affecting share plans are announced, effected or made; or (v) the
lifting of dealing restrictions which prevented the granting of options during
any period specified above.
Variation of share capital
In the event of any variation of the Company's share capital, a demerger,
payment of a special dividend or other corporate event which materially
affects the market price of the Ordinary Shares, the Remuneration Committee
may make such adjustment as it considers appropriate to the number and/or
class of Ordinary Shares subject to a New Option and/or the exercise price
payable. Such adjustments are intended to preserve the value of New Options
granted under the New Option Plan.
Leaving employment
Generally, a new Option which has not been exercised will lapse upon a
participant's termination of employment with the Enlarged Group.
However, if a participant ceases to be an employee of the Enlarged Group due
to their termination of employment by the Company (other than where the
Company is entitled to terminate employment summarily), death, injury or
disability (both as evidenced to the satisfaction of the Remuneration
Committee), redundancy, retirement with the agreement of the Remuneration
Committee, their employing company or the business for which they work being
sold out of the Group or in other circumstances at the discretion of the
Remuneration Committee, then their New Option will vest and may be exercised
within six months from the date of leaving or, in the case of death, within
one year of the date of death.
Corporate events
In the event of a change of control of the Company (not being an internal
corporate reorganisation), all New Options will vest and become exercisable
early.
In the event of an internal corporate reorganisation, the New Options will be
replaced by equivalent new options over shares in a new holding company.
In the event of (i) a demerger, delisting, special dividend or other similar
event which, in the opinion of the Remuneration Committee, would affect the
market price of the Ordinary Shares to a material extent, or (ii) any reverse
takeover, merger by way of a dual listed company or other significant
corporate event, the Remuneration Committee may decide that New Options shall
vest early or be adjusted on such basis as considered appropriate.
In any of the circumstances above, the Remuneration Committee and the
participant may agree with an acquiring company that New Options will not vest
in connection with the relevant corporate event but instead be exchanged for
equivalent options over shares in the acquiring company.
Malus and clawback
The Remuneration Committee may reduce any unexercised New Options (malus) or
require the repayment of Ordinary Shares received (clawback) any time prior to
the third anniversary of the date a New Option becomes exercisable where it
determines that there has been a material misstatement of the Company's
financial results or an error of calculation (including on account of
inaccurate or misleading information) or in the event of serious misconduct,
corporate failure or material reputational damage.
A malus and clawback determination may be satisfied by way of a reduction in
the amount of any future bonus, existing share award and/or a requirement to
make a cash payment.
Participants' rights
New Options under the New Option Plan will not confer any Shareholder rights
until the New Options have been exercised and the participants have received
the Ordinary Shares.
The New Options will not form part of the participant's pensionable income.
Rights attaching to Ordinary Shares
Any Ordinary Shares allotted in respect of the New Option Plan will rank
equally with Ordinary Shares then in issue (except for rights arising by
reference to a record date prior to their allotment).
Amendments and termination
The Remuneration Committee may, at any time, amend the New Option Plan in any
respect, provided that:
(a) no changes which are materially adverse to participants can be made
without a majority consent (determined by reference to the number of Ordinary
Shares under New Option) of the participants affected by the change;
(b) the prior approval of the Company's Shareholders in general meeting
must be obtained for any amendments that are to the advantage of participants
in respect of the rules governing eligibility, the terms of securities, cash
or other benefit to be provided and for the adjustment thereof (if any) if
there is a capitalisation issue, rights issue or open offer, sub-division or
consolidation of shares or reduction of capital or any other variation of
capital;
(c) no amendment is made which would mean that the New Option Plan would
cease to be an "employees' share scheme" as defined in Section 1166 of the
Companies Act 2006; and
(d) certain requirements continue to be met in relation to amendments to
CSOP Options.
The requirement to obtain the prior approval of the participants and the
Company's Shareholders in general meeting will not, however, apply to any
minor alteration made to benefit the administration of the New Option Plan, to
take account of a change in legislation or to obtain or maintain favourable
tax, exchange control or regulatory treatment for participants or for any
company in the Enlarged Group.
No New Options may be granted more than ten years after the date of adoption
of the New Option Plan.
IRREVOCABLE UNDERTAKINGS
The Company has received irrevocable undertakings from the Directors that they
will, or will procure that the legal Shareholders will, vote in favour of the
Resolutions at the General Meeting in respect of 5,333,166 Ordinary Shares
representing, in aggregate, approximately 0.77 per cent. of the Existing
Ordinary Shares.
LOCK-INS AND ORDERLY MARKET ARRANGEMENTS
CRH has undertaken to the Company that it (or whichever of its subsidiary
undertakings shall participate in the Placing) will agree not to dispose of
any interest in the Ordinary Shares held by them for a period of 9 months from
the date of Admission and, for the 3 months following that period, that they
will only dispose of their holdings through one or more of the Joint
Bookrunners and in such manner as they may direct so as to maintain an orderly
market in the Ordinary Shares. The Company has undertaken to the Nominated
Adviser and Joint Bookrunners not to give any consent or waiver, or to modify
the terms of the lock-in without the prior consent of the Nominated Adviser
and Joint Bookrunners.
APPENDIX I - DEFINITIONS AND GLOSSARY OF TECHNICAL TERMS
The following definitions apply throughout this announcement, unless the
context otherwise requires:
affiliate or affiliates an affiliate of, or person affiliated with, a person; a person that, directly
or indirectly, or indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with, the person specified
Acquisitions the proposed acquisition by the Company (in three separate transactions) of:
(i) the Deal 1 Targets, which constitutes a reverse takeover pursuant to Rule
14 of the AIM Rules for Companies; (ii) the Deal 2 Target, subject to the
Company exercising its option to enter into the UK SPA; and (iii) the Deal 3
Target, subject to the Polish Purchaser exercising its option to enter into
the Polish SPA
Act the Companies Act 2006 (as amended)
Admission the re-admission of the Enlarged Share Capital to trading on AIM becoming
effective in accordance with Rule 6 of the AIM Rules for Companies
Admission Document the admission document to be prepared by the Company in accordance with the
AIM Rules for Companies in respect of Admission
AIM AIM, a market operated by the London Stock Exchange
AIM Rules and UK MAR Committee the committee of the Board whose remit is compliance with the AIM Rules for
Companies and UK MAR
AIM Rules for Companies the AIM rules for companies published by the London Stock Exchange from time
to time
AIM Rules for Nominated Advisers the AIM rules for nominated advisers published by the London Stock Exchange
from time to time
Aqualung Aqualung Carbon Capture AS
ArcelorMittal ArcelorMittal Global Holdings S.L.R.
Articles the articles of association of the Company as in force as at the date of this
announcement
Audit Committee the audit committee of the Board
Baltic Aggregates Baltic Aggregates Oy, a subsidiary of the Group registered in Finland and
focused on aggregate exports from Finland to the Baltics
Baltics Platform the Group's limestone and dolomite operations, and part of Nordkalk, covering
the Baltics' markets and including Baltic Aggregates
BNP Paribas BNP PARIBAS of 16 boulevard des Italiens, 75009 Paris, France
Benelux Platform the Group's construction materials platform covering the Benelux market
including GduH, B-Mix, Goijens, Cube Beton and Stone Holdings
Björka Mineral Björka Mineral AB
B-Mix collectively, B-Mix Beton NV, J&G Overslag en Kraanbedrijf BV and Top
Pomping NV
Board the Directors as at the date of this announcement
Bridge Loan a 1 year term loan of €125 million, with options to extend in aggregate by
12 months, provided by the Lenders to the Company to part finance the
Acquisitions
Call Option Targets the Deal 2 Target and the Deal 3 Target
Call Options together, the UK Call Option and the Polish Call Option
Carmeuse Carmeuse Holding S.A.
Carrières du Boulonnais or CdB SAS Carrières du Boulonnais, part of Groupe Carrières du Boulonnais (Groupe
CB)
Carve Out the procedures required for the carve out of certain businesses and assets
from the existing businesses of CRH with the result that such business and
assets are wholly-owned by the UK Target and the Polish Target and therefore
capable of being acquired
Casters Casters Beton NV
CCP CCP Building Products Limited
CDH or Carrières du Hainaut CDH Développement SA together with its wholly owned subsidiaries Carrières
du Hainaut SCA and CDH International SCA
Closing Date (i) 4 January 2024, if the closing conditions have been fulfilled or waived by
such date, or (ii) any later date on which all closing conditions have been
fulfilled or waived (as the case may be), or at any other time as the parties
to the Master Purchase Agreement may agree
City Code the City Code on Takeovers and Mergers published by the Panel from time to
time
Company or SigmaRoc SigmaRoc plc, a public limited company incorporated under the laws of England
and Wales with registered number 05204176, whose registered office is at 6
Heddon Street, London W1B 4BT, United Kingdom
Conditions to the Polish Call Option (i) the Polish Purchaser having received notice from the Polish Seller that
the Polish Carve Out has been completed in accordance with the Polish Call
Option; and (ii) the Target operating the only burnt lime business of the
Polish Seller and its Affiliates which is located in Europe
Conditions to the UK Call Option (i) the Company having received notice from the UK Seller that the UK Carve
Out has been completed in accordance with the UK Call Option and (ii) the
transaction under the Master Purchase Agreement having closed
CREST the relevant system (as defined in the CREST Regulations) for paperless
settlement of share transfers and holding shares in uncertificated form which
is administered by Euroclear
CREST Regulations the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755) (as
amended)
CRH CRH plc (NYSE: CRH) (LSE:CRH), an international group of diversified building
materials businesses headquartered in Dublin, Ireland
Czech Seller the seller of the Czech Target, being CRH Europe Investments B.V.
Czech Target 75 per cent. of the issued share capital of Vápenka Vitošov s.r.o.
Deal 1 Acquisition the acquisition by the Company of the Deal 1 Targets, which comprises a
reverse takeover for the purposes of Rule 14 of the AIM Rules for Companies
Deal 1 Completion completion of the Deal 1 Acquisition, which shall occur on Admission
Deal 1 Effective Date 1 January 2024, 00:01 hrs in the relevant jurisdiction
Deal 1 Sellers together, the German Seller, the Czech Seller and the Irish Seller, and each,
a "Deal 1 Seller"
Deal 1 Targets those Targets being acquired by the Company in Deal 1, being the German
Target, Czech Target and Irish Target, and each, a "Deal 1 Target"
Deal 2 Acquisition the acquisition of the Deal 2 Target, subject to and conditional upon the
Company exercising its option to enter into the UK SPA
Deal 2 Sellers the UK Seller
Deal 2 Target subject to and conditional upon the Company exercising its option to enter
into the UK SPA, the UK Target
Deal 3 Acquisition the acquisition of the Deal 3 Target, subject to and conditional upon the
Polish Purchaser exercising its option to enter into the Polish SPA
Deal 3 Seller the Polish Seller
Deal 3 Target subject to and conditional upon the Polish Purchaser exercising its option to
enter into the Polish SPA, the Polish Target
Directors the directors of the Company as at the date of this announcement,
EBITDA earnings before interest, tax, depreciation and amortisation
EEA European Economic Area
Enlarged Group the Existing Group as it will be on Admission, i.e. as enlarged by the
acquisition of the Deal I Targets (but not the Deal 2 Target and Deal 3
Target)
Enlarged Share Capital the issued Ordinary Shares upon Admission, comprising the Existing Ordinary
Shares and the Fundraising Shares
Euroclear Euroclear UK & International Limited, a company incorporated under the
laws of England and Wales
EUWA the European Union (Withdrawal) Act 2018 (as amended)
Executive Directors the executive Directors of the Company, who as at the date of this
announcement, are David Barrett, Max Vermorken and Garth Palmer
Existing Facility the syndicated senior credit facility of up to approximately £305 million
arranged by Santander UK and BNP Paribas
Existing Group the Company and its subsidiary undertakings as at the date of this
announcement
Existing Ordinary Shares the 693,801,899 Ordinary Shares in issue as at the date of this announcement
FCA the Financial Conduct Authority
Form of Proxy the form of proxy for use by holders of Existing Ordinary Shares at the
General Meeting
Franzefoss Franzefoss AS, a Norwegian construction materials group
Fundraising the Placing and the REX Intermediaries Offer
Fundraising Shares the Placing Shares and the REX Intermediaries Offer Shares
FSMA the Financial Services and Markets Act 2000 (as amended)
GD Harries GDH (Holdings) Limited and its subsidiary undertakings including Gerald D.
Harries & Sons Limited
GDH or Granulat du Hainut Granulat du Hainaut SA
German Intercompany Loan Receivables the receivables (including accrued interest) owed by the German Target to the
relevant Deal 1 Sellers and their affiliates (other than the Deal 1 Targets),
as outstanding as of the Deal 1 Effective Date, and to be assigned to the
Company upon the acquisition of the Deal 1 Targets, substantially in the form
attached to the Master Purchase Agreement
German Purchaser SigmaCEN GmbH, a limited liability company incorporated under German law,
registered in the commercial register at the local court
of Charlottenburg under HRB 256485 B, a 100 per cent. subsidiary of the
Company
German Seller the seller of the German Target, being CRH Zehnte Vermögensverwaltungs GmbH
German Target Fels Holding GmbH, including its fully owned (direct or indirect) subsidiaries
Fels-Werke GmbH, Fels Netz GmbH and Fels Vertriebs und Service GmbH & Co
KG
General Meeting the general meeting of the Company to be held at 11.00 a.m. on 11 December
2023 at the offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London
ECR4 3TT, the Notice of which is to be set out in the Admission Document
Goijens Gripeco BV and its 100 per cent. owned subsidiaries Wegenbouw Goijens NV,
Goijens Recycling NV and G&G Bentonpompen BV, a Belgian group of companies
acquired by the Group in 2023 and which supplies ready-mixed concrete and
pumping solutions in the north east of Belgium
Greenbloc the Existing Group's cement free ultra-low carbon precast product range
HMRC His Majesty's Revenue and Customs
Intermediaries the intermediaries that were appointed by the Company in connection with the
REX Intermediaries Offer and who agreed to adhere to and be bound by the
Intermediaries Terms and Conditions
Intermediaries Agreement the booklet entitled "Intermediary Agreement: REX Retail Offer" and
containing, amongst other things, the Intermediaries Terms and Conditions
Intermediaries Terms and the terms and conditions agreed between the Company, the REX
Conditions Intermediaries Offer Co-ordinator and the Intermediaries in relation to the
REX Intermediaries Offer, and contained in the Intermediaries Agreement
Irish Seller the seller of the Irish Target, being Irish Cement Limited
Irish Target Clogrennane Lime Limited
ISIN International Securities Identification Number
Issue Price 47.5 pence per Fundraising Share
Johnston or JQG Johnston Quarry Group Limited, Guiting Quarry Limited and their subsidiary
undertakings
Joint Bookrunners BNP Paribas, Santander, Liberum Capital, Peel Hunt and Redburn
LafargeHolcim Holcim Ltd (SIX: HOLN) (XPAR: HOLN), operating as LafargeHolcim, a
multinational producer of construction materials
LEI Legal Entity Identifier
Lenders Santander and BNP Paribas (as mandated lead arrangers and bookrunners)
Lhoist Lhoist S.A., a family-owned lime, dolomite and mineral products business,
headquartered in Belgium
Liberum Capital Liberum Capital Limited of Ropemaker Place, Level 12, 25 Ropemaker Street,
London EC2Y 9LY, United Kingdom
London Stock Exchange London Stock Exchange plc
LTIP the long term incentive plan adopted by the Company, known as the SigmaRoc
Performance Share Plan
Master Purchase Agreement the conditional agreement entered into by the Company, the German Purchaser,
the German Seller, the Czech Seller and the Irish Seller dated 22 November
2023
MiFID II EU Directive 2014/65/EU on markets in financial instruments
New Facilities the new syndicated senior secured credit facilities of up to €875 million,
provided by the Lenders, which comprises two facilities being a senior
facility consisting of the Term Loan and RCF and separate bridging loan
facility of the Bridge Loan which will replace the Existing Facility on
drawdown under the New Facilities
NK East Oy a company in the Nordkalk Group incorporated and registered in Finland, which
is the holding company of Nordkalk's Ukrainian subsidiaries, Nordkalk Ukraine
TOV and NK Prykarpattya TOV
New Option Plan the proposed new option plan (to be known as the "Sigmaroc plc Share Option
Plan 2023") to be adopted by the Company, conditional on Admission and subject
to shareholder approval
New Options the proposed new options to be granted under the New Option Plan, subject to
shareholder approval and Admission
Nominated Adviser Liberum Capital
Nomination Committee the nomination committee of the Board
Non-Executive Directors the Non-Executive Directors, who as at the date of this announcement, are
Simon Chisholm, Jacques Emsens, Axelle Henry and Tim Hall
Nordkalk Group Nordkalk and its subsidiary undertakings as at the date of this announcement
Nordkalk Share Purchase Agreement the agreement dated 15 July 2021 made between the Company and Rettig Group
pursuant to which the Company purchased from Rettig Group the entire issued
share capital of Nordkalk
Notice the notice of General Meeting which will be set out in the Admission Document
NorFraKalk NorFraKalk SA, a Norway incorporated joint venture company equally owned by
Nordkalk and Franzefoss
Nordic a region comprising Finland, Iceland, Norway, Denmark, Sweden, and the Faroe
Islands
Nordkalk Nordkalk Oy Ab
Nordkalk Group Nordkalk and its subsidiary companies and undertakings
Official List the Official List of the FCA
Omya NK East Share Purchase Agreement Omya AG the agreement made between the Company and Nordkalk dated 30 August
2021, pursuant to which the Company acquired NK East Oy for €1
Option Plan the option plan adopted by the Company in 2016
Ordinary Shares ordinary shares of £0.01 each in the capital of the Company
Panel the Panel on Takeovers and Mergers
Peel Hunt Peel Hunt LLP of 7(th) Floor 100 Liverpool Street, London, EC2M 2AT, United
Kingdom
Placing the conditional placing of the Placing Shares by the Joint Bookrunners at the
Issue Price pursuant to the Placing Agreement
Placing Agreement the agreement conditional upon, inter alia, the passing of Resolutions
numbered 1 and 2, dated on or around the date of this announcement and made
between the Company and the Joint Bookrunners relating to the Placing
Placing Shares the, in aggregate, 421,052,631 new Ordinary Shares to be issued by the Company
pursuant to the Placing
Polish Call Option the option agreement entered into by the Company and the Polish Seller dated
22 November 2023, pursuant to which the Polish Purchaser (at its sole
discretion) has the option to acquire the Polish Target
Polish Carve Out the Carve Out as it relates to the Polish Target
Polish Competition Office the Office of Competition and Consumer Protection in Poland
Polish Competition Office the clearances that the Polish Purchaser is required to obtain from
Clearance the Polish Competition Office in order to complete, subject to the Polish
Purchaser exercising the Polish Call Option, the acquisition of the Polish
Target
Polish Purchaser SigmaRoc plc, up to and until such time as the Polish SPV is incorporated and
enters into a deed of adherence in respect of the Polish Call Option, wherein
it assumes the rights and obligations of SigmaRoc plc (as purchaser) in the
Polish Call Option and thereafter, the Polish SPV
Polish Seller Trzuskawica S.A.
