REG - Kohlberg Kravis R. Spectris PLC - RECOMMENDED CASH ACQUISITION
02/07/2025 07:00
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RNS Number : 3172P Kohlberg Kravis Roberts & Co LP 02 July 2025
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INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
2 July 2025
RECOMMENDED CASH ACQUISITION
of
Spectris plc ("Spectris")
by
Project Aurora Bidco Limited ("Bidco")
a special purpose vehicle indirectly wholly-owned by funds advised by Kohlberg
Kravis Roberts & Co. L.P. and its affiliates ("KKR")
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of Bidco and Spectris are pleased to announce that they
have reached agreement on the terms of a recommended cash acquisition by Bidco
of the entire issued and to be issued share capital of Spectris (the
"Acquisition").
· Under the terms of the Acquisition, each Spectris Shareholder will be
entitled to receive:
for each Spectris Share: £40.00 in cash (the "Offer Value")
comprising, for each Spectris Share held:
· £39.72 in cash from Bidco (the "Cash Consideration"); and
· an interim dividend of 28 pence to be paid (subject to approval by
the Spectris Directors) by Spectris in the ordinary course of its FY25
dividend calendar (the "Permitted Dividend").
· The Offer Value represents an attractive premium of approximately:
· 6.3 per cent. to the value of the Advent Offer of £37.63 per
Spectris Share;
· 96.3 per cent. to the Closing Price of £20.38 per Spectris Share on
6 June 2025 (being the last Business Day prior to the commencement of the
Offer Period);
· 94.4 per cent. to the volume-weighted average price in the one month
to 6 June 2025 of £20.58; and
· 85.6 per cent. to the volume-weighted average price in the three
months to 6 June 2025 of £21.55.
· The Offer Value values the entire issued and to be issued share
capital of Spectris at approximately £4.1 billion and implies an enterprise
value of approximately £4.7 billion. It represents a multiple of 19.5x
Spectris' Adjusted EBITDA, and 23.0x Spectris' Adjusted EBIT, for the year
ended 31 December 2024.
· Other than the Permitted Dividend, if any dividend, distribution or
other return of value is announced, declared, made or paid, or becomes
payable, in respect of Spectris Shares on or after the date of this
Announcement and before the Effective Date, Bidco reserves the right to reduce
the Cash Consideration payable in respect of each Spectris Share by the amount
of all or part of any such dividend, distribution or other return of value. If
Bidco exercises this right, Spectris Shareholders will be entitled to receive
and retain any such dividend, distribution or other return of value.
· The Acquisition is expected to be effected by means of a
Court-sanctioned scheme of arrangement between Spectris and Scheme
Shareholders under Part 26 of the Companies Act, although Bidco reserves the
right to effect the Acquisition by way of a Takeover Offer.
Background to and reasons for the Acquisition
· Spectris is a highly attractive, global precision measurement
company, focusing on two industry-leading divisions, providing key insights to
customers through premium precision measurement solutions using technical
expertise and deep domain knowledge.
· KKR has long admired Spectris and has been impressed by Spectris'
reputation for product quality, application expertise and a leading position
that has been underpinned by significant innovation and R&D investment.
· Further, KKR commends Spectris' management team on repositioning
Spectris as a more focused and higher quality business, delivering sustainable
and compounding long term growth, with recent strategic acquisitions adding
quality businesses with complementary capabilities to the existing portfolio.
· KKR believes that Spectris has a number of opportunities to
accelerate its growth in attractive end markets which it has not been able to
execute as a listed company. KKR's experience, capabilities and long-term
partnership approach will enable the firm to be a committed and responsible
strategic partner to Spectris, and KKR can provide access to additional
capital, expertise and resource to accelerate the longer-term growth potential
of Spectris' businesses, both organically and through growth strategies in a
fragmented market.
· KKR has been investing in the UK since 1996 and has deployed over
US$25 billion of equity across private equity and real assets in completing
over 50 transactions, reflecting the strength of KKR's platform in the UK and
the attractiveness of the UK as a place to invest. Across KKR's various
investing strategies, notable examples of recent acquisitions of companies in
the UK include Citation, ContourGlobal, ERM and Viridor.
· KKR is a leader in acquiring and building industrial businesses on a
global scale. In particular, KKR has a long history of investing in high
quality, highly engineered and leading industrial companies. KKR's investment
approach centres on long-term value creation, supporting portfolio companies
in unlocking their full growth and operational potential, creating value for
all stakeholders. Through value creation initiatives such as operational
improvements, unlocking new organic growth vectors and accretive M&A, KKR
partners with management teams to build stronger and enduring companies. KKR
has an established and growing track record that demonstrates the
effectiveness of this strategy and a commitment to building businesses.
· KKR is committed to creating a positive legacy in the communities in
which its portfolio companies operate and commends the Spectris Board on
establishing the Spectris Foundation and for the impactful work that it does
in supporting access to high-quality STEM education. KKR strongly supports
community engagement and non-profit involvement across its portfolio companies
and is committing to permit the continued provision of certain current support
services and a minimum £1 million annual contribution, in each case, by
Spectris to the Spectris Foundation to support its impressive work.
