REG - Kohlberg Kravis R. Smart Metering Sys - Cancellation and Compulsory Acquisition

Smart Metering SystemsAnnouncement

25/03/2024 07:00

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RNS Number : 0610I  Kohlberg Kravis Roberts & Co LP  25 March 2024

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. PLEASE
SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. ANY FAILURE TO
COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW

FOR IMMEDIATE RELEASE

25 March 2024

RECOMMENDED FINAL CASH OFFER

for

Smart Metering Systems plc ("SMS")

by

Sienna Bidco Limited ("Bidco")

a newly formed company wholly-owned by funds advised by Kohlberg Kravis
Roberts & Co. L.P. and its affiliates

CANCELLATION OF ADMISSION TO TRADING ON AIM OF SMS SHARES AND COMPULSORY
ACQUISITION PROCEDURE

Introduction

On 7 December 2023, the boards of directors of SMS and Sienna Bidco Limited
("Bidco"), a newly formed company wholly-owned by funds advised by Kohlberg
Kravis Roberts & Co. L.P. and its affiliates, announced that they had
reached agreement on the terms and conditions of a recommended cash
acquisition by Bidco of the entire issued and to be issued ordinary share
capital of SMS (the "Acquisition"), to be effected by means of a
Court-sanctioned scheme of arrangement (the "Scheme") under Part 26 of the
Companies Act 2006 (the "Companies Act").

On 18 January 2024, Bidco announced that Bidco had determined, with the
consent of SMS and the Takeover Panel, to implement the Acquisition by way of
a recommended takeover offer (as defined in section 974 of the Companies Act)
(a "Takeover Offer") rather than by way of the Scheme. Under the terms of the
Takeover Offer, Bidco continues to offer SMS Shareholders 955 pence in cash
for each SMS Share (the "Offer").

On 24 January 2024, the full terms and conditions of the Takeover Offer and
the procedures for acceptance (the "Offer Document"), together with the
related Form of Acceptance, were published and posted to SMS Shareholders (and
for information purposes, to holders of options under the SMS Share Plans and
persons with information rights). The Offer Document and the Form of
Acceptance are available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, at SMS's website at
https://www.sms-plc.com/ (https://www.sms-plc.com/)

This announcement should be read in conjunction with the full text of the
Offer Document. Capitalised terms used in this announcement shall, unless
otherwise defined, have the same meanings as set out in the Offer Document.
Unless otherwise stated, all times referred to in this announcement are to
London times.

SMS Shareholders are reminded that Bidco declared the Offer unconditional on
22 March 2024.

 

Acceptance level update

In accordance with Rule 17 of the Takeover Code, Bidco is pleased to announce
that, as at 6.00 p.m. (London time) on 22 March 2024 (being the last Business
Day prior to the date of this announcement), valid acceptances of the Offer
("Valid Acceptances") had been received in respect of a total of 126,127,845
SMS Shares, representing approximately 91.30 per cent. of SMS's existing
issued share capital.

So far as Bidco is aware, as informed by SMS, included within the above are
Valid Acceptances in respect of 141,341 SMS Shares (representing, in
aggregate, approximately 0.1 per cent. of SMS's existing issued share capital)
which were the subject of irrevocable undertakings in favour of Bidco to
accept (or procure the acceptance of) the Offer, as given by the SMS Directors
in respect of their own beneficial holdings of SMS Shares.

As at 6.00 p.m. (London time) on 22 March 2024, Bidco has received Valid
Acceptances of the Offer in respect of 126,127,845 SMS Shares (representing
approximately 91.30 per cent. of SMS's existing issued share capital).

The percentages of SMS Shares referred to in this announcement are based on
figures of 138,134,520 SMS Shares in issue as at close of business in London
on 22 March 2024 (being the last Business Day prior to the date of this
announcement), which includes 4,527,602 SMS Shares which were issued pursuant
to the SMS Share Plans upon the Offer being declared unconditional, in
accordance with information publicly available to Bidco as at the date of this
announcement. Bidco notes that the 4,527,602 SMS Shares which were issued
pursuant to the SMS Share Plans upon the Offer being declared unconditional
will be processed as Valid Acceptances today.

Cancellation of admission to trading on AIM and re-registration

As the Takeover Offer has been declared unconditional and Bidco now has, by
virtue of acceptances of the Takeover Offer or otherwise, acquired, or agreed
to acquire, SMS Shares carrying not less than 75 per cent. of the voting
rights then exercisable at a general meeting of SMS Shareholders, Bidco will
procure that SMS makes an application to the London Stock Exchange for the
cancellation of the admission to trading of SMS Shares on AIM.