Polish SPA the substantially agreed form SPA attached to the Polish Call Option
Polish SPV the direct or indirect wholly-owned subsidiary of the Company to be
incorporated in Poland for the purpose of entering into the Polish SPA
Polish Target Ovetill Investments Sp. z o.o.
Polish Target Completion subject to and conditional upon the Polish Purchaser exercising the Polish
Call Option, completion of the acquisition of the entire issued share capital
of the Polish Target by the Polish Purchaser
Poundfield Poundfield Products (Group) Limited and its subsidiary undertakings, including
Poundfield Precast
Poundfield Precast Poundfield Precast Limited
PPG the Existing Group's Precast Products Group platform based in the UK
Proposals together, the Acquisitions, the Fundraising, Admission and other matters
described in this Announcement
Prospectus Regulation Prospectus Regulation (EU) 2017/1129
Prospectus Regulation Rules the prospectus regulation rules made by the FCA under Part VI of FSMA, as
amended
QIB a qualified institutional buyer as defined in Rule 144A
QCA Code the QCA Corporate Governance Code published by the Quoted Companies Alliance
from time to time
RCF a revolving credit facility of €150 million provided by the Lenders to the
Company
Redburn Atlantic Redburn (Europe) Limited of 2(nd) Floor,10 Aldermanbury, London, EC2V 7RF,
United Kingdom
Remuneration Committee the remuneration committee of the Board
Resolutions the resolutions to be proposed at the General Meeting
Rettig Group Rettig Group Oy Ab
Reverse Takeover the proposed acquisition by the Company of the Deal I Targets
REX Intermediaries Offer the offer of the REX Intermediaries Offer Shares to the Intermediaries using
the Peel Hunt REX portal
REX Intermediaries Offer Co-Ordinator Peel Hunt LLP
REX Intermediaries Offer Shares the new Ordinary Shares to be issued by the Company pursuant to the REX
Intermediaries Offer
Ronez Ronez Limited, the Existing Group's Channel Islands based business
RTO Option Plan the option plan adopted by the Company in 2016, which was conditional upon the
acquisition of Ronez
Regulation S Regulation S promulgated under the Securities Act
Rule 144A Rule 144A under the Securities Act
S&P S&P Global Inc. (NYSE:SPGI)
Santander Banco Santander, S.A. (LON: BNC), a multinational banking group operating as
Santander Group
Santander UK the UK branch of the Santander business
Scheduled Deal 1 Completion Date 4 January 2024
Shareholder a holder of Ordinary Shares
SEDOL Stock Exchange Daily Official List
Sellers means the respective sellers of each of the Targets, being: (i) in respect of
the Deal 1 Acquisition, the German Seller, the Czech Seller and the Irish
Seller and; (ii) in respect of the Deal 2 Acquisition, the UK Seller; and
(iii) in respect of the Deal 3 Acquisition, the Polish Seller
SKOY Suomen Karbonaatti Oy, a joint venture company between Nordkalk (51 per cent.)
and Omya Oy (49 per cent.), a subsidiary of Switzerland-based industrial
minerals company Omya
SPA share purchase agreement
Stone Holdings Stone Holdings S.A.
Targets each of the German Target, Czech Target, Irish Target, Polish Target and UK
Target
Term Loan a five year term loan of €600 million provided by the Lenders to the Company
to part finance the Acquisitions and to pay financing costs
TUPE the Transfer of Undertakings (Protection of Employment) Regulations 2006, as
amended
UK the United Kingdom of Great Britain and Northern Ireland
UK Call Option the option agreement entered into by the Company and the UK Seller dated 22
November 2023, pursuant to which the Company (at its sole discretion) has the
option to acquire the UK Target
UK Carve Out the Carve Out as it relates to the UK Target
UK SPA the substantially agreed form SPA attached to the UK Call Option
UK MAR the UK version of the EU Market Abuse Regulation (596/2014) as it forms part
of the retained EU law as defined in the EUWA
UK Prospectus Regulation the UK version of the Prospectus Regulation as it forms part of EU retained
law by virtue of the EUWA
UK Seller the seller of the UK Target, being Tarmac Cement and Lime Limited
UK Target Tarmac Shelfco Limited
UK Target Completion subject to and conditional upon the Company exercising the UK Call Option,
completion of the acquisition of the entire issued share capital of the UK
Target by the Company
uncertificated or in uncertificated form recorded on a register of securities maintained by Euroclear in accordance
with the CREST Regulations as being in uncertificated form in CREST and title
to which, by virtue of the CREST Regulations, may be transferred by means of
CREST
US Securities Act the United States Securities Act of 1993, as amended
Verdalskalk Verdalskalk AS, a joint venture company incorporated in Norway, in which
Nordkalk holds a 10 per cent. equity interest
References to a "company" in this announcement shall be construed so as to
include any company, corporation or other body corporate, wherever and however
incorporated or established.
Words importing the singular shall include the plural and vice versa, and
words importing the masculine gender shall include the feminine or neutral
gender.
For the purpose of this announcement, "subsidiary" and "subsidiary
undertaking" have the meanings given by the Companies Act 2006.
GLOSSARY OF TECHNICAL TERMS
°C degrees Celsius
°F degrees Fahrenheit
Adjusted Leverage Ratio the comparison of net debt to Underlying EBITDA for the last twelve months
adjusted for pre-acquisition earnings of subsidiaries acquired during the year
aggregate aggregates are small rock fragments (typically 0.08mm to 80mm in diameter) of
mineral origin. Aggregates come in different types: maritime, fluvial and
terrestrial. They may be sand, gravel or crushed gravel. Aggregates, mixed
with water and cement, are essential for the production of concrete
aragonite a carbonate mineral, one of the three most common naturally occurring crystal
forms of calcium carbonate
ASP average selling price
asphalt a mixture of bitumen and mineral aggregates used in the construction of road
and car park surfaces
Baltics a geographical area compromising Estonia, Latvia and Lithuania and is bounded
on the west and north by the Baltic Sea
Benelux a collective name for Belgium, the Netherlands and Luxembourg
Bluestone a high value blue coloured decorative limestone extracted from the Existing
Group's CDH quarry, which has distinct characteristics and is a Global
Heritage Resource
CaCO3 or calcium carbonate calcium carbonate, a substance found in sedimentary rocks such as limestone,
predominately in the crystalline forms of calcite and aragonite
CAGR compound annual growth rate
calcination a heating process whereby a substance is purified and, as used specifically in
this announcement, the transformation of limestone to lime
calcite is a carbonate mineral and the most stable polymorph of calcium carbonate
calcium silicate a lightweight, porous, chalky material, which is used for insulation, being
suitable for temperatures up to 1200°F (649°C), as an anticaking agent in
food production and as an antacid
CaO or calcium oxide calcium oxide, otherwise known as quicklime or burnt lime
CapEx capital expenditure
CaS or calcium sulphide calcium sulphide, a substance produced in steel manufacturing when limestone
reacts with sulphur, which goes into slag
causticising a reaction in which sodium carbonate in green liquor reacts with calcium
hydroxide from the slaker to form sodium hydroxide and calcium carbonate
CBAM Cross Border Adjustment Mechanism is an EU carbon border tax, with the aim of
reducing carbon emissions
CCUS carbon capture utilisation and storage
cement cement is a hydraulic bonding agent which is obtained by heating, then
grinding, a mixture of limestone and clay. Most cements are made from clinker
and additives and are usually used in the form of a powder. Cement sets when
mixed with water. Combined with sand and aggregates (sand or gravel), it turns
into rock-hard concrete or mortar
CO2 carbon dioxide
concrete concrete is a building material made by mixing water, aggregates and sand with
a binding agent (usually cement) and, if necessary, with additives. This
mixture is made on building sites and in factories
CRIRSCO Committee for Mineral Reserves International Reporting Standards
DRI direct reduced iron, produced from the direct reduction of iron ore (in the
form of lumps, pellets, or fines) into iron by a reducing gas or elemental
carbon produced from natural gas or coal
DWT deadweight tonnage, a measure of how much weight a ship can carry and is the
sum of the weights of cargo, fuel, fresh water, ballast water, provisions,
passengers and crew
dolomite an anhydrous calcium magnesium carbonate mineral with a chemical composition
of CaMg(CO3)2
E1, E2, etc. a resource product classification tool of environmental-social-economic
viability, as administered by UNFC
eCO2 embodied CO2
EAF electric arc furnace, is a furnace that heats material by means of an electric
arc
EPS Earnings Per Share
ESG environmental, social and governance
ETS European Trading Systems
EU the European Union
EUA Emission Unit Allowances
EUETS EU Emissions Trading System
EuLA European Lime Association
EUR Euro
CZK Czech Crown
F1, F2, etc. a resource product classification tool of technical viability, as
administered by UNFC
G1, G2, etc. a resource product classification tool of confidence in an estimate, as
administered by UNFC
GCC ground calcium carbonate
GDP gross domestic product
GHG greenhouse gas
Ha a hectare is a non-SI metric unit of area equal to a square with 100-metre
sides (1hm(2)), or 10,000m(2), and is primarily used in the measurement of
land
H2O the chemical formula for water
igneous rock a rock that has formed through the cooling and solidification of magma or lava
ISO14001 the international standard for environmental management systems, designed by
the International Organisation for Standardisation (ISO) to help businesses
and other organisations to reduce their environmental impact
ISO 18001 and 45001 the international standards for health and safety management systems designed
by the ISO
kg kilogram
kt thousand tonnes
ktpa thousand tonnes per annum
LFL like-for-like comparative with relevant prior period prepared on a pro-forma
basis
licence, lease or permit any form of licence, permit, lease or other entitlement granted by the
relevant Government department in accordance with its mining legislation that
confers on the holder certain rights to explore for and/or extract minerals
that might be contained in the land, or ownership title that may prove
ownership of the minerals
lime or quicklime a limestone product with the chemical formula CaO, produced by heating
limestone at high temperatures in kilns, which has a range of uses, including
in the production of iron and steel, paper and pulp production, treatment of
water and flue gases and in the mining industry
limestone is a sedimentary rock composed primarily of the calcite and aragonite
minerals, both of which are formed from calcium carbonate
Mt million tonnes
Mtpa million tonnes per annum
MWh megawatt-hour, a unit for measuring power that is equal to 1,000 kilowatts of
electricity being used continuously for one hour
NATO North Atlantic Treaty Organization
OEM original equipment manufacturer
PAC price adjustment clause
PCC precipitated calcium carbonate
PPB pulp, paper & board
PERC Pan European Reserves and Resources Reporting Committee which administers the
PERC Code
PERC Code the code of that name for the reporting of exploration results, mineral
resources and mineral reserves and which sets out minimum standards,
recommendations and guidelines for the United Kingdom, Ireland and Europe, as
administered by PERC
pH a logarithmic scale used to measure of how acidic/basic a solution is. The pH
scale ranges from 0 to 14, with 7 being neutral. pHs of less than 7 indicate
acidity, whereas a pH of greater than 7 indicates a base
PLN Polish Zloty
SASB sustainability accounting standards board
slag the silicon dioxide and metal oxide mixture left over as a by-product of
extracting metal from its ore during the smelting process
SBTi Science Based Targets initiative
SG&A Selling, General & Administrative
slaking the process of adding water to calcium oxide (lime) to produce calcium
hydroxide (slaked lime or hydrated lime)
SONIA Sterling Overnight Index Average
stack large industrial chimneys designed to emit and disperse hot air, particulate
matter, and pollutants into the atmosphere at such a height as to not
constitute a danger to surrounding life on the ground
Reserves In the case of all members of the Existing Group other than Nordkalk, Reserves
represent the estimate of the part of a Resource that has more certainty and
considers non geological factors such as permitting, feasibility assessments,
social and environmental factors, and also factors diluting materials and
allowances for losses, which may occur when the material is mined or
extracted. In the case of Nordkalk, the estimate of reserves which represents
a 'commercial project' pursuant to the UNFC classification system, where the
relevant permitting has been approved and the E1, F1 and G1 or G2 criteria
under UNFC are met.
Resources a concentration or occurrence of solid material of economic interest in or on
the Earth's crust in such form, grade or quality and quantity that there are
reasonable prospects for eventual economic extraction. The location, quantity,
grade or quality, continuity and other geological characteristics are known,
estimated or interpreted from specific geological evidence and knowledge,
including sampling. In the case of all members of the Existing Group other
than Nordkalk, Resources represent the estimate of the potentially viable
mineable minerals. In the case of Nordkalk, Resource estimates represent the
estimate of potential reserves where the E2, F2 and G1, G2 or G3 criteria
under UNFC classification are met.
TCFD task force on climate-related financial disclosures
tpa tonnes per annum
tph tonnes per hour
underlying in relation to stated financial figures, such as EBITDA, earnings per share
and profit before tax, underlying figures are stated before acquisition
related expenses, certain finance costs, redundancy and reorganisation costs,
impairments, amortisation of acquisition intangibles and share option expense
UNFC United Nations Framework Classification for Resources
wharves plural of wharf, a structure on the shore of a harbour or on the bank of a
river or canal where ships may dock to load and unload cargo or passengers
wollastonite a naturally occurring mineral which is a chemical combination of calcium,
silicon and oxygen. It is formed when limestone, or other high-calcium rocks,
undergo high temperature and pressure changes sometimes in the presence of
silica-bearing fluids such as in skarns or contact metamorphic rocks.
APPENDIX II - RISK FACTORS
Investing in and holding Ordinary Shares involves financial risk. Prospective
investors in the Ordinary Shares should carefully review all of the
information contained in this announcement and should pay particular attention
to the following risks associated with an investment in the Ordinary Shares,
the Enlarged Group's business and the industry in which it participates prior
to making an investment decision.
The risk factors set out below apply to the Enlarged Group as at the date of
this announcement.
The risks and uncertainties described below are not an exhaustive list, are
not set out in any order of priority and do not necessarily comprise all, or
explain all, of the risks associated with the Enlarged Group and the industry
in which it participates or an investment in the Ordinary Shares. They
comprise the material risks and uncertainties in this regard that are known to
the Existing Group and should be used as guidance only. Additional risks and
uncertainties relating to the Enlarged Group and/or the Ordinary Shares that
are not currently known to the Existing Group, or which the Existing Group
currently deems immaterial, may arise or become (individually or collectively)
material in the future, and may have a material adverse effect on the Enlarged
Group's business, results of operations, financial condition and prospects. If
any such risk or risks should occur, the price of the Ordinary Shares may
decline and investors could lose part or all of their investment. There can be
no certainty that the Enlarged Group will be able to implement successfully
its growth strategy as is detailed in this announcement. No representation is
or can be made as to the future performance of the Enlarged Group and there
can be no assurance that the Enlarged Group will achieve its objectives.