· KKR has pioneered a global movement regarding broad-based ownership
and employee engagement as part of its commitment to enabling all colleagues
across its businesses to participate in the benefits of ownership over KKR's
investment period in its portfolio companies. To date, KKR has rolled out over
65 broad-based ownership programmes, impacting over 160,000 non-senior
employees. Bidco is exploring, following completion of the Acquisition,
potentially offering every Spectris employee not eligible for managerial
incentives at Spectris a form of employee ownership participation. No decision
has been made in respect of the terms of, or timing for implementation of,
such incentive scheme.
Spectris Recommendation
· The Spectris Directors, who have been so advised by Goldman Sachs,
Rothschild & Co, and BofA Securities as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and reasonable.
In providing their advice to the Spectris Directors, Goldman Sachs,
Rothschild & Co, and BofA Securities have taken into account the
commercial assessments of the Spectris Directors. BofA Securities is providing
independent financial advice to the Spectris Directors for the purposes of
Rule 3 of the Code.
· Accordingly, the Spectris Directors intend to unanimously recommend
that Spectris Shareholders vote in favour of the Scheme at the Court Meeting
and the Resolutions to be proposed at the General Meeting.
· On 23 June 2025, the board of MI Metron UK Bidco Ltd ("Metron
Bidco"), an indirect subsidiary of funds managed and/or advised by Advent, and
the Spectris Board announced that they had reached agreement on the terms of a
recommended cash acquisition by Metron Bidco of Spectris at a total offer
value of £37.63 per Spectris Share (the "Advent Announcement"). The Advent
Announcement stated that the Spectris Directors intended to unanimously
recommend that Spectris Shareholders vote in favour of the Advent Offer at the
Advent Shareholder Meetings.
· In light of their intended recommendation of the Acquisition, the
Spectris Directors have decided unanimously to withdraw their recommendation
of the Advent Offer.
Information on Bidco and KKR
Bidco
· Bidco is a special purpose vehicle formed under the laws of England
and Wales. It is indirectly wholly-owned by funds advised by KKR and is
intended to be used for the purposes of the Acquisition. Bidco has not traded
since its date of incorporation, nor has it entered into any obligations other
than in connection with the Acquisition.
· The current directors of Bidco are Joshua Weisenbeck, Christopher
Drewsen and Sophia Kakarakis. Further details in relation to Bidco will be
contained in the Scheme Document.
KKR
· KKR is a leading global investment firm with approximately US$664
billion in assets under management as of 31 March 2025. KKR invests globally
across private equity, credit and real assets like infrastructure and real
estate, and also offers capital markets and insurance solutions. KKR aims to
generate attractive investment returns by following a patient and disciplined
investment approach, employing world-class people, and supporting growth in
its portfolio companies and the communities in which they operate.
· KKR will invest in the Acquisition largely through a combination of
KKR's European and North American Private Equity strategies with participation
by its private wealth vehicles, reflecting the global nature of Spectris'
business. As of 31 March 2025, KKR's global private equity platform has US$209
billion in assets under management.
· KKR has a long history of making investments in the industrial sector
and has a track record of investing in high quality, highly engineered and
leading industrial companies and working collaboratively with such companies
to scale them as global leaders and transform their operations through
identified value creating strategies enabled by impassioned, highly aligned
employees with a participation in the shareholder value that they help create.
Examples of KKR's current and recent past investments in the sector globally
include Marmic Fire & Safety, Chase Corporation, Potter Global
Technologies, CIRCOR International, Fortifi Food Processing Solutions,
Ingersoll Rand, Hensoldt, Flow Control Group and Novaria Group.
· The Acquisition would further strengthen KKR's presence and
investment activity in the UK, where KKR has a long track record. KKR's first
investment in the UK was in 1996 and its office in London was opened in 1999,
which has since grown to approximately 130 investment professionals and around
340 employees in London. KKR has invested over US$25 billion of equity across
private equity and real assets, completing over 50 transactions. Today, KKR's
portfolio companies employ around 35,000 people in the UK. KKR's recent
investments in the UK include Citation, ContourGlobal, ERM and Viridor, and
the firm currently has 22 investments in UK companies across its private
equity and infrastructure strategies.
Information on Spectris
· Spectris combines leading technical expertise and deep domain
knowledge to provide its customers with critical insights through high quality
precision measurement solutions that enable them to solve some of their
greatest challenges, making the world cleaner, healthier, and more productive.
· Spectris is well positioned to compete across its customer offering
and employs c.7,400 people located in more than 30 countries, all united
behind its purpose to deliver significant value for all its stakeholders.
Spectris is headquartered in London and focuses on two strong divisions, with
a global network of c.2,200 sales and service employees and best in class
manufacturing facilities and labs.
· Spectris operates through two divisions:
· Spectris Scientific: a global leader in advanced material measurement
and characterisation, operating in attractive end markets, such as
pharmaceutical, semiconductor, primary and advanced materials and advanced
research. Spectris Scientific comprises Malvern Panalytical, Particle
Measuring Systems and Servomex. Through these three companies, Spectris
Scientific provides leading scientific instruments and services, measuring
particles down to the nano scale, helping customers better understand and
shape everything from proteins, metals and polymers to controlling aseptic
manufacturing.