In accordance with the Offer Document and the AIM Rules, a notice period of no
less than 20 Business Days shall apply in respect of the cancellation of the
admission to trading of SMS Shares on AIM. SMS will make a further
announcement in respect of the expected cancellation date as soon as possible.

As soon as possible after the cancellation of the admission to trading of SMS
Shares on AIM, it is intended that SMS will be re-registered as a private
limited company.

Such cancellation of admission to trading on AIM of SMS Shares and
re-registration of SMS as a private limited company would significantly reduce
the liquidity and marketability of any SMS Shares in respect of which the
Takeover Offer has not been accepted at that time and their value may be
affected as a consequence.

Compulsory acquisition

In addition, as the Takeover Offer has been declared unconditional and Bidco
now has, by virtue of acceptances of the Takeover Offer or otherwise,
acquired, or agreed to acquire, SMS Shares carrying not less than 90 per cent.
of the voting rights then exercisable at a general meeting of SMS
Shareholders, Bidco will shortly begin the implementation of the compulsory
acquisition procedure to acquire any remaining SMS Shares in respect of which
the Offer has not been accepted under Chapter 3 of Part 28 of the Companies
Act, as contemplated by the Offer Document.

Bidco will, shortly, pursuant to sections 979 and 980 of the Companies Act,
dispatch formal compulsory acquisition notices (the "Notices") to those SMS
Shareholders who have not yet accepted the Offer (the "Non-Assenting
Shareholders"). The Notices will set out Bidco's intention to acquire any
remaining SMS Shares in respect of which the Offer has not been accepted on a
compulsory basis on the same terms as the Offer.

On the expiry of six weeks from the date of the Notices, unless a
Non-Assenting Shareholder has applied to the Court and the Court orders
otherwise, the SMS Shares held by the Non-Assenting Shareholders will be
acquired compulsorily by Bidco on the same terms as the Offer. The
consideration to which those SMS Shareholders will be entitled will be held by
SMS on trust on behalf of those SMS Shareholders who have not accepted the
Offer.

SMS Board changes

Two representatives of KKR, Andrew Furze and Yimei Luo, were appointed as
non-executive directors to the SMS Board on 22 March 2024.

Andrew Furze joined KKR in 2021 and is Managing Director in the Infrastructure
team. Prior to joining KKR, Mr. Furze spent fourteen years at Macquarie, where
he was a managing director focused on the European infrastructure sector. He
holds a BSc. in Economics from the London School of Economics and Political
Science and an MSc. in Finance from INSEAD.

Yimei Luo joined KKR in 2016 and is Director on the Infrastructure team,
focusing on investments across Europe, Middle East and Africa. She also spent
four years of her tenure at KKR in Singapore and Hong Kong, covering
infrastructure sectors in the APAC region. Prior to joining KKR, Ms. Luo was
with UBS in London focusing on M&A and financing transactions in the
energy and infrastructure sectors. She began her career on the corporate
development team with Total SA, the French oil and gas major. Ms. Luo holds
degrees from Peking University and ESSEC Business School.

In addition, Ruth Leak, James Richards and Mike Winkel each stepped down as an
independent non-executive director of SMS on 22 March 2024.

Interests in securities

As at the close of business in London on 21 March 2024, the interests in, or
rights to subscribe in respect of, relevant SMS securities held by persons
acting in concert with Bidco were:

 Name                             Nature of interest       Number of SMS Shares  Percentage of SMS's issued share capital
 Calvert Research and Management  Ownership of SMS Shares  104,045               0.08

 

Save as disclosed in this announcement, as at the close of business in London
on 21 March 2024, neither Bidco, nor any Bidco Director, nor, so far as the
Bidco Directors' are aware, any other person acting, or deemed to be acting,
in concert with Bidco:

 

·     had any interest in, or right to subscribe in respect of, any
relevant SMS securities;

·     had any short position (whether conditional or absolute and whether
in the money or otherwise), including any short position under a derivative,
any agreement to sell  or any delivery obligation or any right to require
another person to take purchase or take delivery of relevant SMS securities;

·     had procured an irrevocable commitment or letter of intent to
accept the terms of the Offer in respect of relevant SMS securities; or

·     had borrowed or lent any relevant SMS securities, save for any
borrowed shares which have been either on-lent or sold.