Prospective investors should consider carefully whether an investment in the
Ordinary Shares is suitable for them in the light of the information in this
announcement and their personal circumstances. Prospective investors should
consult a legal adviser, an independent financial adviser or a tax adviser for
legal, financial or tax advice if they do not understand any part of this
announcement.
RISKS RELATING TO THE ACQUISITIONS AND THE TARGETS
The due diligence carried out in respect of the Targets may not have revealed
all relevant facts or uncovered significant liabilities
Whilst the Company conducted due diligence, such as legal, tax, financial and
technical, in respect of the Acquisitions with the objective of identifying
any material issues that may affect its decision to proceed with the
Acquisitions, there can be no assurance that all such issues have been
identified. The Company also used information revealed during the due
diligence process to formulate its business and operational planning. During
the due diligence process, the Company is only able to rely on the information
that was made available to it. Any information that was provided or obtained
from available sources may not have been accurate at the time of delivery
and/or remained accurate during the due diligence process and in the run-up to
the Acquisitions and not all information requested has been provided.
Notwithstanding the aforesaid, the Company believes its diligence is
reasonable and appropriate based on the facts and information made available
to it. Whilst the Company is of the opinion that sufficient information has
been made available for its purposes based upon its current knowledge of the
Targets, there can be no assurance that the due diligence revealed all
relevant facts or uncovered all significant liabilities. If the due diligence
investigation failed to identify key information in respect of the Targets, or
if the Company considered certain material risks to be commercially
acceptable, the Company may be forced to write-down or write-off assets in
respect of the Targets, which may have a material adverse effect on the
Enlarged Group's business, financial condition or results of operations. In
addition, following the Acquisitions, the Company may be subject to
significant, previously undisclosed liabilities in respect of the Targets that
were not known or identified during due diligence and which could have a
material adverse effect on the Enlarged Group's business, financial condition
and results of operations.
Furthermore, as is customary when investigating companies for the purposes of
an acquisition, as part of its due diligence the Company has uncovered a
variety of matters in the Targets which could be improved upon (which span a
variety of areas including but not limited to contractual terms, employment
terms, property, land and real estate title, planning consents and use,
compliance with planning law and regulation, environmental liabilities,
permitting and regulatory issues, data protection and IP and domain name
protection). The Company and the Board assess these matters as relatively
minor in the context of the Acquisitions and their intention is to address
these post Admission to the extent it is considered prudent to do so in the
context of the Enlarged Group.
Whilst the Company has received a form of contractual comfort pursuant to the
warranties and indemnities contained in the Master Purchase Agreement, there
is no guarantee that such arrangements will provide adequate compensation for
the Company for any loss or liability arising from any undisclosed
liabilities, issues or defects that may arise in relation to the Targets. This
could have a material adverse effect on the financial position of the Enlarged
Group.
There are limitations to the protection afforded to the Company pursuant to
the warranties and indemnities contained in the Master Purchase Agreement
Warranties under the Master Purchase Agreement are subject to certain
limitations and are limited in scope.
In relation to the business warranties, should the relevant breaches fall
below the individual and aggregate thresholds, the liability in relation to
such breaches will sit with the Existing Group. Additionally, the aggregate
liability for all breaches of business warranties is capped.
Accordingly, the Company may incur substantial losses if a breach of a
business warranty occurs which falls below the thresholds or exceeds the
liability cap, or a matter arises which is not protected by warranties under
the Master Purchase Agreement. This could have a material adverse effect on
the Enlarged Group's business results of operations and financial condition.
The Targets' results may not match the Board's expectations
If the results and cash flows generated by the Targets are not in line with
the Company's expectations, it may materially impact on the financial
performance of the Enlarged Group which could have an adverse effect on the
Enlarged Group's financial position and share price. Demand for the Targets
products are influenced by multiple factors, including global and national
economic circumstances, monetary policy, consumer sentiment, variations in
fuel and other input costs amongst other factors. The Target's results may be
adversely impacted by negative trends in these factors. In addition, any
goodwill that arises on the Acquisitions may be required to be written down,
which, while having no cash impact, could have an adverse effect on the
Enlarged Group's financial position and share price.
There can be no assurance that the Enlarged Group will realise the anticipated
benefits and synergies of the Acquisitions
The Enlarged Group may not realise the anticipated benefits and synergies of
the Acquisitions or may encounter difficulties in achieving the same. The
Enlarged Group is subject to all of the risks set forth in this "Risk Factors"
section which may impact the Enlarged Group's ability to realise the benefits
and synergies its Directors believe will result from the Acquisitions. In
addition, if the future financial performance and cash flows generated by the
Enlarged Group are not in line with the Directors' expectations, or the
mineral resource is not of the quality, or is not present in the volumes that
the Directors expect, it may significantly affect the financial performance of
the Enlarged Group. This could reduce the potential benefits and synergies
arising from the Acquisitions, adversely affect the market price of the
Ordinary Shares, or have a material adverse effect on the Enlarged Group's
business, financial condition, operating results and prospects.
The German Target is currently in negotiations with a key customer in Germany
The German Target is currently negotiating a new supply agreement with a
significant customer which will also require a supply of differently composed
products.
In order to offer the products required and secure exclusivity under the new
supply agreement, capital expenditures of the German Target in an amount of
approximately one fourth of the annual revenue generated with the customer is
necessary. The German Target and the customer are currently negotiating the
new framework agreement with a first phase of delivery of new products to take
effect in 2026. A full transfer of delivery of new products (and final
phase-out of delivery of existing products) is expected with implementation of
the third phase by the customer in 2033.
Written agreements between members of the Targets and key customers and key
suppliers have expired or are on unwritten terms
Certain material suppliers and customers of the Targets are doing business
with the Targets without legally binding written agreements. Whilst these
suppliers and customers have been operating in this way for some time, there
is a risk that in the absence of written terms there may be disagreements as
to the terms of business or the services may be terminated or discontinued
without notice. In addition, certain agreements have expired. It has been
confirmed during due diligence in most respects that services have continued.
Following completion of the Acquisitions, the Company will be taking steps to
seek to ensure that all key suppliers and customers are legally bound by
written agreements.
Certain contractual arrangements have onerous terms, including change of
control provisions and unilateral termination rights
The Targets contract with a variety of counterparties, including customers and
suppliers, in relation to its products. Certain contracts, including with key
customers and suppliers, contain provisions which might ordinarily be regarded
as unusual or onerous, including without limitation termination rights at
short notice, change of control provisions, uncapped liability for the Targets
and financial penalties.
To the extent that the Company wishes to keep these arrangements in place
following completion of the Acquisitions, the Company may require the consent
of third parties, which may not be forthcoming. In addition, counterparties
may exercise their unilateral right of termination (or threaten to do so) in
order to obtain more advantageous commercial and legal terms for themselves,
putting the Targets in a commercially worse position than they were prior to
the Acquisitions. In the event that contracts are terminated or are
renegotiated to the counterparty's advantage, the operations and revenues of
the Enlarged Group may be affected commensurately.
There are inherent environmental risks in the sector that the Enlarged Group
operates
Quarrying operations and the production of the Enlarged Group's products have
inherent risks and liabilities associated with damage to the environment and
the disposal of waste products occurring as a result of exploration and
production. Environmental and safety legislation and regulation (e.g. in
relation to reclamation, disposal of waste products, pollution and protection
of the environment, protection of wildlife and otherwise relating to
environmental protection) is frequently changing and is generally becoming
more restrictive with a heightened degree of responsibility for companies and
their directors and employees and more stringent enforcement of existing laws
and regulations. Future changes could impose significant costs and burdens on
the Enlarged Group (the extent of which cannot be predicted) both in terms of
compliance and potential penalties, liabilities and remediation. Investor
sentiment may also change and there is a risk that investors turn away from
sectors which have potentially negative environmental impacts. Breach of any
environmental obligations could result in penalties and civil liabilities
and/or suspension of operations, any of which could adversely affect the
Enlarged Group. Further, approval may be required for any material plant
modifications or additional land clearing and for ground disturbing
activities. Delays in obtaining such approvals could result in the delay to
anticipated exploration programmes or mining activities.
The Enlarged Group will need to apply for new permits to maintain or increase
the level of future production at several of its sites of operation. In
addition, following the Acquisitions, certain of the Targets will need to
apply for entirely new environmental, planning and other licences. There is no
guarantee that these new permits or requested changes to existing permits will
be granted. For example, the permitting application processes may be adversely
affected or ultimately fail due to environmental concerns, including
greenhouse gases, protected species and complaints from local inhabitants. Any
environmental issues encountered will likely increase the expense and timeline
for the permitting process and decrease the ultimate likelihood of success.
Ultimately if they are not granted, the current or intended use of the site
and the operations may not be able to be continued.
There may also be unforeseen environmental liabilities resulting from
quarrying and other activities, which may be costly to remedy. If the Enlarged
Group is unable to fully remedy an environmental problem, it may be required
to stop or suspend relevant operations or enter into interim compliance
measures pending completion of the required remedy. The potential exposure may
be significant and could have a material adverse effect on the Enlarged Group.
The Enlarged Group is currently evaluating the costs of insurance for
environmental risks (including potential liability for pollution or other
hazards as a result of the disposal of waste products occurring from
production).
Whilst the Company has carried out legal, financial and technical due
diligence on the Targets, it has not been able to fully assess certain aspects
of the Targets' businesses, or visit every site of operation, including a full
assessment of the Targets' compliance with applicable environmental laws and
regulations or visit every site of operation. Where possible, warranties and
other comfort has been sought from the Sellers in the Master Purchase
Agreement but there can be no guarantee that a Target is not later found to be
in breach of applicable law and regulation and may be requested to remedy any
such breaches at its own cost or else may incur additional liabilities
(including fines and censures) in respect of the same or else be forced to
discontinue operations.
In particular, a number of sites in Sweden have been registered as
contaminated properties in the national register of contaminated properties,
including the Storugns and Köping ports and there is therefore a potential
financial liability attached to this registration. In Sweden, registration is
automatic for any site with operations that contaminate or could potentially
contaminate the land.
Environmental hazards may exist on the properties in which the Enlarged Group
holds interests that are unknown to the Company and that have been caused by
previous or existing owners or operators of the properties. To the extent the
Enlarged Group is subject to environmental liabilities, the payment of any
liabilities or the costs that may be incurred to remedy environmental impacts
would reduce funds otherwise available for operations. However, compensation
can often be claimed from previous landowners if they were the polluters.
The Enlarged Group may assume responsibility for restoration and
decommissioning costs
Upon cessation of any quarrying operations, the Enlarged Group may assume
responsibility for costs associated with restoring the operational sites by
taking reasonable and necessary steps in accordance with generally accepted
environmental practices. Any environmental permits held by the Enlarged Group
may also specify commitments to specific restoration activities on a site.
However, some restoration provisions can be advantageous to the company, such
as restoring excavations as inert landfill sites or tourist/commercial
attractions such as water parks or nature reserves.
The remediation works at one landfill in Germany are required to be concluded
by 2035, with certain parts to be concluded by May 2030. The operation cannot
be fully undertaken as part of the land affected is not currently owned by the
Targets. The Enlarged Group will take steps to seek to acquire the required
properties following completion of the Acquisitions. If the required
properties are not purchased, the Enlarged Group may need to seek amendments
to the existing remediation plans which may be cost intensive and consume
significant operational and financial resources.
There are risks and uncertainties relating to title to land and properties
held by the Targets
While the Company has to the extent possible investigated the Targets' title
to, and rights and interests in, the land and properties held by the Targets
this should not be construed as a guarantee that they are all in good title.
Title to the land and properties may be subject to undetected defects,
including third party rights and covenants. If a defect does exist and it is
successfully challenged, it is possible that the Enlarged Group may lose all
or part of its interest in the relevant land. In addition, there are patches
of landlocked sites (i.e. land not owned by the Targets) or possible ransom
strips within the area of operations which the Targets may need access to.
Some parcels of land in the Targets' demise are encumbered with a limited
personal easement waiving mining damage. The encumbrance of real property with
mining damage waivers could lead to issues for the financing of the real
property (especially with non-regional banks that are not familiar with the
subject). Should title to any real estate be challenged or revoked, it may
have a significant effect on the operations and therefore of the financial
results of the Enlarged Group.
There is no guarantee that the Targets will be integrated successfully
How the acquired Targets' businesses will perform as part of the wider
Enlarged Group is difficult to predict and may not meet predictions and
expectations. Though businesses within the Enlarged Group are expected to
continue to operate under existing management in line with the Existing
Group's decentralised strategy, the integration of the Targets will be
essential to ensure that efficiencies can be achieved, and the success of such
integration cannot be guaranteed. The acquisition of the Targets will expose
the Enlarged Group to potential risks associated with the assimilation of new
technologies and personnel, unforeseen or hidden liabilities, the diversion of
management attention and resources from the Enlarged Group's existing
businesses and the inability to generate sufficient revenues to offset the
costs and expenses associated with such acquisitions.
Customer concentration of the Targets
The Targets' largest customers represent a significant proportion of the
Targets' revenues across the period covered by the historical financial
information. Accordingly, there is a significant level of customer
concentration, for example the top 10 customers in a jurisdiction contribute
over 60 per cent. of product revenue over a number of years. While the
majority of these are longstanding relationships of over 5 years, the loss of
a key customer could have a material effect on the relevant Target's business,
results of operations, financial condition and/or growth prospects and,
potentially in turn, those of the Enlarged Group.
Hedging arrangements in relation to CO2
The Targets and CRH have historically entered into forward-hedging contracts
for the purchase of CO2 allowances in order to mitigate potential increases in
the market rate of CO2 allowances and any lag between the Targets' input costs
and price negotiations with customers. CO2 allowances are used to fund the net
CO2 emission deficit, and the Targets are required to acquire sufficient
allowances to cover this net deficit.
Throughout the period covered by the historical financial information, the
Targets benefited from their hedging arrangements following a period of
sustained increases in the market price of CO2 allowances and during which
there was a lag in raising the Targets' ASP to reflect this movement. Going
forward the Enlarged Group intends to continue with its existing hedging
strategy to also incorporate the Targets. However, there is no guarantee that
the Enlarged Group's hedging strategy will continue to be effective or fully
offset any increase in input costs or that the Targets will be able to factor
increased CO2 price increases into customer pricing negotiations and the
Targets' ASP. This may impact future performance and ability to fund longer
term capex requirements which are required to accommodate the continued
decline in free carbon allowances from the EU and UK ETS.
There was a level of groupwide energy cost hedging up to the end of FY21 and
hedging in selected markets in FY22. Since then, and given high market cost
inflation, each of the Targets has largely made its own local arrangements
with suppliers. Hedging has not been a focus in FY23 given softening energy
indices and passthrough mechanisms in place. The Targets management has
decided not to hedge in FY24, reflecting the fact that the spot price is lower
than hedging, and the ability to pass through energy costs to customers via
the energy surcharge. There is a risk that deciding not to implement groupwide
energy cost hedging has a negative financial effect on the Enlarged Group.
Intellectual property rights and domain names
The Company has identified a portfolio of intellectual property and domain
names relevant to the business of the Targets. The portfolio is comprised of
patents, trade marks, trade mark applications and domain names. There is no
assurance that the intellectual property identified constitutes all of the
intellectual property relevant to the business of the Targets. Furthermore,
some intellectual property rights and domain names are not registered in the
name of the Targets. As such, these will need to be transferred or assigned to
the Targets prior to completion of the Acquisitions. If the Targets do not
acquire ownership or the right to use all of the intellectual property and
domain names considered relevant to their business, it may result in a
material adverse effect on the Enlarged Group's business, financial condition
and prospects. There is also no guarantee that any of the trade mark
applications identified as relevant to the Targets will proceed to grant.
Employees of the Targets are members of trade unions
The Enlarged Group may be limited in its flexibility in dealing with its
staff, including those of the Targets, due to wide ranging trade union
membership amongst employees. If there is a material disagreement between the
Enlarged Group and its staff belonging to trade unions, the Enlarged Group's
operations could suffer an interruption or shutdown that could have a material
adverse effect on its business, results of operations or financial condition.
Trade unions and/or other employee representatives must also be notified of,
and consulted with in relation to, all proposed changes to terms or working
conditions of employees of the Enlarged Group.