· Spectris Dynamics: a global leader in advanced integrated virtual and
physical testing, and high precision sensing solutions through its business,
HBK. Spectris Dynamics is strategically placed, offering broad solutions, with
the ability to integrate both the physical and virtual worlds of test and
measurement. Spectris Dynamics supports some of the world's leading machine
manufacturing, aerospace, automotive, electronics and advanced research
customers.
· For the financial year ended 31 December 2024, Spectris reported
sales of £1,299 million, EBITDA of £239 million, and adjusted operating
profit of £203 million. Spectris completed the acquisition of three
high-quality, complementary businesses during 2024 (SciAps Incorporated,
Micromeritics Instrument Corporation, and Piezocryst Advanced Sensorics),
delivering material synergies. Micromeritics and SciAps will be integrated
into Malvern Panalytical in Spectris Scientific, while Piezocryst will be
integrated into Spectris Dynamics. Spectris also completed the disposal of Red
Lion Controls in April 2024.
· As at 6 June 2025, being the last Business Day prior to the
commencement of the Offer Period, Spectris' market capitalisation was
£2.1 billion. Spectris' shares are publicly listed on the London Stock
Exchange under the symbol SXS.L. For more information, visit www.spectris.com.
Timetable and Conditions
· It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Co-operation Agreement).
· The Acquisition will be put to Spectris Shareholders at the Court
Meeting and at the General Meeting. Completion of the Acquisition will be
conditional, among other things, on the following matters:
· the approval of the Scheme by a majority in number of the Scheme
Shareholders present and voting at the Court Meeting, either in person or by
proxy, representing at least 75 per cent. in value of the Scheme Shares voted
by those Scheme Shareholders;
· the passing of a special resolution implementing the Scheme by
Spectris Shareholders representing at least 75 per cent. of votes cast at the
General Meeting; and
· the Scheme being sanctioned by the Court (without modification, or
with modification on the terms agreed by Bidco and Spectris) and an office
copy of the Court Order being delivered to the Registrar of Companies.
· The Scheme must become effective by no later than 11.59 p.m. on the
Long Stop Date.
· The Acquisition is also subject to the other terms and Conditions set
out in Appendix 1 to this Announcement, including the receipt of certain
antitrust approvals, including in the EU, the US and China and certain foreign
investment approvals including in the UK. Bidco will work with Spectris to
engage constructively with all relevant stakeholders to satisfy these
conditions, in accordance with the terms of the Co-operation Agreement.
· The Scheme Document will include full details of the Scheme, notices
of the Court Meeting and the General Meeting, and the expected timetable of
principal events relating to the Acquisition and will specify the actions to
be taken by Spectris Shareholders. The Scheme Document, together with the
Forms of Proxy, will be published within 28 days of this Announcement (unless
a later date is agreed with the Panel).
· The Acquisition is expected to complete in or by Q1 2026, subject to
the satisfaction (or, where applicable, waiver) of the Conditions set out in
Appendix 1 to this Announcement.
Comments on the Acquisition
· Commenting on the Acquisition, Mark Williamson, the Chairman of
Spectris, said:
"The Board of Spectris is pleased to recommend KKR's cash offer for Spectris
which is a 6.3% increase to the Advent proposal and represents a premium of
96.3% to the undisturbed share price.
This offer reflects the excellent work of the Spectris management team in
recent years to transform Spectris into a focused, high quality, premium
precision measurement business that is well positioned for the future. While
we remain confident in the opportunities for the business, KKR's offer
provides attractive and immediate cash value for shareholders and a compelling
vision for the future of the Group that the Board believes will be to the
benefit of our stakeholders."
· Commenting on the Acquisition, Andrew Heath, Chief Executive of
Spectris, said:
"This attractive offer from KKR recognises the quality of Spectris, our
people, and our strong growth prospects. Our success in recent years has been
driven by exceptionally talented people united behind a common purpose and
ambition. We have been impressed by KKR's intentions for our business, and the
commitments to invest in our people and our future growth. I am confident that
the next stage of the Group's development will be exciting and full of
opportunity."
· Commenting on the Acquisition, Joshua Weisenbeck, Partner at KKR,
said:
"Spectris is an impressive industrial technology business serving attractive
end-markets such as life sciences, industrial automation, aerospace &
defence, academia, and more. We believe there is an excellent fit in terms of
our respective values, with a strong focus on its talented employees and
supporting communities in which it operates. We have a long track record of
investing in great UK companies and developing industrial technology
businesses globally. We aim to build on these values, while investing to
continue the transformation of Spectris as a global leader."
· Christopher Drewsen, Director at KKR, added:
"Over our nearly five-decade history, we've invested in close to 70 industrial
businesses globally and seen the impact of a focused operational approach
which we continue to build upon, including through the employee ownership
programmes KKR pioneered in 2011. KKR will bring the full resources of our
firm to help Spectris go further, move faster, and deliver innovative products
to customers worldwide."
This summary should be read in conjunction with, and is subject to, the full
text of this Announcement and its Appendices.