Offer remains open and action to be taken

The Offer will remain open for acceptance until further notice. At least 14
calendar days' notice will be given by an announcement before the Offer is
closed. SMS Shareholders who have not yet accepted the Offer are urged to do
so as soon as possible in accordance with the following procedures:

·     To accept the Takeover Offer in respect of SMS Shares in
certificated form (that is, not in CREST), you must complete and return the
Form of Acceptance accompanying the Offer Document, along with your share
certificate(s) and/or other document(s) of title, to Computershare Investor
Services PLC, Corporate Actions Projects, Bristol, BS99 6AH as soon as
possible. Further details relating to the procedure for acceptance of the
Offer in respect of such certificated SMS Shares is set out in section 12.1 of
Part I of the Offer Document and in the Form of Acceptance.

·     Acceptances in respect of SMS Shares in uncertificated form (that
is, in CREST) should be made electronically through CREST so that the TTE
instruction settles as soon as possible. Further details relating to the
procedure for acceptance of the Offer in respect of such uncertificated SMS
Shares are set out in section 12.2 of Part I of the Offer Document. If you are
a CREST sponsored member, you should refer to your CREST sponsor as only your
CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details on how to accept the Offer are set out in section 12 of Part 1 of
the Offer Document.

Settlement

Settlement of the consideration to which any SMS Shareholder is entitled under
the Offer will be effected in respect of further acceptances received while
the Offer remains open, complete in all respects, within 14 calendar days of
such receipt, save for those SMS Shareholders who acquired their SMS Shares on
or after the Offer being declared unconditional, pursuant to options or awards
granted under the SMS Share Plans, or who hold their SMS Shares through the
SMS SIP trust. Those SMS Shareholders should refer to the provisions at
section 13.3 of Part I of the Offer Document.

SMS Shareholders should note that if they accept the Offer while the Offer
remains open, they will receive the consideration in respect of their SMS
Shares within 14 calendar days of receipt of such acceptance. However, for any
SMS Shares which Bidco compulsorily acquires, the Non-Assenting Shareholders
will not receive their consideration until the completion of the compulsory
acquisition procedure, which is expected to take a minimum of six weeks from
the posting of the Notices.

Questions

If SMS Shareholders have any questions about this announcement or the Offer
Document, or are in any doubt as to how to complete the Form of Acceptance,
please contact the Shareholder Helpline operated by Computershare, the
receiving agent in respect of the Takeover Offer, on +44 (0)370 707 4087.
Please use the country code if calling from outside the UK. Lines are open
between 8:30 a.m. and 5:30 p.m. Monday to Friday (except public holidays in
England and Wales). Calls from outside the UK will be charged at the
applicable international rate. Different charges may apply to calls from
mobile telephones. Please note that calls may be monitored or recorded and
Computershare cannot provide advice on the merits of the Takeover Offer or the
Acquisition or give any financial, legal or tax advice. Additional Forms of
Acceptance are available from the Receiving Agent upon request.

Enquiries

 Morgan Stanley (Joint Financial Adviser to KKR)                               +44 (0) 20 7425 8000

 Shirav Patel / Francesco Puletti / Andrew Foster / George Chalaris / Nagib
 Ahmad
 Macquarie Capital (Joint Financial Adviser to KKR)                            +44 (0) 20 3037 2000

 Adam Hain / Ashish Mehta

 FGS Global (PR Adviser to KKR)                                                KKR-LON@fgsglobal.com (mailto:KKR-LON@fgsglobal.com)

 Faeth Birch / Alastair Elwen / Sophia Johnston                                +44 (0) 20 725 13801
 Smart Metering Systems plc                                                    +44 (0) 141 249 3850

 Miriam Greenwood, Chairman / Tim Mortlock, Chief Executive Officer / Gail
 Blain, Chief Financial Officer / Dilip Kejriwal, Head of Investor Relations

 RBC Capital Markets (Joint Financial Adviser and Joint Broker to SMS)         +44 (0) 20 7653 4000

 Mark Preston / Evgeni Jordanov / Matthew Coakes / Sam Jackson
 Investec Bank plc (Joint Financial Adviser and Joint Broker to SMS)           +44 (0) 20 7597 5970

 Chris Baird / Henry Reast / James Rudd / Shalin Bhamra
 Cavendish Securities plc (Nomad and Joint Broker to SMS)                      +44 (0) 131 220 6939

 Neil McDonald / Peter Lynch / Adam Rae
 Instinctif Partners (Public Relations Adviser to SMS)                         sms@instinctif.com (mailto:sms@instinctif.com)

 Tim Linacre / Guy Scarborough                                                 +44 (0) 7949 939 237

                                                                               +44 (0) 7917 178 920

Simpson Thacher & Bartlett LLP is acting as legal adviser to KKR and
Bidco.