There is no guarantee that either of the Call Options will be exercised and
therefore there is no guarantee that the acquisition of the Deal 2 Target or
the Deal 3 Target will complete. In the event that either of the Call Options
is not exercised a significant break fee may become payable by the Company
The exercise of the UK Call Option and the Polish Call Option is entirely at
the Company's and Polish Purchaser's (as applicable) discretion if the
relevant conditions are met. The exercise of the relevant Call Option is
subject to the Conditions to the UK Call Option and the Conditions to the
Polish Call Option. There is therefore no guarantee that either the Deal 2
Acquisition or Deal 3 Acquisition or both acquisitions will go ahead, or they
may complete later than expected or may not complete at all.
Investors should note that in a significant break fee of £25 million per Call
Option may become payable should a Call Option not be exercised.
The implications of either or both of Deal 2 or Deal 3 not completing could
also potentially weaken the strategic rationale for the Acquisitions and the
Enlarged Group's position in the Northern Europe.
The exercise of the Polish Call Option is subject to Polish Competition Office
Clearance
The exercise by the Polish Purchaser of its option to enter into the Polish
SPA (subject to and conditional upon, among other things, the Polish Carve Out
being effected and the Polish Purchaser exercising the Polish Call Option) and
thereby to acquire the Polish Target pursuant to the Polish SPA is
conditional, inter alia, receiving Polish Competition Office Clearance, for
which the Polish Purchaser will make the necessary filings with the Polish
Competition Office once the Polish Call Option is exercised and the Polish SPA
is executed. The Polish Competition Office will have one month (provided it
does not open Phase II review) to issue a decision concerning the initial
filings. However, the Polish Competition Authority usually asks questions in
respect of submitted documentation (generally twice or more - depending on the
scope of information provided and on the person who is the case handler) and
such questions suspend the deadline to issue the decision. The Company has not
identified any overlapping markets in Poland, therefore, the Board would
expect competition clearance in Poland to take approximately 60 to 90 days
from filing. There is no guarantee that the Polish Competition Office
Clearance will be forthcoming or be granted. In the event that Polish
Competition Office Clearance is not received the Polish Purchaser will not be
able to acquire the Polish Target.
There are risks associated with the UK Carve Out and the Polish Carve Out
The Company and/or the Polish Purchaser shall not be entitled to exercise its
option to enter into the UK SPA and/or the Polish SPA, if the relevant Carve
Out is not completed. If the relevant Carve Out is not completed the Deal 2
Acquisition and/or the Deal 3 Acquisition (as applicable) cannot be completed.
As part of the Carve Out, a variety of assets, including contracts, employees
and real estate need to transfer to the Deal 2 Target and the Deal 3 Target.
As part of the due diligence process conducted by the Company, the following
particular risks have been noted:
UK Carve Out
One customer contract to be included in the UK Carve Out contains onerous
terms and drafting that
does not accommodate novation, and therefore cannot be easily carved out. As a
result, the contract is likely to be needed to be renegotiated to transfer to
Deal 2 Target as part of the Carve Out.
· A relatively substantial portion of the revenue
attributable to the top customers of the Deal 2 Target is derived from
arrangements that are undocumented and/or on a spot basis. There is no
guarantee that those customers will continue to purchase goods after the UK
Carve Out, on the same terms or at all.
· The Company has not been able to ascertain if there any
title restrictions on the properties included in the UK Carve Out. Title
restrictions could affect the transferability of properties intended to be
included in the UK Carve Out.
Polish Carve Out
· Several material contracts to be include in the Polish
Carve Out are subject to public procurement laws which may not accommodate
novation. As a result, there is a risk that such contracts cannot be carved
out and transferred to Deal 3 Target.
· A property in Poland, intended to be included in the
Polish Carve Out, is subject to plot division proceedings. Until the
completion of the plot division proceedings and issuance of a final division
decision the property cannot be included in the Polish Carve Out.
Further, whilst the Company conducted due diligence, such as legal, tax,
financial and technical, with the objective of identifying any material issues
that may affect the completion of a successful Carve Out, there can be no
assurance that all such issues have been identified.
Any failure to effectively manage environmental impact could expose the Group
to disruption, financial liabilities and reputational damage which could have
a material adverse effect on its business, operating results, financial
condition or prospects
With a growing regulatory and wider stakeholder focus on reducing the
environmental impact of the Group's operations, the Directors have set targets
to improve the Group's impact in respect of energy, carbon, water, waste and
biodiversity. The Group closely monitors compliance and seeks continued
improvement. However, the Group may fail, or be perceived as having failed, to
meet those targets, which could expose the Group to regulatory breaches,
financial penalties, disruption, clean-up costs and reputational risk, any of
which could have a material adverse effect on its business, operating results,
financial condition or prospects.
The Targets may be subject to legacy defined benefit pension scheme
liabilities
The German Target may be liable for legacy defined benefit pension scheme
liabilities due to changes in pensions legislation and differing actuarial
assumptions and accounting standards being used to calculate pensions
liabilities. Such changes could impose significant costs and burdens on the
Enlarged Group (the extent of which cannot be predicted) both in terms of
compliance and potential penalties, liabilities and remediation.
RISKS RELATING TO THE ENLARGED GROUP AND ITS BUSINESS
The Enlarged Group's business may be adversely affected by general economic,
political and financial market conditions.
The Enlarged Group is dependent on the level of activity in its end markets.
Accordingly, the Enlarged Group will be susceptible to any deterioration in
UK, Ireland, Sweden, Finland, Norway, Germany, Czech Republic and Polish
economic conditions. This may be driven from a deterioration in construction
activity, the impact of Government policy, increased interest rates, exchange
rate fluctuations, geopolitical conditions, volatility and/or price increases
in the global energy markets. Such changes in macroeconomic and political
conditions may substantially and adversely affect the business, financial and
operating performance of the Enlarged Group or its key customers and
suppliers.
Several macroeconomic factors influence the levels and growth of construction
and infrastructure spending activity, including economic growth, demographic
trends, the state of the housing market, mortgage availability, mortgage
interest rates, changes in household income, inflation and Government policy.
Any potential adverse changes in the macroeconomic or political climate,
including short-term downturns, may result in the Enlarged Group facing a
decrease in demand for its products which may result in reduces
sales volumes and/or pressure on average selling prices which may lead to
declining revenue and/or margins. Furthermore, any failure to adequately
utilise the Enlarged Group's production capacity as a result of low levels of
demand could adversely affect its profitability. These factors, if they
materialize, or if difficult macroeconomic conditions occur, could have a
material adverse effect on the Enlarged Group's business, financial condition,
results of operations and prospects.
The operations of the Enlarged Group require permits, licences and
authorisations, in particular relating to environmental, health and safety and
planning permissions
The operations of the Enlarged Group require licences, permits, planning
permissions and consents and in some cases renewals of existing licences and
permits from various governmental authorities. Certain Targets, and in
particular the Irish Target, will also require permits, licences and
authorisations (including in relation to environmental, planning and
greenhouse gases) following the change of control following the Acquisitions.
There is no guarantee that such authorisations will be forthcoming. In this
event, there is no guarantee that the Enlarged group will be able to carry on
the activities of the relevant Target Company as currently carried on (if at
all).
The Enlarged Group also requires appropriate planning permissions to apply to
the area of the Enlarged Group's operations. Planning consents are required in
order to extract the Enlarged Group's mineral reserves and build and update
the construction and operation of plants. Planning applications can take years
to be determined and, consequently, planning permissions can be costly to
obtain and may ultimately not be successful. They may also be challenged at a
later date. The granting of planning permissions normally attaches conditions
on operating hours, emissions, discharges, extraction limits, restoration etc
which members of the Enlarged Group must adhere to. They can be subject to
appeal from organisations, individuals and both national and local lobby
groups and ultimately to the public enquiry. There are risks that applications
are unsuccessful or are delayed at sites where reserves become critical.
Further the Enlarged Group's ability to obtain, sustain or renew licences and
permits and other licences and permits that are required by it on applicable
terms is subject to changes in regulations and policies and to the discretion
of the applicable governmental authorities.
There is no guarantee that the Enlarged Group will obtain or be granted or
retain the requisite planning or permits and other authorisations or be able
to continue to comply with any ongoing conditions or will not have enforcement
action initiated against it by a relevant government authority and therefore
to carry on its planned operations, which failure could have a material
adverse effect on parts of the Enlarged Group's business.
The Enlarged Group is subject to a broad range of laws, regulations and
standards
The Enlarged Group will be subject to a broad range of laws, regulations and
standards, including those relating to employment, pensions, data protection,
land and water use, planning, pollution, greenhouse gases, protection of the
public, protection of the environment and the handling of waste materials,
mineral production, exports, taxes and other matters.
Future changes in applicable laws, regulations, standards and changes in their
enforcement or regulatory interpretation could result in changes in legal
requirements or in the terms of existing permits or agreements applicable to
the Enlarged Group or its properties, which could have a material adverse
impact on the Enlarged Group's current operations and future projects. Any
changes in the laws of the countries in which the Targets and wider Enlarged
Group operates could materially affect not only the rights and title to the
interests held there but also their use and operations. No assurance can be
given that the governments of such countries will not revoke or significantly
alter the conditions of the applicable permitting or authorisations, nor that
such authorisations will not be challenged or impugned by third parties. In
addition, such approvals are subject to change in various circumstances and
further authorisations may be required.
In particular, environmental regulations and standards are becoming
increasingly stringent. Existing and possible future environmental
legislation, regulations and actions could cause significant expense, capital
expenditures, restrictions and delays in the Enlarged Group's activities, the
extent of which cannot be predicted and which may well be beyond the capacity
of the Enlarged Group to fund.
It is the Enlarged Group's policy to require that all of its subsidiary
undertakings, employees, suppliers and sub-contractors comply with applicable
laws, regulations and standards. However, violations of such laws, regulations
and standards, in particular environmental laws, could result in restrictions
on the operations of the Enlarged Group's sites, damages, fines or other
sanctions, increased costs of compliance with potential reputational damage
and potential loss of future contracts.
The Enlarged Group is subject to wide ranging privacy and data protection laws
The Enlarged Group is subject to laws relating to privacy rights and data
protection. Such laws govern the Enlarged Group's ability to collect, use and
transfer information relating to its employees and business partners (both
customers and suppliers). The Enlarged Group must comply with strict data
protection and privacy laws in the European Union and certain other
jurisdictions in which the Enlarged Group operates. The Company has identified
some potential minor deficiencies in compliance by the Targets with applicable
data protection and privacy laws. There is therefore a risk that data could be
wrongfully appropriated, lost or disclosed, damaged or processed in breach of
privacy or data protection laws. As a result, the Targetsmay be subject to
claims from third parties relating to the infringement of privacy rights or
data protection laws. The Targets could also be subject to investigative or
enforcement action by the Information Commissioner's Office in the UK or
similar regulatory authorities in other jurisdictions which it operates. Any
perceived or actual failure to comply with privacy or data protection laws
could therefore harm the Company's reputation and deter new customers.
Following completion of the Acquisitions, the Company will be taking steps to
address potential areas of non-compliance and update its policies and
procedures.
Mineral Resource and Mineral Reserve estimates and Nordkalk's use of the
United Nations Framework Classification (UNFC) Mineral Resource and Mineral
Reserve categorisation
The Enlarged Group's reported Resources are estimates based on external
geologist review of sites and geological data and consider a range of
assumptions. In addition, Resource estimates can be based on limited sampling
and consequently may be uncertain because the samples may not be
representative. There are numerous uncertainties inherent in estimating
Resources and Reserves, including factors beyond the control of the Enlarged
Group. The estimation of Resources is a subjective process and the accuracy of
any such estimates is a function of the quality of available data and of
engineering and geological interpretation and judgment. Results of drilling,
material testing, production, evaluation of mine plans and exploration
activities subsequent to the date of any estimate may justify revision (up or
down) of such estimates. There is no assurance that the entirety of the
Resources can be economically quarried. Mineral Reserves have more certainty
and consider non geological factors such as permitting, feasibility
assessments, yield, social and environmental factors. Lower market prices,
increased production costs, reduced recovery rates and other factors may
render parts of the Enlarged Group's Resources unviable to exploit and may
result in revision of its estimates from time to time. Reserve data is not
indicative of future results of operations. If in the future, the Enlarged
Group's actual Resources and Reserves prove to be less than the current
estimates, other than as a result of depletion through production, the
Enlarged Group's results of operations and financial condition may be
materially and adversely affected. The Company and the Directors cannot give
any assurance that the estimated Reserves will be recovered as the Enlarged
Group proceeds through production or that they will be recovered at the
volume, grade and rates estimated.
Furthermore, Nordkalk uses the United Nations Framework Classification (UNFC)
mineral Resource and mineral Reserve categorisation and reporting standard
over the more commonly-used Committee for Mineral Reserves International
Reporting Standards (CRIRSCO) based disclosure standard for mineral Resource
and mineral Reserve estimates. The UNFC is a public domain standard that has
gained traction with European governments. The UNFC is typically used for
public reporting of national mineral inventories and as a generic
classification framework. If estimates of mineral Reserves and mineral
Resources are to be re¬classified using the more technically detailed CRIRSCO
standard in the future, revised modelling and planning will be required and
may affect the assessment of the minerals which may result in the downward
adjustment of available mineral Reserves.
The Enlarged Group is reliant on mineral Reserves to extract limestone and any
reduction to Reserves is likely to reduce the economic life of a quarry until
such time as additional Reserves can be accessed, which could materially
impact the longevity of the Enlarged Group's operations at quarrying sites
where there is both a low level of Reserves and significant planned extraction
rates.
There is a put option in NKD Holding Oy's Shareholders' Agreement
The shareholders' agreement relating to NKD Holding Oy contain a put option on
Nordkalk. At any time after 12 October 2032 (being the fifteenth anniversary
of the agreement's effective date of 12 October 2017) NKD Holding Oy's other
shareholder, an Estonian company named Debalma OÜ (which holds 49 per cent.
of the issued share capital of NKD Holding Oy) has the right to demand that
Nordkalk acquires the shares in NKD Holding Oy owned by Debalma OÜ, at an
option price which will be calculated pursuant to a mechanism set out in the
shareholders agreement.
Nordkalk AB is involved in a dispute with the Swedish state which is ongoing
Nordkalk AB, Nordkalk's main operating subsidiary in Sweden, is involved in a
dispute with the Swedish state as claimant, in which Nordkalk AB has claimed
damages from the Swedish state in the amount of SEK 2,368,379,000
(approximately £198 million). On 1 April 2020, Nordkalk AB filed a claim for
compensation for economic loss due to land use restrictions as a result of the
Swedish government's designation of a piece of land as environmentally
protected pursuant to a Natura 2000 decision (Nacka District Court case no.
M2296-20). The counterparty is the Swedish State, which is represented by the
Legal, Financial and Public Procurement Agency. In June 2014, Nordkalk AB was
granted a permit for limestone quarrying on the company-owned property known
as Bunge Ducker 1:64 (case no. M 366-13) by the Land and Environmental Court.
The permit allowed a maximum quarrying of 2.5Mtpa of limestone until the
limestone deposit on the property ends, which was expected to take about 25
years. The permit decision was appealed. On 31 August 2015, before the Land
and Environmental Court of Appeal had ruled in the appealed case, the
Government designated Bunge Ducker 1:64 (including the limestone deposit) as a
Natura 2000 area. Within a Natura 2000 area, biodiversity is considered worthy
of protection and no environmentally damaging interventions can be made. In a
judgment on 11 September 2018, the Land and Environment Court of Appeal
revoked the June 2014 permit with direct reference to the fact that the
alleged limestone quarry now was designated as a Natura 2000 area according to
the Government decision.
On 14 March 2023, the court made an award to Nordkalk in compensation for the
economic loss, of which a sum of c. SEK 188 million (c. £17 million) that is
to be adjusted for inflation and interest until payment is made, is receivable
by the Existing Group as its share. As announced on 6 April 2023, by the
Company, the State appealed the verdict and subsequently the Existing Group
also appealed. The Existing Group remains confident in the merits of its case
and will keep the markets informed of any further developments.
There is uncertainty as to the impact on the Enlarged Group of government
spending
The Enlarged Group will be largely dependent on government spending on
improving public infrastructure, buildings and services. Governments may
decide to reduce present or future investment in transport, health or other
construction projects or other areas in which the Enlarged Group can compete
for work to supply building materials to contractors. Any reduction in such
investment and funding may have an adverse effect on the Enlarged Group's
future revenues and profitability.
The Enlarged Group is active in a competitive industry
The industry in which the Enlarged Group operates is competitive. The Enlarged
Group will compete with other local and international companies, including
potentially larger competitors with access to greater financial, technical and
other resources than the Company, which may give them a competitive advantage.
In addition, actual or potential competitors may be strengthened through the
acquisition of additional assets and interests and competition could adversely
affect the Company's ability to acquire suitable additional assets in the
future.