The Acquisition will be subject to the Conditions and certain further terms
set out in Appendix 1 to this Announcement and to the full terms and
conditions to be set out in the Scheme Document. The bases and sources for
certain financial information contained in this Announcement are set out in
Appendix 2 to this Announcement. The details and bases of belief of each of
the Spectris Profit Forecasts are contained in Appendix 3. The defined terms
used in this Announcement are set out in Appendix 4 to this Announcement.
Enquiries
Spectris
Teneo
(PR Adviser to Spectris)
Martin Robinson +44 79 7707 1178
Giles Kernick
+44 78 1791 3082
Goldman Sachs International +44 20 7774 1000
(Lead Financial Adviser to Spectris)
Anthony Gutman
Nick Harper
Harry Webster
Cara Pazdon
Rothschild & Co +44 20 7280 5000
(Lead Financial Adviser to Spectris)
Ravi Gupta
Sabina Pennings
Alistair Allen
Nick Ivey
BofA Securities +44 20 7628 1000
(Rule 3 Adviser, Joint Financial Adviser and Corporate Broker to Spectris)
Ed Peel
James Robertson
Rowland Phillips
George Whitlam
Tom Brown
Barclays +44 20 7623 2323
(Joint Financial Adviser and Corporate Broker to Spectris)
Neal West
Adrian Beidas
Callum West
Eoin Healy
Bidco
J.P. Morgan Cazenove +44 20 3493 8000
(Sole Financial Adviser to KKR and Bidco)
Richard Walsh
Dwayne Lysaght
Jonty Edwards
Stuart Jempson
FGS Global +44 20 7251 3801
(PR Adviser to KKR and Bidco)
Faeth Birch
Alastair Elwen
Slaughter and May is acting as legal adviser to Spectris.
Kirkland & Ellis International LLP and Simpson Thacher & Bartlett LLP
(regulatory) are acting as legal advisers to KKR and Bidco.
The person responsible for arranging the release of this Announcement on
behalf of Spectris is Rebecca Dunn, Spectris Head of Corporate Affairs.
Important notices relating to financial advisers
Goldman Sachs International ("Goldman Sachs"), which is authorised by the PRA
and regulated by the FCA and the PRA in the United Kingdom, is acting
exclusively for Spectris and no one else in connection with the matters
referred to in this Announcement and will not be responsible to anyone other
than Spectris for providing the protections afforded to clients of Goldman
Sachs, or for providing advice in relation to the matters referred to in this
Announcement.
N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is
authorised and regulated by the FCA in the United Kingdom, is acting
exclusively as financial adviser to Spectris and for no one else in connection
with the matters referred to in this Announcement and will not be responsible
to anyone other than Spectris for providing the protections afforded to
clients of Rothschild & Co, nor for providing advice in relation to the
matters referred to in this Announcement. Neither Rothschild & Co nor any
of its affiliates (nor their respective directors, officers, employees or
agents) owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Rothschild & Co in
connection with this Announcement, any statement contained in this
Announcement or otherwise. No representation or warranty, express or implied,
is made by Rothschild & Co as to the contents of this Announcement.
Merrill Lynch International ("BofA Securities"), which is authorised by the
Prudential Regulatory Authority and regulated by the Financial Conduct
Authority and the Prudential Regulatory Authority in the United Kingdom, is
acting exclusively for Spectris and for no one else in connection with the
Acquisition and will not be responsible to anyone other than Spectris for
providing the protections afforded to its clients or for providing advice in
relation to the matters referred to in this Announcement. Neither BofA
Securities, nor any of its affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of BofA
Securities in connection with this Announcement, any statement contained
herein or otherwise.
Barclays Bank PLC, acting through its investment bank ("Barclays"), which is
authorised by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for Spectris and no one else in connection
with the Acquisition and will not be responsible to anyone other than Spectris
for providing the protections afforded to clients of Barclays nor for
providing advice in relation to the Acquisition or any other matter referred
to in this Announcement.
In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the US Exchange Act, Barclays and its affiliates will continue to
act as exempt principal trader in Spectris securities on the London Stock
Exchange. These purchases and activities by exempt principal traders which are
required to be made public in the United Kingdom pursuant to the Code will be
reported to a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com. This information
will also be publicly disclosed in the United States to the extent that such
information is made public in the United Kingdom.
J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove") and which is authorised in
the United Kingdom by the PRA and regulated in the United Kingdom by the PRA
and the FCA, is acting as financial advisor exclusively for KKR and Bidco and
no one else in connection with the Acquisition and will not regard any other
person as its client in relation to the Acquisition and will not be
responsible to anyone other than KKR and Bidco for providing the protections
afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for
providing advice in relation to the Acquisition or any other matter or
arrangement referred to herein.
Further information
This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer, solicitation or invitation to
purchase, otherwise acquire, subscribe for, exchange, sell or otherwise
dispose of, any securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any
sale, purchase issuance or transfer of securities of Spectris in any
jurisdiction in contravention of applicable law. The Acquisition will be
implemented solely through the Scheme Document (and the accompanying Forms of
Proxy), which will contain the full terms and conditions of the Acquisition,
including details of how to vote in respect of the Acquisition. Any decision
in respect of the Acquisition should be made only on the basis of the
information in the Scheme Document (or, if the Acquisition is implemented by
way of a Takeover Offer, the Takeover Offer document).