Hogan Lovells International LLP is acting as legal adviser to SMS.

 

The following disclosures are made pursuant to Schedule 2 paragraph (g) of the
AIM Rules.

Andrew Furze, age 37, holds / held the following directorships and/or
partnerships:

 Current Directorships / Partnerships            Former Directorships / Partnerships

                                                 (within the last 5 years)
 Sienna Midco 2 Limited                          Stallion Topco Limited

 Sienna Midco 3 Limited                          Stallion Holdco Limited

 Sienna Bidco Limited                            Stallion Parentco Limited

 Aqueduct Bidco Limited                          Stallion Bidco Limited

 John Laing Group Limited                        Nimbus UK Bidco Limited

 Nimbus UK Bidco Limited                         Glasfaser Deutschland UK John Laing Holdings Limited

 Kohlberg Kravis Roberts & Co Partners LLP       Glasfaser Direkt GmbH

 Caruna Networks Oy

 

Yimei Luo, age 37, holds / held the following directorships and/or
partnerships:

 Current Directorships / Partnerships           Former Directorships / Partnerships

                                                (within the last 5 years)
 Kohlberg Kravis Roberts & Co Partners LLP

 Q Park B.V.

 

There are no further disclosures required under Schedule 2 paragraph (g) of
the AIM Rules.

 

Important Notices

RBC Europe Limited (trading as RBC Capital Markets), which is authorised by
the Prudential Regulatory Authority ("PRA") and regulated by the Financial
Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting for SMS
and no one else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than SMS for
providing the protections afforded to clients of RBC Capital Markets, or for
providing advice in connection with this announcement or any matter referred
to herein.

Investec, which is authorised by the PRA and regulated by the FCA and PRA in
the United Kingdom, is acting exclusively as financial adviser to SMS and for
no one else in connection with the matters referred to in this announcement
and will not be responsible to any person other than SMS for providing the
protections afforded to clients of Investec, nor for providing advice in
relation to the Scheme Document, the content of this announcement and/or the
Scheme Document or any matter referred to in this announcement and/or the
Scheme Document. Neither Investec nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Investec in connection with
this announcement, any statement contained herein or otherwise.

Cavendish, which is authorised and regulated in the United Kingdom by the FCA,
is acting exclusively for SMS and no one else in connection with the subject
matter of this announcement and will not be responsible to anyone other than
SMS for providing the protections afforded to clients of Cavendish or for
providing advice in relation to the subject matter of this announcement, the
contents of this announcement and any other matters referred to in this
announcement.

Morgan Stanley & Co. International plc ("Morgan Stanley") which is
authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority in the UK
is acting as financial adviser exclusively for KKR and no one else in
connection with the matters set out in this announcement. In connection with
such matters, Morgan Stanley, its affiliates and their respective directors,
officers, employees and agents will not regard any other person as their
client, nor will they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in connection
with the contents of this announcement or any other matter referred to herein.

Macquarie Capital (Europe) Limited ("Macquarie Capital") which is regulated by
the Financial Conduct Authority in the UK is acting as financial adviser
exclusively for KKR and no one else in connection with the matters set out in
this announcement. In connection with such matters, Macquarie Capital, its
affiliates and their respective directors, officers, employees and agents will
not regard any other person as their client, nor will they be responsible to
any other person for providing the protections afforded to their clients or
for providing advice in connection with the contents of this announcement or
any other matter referred to herein. Macquarie Capital (Europe) Limited is not
an authorised deposit-taking institution for the purposes of the Banking Act
1959 (Commonwealth of Australia), and its obligations do not represent
deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.
Any investments are subject to investment risk including possible delays in
repayment and loss of income and principal invested.  Macquarie Bank Limited
does not guarantee or otherwise provide assurance in respect of the
obligations of Macquarie Capital (Europe) Limited.

Further Information

This announcement is for information purposes only and does not constitute or
form any part of an offer to sell or subscribe for or an invitation to
purchase or subscribe for any securities or the solicitation of an offer to
buy any securities, pursuant to the Acquisition or otherwise. The Acquisition
shall be made solely by means of the Offer Document which, together with the
Form of Acceptance, shall contain the full terms and Conditions of the
Acquisition, including details of how to accept the Takeover Offer. SMS
Shareholders are strongly advised to read the formal documentation in relation
to the Takeover Offer once it has been dispatched. Each SMS Shareholder is
urged to consult its independent professional adviser immediately regarding
the tax consequences to it (or its beneficial owners) of the Acquisition.