Many of the Enlarged Group's products are commodities that face strong volume
and price competition. Such products may also face competition from substitute
products, including new products, that the Enlarged Group does not produce. A
number of existing competitors compete on range, price, quality and service
and potential new low-cost competitors may be attracted into the market
through increased demand. Increase in costs or prices; reliance on key
suppliers and key customers, including national merchants, could impact supply
and profitability. Competitive pressures from local competitors in new markets
the Enlarged Group is active in post the Acquisitions could impact
profitability and market share. The Enlarged Group will have an expanded
geographic footprint and must maintain strong customer relationships to remain
competitive.
The Enlarged Group is subject to changes in energy prices and costs of raw
materials
Raw materials such as cement, bitumen, fuel, utilities and explosives are
sourced from other third party suppliers. Raw material can be subject to
limited availability and price fluctuation. Factors such as currency
fluctuations, production prices, logistics, adverse weather conditions, social
instability, and force majeure events have the potential to disrupt, raw
material supplies and impact prices of the Enlarged Group's principal sources
of raw materials. Energy cost changes might have an impact on average selling
prices dependent upon inter alia the Enlarged Group's ability to pass these
changes on to customers. Further certain businesses will continue to operate
without the benefit of internal hedging on CO2 costs.
Numerous factors could affect product prices, including supply and demand
Market prices of the Enlarged Group's products and services could be affected
by numerous factors which are beyond the control of the Enlarged Group,
including local demand, national economic and political events, international
economic trends, inflation and deflation, currency exchange fluctuation,
speculative activity and the political and economic conditions of the
jurisdictions in which SigmaRoc operates. The combined effect of these factors
is difficult to predict and an investment in the Company could be affected
adversely by changes in economic, political, administrative, taxation or other
regulatory factors, in any jurisdiction in which the Enlarged Group may
operate.
The Enlarged Group is reliant on third parties who may default
The Enlarged Group is reliant on its supply chain, particularly in relation to
the supply energy, raw materials and delivery of products to customers. If a
contractor or supplier failed financially or was responsible for late or
inadequate delivery or poor quality of materials then it could damage the
relevant part of the Enlarged Group's reputation and/or cause downtime and/or
delays; potentially incurring financial losses to the extent not covered by
the Enlarged Group's insurance or the suppliers insurance.
The Board may be unable to find appropriate acquisition targets and/or
integrate future acquisitions
The Enlarged Group may acquire other assets if suitable opportunities become
available. Any future acquisition poses integration and other risks which may
affect the Enlarged Group's results or operations. To the extent that suitable
opportunities arise, the Company may seek to expand its business through the
identification and acquisition of, or significant investments in,
complementary companies, assets, products and services. There can be no
assurance that the Company will identify suitable acquisitions or
opportunities, obtain the financing necessary to complete and support such
acquisitions or acquire businesses on satisfactory terms, or that any business
acquired will prove to be profitable. In addition, the acquisition and
integration of independent companies can be complex, costly and time-consuming
involving a number of possible problems and risks, including possible adverse
effects on the Enlarged Group's operating results, diversion of management's
attention, failure to retain personnel, failure to maintain customer service
levels, disruption to relationships with customers and other third parties,
risks associated with unanticipated events or liabilities and difficulties in
the assimilation of the operations, technologies, systems, services and
products of the acquired companies. No assurance can be given that the
Enlarged Group will be able to manage future acquisitions profitably or to
integrate such acquisitions successfully without additional costs, delays or
other problems and any failure to achieve successful integration of such
acquisitions could have a material adverse effect on the results of operations
or financial condition of the Enlarged Group. If the Enlarged Group is unable
to attract and retain key officers, managers and technical personnel to
adequately effect any such acquisitions and integration, the Enlarged Group's
ability to execute its business strategy successfully could be materially and
adversely affected. The current Directors and Management team have experience
of integration since inception and operate a decentralised model, where often
intensive and risky integration of aspects such as IT systems into a single
global solution are not required.
The Enlarged Group is dependent on key and skilled personnel
The Enlarged Group's future success is substantially dependent on the
continued services and continuing contributions of its Directors, senior
management and other key personnel. In particular the Enlarged Group is
dependent on the continued employment and performance of the Enlarged Group's
management team. The loss of the services of any of the Company's executive
officers or other key employees could have a material adverse effect on the
Enlarged Group's business.
The Enlarged Group's operations require individuals with a high degree of
technical and/or professional skills and experienced equipment and quarrying
trade professionals. The Enlarged Group may encounter significant competition
for qualified management and skilled workers and will be in competition with
other quarry operations and other local industries. If the Enlarged Group is
unable to attract and retain an adequate number of skilled workers, a decrease
in productivity or an increase in costs may have an adverse effect on the
Enlarged Group's operations, results and its financial condition.
The Enlarged Group may incur significant costs in the event of unsuccessful
transactions
There is a risk that the Enlarged Group may incur substantial legal, financial
and advisory expenses arising from unsuccessful transactions which may include
public offer and transaction documentation, legal, accounting, operational and
other due diligence.
The Company may require future financing
The Company may need to seek additional sources of financing to implement its
growth strategy. There can be no assurance that the Company will be able to
raise those funds, whether on acceptable terms or at all. Given that the
Enlarged Group operates in a sector which has potentially negative impacts
upon the environment, investment may be less readily available. If further
financing is obtained by issuing new equity securities other than on a pro
rata basis to existing Shareholders, the existing Shareholders may be diluted
and the new securities may carry rights, privileges and preferences superior
to the Ordinary Shares. The Company may seek further debt finance to fund all
or part of any future acquisition. There can be no assurance that the Company
will be able to raise those debt funds, whether on acceptable terms or at all.
If debt financing is obtained, the Company's ability to raise further finance
and its ability to operate its business may be subject to restrictions.
Following completion of the Acquisitions, the Enlarged Group will have
additional indebtedness. The Enlarged Group accordingly will be required to
service interest payments in respect of the increased indebtedness. While not
expected in the foreseeable future, any failure to make payments when due
could result in a default under the relevant financing arrangement which could
in turn have a material adverse effect on the Enlarged Group's business,
financial condition, results of operation and prospects.
The Company is subject to the risks and liabilities associated with possible
accidents, injuries or deaths on its properties
Quarrying, like many other extractive natural resource industries, is subject
to potential risks and liabilities due to accidents that could result in
serious injury or death. The impact of such accidents could affect the
profitability of the operations, cause an interruption to operations, lead to
a loss of licences and permits, affect the reputation of the Company and its
ability to obtain further licences, damage community relations and reduce the
perceived appeal of the Company as an employer. There is no assurance that the
Company has been or will at all times be in full compliance with all laws and
regulations or hold, and be in full compliance with, all required health and
safety permits. The potential costs and delays associated with compliance with
such laws, regulations and permits could prevent the Company from proceeding
with the development of a project or the operation or further development of a
project, and any non-compliance therewith may adversely affect the Company's
operations, financial condition and results of operations. Amendments to
current laws, regulations and permits governing operations and activities of
companies in this sector, or more stringent implementation thereof, could have
a material adverse impact on the Company and cause increases in expenses,
capital expenditures or production costs, reduction in levels of production at
producing properties, delays in the development of new quarrying properties,
or increases in abandonment costs.
The Enlarged Group may become involved in litigation
There can be no guarantee that the current or future actions of the Enlarged
Group will not result in litigation. The quarrying industry, as with all
industries, is subject to legal claims, both with and without merit, in
particular in relation to environmental and health and safety liability and
alleged product defects. Defence and settlement costs can be substantial, even
with respect to claims that have no merit. Due to the inherent uncertainty of
the litigation process, there can be no assurance that the resolution of any
particular legal proceeding will not have an adverse effect on the Enlarged
Group's financial position or results of operations.
The Enlarged Group may have to make claims under its insurance and any
insurance cover in place may not be adequate
CRH is of such a size that it operates a captive insurance program.
Accordingly the Directors have engaged the Company's insurance broker to
ensure placing of suitable insurance for the Enlarged Group. After completion,
the Directors believe that the Enlarged Group will have a robust and suitable
insurance cover but recognise that a claim could be made against a group
company which exceeds the limits of insurance cover or is in respect of a
matter that is uninsurable. In those circumstances the Enlarged Group could
suffer financial loss.
The payment by the Enlarged Group's insurers of any insurance claims may
result in increases in the premiums payable by the Enlarged Group for its
insurance cover and adversely affect the Enlarged Group's financial
performance. In the future, some or all of the Enlarged Group's insurance
coverage may become unavailable or prohibitively expensive.
Loss of IT systems
The Enlarged Group will be dependent on IT systems for the delivery of its
business which will be vulnerable to damage `or interruption from flood, fire,
power loss, telecommunications failure, cyber attacks and similar events.
Failure of these systems could cause financial loss to the Enlarged Group as
well as damage to its brand and reputation. In addition, certain IT services
are currently provided to certain of the Targets, and in particular the Irish
Target, by entities in the wider CRH group - as such the Company will need to
source an appropriate third party supplier once the Acquisitions are complete.
There may be exchange rate risks
The Fundraising Shares are priced in Sterling and will be quoted and traded in
Sterling. In addition, any dividends the Company may pay will be declared and
paid in sterling. Accordingly, Shareholders resident in non-UK jurisdictions
are subject to risks arising from adverse movements in the value of their
local currencies against Sterling, which may reduce the value of the
Fundraising Shares, as well as that of any dividend paid.
GENERAL RISKS
Investment in AIM-listed securities
Investment in shares traded on AIM is perceived to involve a higher degree of
risk and be less liquid than investment in companies whose shares are listed
on the Official List. An investment in the Ordinary Shares may be difficult to
realise. Prospective investors should be aware that the value of an investment
in the Company may go down as well as up and that the market price of the
Ordinary Shares may not reflect the underlying value of the Company. Investors
may therefore realise less than, or lose all of, their initial investment.
Liquidity
There may not be sufficient liquidity in the market for the Ordinary Shares in
order for investors to sell their Ordinary Shares.
The Ordinary Shares will be traded on AIM rather than the Official List. It
may be more difficult for an investor to realise his or her investment in an
AIM-quoted company than a company whose securities are listed on the Official
List. Whilst the Company is applying for the admission of the Enlarged Share
Capital to trading on AIM, there can be no assurance that an active trading
market will develop, or if developed, that it will be maintained.
AIM is a market for emerging or smaller, growing companies and may not provide
the liquidity normally associated with the Official List or other exchanges.
The future success of AIM and liquidity in the market
for the Ordinary Shares cannot be guaranteed. In particular, the market for
the Ordinary Shares may be, or may become, relatively illiquid and therefore
the Ordinary Shares may be or may become difficult to sell.
An investment in the Company may not be suitable for all readers of this
announcement. Accordingly, investors are strongly advised to consult an
independent financial adviser authorised for the purposes of FSMA.
Share price volatility
The trading price of the Ordinary Shares may be subject to wide fluctuations
in response to a range of events and factors, such as variations in operating
results, announcements of technological innovations or new products and
services by the Enlarged Group or its competitors, changes in financial
estimates and recommendations by securities analysts, the share price
performance of other companies that investors may deem comparable to the
Enlarged Group, the general market perception of construction and materials
companies, news reports relating to trends in the Enlarged Group's markets,
legislative changes in the Enlarged Group's sector, ESG-related investment
trends, and other factors outside of the Enlarged Group's control. Such events
and factors may adversely affect the trading price of the Ordinary Shares,
regardless of the performance of the Enlarged Group. Prospective investors
should be aware that the value of the Ordinary Shares could go down as well as
up and investors may therefore not recover their original investment
especially as the market in the Ordinary Shares may have limited liquidity.
Dividends
The payment of dividends will depend on the Enlarged Group's future
acquisition strategy and available cash resources. The Company does not have
any current intentions to pay out dividends in the short to medium term. The
dividend policy should not be construed as a dividend forecast. The Company's
ability to pay dividends will depend on the level of distributions, if any,
received from its operating subsidiaries. There can be no guarantee that the
Enlarged Group's objectives will be achieved, and it will depend on the
earnings and the Company's financial condition, current and anticipated cash
needs and such other factors as the Directors consider appropriate. The
Company's subsidiaries may also, from time to time, be subject to restrictions
or their ability to make distributions, including any regulatory, fiscal and
other restrictions. If a dividend is paid in the future, any change in the tax
treatment of dividends or interest received by the Company may reduce the
level of yield received by Shareholders.
Share options
, The Company has issued share options to, amongst others, certain Directors
and employees. The Company may, in the future, issue further share options to
subscribe for new Ordinary Shares to certain employees, Directors, senior
management and consultants of the Enlarged Group, including pursuant to the
New Option Plan. The exercise of any such share options and any warrants
(should any be granted in the future) would result in a dilution of the
shareholdings of other investors.
Taxation
Any change in the Company's tax status or in taxation legislation could affect
the Company's ability to provide returns to Shareholders. Statements in this
announcement concerning the taxation of investors in Ordinary Shares are based
on current tax law and practice which is subject to change. The taxation of an
investment in the Company depends on the individual circumstances of
investors.
Forward looking statements
Historical facts, information gained from historical performance, present
facts, circumstances and information and assumptions from all or any of these
are not a guide to the future. Statements as to the Enlarged Group's aims,
targets, plans and intentions and any other forward looking statement referred
to or contained herein are no more than that and do not comprise forecasts.
Any such forward looking statements are based on assumptions and estimates and
involve risks, uncertainties and other factors which may cause the actual
results, outcome, financial condition, performance, achievements or findings
of the Enlarged Group to be materially different from any future results,
performances or achievements expressed or implied by such forward looking
statements.
It should be noted that the factors listed above are not intended to be
exhaustive and do not necessarily comprise all of the risks to which the
Enlarged Group is or may be exposed or all those associated with an investment
in the Company. In particular, the Company's performance is likely to be
affected by changes in market and/or economic conditions, political, judicial,
and administrative factors and in legal, accounting, regulatory and tax
requirements in the areas in which it operates and holds its major assets.
There may be additional risks and uncertainties that the Directors do not
currently consider to be material or of which they are currently unaware which
may also have an adverse effect upon the Enlarged Group.
If any of the risks referred to herein crystalise, the Enlarged Group's
business, financial condition, results or future operations could be
materially adversely affected. In such case, the price of its Ordinary Shares
could decline and investors may lose all or part of their investment.
APPENDIX III - TERMS AND CONDITIONS OF THE PLACING
TERMS AND CONDITIONS OF THE PLACING
The terms and conditions contained in this announcement, including this
Appendix (together the "announcement") (the "Terms and Conditions") and the
information comprising this announcement are restricted and are not for
publication, release or distribution, in whole or in part, directly or
indirectly, in or into the United States, Canada, Australia, New Zealand, the
Republic of South Africa, or Japan, or any other state or jurisdiction in
which such release, publication or distribution would be unlawful. The Terms
and Conditions and the information contained herein is not intended to and
does not contain or constitute an offer of, or the solicitation of an offer to
buy or subscribe for, securities to any person in the United States, Canada,
Australia, New Zealand, the Republic of South Africa or Japan, or any other
state or jurisdiction in which such an offer would be unlawful.
Important information for invited Placees only regarding the Placing
Members of the public are not eligible to take part in the Placing. This
Announcement and the Terms and Conditions set out in this announcement are for
information purposes only and are directed only at persons whose ordinary
activities involve them acquiring, holding, managing and disposing of
investments (as principal or agent) for the purpose of their business and who
have professional experience in matters relating to investments and are: (1)
if in member states ("Member States") of the European Economic Area ("EEA")
are "Qualified Investors" in such Member State ("EEA Qualified Investor")
within the meaning of Article 2l of the Regulation (EU) 2017/1129 ("EU
Prospectus Regulation"); and (2) if in the United Kingdom are "Qualified
Investors" in the United Kingdom ("UK Qualified Investor") within the meaning
of Article 21 of the Regulation (EU) 2017/1129 as it forms part of the law of
England and Wales by virtue of section 3 of the European Union (Withdrawal)
Act 2018 and as modified by or under domestic law ("UK Prospectus Regulation")
and who fall within the meaning of Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO"),
and/or (ii) high net worth companies, unincorporated associations or other
bodies within the meaning of Article 49(2)(a) to (d) of the FPO; and/or (iii)
persons to whom it may otherwise be lawfully communicated (each a "Relevant
Person"). No other person should act or rely on this announcement and persons
distributing this announcement must satisfy themselves that it is lawful to do
so. By accepting the Terms and Conditions each Placee represents and agrees
that it is a Relevant Person. This announcement and the Terms and Conditions
set out herein must not be acted on or relied on by persons who are not
Relevant Persons. Any investment or investment activity to which this
announcement and the Terms and Conditions set out herein relate is available
only to Relevant Persons and will be engaged in only with Relevant Persons.
This Announcement does not itself constitute an offer for sale or subscription
of any securities in the Company.