This Announcement does not constitute a prospectus, prospectus equivalent or a
prospectus exempted document.
This Announcement has been prepared for the purpose of complying with English
law and the Code and the information disclosed may not be the same as that
which would have been disclosed if this Announcement had been prepared in
accordance with the laws of jurisdictions outside England and Wales.
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.
Overseas Shareholders
The release, publication or distribution of this Announcement in whole or in
part, directly or indirectly, in, into or from jurisdictions other than the UK
and the availability of the Acquisition to Spectris Shareholders who are not
resident in the UK may be restricted by law and therefore any persons who are
not resident in the UK or who are subject to the laws of any jurisdiction
other than the UK (including Restricted Jurisdictions) should inform
themselves about, and observe, any applicable legal or regulatory
requirements. In particular, the ability of persons who are not resident in
the UK or who are subject to the laws of another jurisdiction to participate
in the Acquisition or to vote their Spectris Shares in respect of the Scheme
at the Court Meeting, or to execute and deliver Forms of Proxy appointing
another to vote at the Court Meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located or to which they
are subject. Any failure to comply with applicable legal or regulatory
requirements of any jurisdiction may constitute a violation of securities laws
or regulations in that jurisdiction. To the fullest extent permitted by
applicable law and regulation, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Bidco or required by the Code, and permitted by
applicable law and regulation, the Acquisition shall not be made available,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
The Acquisition will be subject to the applicable requirements of English law,
the Code, the Panel, the London Stock Exchange and the FCA.
Copies of this Announcement and any formal documentation relating to the
Acquisition are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in or into or from any Restricted
Jurisdiction or any jurisdiction where to do so would constitute a violation
of the laws or regulations of such jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported vote in
respect of acceptance of the Acquisition. If the Acquisition is implemented by
way of Takeover Offer (unless otherwise permitted by applicable law or
regulation), the Takeover Offer may not be made, directly or indirectly, in or
into, from, or by use of the mails or any other means or instrumentality
(including, without limitation, facsimile, email or other electronic
transmission, telex or telephone) or interstate or foreign commerce of, or any
facility of a national, state or other securities exchange of any Restricted
Jurisdiction and the Takeover Offer will not be capable of acceptance by any
such use, means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Spectris Shareholders in overseas jurisdictions
will be contained in the Scheme Document.
Additional information for U.S. investors
U.S. Spectris Shareholders should note that the Acquisition relates to an
offer for the shares of a UK company and is being made by means of a scheme of
arrangement provided for under English company law. The Acquisition is
therefore not subject to the tender offer rules or the proxy solicitation
rules under the U.S. Exchange Act, as amended. Accordingly, the Acquisition is
subject to the requirements and practices applicable to a scheme of
arrangement involving a target company in the UK listed on the London Stock
Exchange, which differ from the requirements of the U.S. tender offer and
proxy solicitation rules. If, in the future, Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer and determines to extend
the Takeover Offer into the U.S., the Acquisition will be made in compliance
with applicable U.S. tender offer rules and regulations.
The financial information with respect to Spectris included in this
Announcement and to be included the Scheme Document has been or will have been
prepared in accordance with IFRS and thus may not be comparable to financial
information of U.S. companies or companies whose financial statements are
prepared in accordance with generally accepted accounting principles in the
U.S.
It may be difficult for U.S. Spectris Shareholders to enforce their rights and
any claims they may have arising under the U.S. federal securities laws in
connection with the Acquisition, since Spectris and Bidco are each located in
a country other than the United States, and some or all of their respective
officers and directors may be residents of countries other than the United
States. U.S. Spectris Shareholders may not be able to sue Spectris or Bidco,
or their respective officers or directors in a non-U.S. court for violations
of the U.S. securities laws. Further, it may be difficult to compel Spectris
or Bidco and their respective affiliates to subject themselves to the
jurisdiction or judgment of a U.S. court for violations of the U.S. securities
laws.
The receipt of Cash Consideration pursuant to the Scheme by U.S. Spectris
Shareholders as consideration for the transfer of its Spectris Shares pursuant
to the Scheme may be a taxable transaction for U.S. federal income tax
purposes and under applicable U.S. state and local, as well as foreign and
other, tax laws. Each Spectris Shareholder (including U.S. Spectris
Shareholders) is urged to consult their independent professional adviser
immediately regarding the tax consequences of the Acquisition applicable to
them.
Neither the SEC nor any U.S. state securities commission has approved,
disproved or passed judgment upon the fairness or the merits of the
Acquisition or determined if this Announcement is adequate, accurate or
complete. Any representation to the contrary is a criminal offence in the U.S.