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

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

This announcement does not constitute a prospectus or prospectus equivalent
document.

Overseas Shareholders

The release, publication or distribution of this announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by law.
Persons who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.

The availability of the Takeover Offer to SMS Shareholders who are not
resident in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens and
therefore persons who are not resident in the UK should inform themselves of,
and observe, any applicable legal or regulatory requirements of their
jurisdictions. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Offer disclaim any responsibility or liability for the violation of such
restrictions by any person.

Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Takeover Offer may not be made
directly or indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of
any Restricted Jurisdiction and the Offer may not be capable of acceptance by
any such use, means, instrumentality or facilities. Copies of this
announcement and any formal documentation relating to the Takeover Offer are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from any Restricted Jurisdiction
and persons receiving such documents (including, without limitation, agents,
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send them in or into or from any Restricted Jurisdiction. Doing
so may render invalid any related purported acceptance of the Takeover Offer.

This announcement does not constitute an offer or invitation to purchase or
subscribe for any securities or a solicitation of an offer to buy any
securities pursuant to this announcement or otherwise in any jurisdiction in
which such offer or solicitation is unlawful.

The Acquisition shall be subject to the applicable requirements of the
Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct
Authority and the AIM Rules. Further details in relation to Overseas
Shareholders will be contained in the Offer Document.

Additional Information for US Investors

The Takeover Offer relates to the shares of a Scottish company and is being
made by means of a contractual takeover offer under the Takeover Code and
under English and Scots law. The Offer is being made in the United States
pursuant to all applicable laws and regulations, including, to the extent
applicable, to holders of SMS Shares resident in the United States ("US SMS
Shareholders") pursuant to Section 14(e) and Regulation 14E under the US
Exchange Act as a "Tier II" tender offer, and otherwise in accordance with the
requirements of the Takeover Code. Accordingly, the Takeover Offer is subject
to the disclosure and other procedural requirements, including with respect to
withdrawal rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic tender
offer procedures and law. The Takeover Offer is being made in the United
States by Bidco and no one else. The Takeover Offer will be made to US SMS
Shareholders on the same terms and conditions as those made to all other SMS
Shareholders to whom an offer is made. Any information documents, including
the Offer Document, will be disseminated to US SMS Shareholders on a basis
comparable to the method that such documents are provided to the other SMS
Shareholders to whom an offer is made.

Certain financial information included in this announcement and the Offer
Document has been or will have been prepared in accordance with generally
accepted accounting standards applicable in the United Kingdom and thus may
not be comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the US.

To the extent permitted by the Takeover Code and applicable law, in accordance
with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act,
Bidco, certain affiliated companies and their nominees or brokers (acting as
agents) may make certain purchases of, or arrangements to purchase, shares in
SMS outside of the US, outside the Takeover Offer, during the Offer Period and
the period in which the Takeover Offer remains open for acceptance. Also, to
the extent permitted by the Takeover Code and applicable law, in accordance
with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act,
each of Morgan Stanley, Macquarie Capital, Cavendish, Investec and RBC will
continue to act as a connected exempt principal trader in SMS Shares on the
London Stock Exchange. If such purchases or arrangements to purchase were to
be made they would be made outside the U.S. and would comply with applicable
law. Any such purchases by Bidco or its affiliates will not be made at prices
higher than the price of the Takeover Offer provided in this announcement
unless the price of the Takeover Offer is increased accordingly. Any
information about such purchases will be disclosed as required in the UK, will
be reported to a Regulatory Information Service and will be available on the
London Stock Exchange website, www.londonstockexchange.com/
(http://www.londonstockexchange.com/) .

Neither the U.S. Securities and Exchange Commission (the "SEC") nor any
securities supervisory authority of any state or other jurisdiction in the
United States has approved or disapproved the Takeover Offer or reviewed it
for its fairness, nor have the contents of the Offer Document or any other
documentation relating to the Takeover Offer been reviewed for accuracy,
completeness or fairness by the SEC or any securities supervisory authority in
the United States. Any representation to the contrary is a criminal offence in
the United States.

It may be difficult for US SMS Shareholders to enforce their rights and claims
arising out of the US federal securities laws in connection with the Takeover
Offer, since Bidco and SMS are located in countries other than the US, and
some or all of their officers and directors may be residents of countries
other than the US.