The Placing Shares have not been and will not be registered under the US
Securities Act, or under the applicable securities laws of any state or other
jurisdiction of the United States, and may not be offered, sold, taken up,
resold, transferred or delivered, directly or indirectly, in or into the
United States, except pursuant to an applicable exemption from the
registration requirements of the US Securities Act and in compliance with the
securities laws of any relevant state or other jurisdiction of the United
States. There will be no public offering of the Placing Shares in the United
States. The Placing Shares are being offered and sold (i) outside the United
States in "offshore transactions" in reliance on and in accordance with
Regulation S ("Regulation S") under the US Securities Act and (ii) inside
the United States to a limited number of persons reasonably believed to be
"qualified institutional buyers" ("QIBs") as defined in Rule 144A ("Rule
144A") under the US Securities Act in transactions exempt from the
registration requirements of the US Securities Act.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing authorities
passed upon or endorsed the merits of the Placing or the accuracy or the
adequacy of this announcement. Any representation to the contrary is a
criminal offence in the United States.
This announcement is for information purposes only and does not constitute an
offer to sell or issue, or the solicitation of an offer to buy or subscribe
for, securities in the United States, Canada, Australia, New Zealand, the
Republic of South Africa, Japan, or in any jurisdiction in which such offer or
solicitation is unlawful. This announcement is not for publication or
distribution in or into the United States, Canada, Australia, New Zealand, the
Republic of South Africa or Japan, nor in any country or territory where to do
so may contravene local securities laws or regulations. The distribution of
this announcement (or any part of it or any information contained within it)
in other jurisdictions may be restricted by law and therefore persons into
whose possession this announcement (or any part of it or any information
contained within it) comes should inform themselves about and observe any such
restriction. Any failure to comply with these restrictions may constitute a
violation of the securities law of any such jurisdictions. The Placing Shares
have not been and will not be registered under the US Securities Act nor under
the applicable securities laws of any state or other jurisdiction of the
United States or any province or territory of Canada, Australia, New Zealand,
the Republic of South Africa or Japan. Accordingly, the Placing Shares may not
be offered or sold directly or indirectly in or into the United States,
Canada, Australia, New Zealand, the Republic of South Africa or Japan or to
any resident of the United States, Canada, Australia, New Zealand, the
Republic of South Africa or Japan.
Each Placee should consult with its own advisers as to legal, tax, business,
financial and related aspects of a purchase of and/or subscription for the
Placing Shares.
All offers of the Placing Shares in the United Kingdom or the EEA will be made
pursuant to an exemption from the requirement to produce a prospectus under
the UK Prospectus Regulation or the EU Prospectus Regulation, as appropriate.
In the United Kingdom, this announcement is being directed solely at persons
in circumstances in which section 21(1) of the Financial Services and Markets
Act 200 (the "FSMA") does not require the approval of the relevant
communication by an authorised person.
Each Placee will be deemed to have read and understood this announcement in
its entirety and to be making such offer on these terms and conditions, and to
be providing the representations, warranties, acknowledgements and
undertakings, contained in these terms and conditions. In particular each such
Placee represents, warrants and acknowledges to each of the Company and the
Joint Bookrunners that:
(a) it is a Relevant Person (as defined above) and undertakes that it will
purchase and/or subscribe for, hold, manage or dispose of any Placing Shares
that are allocated to it for the purposes of its business;
(b) it is acquiring the Placing Shares for its own account or acquiring the
Placing Shares for an account with respect to which it has sole investment
discretion and has the authority to make, and does make the representations,
warranties, indemnities, acknowledgments, undertakings and agreements
contained in this announcement;
(c) in the case of any Placing Shares subscribed for by it as a financial
intermediary as that term is used in Article 5 of the EU Prospectus Regulation
or the UK Prospectus Regulation (as applicable), any Placing Shares purchased
and/or subscribed for by it in the Placing will not be subscribed for and/or
purchased on a non-discretionary basis on behalf of, nor will they be
subscribed for and/or purchased with a view to their offer or resale to,
persons in a Member State or the United Kingdom other than EEA Qualified
Investors or UK Qualified Investors (as applicable), or in circumstances which
may give rise to an offer of securities to the public other than an offer or
resale in the United Kingdom or in a Member State to UK Qualified Investors or
EEA Qualified Investors (as applicable), or in circumstances in which the
prior consent of the Joint Bookrunners has been given to each such proposed
offer or resale;
(d) where Placing Shares have been acquired by it on behalf of persons in
any member state of the EEA or the United Kingdom other than EEA Qualified
Investors or UK Qualified Investors (as applicable), the offer of those
Placing Shares to it is not treated under the EU Prospectus Regulation or the
UK Prospectus Regulation as having been made to such persons;
(e) it understands (or if acting for the account of another person, such
person has confirmed that such person understands) the resale and transfer
restrictions set out in this announcement;
(f) if located outside of the United States, it is acquiring the Placing
Shares in an "offshore transaction" in reliance on and in accordance with
Regulation S; and
(g) if located in the United States, it is a QIB and will duly execute a US
investor representations letter and deliver the same to one of the Joint
Bookrunners or its affiliates as soon as possible after confirmation of its
allocation in the Placing and in any event prior to settlement of the Placing
Shares.
Persons (including, without limitation, nominees and trustees) who have a
contractual or other legal obligation to forward a copy of this announcement,
of which these terms and conditions form part, should seek appropriate advice
before taking any action.
None of the Joint Bookrunners, nor any of their affiliates, agents, directors,
officers or employees, make any representation to any Placees regarding an
investment in the Placing Shares.
Introduction
Each of the Joint Bookrunners may require a Placee to agree to such further
terms and/or conditions and/or give such additional warranties and/or
representations and/or undertakings as it (in its absolute discretion) sees
fit and/or may require any such Placee to execute a separate placing letter
(for the purposes of this announcement, a "Placing Letter"). The terms of this
announcement will, where applicable, be deemed to be incorporated into that
Placing Letter.
Details of the Placing
The Joint Bookrunners have entered into the Placing Agreement with the Company
under which the Joint Bookrunners have agreed, on the terms and subject to the
conditions set out therein, and undertaken to use their reasonable endeavours
to procure, as the Company's agents for the purpose of the Placing,
subscribers for the Placing Shares at the Placing Price.
The Placing is conditional upon, amongst other things, Admission becoming
effective, the Master Acquisition Agreement becoming unconditional and the
Placing Agreement not being terminated in accordance with its terms, as
detailed further below.
The Placing Shares are and will be credited as fully paid and will rank pari
passu in all respects with the existing issued Ordinary Shares, including the
right to receive all dividends and other distributions (if any) declared, made
or paid on or in respect of the Ordinary Shares after the date of issue of the
Placing Shares to the relevant Placees.
Application for admission to trading
Application has been or will be made to the London Stock Exchange for
Admission of the Placing Shares to be issued pursuant to the Placing and the
re-admission of the Enlarged Share Capital to trading on AIM.
The Placing and the Deal 1 Acquisition are inter-conditional and are both
subject to, inter alia, Shareholder approval at the General Meeting. Should
these conditions not be satisfied, Admission will not occur.
It is anticipated that the Company currently expects to be in a position to
complete the Deal 1 Acquisition (and therefore for Admission to occur) on or
around 4 January 2024.
The Placing Shares will not be admitted to trading on any stock exchange other
than AIM.
No Prospectus
No offering document or prospectus has been or will be submitted to be
approved by the FCA or submitted to the London Stock Exchange in relation to
the Proposals and no such prospectus is required (in accordance with the UK
Prospectus Regulation and/or the EU Prospectus Regulation) to be published and
Placees' commitments will be made solely on the basis of the information
contained in this announcement released by the Company today and subject to
the further terms set forth in the trade confirmation or contract note to be
provided to individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees that the
content of this announcement and all other publicly available information
previously or simultaneously published by the Company by notification to a
Regulatory Information Service or otherwise filed by the Company is
exclusively the responsibility of the Company and confirms that it has neither
received nor relied on any other information, representation, warranty, or
statement made by or on behalf of the Company, the Joint Bookrunners, or any
other person and none of the Company or the Joint Bookrunners or any of their
respective affiliates will be liable for any Placee's decision to participate
in the Placing based on any other information, representation, warranty or
statement which the Placees may have obtained or received. Each Placee
acknowledges and agrees that it has relied on its own investigation of the
business, financial or other position of the Company in accepting a
participation in the Placing. Nothing in this paragraph should exclude or
limit the liability of any person for fraudulent misrepresentation by that
person.
Bookbuild
The Joint Bookrunners will today commence the bookbuilding process in respect
of the Placing (the "Bookbuild") to determine demand by Placees for
participation in the Placing. No commissions will be paid to Placees or by
Placees in respect of any Placing Shares.
The Joint Bookrunners and the Company shall be entitled to effect the Placing
by such alternative method to the Bookbuild as they may, in their absolute
discretion, determine.
Participation in, and principal terms of, the Placing
1. Each of the Joint Bookrunners (whether through itself or
any of its affiliates) is arranging the Placing as placing agent and broker of
the Company for the purpose of each using its reasonable endeavours to procure
Placees at the Placing Price for the Placing Shares.
2. Participation in the Placing will only be available to
persons who may lawfully be, and are, invited to participate by the Joint
Bookrunners. The Joint Bookrunners and/or their respective affiliates may
participate in the Placing as principals (and are each entitled to enter bids
as principal in the Bookbuild).
3. Completion of the Placing will be announced on a Regulatory
Information Service following completion of the Bookbuild.
4. To bid in the Bookbuild, Placees should communicate their
bid by telephone or in writing to their usual sales contact at any of the
Joint Bookrunners. Each bid should state the number of Placing Shares for
which the prospective Placee wishes to subscribe. Bids may be scaled down by
the Joint Bookrunners on the basis referred to in paragraph 13 below.
5. A bid in the Bookbuild will be made on the terms and
subject to the conditions in this announcement and will be legally binding on
the Placee on behalf of which it is made and except with the Joint
Bookrunners' consent will not be capable of variation or revocation after the
time at which it is submitted. Each Placee will also have an immediate,
separate, irrevocable and binding obligation, owed to the Company and the
Joint Bookrunners, to pay to them (or as the Joint Bookrunners may direct) in
cleared funds an amount equal to the product of the Placing Price and the
number of Placing Shares that such Placee has agreed to subscribe for and the
Company has agreed to allot and issue to that Placee. Each prospective
Placee's obligations will be owed to the Company and the Joint Bookrunners.
6. The Bookbuild in respect of the Placing is expected to
close no later than 7.00 p.m. on 22 November 2023, but the Bookbuild may be
closed earlier or later at the discretion of the Joint Bookrunners and the
Company. The Joint Bookrunners may, in agreement with the Company, accept
bids, either in whole or in part, that are received after the Bookbuild has
closed.
7. This announcement gives details of the terms and conditions
of, and the mechanics of participation in, the Placing. No commissions will be
paid to Placees or by Placees in respect of any Placing Shares.
8. Each Placee's commitment will be made solely on the basis
of the information set out in Announcement. By participating in the Placing,
each Placee will be deemed to have read and understood these Terms and
Conditions and the rest of this announcement in its entirety and to be
participating and making an offer for the Placing Shares on these Terms and
Conditions and to be providing the representations, warranties and
acknowledgements and undertakings contained in these Terms and Conditions.
9. The Placing Price will be a fixed price of 47.5 pence per
Placing Share.
10. An offer for Placing Shares, which has been communicated by a
prospective Placee to the Joint Bookrunners, shall not be capable of
withdrawal or revocation without the consent of the Joint Bookrunners.
11. Each Placee's allocation will be confirmed to Placees orally
or in writing by the Joint Bookrunners as soon as practicable following the
close of the Bookbuild. The terms of this announcement will be deemed
incorporated by reference therein. The oral or written confirmation to such
Placee will constitute an irrevocable legally binding commitment upon such
person (who will at that point become a Placee) in favour of the Joint
Bookrunners (as applicable), and the Company, under which it agrees to
subscribe for and/or acquire the number of Placing Shares allocated to it at
the Placing Price on the Terms and Conditions set out in this announcement and
in accordance with the Company's articles of association. Except as required
by law or regulation, no press release or other announcement will be made by
the Joint Bookrunners or the Company using the name of any Placee (or its
agent), in its capacity as Placee (or agent), other than with such Placee's
prior written consent.
12. Each Placee will have an immediate, separate, irrevocable and
binding obligation, owed to the Joint Bookrunners (as agent for the Company),
as applicable, to pay in cleared funds immediately on the settlement date, in
accordance with the registration and settlement requirements set out below, an
amount equal to the product of the Placing Price and the number of Placing
Shares such Placee has agreed to take up.
13. The Joint Bookrunners may choose to accept bids, either in
whole or in part, on the basis of allocations determined in agreement with the
Company and may scale down any bids for this purpose on such basis as they may
determine. The Joint Bookrunners may also, notwithstanding paragraphs 4 and 5
above, and subject to prior agreement with the Company, allocate Placing
Shares after the time of any initial allocation to any person submitting a bid
after that time. The Company reserves the right (upon agreement with the Joint
Bookrunners) to reduce or seek to increase the amount to be raised pursuant to
the Placing at its discretion.
14. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing Shares under
the Placing will be required to be made at the times and on the basis
explained below under "Registration and Settlement".
15. All obligations under the Bookbuild and Placing will be
subject to fulfilment or (where applicable) waiver of, amongst other things,
the conditions referred to below under "Conditions of the Placing" and to the
Placing Agreement not being terminated on the basis referred to below under
"Right to terminate under the Placing Agreement".
16. By participating in the Bookbuild, each Placee will agree that
its rights and obligations in respect of the Placing will terminate only in
the circumstances described below and will not be capable of rescission or
termination by the Placee.
17. To the fullest extent permissible by law, none of the Company,
the Joint Bookrunners, or any of their respective affiliates shall have any
liability to Placees (or to any other person whether acting on behalf of a
Placee or otherwise) under these terms and conditions. In particular, none of
the Company, the Joint Bookrunners, or any of their respective affiliates
shall have any liability (including to the fullest extent permissible by law,
any fiduciary duties) in respect of the Joint Bookrunners' conduct of the
Bookbuild. Each Placee acknowledges and agrees that the Company is responsible
for the allotment of the Placing Shares to the Placees, and none of the Joint
Bookrunners, shall have any liability to Placees for the failure of the
Company to fulfil those obligations.
18. The Joint Bookrunners shall, following consultation with, and
on approval of such allocations by, the Company, be entitled to allocate
Placing Shares at their respective discretions to Placees in respect of their
allocations of Placing Shares.
Conditions of the Placing
The Joint Bookrunners' obligations under the Placing Agreement are conditional
on, inter alia:
(a) the Company procuring that the Admission Document and
the Form of Proxy are sent to each Shareholder who is entitled to receive
notice of the General Meeting subject to such exceptions as are permitted by
the Companies Act and the Company's articles of association;
(b) the Master Acquisition Agreement: (i) not having lapsed
or been terminated and (ii) having become unconditional in all respects, (save
for: (a) Admission and (b) any conditions relating to the Placing Agreement
having become unconditional or not having terminated prior to Admission);
(c) the New Facilities becoming unconditional in all
respects on or prior to Admission (save for any conditionality relating to the
Placing Agreement and Admission);
(d) the Resolutions (other than the Resolution relating to
the New Option Plan) having been duly passed by the requisite majority the
General Meeting;
(e) the Company allotting, subject only to Admission, the
Placing Shares in accordance with the Placing Agreement; and
(f) Admission of the Placing Shares taking place not later
than 8 a.m. on 4 January 2024 (or such later time and date not being later
than 8.30 a.m. on 18 January 2024 as may be agreed between the Company and the
Joint Bookrunners).
The Placing Agreement contains certain warranties and representations from the
Company and an indemnity from the Company for the benefit of the Joint
Bookrunners. The Placing Agreement contains certain conditions to be satisfied
(or, where permitted, waived or extended in writing by the Joint Bookrunners)
on or prior to Admission, including there having been no material adverse
change, the warranties being true and accurate and not misleading (in the
opinion of the Joint Bookrunners) and the performance by the Company of its
obligations under the Placing Agreement.
None of the Company, the Directors, and the Joint Bookrunners owes any
fiduciary duty to any Placee in respect of the representations, warranties,
undertakings or indemnities in the Placing Agreement.
If: (i) any of the conditions contained in the Placing Agreement, including
those described above, are not fulfilled or waived by the Joint Bookrunners by
the time or date where specified (or such later time or date as the Company
and the Joint Bookrunners may agree), or (ii) the Placing Agreement is
terminated as described below, the Placing will lapse and the Placees' rights
and obligations hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be made by the
Placee in respect thereof.