In accordance with normal United Kingdom practice and pursuant to Rule
14e-5(b) of the U.S. Exchange Act, Bidco, certain of its affiliated companies
and their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, shares or other securities
of Spectris outside of the U.S., other than pursuant to the Acquisition, until
the date on which the Acquisition and/or Scheme becomes effective, lapses or
is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the US
Exchange Act, J.P. Morgan Cazenove (and/or certain of its affiliates) will
continue to act as exempt principal traders in Spectris shares on the London
Stock Exchange. If such purchases or arrangements to purchase were to be made,
they would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and would comply with applicable law,
including the U.S. Exchange Act. Any information about such purchases or
arrangements to purchase 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 at www.londonstockexchange.com
(http://www.londonstockexchange.com) .
Forward-looking statements
This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and Spectris contain statements which are, or
may be deemed to be, "forward-looking statements". All statements, other than
statements of historical fact are, or may be deemed to be, forward-looking
statements. Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on assumptions, expectations,
valuations, targets, estimates, forecasts and projections of Bidco and
Spectris about future events, and are therefore subject to risks and
uncertainties which could cause actual results, performance or events to
differ materially from those expressed or implied by the forward-looking
statements. The forward-looking statements contained in this Announcement
include statements relating to the expected effects of the Acquisition on the
Bidco Group, the Spectris Group and the Enlarged Group, the expected timing
and scope of the Acquisition and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified by the use
of forward-looking words such as "plans", "prepares", "expects" or "does not
expect", "is expected to", "is subject to", "budget", "targets", "aims",
"scheduled", "estimates", "forecast", "intends", "anticipates", "seeks",
"prospects", "potential", "possible", "assume" or "believes", or variations of
such words and phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken, occur or be
achieved. Although Bidco and Spectris believe that the expectations reflected
in such forward-looking statement are reasonable, Bidco and Spectris can give
no assurance that such expectations will prove to be correct. By their nature,
forward-looking statements involve risks (known and unknown) and uncertainties
(and other factors that are in many cases beyond the control of Bidco and/or
Spectris) because they relate to events and depend on circumstances that may
or may not occur in the future.
There are a number of factors that could affect the future operations of the
Bidco Group, the Spectris Group and/or the Enlarged Group and that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements. These factors include the
satisfaction (or, where permitted, waiver) of the Conditions, as well as
additional factors, such as: domestic and global business and economic
conditions; asset prices; market related risks such as fluctuations in
interest rates and exchange rates, industry trends, competition, changes in
the behaviour of other market participants, changes in government and
regulation, changes in the policies and actions of governments and/or
regulatory authorities (including changes related to capital, tax and
tariffs), changes in political and economic stability (including exposures to
terrorist activities, the UK's exit from the European Union, Eurozone
instability, the Russia-Ukraine conflict, the ongoing conflict in the Middle
East, disruption in business operations due to reorganisation activities,
interest rate, inflation, deflation and currency fluctuations), the timing
impact and other uncertainties of future or planned acquisitions or disposals
or offers, the inability of the Enlarged Group to realise successfully any
anticipated benefits or savings when the Acquisition is implemented (including
changes to the board and/or employee composition of the Enlarged Group), the
inability of the Bidco Group to integrate successfully the Spectris Group's
operations and programmes when the Acquisition is implemented, the Enlarged
Group incurring and/or experiencing unanticipated costs and/or delays
(including IT system failures, cyber-crime, fraud and pension scheme
liabilities), or difficulties relating to the Acquisition when the Acquisition
is implemented. Other unknown or unpredictable factors could affect future
operations and/or 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.
Each forward-looking statement speaks only as of the date of this
Announcement. Neither the Bidco Group nor the Spectris Group, nor any of their
respective associates or directors, officers or advisers, provides any
representation, warranty, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this
Announcement will actually occur. Forward-looking statements involve inherent
risks and uncertainties. All forward-looking statements contained in this
Announcement are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Readers are cautioned not
to place undue reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including under the
Code, the UK Market Abuse Regulation and the DTRs), neither the Bidco Group
nor the Spectris Group is under or undertakes any obligation, and each of the
foregoing expressly disclaims any intention or obligation, to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
No profit forecasts or estimates or quantified financial benefits statements
Each of the Spectris Profit Forecasts is a profit forecast for the purposes of
Rule 28 of the Code. Each of the Spectris Profit Forecasts, and the
assumptions and basis of preparation on which each such Spectris Profit
Forecast is based, as well as the relevant Spectris Directors' confirmation,
in each case, as required by Rule 28.1 of the Code, are set out in Appendix 3
of this Announcement.
Other than the Spectris Profit Forecasts, nothing in this Announcement is
intended, or is to be construed, as a profit forecast, profit estimate or
quantified financial benefits statement for any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
share for Bidco or Spectris for the current or future financial years, will
necessarily match or exceed the historical published earnings or earnings per
share for Bidco or Spectris, as appropriate.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following the
commencement of the Offer Period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th Business Day following the announcement in which any
securities exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm (London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by Spectris Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Spectris may be
provided to Bidco during the Offer Period as required under section 4 of
Appendix 4 to the Code to comply with Rule 2.11(c) of the Code.