US SMS Shareholders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to subject
themselves to a US court's jurisdiction and judgement.

The receipt of cash pursuant to the Takeover Offer by a US SMS Shareholder as
consideration for the transfer of its SMS Shares pursuant to the Takeover
Offer will likely be a taxable transaction for United States federal income
tax purposes and under applicable United States state and local, as well as
foreign and other, tax laws. Each U.S. SMS Shareholder is strongly advised to
consult an appropriately qualified independent professional legal, tax and
financial adviser immediately in connection with making a decision regarding
this transaction, including with respect to the tax consequences of the
Takeover Offer applicable to them, including under applicable U.S. state and
local, as well as overseas and other, tax laws.

Forward Looking Statements

This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by KKR, Bidco or SMS may contain statements about Bidco
and SMS that are or may be deemed to be forward looking statements. All
statements other than statements of historical facts included in this
announcement may be forward looking statements. Without limitation, any
statements preceded or followed by or that include the words "targets",
"plans", "believes", "expects", "aims", "intends", "will", "may", "shall",
"should", "anticipates", "estimates", "projects", "is subject to", "budget",
"scheduled", "forecast" or words or terms of similar substance or the negative
thereof, are forward looking statements. Forward looking statements include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's or
SMS's operations and potential synergies resulting from the Acquisition; and
(iii) the effects of government regulation on Bidco's or SMS's business.

Such forward looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations and projections of the
management of Bidco and SMS about future events, and are therefore subject to
risks and uncertainties that could significantly affect expected results and
are based on certain key assumptions. Many factors could cause actual results
to differ materially from those projected or implied in any forward looking
statements, including: increased competition, the loss of or damage to one or
more key customer relationships, changes to customer ordering patterns, delays
in obtaining customer approvals for engineering or price level changes, the
failure of one or more key suppliers, the outcome of business or industry
restructuring, the outcome of any litigation, changes in economic conditions,
currency fluctuations, changes in interest and tax rates, changes in raw
material or energy market prices, changes in laws, regulations or regulatory
policies, developments in legal or public policy doctrines, technological
developments, the failure to retain key management, or the timing and success
of future acquisition opportunities or major investment projects. Other
unknown or unpredictable factors could cause actual results to differ
materially from those in the forward looking statements. Such forward looking
statements should therefore be construed in the light of such factors. Neither
Bidco nor SMS, nor any of their respective associates or directors, officers
or advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward looking
statements in this announcement will actually occur. Due to such uncertainties
and risks, readers are cautioned not to place undue reliance on such forward
looking statements, which speak only as of the date hereof. All subsequent
oral or written forward looking statements attributable to any member of the
Bidco Group or the SMS Group, or any of their respective associates,
directors, officers, employees or advisers, are expressly qualified in their
entirety by the cautionary statement above.

Bidco and SMS expressly disclaim any obligation to update any forward looking
or other statements contained herein, except as required by applicable law or
by the rules of any competent regulatory authority, whether as a result of new
information, future events or otherwise.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information
provided by SMS Shareholders, persons with information rights and other
relevant persons for the receipt of communications from SMS may be provided to
Bidco during the Offer Period as required under Section 4 of Appendix 4 of the
Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Publication on Website and Availability of Hard Copies

A copy of this announcement and the documents required to be published by Rule
26 of the Takeover Code shall be made available subject to certain
restrictions relating to persons resident in Restricted Jurisdictions on SMS's
website at www.sms-plc.com by no later than 12 noon (London time) on the
Business Day following the date of this announcement. For the avoidance of
doubt, neither the contents of this website nor the content of any other
website accessible from hyperlinks on such website is incorporated into, or
forms part of, this announcement.

In accordance with Rule 30.3 of the Takeover Code, SMS Shareholders, persons
with information rights and participants in the SMS Share Plans may request a
hard copy of this announcement by contacting Computershare Investor Services
PLC during business hours on +44 (0)370 707 4087 or by submitting a request in
writing to Registrar at Computershare Investor Service PLC, The Pavilions,
Bridgwater Road, Bristol, BS99 6ZY. In accordance with Rule 30.3 of the
Takeover Code, a person so entitled may also request that all future
documents, announcements and information in relation to the Acquisition should
be sent to them in hard copy form. If you have received this announcement in
electronic form or via a website notification, hard copies of this
announcement and any document or information incorporated by reference into
this document will not be provided unless such a request is made.

General

If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables or forms may vary slightly and figures shown as totals in
certain tables or forms may not be an arithmetic aggregation of the figures
that precede them.

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rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

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