The Joint Bookrunners may, in their respective absolute discretion, waive, or
extend the period for compliance with the whole or any part of any of the
Company's obligations in relation to the conditions in the Placing Agreement,
save that, inter alia, the condition relating to the Master Acquisition
Agreement being unconditional and Admission taking place may not be waived and
the period for compliance with such conditions may not be extended. Any such
extension or waiver will not affect Placees' commitments as set out in this
announcement.
None of the Joint Bookrunners, nor the Company (as the case may be) shall have
any liability to any Placee (or to any other person whether acting on behalf
of a Placee or otherwise) in respect of any decision they may make as to
whether or not to waive or to extend the time and/or date for the satisfaction
of any condition to the Placing nor for any decision they may make as to the
satisfaction of any condition or in respect of the Placing generally and by
participating in the Placing each Placee agrees that any such decision is
within the respective absolute discretions of the Joint Bookrunners.
Right to terminate under the Placing Agreement
The Joint Bookrunners may, jointly or separately, in their respective absolute
discretions, at any time before Admission terminate the Placing Agreement by
giving notice to the Company and/or the other as the case may be, in certain
circumstances, including, inter alia:
(a) in the opinion of any of the Joint Bookrunner(s)) (acting in
good faith), any of the warranties given by the Company to the Joint
Bookrunners are not true and accurate or have become misleading (or would not
be true and accurate or would be misleading if they were repeated at any time
before Admission) in any material respect by reference to the facts subsisting
at the time when the notice referred to above is given; or
(b) in the opinion of any of the Joint Bookrunner(s) (acting in
good faith), the Company fails to comply with any of its obligations under the
Placing Agreement and that failure is material in the context of the
Proposals; or
(c) in the opinion of the relevant Joint Bookrunner(s) (acting in
good faith), there has been a breach of any provision(s) of the Master
Acquisition Agreement and/or the New Facilities which is material in the
context of the Proposals; or
(d) in the opinion of any of the Joint Bookrunner(s)(acting in
good faith), there has been a development or event (or any development or
event involving a prospective change of which the Company is, or might
reasonably be expected to be, aware) which will or is likely to have a
material adverse effect on the operations, condition (financial, operational,
legal or otherwise), prospects, management, results of operations, financial
position, business or general affairs of the Company or the Group, or the
Enlarged Group respectively, whether or not foreseeable and whether or not
arising in the ordinary course of business; or
(e) there has been a change in national or international
financial, political, economic or stock market conditions (primary or
secondary); an incident of terrorism, outbreak or escalation of hostilities,
war, declaration of martial law or any other calamity or crisis; a suspension
or material limitation in trading of securities generally on any stock
exchange; any change in currency exchange rates or exchange controls or a
disruption of settlement systems or a material disruption in commercial
banking, in each case as would be likely in the opinion of either of the Joint
Bookrunner(s) (acting in good faith) to materially prejudice the success of
the Placing.
The rights and obligations of the Placees shall terminate only in the
circumstances described in these Terms and Conditions and in the Placing
Agreement and will not be subject to termination by the Placee or any
prospective Placee at any time or in any circumstances. By participating in
the Placing, Placees agree that the exercise by the Joint Bookrunners of any
right of termination or other discretion under the Placing Agreement shall be
within the absolute discretion of the Joint Bookrunners, and that it need not
make any reference to Placees and that it shall have no liability to Placees
whatsoever in connection with any such exercise or decision not to exercise.
Placees will have no rights against the Joint Bookrunners, the Company, nor
any of their respective affiliates, directors or employees under the Placing
Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as
amended).
Registration and settlement
Settlement of transactions in the Placing Shares (ISIN: GB00BYX5K988)
following Admission will take place within CREST. Each Placee allocated
Placing Shares in the Placing will be sent a trade confirmation or contract
note stating the number of Placing Shares allocated to it at the Placing
Price, the aggregate amount owed by such Placee to the Joint Bookrunners (as
agent for the Company), as applicable, and settlement instructions. Each
Placee agrees that it will do all things necessary to ensure that delivery and
payment is completed in accordance with either the CREST or certificated
settlement instructions that it has in place with the Joint Bookrunners.
The expected date of settlement in respect of the Placing Shares will be
communicated to you by the Joint Bookrunners (as the case may be) and
settlement will be in accordance with the instructions set out in the trade
confirmation.
Interest is chargeable daily on payments not received from Placees on the due
date in accordance with the arrangements set out above at the rate of two
percentage points above SONIA as determined by the Joint Bookrunners.
Each Placee is deemed to agree that, if it does not comply with these
obligations, the Joint Bookrunners may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from the proceeds,
for the Joint Bookrunners account and benefit (as agent for the Company) as
applicable, an amount equal to the aggregate amount owed by the Placee plus
any interest due. The relevant Placee will, however, remain liable and shall
indemnify the Joint Bookrunners(as agent for the Company) as applicable, on
demand for any shortfall below the aggregate amount owed by it and may be
required to bear any stamp duty or stamp duty reserve tax or securities
transfer tax (together with any interest or penalties) which may arise upon
the sale of such Placing Shares on such Placee's behalf. By communicating a
bid for Placing Shares to the Joint Bookrunners, each Placee confers on the
Joint Bookrunners all such authorities and powers necessary to carry out any
such sale and agrees to ratify and confirm all actions which the Joint
Bookrunners lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the trade confirmation or contract note is copied
and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its
nominee or in the name of any person for whom a Placee is contracting as agent
or that of a nominee for such person, such Placing Shares should, subject as
provided below, be so registered free from any liability to UK stamp duty or
stamp duty reserve tax or securities transfer tax. Placees will not be
entitled to receive any fee or commission in connection with the Placing.
Representations, warranties and further terms
By participating in the Placing each Placee (and any person acting on such
Placee's behalf) irrevocably makes the following representations, warranties,
acknowledgements, agreements and undertakings (as the case may be) to the
Company and Joint Bookrunners, namely that, each Placee (and any person acting
on such Placee's behalf):
1. represents and warrants that it has read and understood
this announcement, including this announcement, in its entirety and that its
subscription for and/or purchase of Placing Shares is subject to and based
upon all the terms, conditions, representations, warranties, acknowledgements,
agreements and undertakings and other information contained in this
announcement and herein and not in reliance on any information given or any
representations, warranties or statements made at any time by any person in
connection with Admission, the Company, the Placing, the Acquisition or
otherwise, other than the information contained in this announcement, and
undertakes not to redistribute or duplicate this announcement or any part of
it;
2. acknowledges that the content of this announcement and,
when published, the Admission Document is exclusively the responsibility of
the Company, and that none of the Joint Bookrunners, nor their respective
affiliates or any person acting on either of their behalves has or shall have
any liability for any information, representation or statement contained in
this announcement and, when published, the Admission Document or any
information previously or concurrently published by or on behalf of the
Company, and will not be liable for any Placee's decision to participate in
the Placing based on any information, representation or statement contained in
this announcement and, when published, the Admission Document or otherwise.
Each Placee further represents, warrants and agrees that the only information
on which it is entitled to rely and on which such Placee has relied in
committing itself to acquire the Placing Shares is contained in this
announcement, such information being all that it deems necessary to make an
investment decision in respect of the Placing Shares and that it has neither
received nor relied on any other information given or representations,
warranties or statements made by the Joint Bookrunners, the Company, or any of
their respective directors, officers or employees or any person acting on
behalf of any of them, or, if received, it has not relied upon any such
information, representations, warranties or statements (including any
management presentation that may have been received by any prospective Placee
or any material prepared by the research department of any of the Joint
Bookrunners, (the views of such research departments not representing and
being independent from those of the Company and the respective corporate
finance departments of the Joint Bookrunners, and not being attributable to
the same)), and neither the Joint Bookrunners nor the Company will be liable
for any Placee's decision to accept an invitation to participate in the
Placing based on any other information, representation, warranty or statement.
Each Placee further acknowledges and agrees that it has relied solely on its
own investigation of the business, financial or other position of the Company
in deciding to participate in the Placing and it will not rely on any
investigation that the Joint Bookrunners, their affiliates or any other person
acting on its or their behalf has or may have conducted;
3. acknowledges that none of the Joint Bookrunners, the
Company nor any of their respective affiliates or any person acting on behalf
of any of them has provided it, and will not provide it, with any material
regarding the Placing Shares or the Company other than this announcement; nor
has it requested any of the Joint Bookrunners, the Company, their respective
affiliates or any person acting on behalf of any of them to provide it with
any such information and acknowledge that they have read and understood this
announcement;
4. acknowledges that no offering document or prospectus has
been or will be prepared in connection with the Placing and it has not
received and will not receive a prospectus or other offering document in
connection with the Placing;
5. represents and warrants that it has neither received nor
relied on any confidential price sensitive information concerning the Company
in accepting this invitation to participate in the Placing;
6. acknowledges that none of the Joint Bookrunners has any
duties or responsibilities to it, or its clients, similar or comparable to the
duties of "best execution" and "suitability" imposed by the Conduct of
Business Sourcebook in the FCA's Handbook of Rules and Guidance and that none
of the Joint Bookrunners, is acting for them or their clients and that each of
the Joint Bookrunners will not be responsible for providing protections to it
or its clients;
7. has the funds available to pay in full for the Placing
Shares for which it has agreed to subscribe and/or purchase and that it will
pay the total amount due by it in accordance with the terms set out in this
announcement and, as applicable, as set out in the trade settlement or the
contract note on the due time and date;
8. acknowledges that the Joint Bookrunners, nor any of their
affiliates or any person acting on behalf of the Joint Bookrunners or any such
affiliate has or shall have any liability for this announcement and, when
published, the Admission Document, any publicly available or filed information
or any representation relating to the Company, provided that nothing in this
paragraph excludes the liability of any person for fraudulent
misrepresentation made by that person;
9. acknowledges that none of the Joint Bookrunners, nor the
ultimate holding company of any of the Joint Bookrunners nor any direct or
indirect subsidiary undertakings of such holding company, nor any of their
respective directors and employees shall be liable to Placees for any matter
arising out of the Joint Bookrunners' role as placing agent or otherwise in
connection with the Placing and that where any such liability nevertheless
arises as a matter of law each Placee will immediately waive any claim against
any of such persons which it may have in respect thereof;
10. understands, and each account it represents has been advised
that (i) the Placing Shares have not been and will not be registered under the
US Securities Act or under the securities laws of any state or other
jurisdiction of the United States and are being offered in a transaction not
involving any public offering in the United States, (ii) the Placing Shares
are being offered and sold pursuant to Regulation S under the US Securities
Act or in a transaction exempt from or not subject to the registration
requirements under the US Securities Act; and (iii) the Placing Shares may not
be reoffered, resold, pledged or otherwise transferred except in accordance
with Regulation S under the US Securities Act or pursuant to an exemption from
or in a transaction not subject to the registration requirements under the US
Securities Act;
11. if located outside of the United States, represents and
warrants that it, and any accounts it represents, (i) is, or at the time the
Placing Shares are acquired will be, outside the United States and (ii) is
acquiring the Placing Shares in an "offshore transaction" in reliance on and
in accordance with Regulation S;
12. if located in the United States,
represents and warrants that it, and any accounts it represents (i) is a QIB
and has delivered a US investor letter and (ii) is acquiring the Placing
Shares for its own account, or for the account of another QIB, and not with a
view to any resale or distribution in violation of the US securities laws;
13. is not subscribing for any Placing Shares as a result of (i)
any "directed selling efforts" as that term is defined in Regulation S or (ii)
any form of "general solicitation or general advertising" within the meaning
of Regulation D under the US Securities Act;
14. will not distribute, forward, transfer or otherwise transmit
this announcement and, when published, the Admission Document, any information
contained within it or any other materials concerning the Placing (including
any electronic copies thereof), in or into the United States;
15. acknowledges that any subscription for the Placing Shares may
involve tax consequences, and that the contents of this announcement and, when
published, the Admission Document do not contain tax advice or information.
The Placee acknowledges that it must retain its own professional advisors to
evaluate the tax, financial and any and all other consequences of an
investment in the Placing Shares;
16. represents and warrants that it will notify any transferee to
whom it subsequently reoffers, resells, pledges or otherwise transfers the
Placing Shares of the foregoing restrictions on transfer and resale;
17. unless otherwise specifically agreed in writing with the Joint
Bookrunners represents and warrants that neither it nor the beneficial owner
of such Placing Shares will be a resident of the United States, Canada,
Australia, New Zealand, Japan or the Republic of South Africa or any other
jurisdiction in which it is unlawful to make or accept an offer to acquire the
Placing Shares;
18. acknowledges that the Placing Shares have not been and will
not be registered under the securities legislation of the United States,
Canada, Australia, New Zealand, Japan or the Republic of South Africa or any
other jurisdiction in which it is unlawful to make or accept an offer to
acquire the Placing Shares and, subject to certain exceptions, may not be
offered, sold, taken up, renounced or delivered or transferred, directly or
indirectly, within those jurisdictions;
19. represents and warrants that the issue or transfer to it, or
the person specified by it for registration as holder, of Placing Shares will
not give rise to a liability under any of sections 67, 70, 93 or 96 of the
Finance Act 1986 (depositary receipts and clearance services) and that the
Placing Shares are not being acquired in connection with arrangements to issue
depositary receipts or to transfer Placing Shares into a clearance system;
20. represents and warrants that: (i) it has complied with its
obligations under the Criminal Justice Act 1993 and UK MAR; (ii) in connection
with money laundering and terrorist financing, it has complied with its
obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism
Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering,
Terrorist Financing and Transfer of Funds (Information on the Payer)
Regulations 2017; and (iii) it is not a person: (a) with whom transactions are
prohibited under the Foreign Corrupt Practices Act of 1977 (as amended) or any
economic sanction programmes administered by, or regulations promulgated by,
the Office of Foreign Assets Control of the US Department of the Treasury; (b)
named on the Consolidated List of Financial Sanctions Targets maintained by HM
Treasury of the United Kingdom; or (c) subject to financial sanctions imposed
pursuant to a regulation of the European Union or a regulation adopted by the
United Nations (together, the "Regulations"); and, if making payment on behalf
of a third party, that satisfactory evidence has been obtained and recorded by
it to verify the identity of the third party as required by the Regulations
and has obtained all governmental and other consents (if any) which may be
required for the purpose of, or as a consequence of, such purchase, and it
will provide promptly to the Joint Bookrunners such evidence, if any, as to
the identity or location or legal status of any person which the Joint
Bookrunners may request from it in connection with the Placing (for the
purpose of complying with such Regulations or ascertaining the nationality of
any person or the jurisdiction(s) to which any person is subject or otherwise)
in the form and manner requested by the Joint Bookrunners on the basis that
any failure by it to do so may result in the number of Placing Shares that are
to be purchased by it or at its direction pursuant to the Placing being
reduced to such number, or to nil, as the Joint Bookrunners may decide in
their sole discretion;
21. represents and warrants that it is acquiring the Placing
Shares for its own account or acquiring the Placing Shares for an account with
respect to which it has sole investment discretion and has the authority to
make, and does make the representations, warranties, indemnities,
acknowledgments, undertakings and agreements contained in this announcement;
22. if it is a financial intermediary, as that term is used in
Article 5 of the EU Prospectus Regulation or the UK Prospectus Regulation (as
applicable), represents and warrants that the Placing Shares subscribed for
and/or purchased by it in the Placing will not be subscribed for and/or
purchased on a non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, persons in the United Kingdom or in a
Member State (as applicable) in circumstances which may give rise to an offer
to the public other than an offer or resale in the United Kingdom or in a
Member State to UK Qualified Investors or EEA Qualified Investors, or in
circumstances in which the prior consent of the Joint Bookrunners has been
given to each such proposed offer or resale;
23. represents and warrants that it has not offered or sold and
will not offer or sell any Placing Shares to persons prior to Admission except
to persons whose ordinary activities involve them acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted in, and which
will not result in, an offer to the public in the United Kingdom, Switzerland
or a Member State;
24. represents and warrants that it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of FSMA) relating to the Placing Shares in
circumstances in which section 21(1) of FSMA does not require approval of the
communication by an authorised person;
25. represents and warrants that it has complied and will comply
with all applicable provisions of UK MAR with respect to anything done by it
in relation to the Placing Shares in, from or otherwise involving, the United
Kingdom or the EEA (as applicable);
26. unless otherwise specifically agreed with the Joint
Bookrunners in writing, represents and warrants that it is an EEA Qualified
Investor or a UK Qualified Investor;
27. if it is a UK Qualified Investor, represents and warrants that
it is a person: (i) who has professional experience in matters relating to
investments falling within Article 19(1) of the FPO; or (ii) falling within
Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated
Associations, etc.") of the FPO; or (iii) are persons to whom it may otherwise
be lawfully communicated;
28. if the Placee is a natural person, such Placee is not under
the age of majority (18 years of age in the United Kingdom) on the date of