Publication on a website and availability of hard copies
This Announcement and the documents required to be published pursuant to Rule
26 of the Code will be available, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, on Bidco's website at
https://www.documentdisplay.com/possible-offer-for-spectris/
(https://www.documentdisplay.com/possible-offer-for-spectris/) and on
Spectris' website at www.spectris.com by no later than 12 noon (London time)
on the Business Day following the publication of this Announcement. Neither
the content of the websites referred to in this Announcement nor the content
of any website accessible from hyperlinks in this Announcement is incorporated
into, or forms part of, this Announcement.
Spectris Shareholders, persons with information rights and participants in the
Spectris Share Plans may, subject to applicable securities laws, request a
hard copy of this Announcement (and any information incorporated into it by
reference to another source) by contacting Spectris' registrars, Equiniti,
between 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (excluding
public holidays in England and Wales) on 0371 384 2030 within the United
Kingdom or on +44 121 415 7047 from overseas, or by submitting a request in
writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex,
BN99 6DA, United Kingdom, with an address to which the hard copy may be sent.
Calls are charged at the standard geographic rate and will vary by provider.
For persons who receive a copy of this Announcement in electronic form or via
a website notification, a hard copy of this Announcement will not be sent
unless so requested. Spectris Shareholders may, subject to applicable
securities laws, also request that all future documents, announcements and
information to be sent in relation to the Acquisition should be in hard copy
form.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
2 July 2025
RECOMMENDED CASH ACQUISITION
of
Spectris plc ("Spectris")
by
Project Aurora Bidco Limited ("Bidco")
a special purpose vehicle indirectly wholly-owned by funds advised by Kohlberg
Kravis Roberts & Co. L.P. and its affiliates ("KKR")
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1 INTRODUCTION
The boards of Bidco and Spectris are pleased to announce that they have
reached agreement on the terms of a recommended cash acquisition by Bidco of
the entire issued and to be issued share capital of Spectris (the
"Acquisition").
2 THE ACQUISITION
Under the terms of the Acquisition, which will be subject to the Conditions
set out in Appendix 1 to this Announcement and to the full terms and
conditions which will be set out in the Scheme Document, each Spectris
Shareholder will be entitled to receive:
for each Spectris Share: £40.00 in cash (the "Offer Value")
comprising, for each Spectris Share held:
· £39.72 in cash from Bidco (the "Cash Consideration"); and
· an interim dividend of 28 pence to be paid (subject to approval by
the Spectris Directors) by Spectris in the ordinary course of its FY25
dividend calendar (the "Permitted Dividend").
The Offer Value represents an attractive premium of approximately:
· 6.3 per cent. to the value of the Advent Offer of £37.63 per
Spectris Share;
· 96.3 per cent. to the Closing Price of £20.38 per Spectris Share on
6 June 2025 (being the last Business Day prior to the commencement of the
Offer Period);
· 94.4 per cent. to the volume-weighted average price in the one month
to 6 June 2025 of £20.58; and
· 85.6 per cent. to the volume-weighted average price in the three
months to 6 June 2025 of £21.55.
The Offer Value values the entire issued and to be issued share capital of
Spectris at approximately £4.1 billion and implies an enterprise value of
approximately £4.7 billion. It represents a multiple of 19.5x Spectris'
Adjusted EBITDA, and 23.0x Spectris' Adjusted EBIT, for the year ended 31
December 2024.
Other than the Permitted Dividend, if any dividend, distribution or other
return of value is announced, declared, made or paid, or becomes payable, in
respect of Spectris Shares on or after the date of this Announcement and
before the Effective Date, Bidco reserves the right to reduce the Cash
Consideration payable in respect of each Spectris Share by the amount of all
or part of any such dividend, distribution or other return of value. If Bidco
exercises this right, Spectris Shareholders will be entitled to receive and
retain any such dividend, distribution or other return of value.
The Acquisition is expected to be effected by means of a Court-sanctioned
scheme of arrangement between Spectris and Scheme Shareholders under Part 26
of the Companies Act, although Bidco reserves the right to effect the
Acquisition by way of a Takeover Offer.
The Acquisition will be subject to the Conditions and certain further terms
set out in Appendix 1 to this Announcement, including, among other things:
(i) the approval of Scheme Shareholders at the Court Meeting and the passing
of the Resolutions relating to the Scheme by Spectris Shareholders at the
General Meeting; (ii) the sanction of the Scheme by the Court; (iii) the
Scheme becoming Effective no later than 11.59 p.m. on the Long Stop Date; and
(iv) the receipt of certain antitrust approvals, including in the EU, the US
and China, and certain foreign investment approvals, including in the UK.
In order to become Effective, the Scheme must be approved by a majority in
number of Scheme Shareholders who are present and vote, whether in person or
by proxy, at the Court Meeting and who represent not less than 75 per cent. in
value of the Scheme Shares held by those Scheme Shareholders (or the relevant
class or classes thereof, if applicable).
The Spectris Shares will be acquired by Bidco fully paid and free from all
liens, equitable interests, charges, encumbrances, rights of pre-emption and
any other third-party rights or interests whatsoever and together with all
rights existing as at the Effective Date, including (without limitation) the
right to receive and retain, in full, all dividends and other distributions
(if any) declared, made or paid or any other return of capital (whether by way
of reduction of share capital or share premium account or otherwise) made on
or after the Effective Date in respect of Spectris Shares, in each case other
than the Permitted Dividend.