such Placee's agreement to subscribe for and/or purchase Placing Shares under
the Placing and will not be any such person on the date that such subscription
and/or purchase is accepted;
29. is aware of and acknowledges that it is required to comply
with all applicable provisions of FSMA with respect to anything done by it in,
from or otherwise involving, the United Kingdom;
30. represents and warrants that it and any person acting on its
behalf is entitled to subscribe for and/or acquire the Placing Shares under
the laws of all relevant jurisdictions and that it has all necessary capacity
and has obtained all necessary consents and authorities and taken any other
necessary actions to enable it to commit to this participation in the Placing
and to perform its obligations in relation thereto (including, without
limitation, in the case of any person on whose behalf it is acting, all
necessary consents and authorities to agree to the terms set out or referred
to in this announcement) and will honour such obligations;
31. where it is subscribing for and/or acquiring Placing Shares
for one or more managed accounts, represents and warrants that it is
authorised in writing by each managed account: (a) to subscribe for and/or
acquire the Placing Shares for each managed account; (b) to make on its behalf
the representations, warranties, acknowledgements, undertakings and agreements
in this announcement, of which this announcement forms part; and (c) to
receive on its behalf any investment letter relating to the Placing in the
form provided to it by the Joint Bookrunners;
32. undertakes that it (and any person acting on its behalf) will
make payment to the Joint Bookrunners for the Placing Shares allocated to it
in accordance with this announcement, including this announcement, on the due
time and date as will be notified to it by the Joint Bookrunners, failing
which the relevant Placing Shares may be placed with other parties or sold as
the Joint Bookrunners may in their sole discretion determine and without
liability to such Placee and it will remain liable and will indemnify the
Joint Bookrunners on demand for any shortfall below the net proceeds of such
sale and the placing proceeds of such Placing Shares and may be required to
bear the liability for any stamp duty or stamp duty reserve tax or security
transfer tax (together with any interest or penalties due pursuant to or
referred to in these terms and conditions) which may arise upon the placing or
sale of such Placee's Placing Shares on its behalf;
33. acknowledges that none the Joint Bookrunners, any of their
affiliates, or any person acting on behalf of the Joint Bookrunners or any
such affiliate, is making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection with the
Placing and that participation in the Placing is on the basis that it is not
and will not be treated for these purposes as a client of the Joint
Bookrunners and that none of the Joint Bookrunners have any duties or
responsibilities to it for providing the protections afforded to their clients
or customers or for providing advice in relation to the Placing nor in respect
of any representations, warranties, undertakings or indemnities contained in
the Placing Agreement nor for the exercise or performance of any of their
rights and obligations thereunder including any rights to waive or vary any
conditions or exercise any termination right;
34. undertakes that the person whom it specifies for registration
as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the
case may be. None of the Joint Bookrunners nor the Company will be responsible
for any liability to stamp duty or stamp duty reserve tax resulting from a
failure to observe this requirement. Each Placee and any person acting on
behalf of such Placee agrees to participate in the Placing and it agrees to
indemnify the Company and the Joint Bookrunners in respect of the same;
35. acknowledges that these terms and conditions and any
agreements entered into by it pursuant to these terms and conditions and any
non-contractual obligations arising out of or in connection with such
agreement shall be governed by and construed in accordance with the laws of
England and Wales and it submits (on behalf of itself and on behalf of any
person on whose behalf it is acting) to the exclusive jurisdiction of the
English courts as regards any claim, dispute or matter (including
non-contractual matters) arising out of any such contract, except that
enforcement proceedings in respect of the obligation to make payment for the
Placing Shares (together with any interest chargeable thereon) may be taken by
the Company and the Joint Bookrunners in any jurisdiction in which the
relevant Placee is incorporated or in which any of its securities have a
quotation on a recognised stock exchange;
36. acknowledges that time shall be of the essence as regards to
its obligations pursuant to this announcement;
37. agrees that the Company and the Joint Bookrunners and their
respective affiliates and others will rely upon the truth and accuracy of the
foregoing representations, warranties, acknowledgements and undertakings which
are given to the Joint Bookrunners on their own behalf and on behalf of the
Company and are irrevocable and are irrevocably authorised to produce this
announcement and, when published, the Admission Document, or a copy thereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby;
38. agrees to indemnify on an on demand, after-tax basis and hold,
the Company and the Joint Bookrunners and their respective affiliates harmless
from any and all costs, claims, liabilities and expenses (including legal fees
and expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and undertakings in
this announcement and further agrees that the provisions of this announcement
shall survive after completion of the Placing;
39. acknowledges that no action has been or will be taken by any
of the Company and/or the Joint Bookrunners or any person acting on behalf of
the Company or the Joint Bookrunners, that would, or is intended to, permit a
public offer of the Placing Shares in any country or jurisdiction where any
such action for that purpose is required;
40. acknowledges that it is an institution that has knowledge and
experience in financial, business and international investment matters as is
required to evaluate the merits and risks of subscribing for and/or acquiring
the Placing Shares. It further acknowledges that it is experienced in
investing in securities of this nature and in this sector and is aware that it
may be required to bear, and it, and any accounts for which it may be acting,
are able to bear, the economic risk of, and is able to sustain, a complete
loss in connection with the Placing. It has relied upon its own examination
and due diligence of the Company and its associates taken as a whole, and the
terms of the Placing, including the merits and risks involved;
41. acknowledges that its commitment to subscribe for and/or
purchase Placing Shares on the terms set out herein and in the trade
confirmation or contract note will continue notwithstanding any amendment that
may in future be made to the terms of the Placing and that Placees will have
no right to be consulted or require that their consent be obtained with
respect to the Company's conduct of the Placing;
42. acknowledges that the Joint Bookrunners, or any of their
affiliates acting as an investor for its own account may take up shares in the
Company and in that capacity may retain, purchase or sell for its own account
such shares and may offer or sell such shares other than in connection with
the Placing;
43. represents and warrants that, if it is a pension fund or
investment company, its subscription and/or purchase of Placing Shares is in
full compliance with all applicable laws and regulation;
44. to the fullest extent permitted by law, it acknowledges and
agrees to the disclaimers contained in the announcement, including this
announcement;
45. acknowledges that the allocation of Placing Shares (in respect
of the Placing shall be determined by the Joint Bookrunners after consultation
with, and the approval of the Company (so far as is practicable) and the Joint
Bookrunners may scale back any placing commitment on such basis as they, with
the approval of the Company, may determine (which may not be the same for each
Placee);
46. irrevocably appoints any Director and any director or duly
authorised employee or agent of the Joint Bookrunners to be its agent and on
its behalf (without any obligation or duty to do so), to sign, execute and
deliver any documents and do all acts, matters and things as may be necessary
for, or incidental to, its subscription for and/or purchase of all or any of
the Placing Shares allocated to it in the event of its own failure to do so;
47. the Company reserves the right to make inquiries of any holder
of the Placing Shares or interests therein at any time as to such person's
status under the US federal securities laws and to require any such person
that has not satisfied the Company that holding by such person will not
violate or require registration under the US securities laws to transfer such
Placing Shares or interests in accordance with the Articles (as amended from
time to time);
48. if it is acting as a "distributor" (for the purposes of UK
MiFIR Product Governance Requirements):
(1) it acknowledges that the Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for the
purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of
Business Sourcebook; or (b) a recommendation to any investor or group of
investors to invest in, or purchase, or take any other action whatsoever with
respect to the Placing Shares and each distributor is responsible for
undertaking its own target market assessment in respect of the Placing Shares
and determining appropriate distribution channels;
(2) notwithstanding any Target Market Assessment undertaken it
confirms that, other than where it is providing an execution-only service to
investors, it has satisfied itself as to the appropriate knowledge,
experience, financial situation, risk tolerance and objectives and needs of
the investors to whom it plans to distribute the Placing Shares and that it
has considered the compatibility of the risk/reward profile of such Placing
Shares with the end target market; and
(3) it acknowledges that the price of the Placing Shares may decline
and investors could lose all or part of their investment; the Placing Shares
offer no guaranteed income and no capital protection; and an investment in the
Placing Shares is compatible only with investors who do not need a guaranteed
income or capital protection, who (either alone or in conjunction with an
appropriate financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources to be able
to bear any losses that may result therefrom; and
49. the Company and the Joint Bookrunners will rely upon the truth
and accuracy of the foregoing representations, warranties, undertakings and
acknowledgements. The Placee agrees to indemnify on an on demand, after-tax
basis and hold each of, the Company and the Joint Bookrunners, and their
respective affiliates harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of any breach of the
representations, warranties, undertakings, agreements and acknowledgements in
this announcement.
The representations, warranties, acknowledgments and undertakings contained in
this announcement are given to the Joint Bookrunners and the Company (as the
case may be) and are irrevocable and shall not be capable of termination in
any circumstances.
The agreement to settle a Placee's subscription and/or purchase (and/or the
subscription and/or purchase of a person for whom such Placee is contracting
as agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to a subscription and/or purchase by it and/or such
person direct from the Company for the Placing Shares in question. Such
agreement assumes that the Placing Shares are not being subscribed for and/or
acquired in connection with arrangements to issue depositary receipts or to
transfer the Placing Shares into a clearance service. If there are any such
arrangements, or the settlement relates to any other subsequent dealing in the
Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which
neither the Company nor the Joint Bookrunners will be responsible, and the
Placee to whom (or on behalf of whom, or in respect of the person for whom it
is participating in the Placing as an agent or nominee) the allocation,
allotment, issue or delivery of Placing Shares has given rise to such UK stamp
duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp
duty reserve tax forthwith and to indemnify on an on demand, after-tax basis
and to hold harmless the Company and the Joint Bookrunners in the event that
any of the Company or the Joint Bookrunners has incurred any such liability to
UK stamp duty or stamp duty reserve tax. If this is the case, each Placee
should seek its own advice and notify the Joint Bookrunners, accordingly.
In addition, Placees should note that they will be liable for any stamp duty
and all other stamp, issue, securities, transfer, registration, documentary or
other duties or taxes (including any interest, fines or penalties relating
thereto) payable outside the UK by them or any other person on the
subscription and/or purchase by them of any Placing Shares or the agreement by
them to subscribe for and/or purchase any Placing Shares.
Each Placee, and any person acting on behalf of the Placee, acknowledges that
none of the Joint Bookrunners owes any fiduciary or other duties to any Placee
in respect of any representations, warranties, undertakings or indemnities in
the Placing Agreement.
When a Placee or person acting on behalf of the Placee is dealing with the
Joint Bookrunners, any money held in an account with the Joint Bookrunners on
behalf of the Placee and/or any person acting on behalf of the Placee will not
be treated as client money within the meaning of the rules and regulations of
the FCA made under the FSMA. The Placee acknowledges that the money will not
be subject to the protections conferred by the client money rules. As a
consequence, this money will not be segregated from the Joint Bookrunners'
money in accordance with the client money rules and will be used by the Joint
Bookrunners in the course of its own business and the Placee will rank only as
a general creditor of the Joint Bookrunners.
All times and dates in this Admission Document may be subject to amendment.
The Joint Bookrunners shall notify the Placees and any person acting on behalf
of the Placees of any changes.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser.
Supply and disclosure of information
If the Joint Bookrunners or the Company or any of their agents request any
information about a Placee's agreement to subscribe for and/or acquire Placing
Shares under the Placing, such Placee must promptly disclose it to them and
ensure that such information is complete and accurate in all respects.
Data protection
Each Placee acknowledges that it has been informed that, pursuant to GDPR the
Company and/or the Registrar will, hold personal data (as defined in GDPR)
relating to past and present Shareholders. Personal data will be retained on
record for a period exceeding seven years after it is no longer used (subject
to any limitations on retention periods set out in applicable law). The
Registrar will process such personal data at all times in compliance with GDPR
and shall only process for the purposes set out in the Company's privacy
notice (the "Purposes") which is available for consultation on the Company's
website at www.sigmaroc.com (http://www.sigmaroc.com) (the "Privacy
Notice") which include to:
(a) process its personal data to the extent and in such manner as
is necessary for the performance of its obligations under its respective
service contracts, including as required by or in connection with the Placee's
holding of Placing Shares, including processing personal data in connection
with credit and anti-money laundering checks on it;
(b) communicate with it as necessary in connection with its
affairs and generally in connection with its holding of Placing Shares;
(c) comply with the legal and regulatory obligations of the
Company and/or the Registrar; and
(d) process its personal data for the Registrar's internal
administration.
Where necessary to fulfil the Purposes, the Company will disclose personal
data to:
(a) third parties located outside of the United Kingdom if
necessary for the Registrar to perform its functions, or when it is within its
legitimate interests, and in particular in connection with the holding of
Placing Shares; or
(b) its affiliates, the Registrar and their respective associates,
some of which may be located outside the United Kingdom.
Any sharing of personal data between parties will be carried out in compliance
with the GDPR and as set out in the Privacy Notice.
Becoming registered as a holder of Placing Shares, a person becomes a data
subject (as defined under GDPR). In providing the Registrar with information,
the Placee hereby represents and warrants to the Company and the Registrar
that: (i) it complies in all material aspects with its data controller
obligations under GDPR, and in particular, it has notified any data subject of
the Purposes for which personal data will be used and by which parties it will
be used and it has provided a copy of the Privacy Notice; and (ii) where
consent is legally competent and/or required under GDPR the Placee has
obtained the consent of any data subject to the Company, the Registrar and
their respective affiliates and group companies, holding and using their
personal data for the Purposes (including the explicit consent of the data
subjects for the processing of any sensitive personal data for the Purposes).
Each Placee acknowledges that by submitting personal data to the Registrar
(acting for and on behalf of the Company) where the Placee is a natural person
he or she has read and understood the terms of the Privacy Notice.
Each Placee acknowledges that by submitting personal data to the Registrar
(acting for and on behalf of the Company) where the Placee is not a natural
person it represents and warrants that:
(a) it has brought the Privacy Notice to the attention of any
underlying data subjects on whose behalf or account the Placee may act or
whose personal data will be disclosed to the Company as a result of the Placee
agreeing to subscribe for and/or purchase Placing Shares; and
(b) the Placee has complied in all other respects with all
applicable data protection legislation in respect of disclosure and provision
of personal data to the Company.
Where the Placee acts for or on account of an underlying data subject or
otherwise discloses the personal data of an underlying data subject, he/she/it
shall, in respect of the personal data it processes in relation to or arising
in relation to the Placing:
(a) comply with all applicable data protection legislation;
(b) take appropriate technical and organisational measures against
unauthorised or unlawful processing of the personal data and against
accidental loss or destruction of, or damage to the personal data;
(c) if required, agree with the Company and the Registrar, the
responsibilities of each such entity as regards relevant data subjects' rights
and notice requirements; and
(d) immediately on demand, fully indemnify each of the Company and
the Registrar and keep them fully and effectively indemnified against all
costs, demands, claims, expenses (including legal costs and disbursements on a
full indemnity basis), losses (including indirect losses and loss of profits,
business and reputation), actions, proceedings and liabilities of whatsoever
nature arising from or incurred by the Company and/or the Registrar in
connection with any failure by the Placee to comply with the provisions set
out above.
Miscellaneous
The rights and remedies of the Joint Bookrunners and the Company under these
terms and conditions are in addition to any rights and remedies which would
otherwise be available to each of them and the exercise or partial exercise of
one will not prevent the exercise of others.
On application, if a Placee is an individual, that Placee may be asked to
disclose in writing or orally his nationality. If a Placee is a discretionary
fund manager, that Placee may be asked to disclose in writing or orally the
jurisdiction in which its funds are managed or owned. All documents provided
in connection with the Placing will be sent at the Placee's risk. They may be
sent by post to such Placee at an address notified by such Placee to the Joint
Bookrunners.
Each Placee agrees to be bound by the Articles (as amended from time to time)
once the Placing Shares which the Placee has agreed to subscribe for and/or
acquire pursuant to the Placing have been acquired by the Placee. The contract
to subscribe for and/or acquire Placing Shares under the Placing and the
appointments and authorities mentioned in this announcement will be governed
by, and construed in accordance with, the laws of England and Wales. For the
exclusive benefit of the Joint Bookrunners and the Company, each Placee
irrevocably submits to the jurisdiction of the courts of England and Wales and
waives any objection to proceedings in any such court on the ground of venue
or on the ground that proceedings have been brought in an inconvenient forum.
This does not prevent an action being taken against a Placee in any other
jurisdiction.
In the case of a joint agreement to subscribe for and/or acquire Placing
Shares under the Placing, references to a Placee in these terms and conditions
are to each of the Placees who are a party to that joint agreement and their
liability is joint and several.
The Joint Bookrunners and the Company expressly reserve the right to modify
the Placing (including, without limitation, its timetable and settlement) at
any time before allocations are determined. The Placing is subject to the
satisfaction of the conditions contained in the Placing Agreement and to the
Placing Agreement not having been terminated.
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