3 BACKGROUND TO AND REASONS FOR THE ACQUISITION
Spectris is a highly attractive, global precision measurement company,
focusing on two industry-leading divisions, providing key insights to
customers through premium precision measurement solutions using technical
expertise and deep domain knowledge.
KKR has long admired Spectris and has been impressed by Spectris' reputation
for product quality, application expertise and a leading position that has
been underpinned by significant innovation and R&D investment.
Further, KKR commends Spectris' management team on repositioning Spectris as a
more focused and higher quality business, delivering sustainable and
compounding long term growth, with recent strategic acquisitions adding
quality businesses with complementary capabilities to the existing portfolio.
KKR believes that Spectris has a number of opportunities to accelerate its
growth in attractive end markets which it has not been able to execute as a
listed company. KKR's experience, capabilities and long-term partnership
approach will enable the firm to be a committed and responsible strategic
partner to Spectris, and KKR can provide access to additional capital,
expertise and resource to accelerate the longer-term growth potential of
Spectris' businesses, both organically and through growth strategies in a
fragmented market.
KKR has been investing in the UK since 1996 and has deployed over US$25
billion of equity across private equity and real assets in completing over 50
transactions, reflecting the strength of KKR's platform in the UK and the
attractiveness of the UK as a place to invest. Across KKR's various investing
strategies, notable examples of recent acquisitions of companies in the UK
include Citation, ContourGlobal, ERM and Viridor.
KKR is a leader in acquiring and building industrial businesses on a global
scale. In particular, KKR has a long history of investing in high quality,
highly engineered and leading industrial companies. KKR's investment approach
centres on long-term value creation, supporting portfolio companies in
unlocking their full growth and operational potential, creating value for all
stakeholders. Through value creation initiatives such as operational
improvements, unlocking new organic growth vectors and accretive M&A, KKR
partners with management teams to build stronger and enduring companies. KKR
has an established and growing track record that demonstrates the
effectiveness of this strategy and a commitment to building businesses.
KKR is committed to creating a positive legacy in the communities in which its
portfolio companies operate and commends the Spectris Board on establishing
the Spectris Foundation and for the impactful work that it does in supporting
access to high-quality STEM education. KKR strongly supports community
engagement and non-profit involvement across its portfolio companies and is
committing to permit the continued provision of certain current support
services and a minimum £1 million annual contribution, in each case, by
Spectris to the Spectris Foundation to support its impressive work.
KKR has pioneered a global movement regarding broad-based ownership and
employee engagement as part of its commitment to enabling all colleagues
across its businesses to participate in the benefits of ownership over KKR's
investment period in its portfolio companies. To date, KKR has rolled out over
65 broad-based ownership programmes, impacting over 160,000 non-senior
employees. Bidco is exploring, following completion of the Acquisition,
potentially offering every Spectris employee not eligible for managerial
incentives at Spectris a form of employee ownership participation. No decision
has been made in respect of the terms of, or timing for implementation of,
such incentive scheme.
4 SPECTRIS RECOMMENDATION
The Spectris Directors, who have been so advised by Goldman Sachs,
Rothschild & Co, and BofA Securities as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and reasonable.
In providing their advice to the Spectris Directors, Goldman Sachs,
Rothschild & Co, and BofA Securities have taken into account the
commercial assessments of the Spectris Directors. BofA Securities is providing
independent financial advice to the Spectris Directors for the purposes of
Rule 3 of the Code.
Accordingly, the Spectris Directors intend to unanimously recommend that
Spectris Shareholders vote in favour of the Scheme at the Court Meeting and
the Resolutions to be proposed at the General Meeting.
On 23 June 2025, the board of MI Metron UK Bidco Ltd ("Metron Bidco"), an
indirect subsidiary of funds managed and/or advised by Advent, and the
Spectris Board announced that they had reached agreement on the terms of a
recommended cash acquisition by Metron Bidco of Spectris at a total offer
value of £37.63 per Spectris Share (the "Advent Announcement"). The Advent
Announcement stated that the Spectris Directors intended to unanimously
recommend that Spectris Shareholders vote in favour of the Advent Offer at the
Advent Shareholder Meetings.
In light of their intended recommendation of the Acquisition, the Spectris
Directors have decided unanimously to withdraw their recommendation of the
Advent Offer.
5 BACKGROUND TO AND REASONS FOR THE RECOMMENDATION
Spectris today and its strategic transformation
Since Spectris announced its Strategy for Profitable Growth in 2019 the
Spectris Group has been fundamentally reshaped into a more focused and higher
quality business, well positioned in attractive markets with sustainable
growth drivers. Following this period of transformation and the subsequent
implementation of the Strategy for Sustainable Growth, which was announced in
2022, Spectris is now a high quality, well positioned business with a world
class portfolio of precision measurement businesses, strong momentum in
strategic execution, and a robust platform for sustainable growth and strong
cash generation to harness Spectris' potential. Notwithstanding a more
challenging 2024, the Spectris Board is fully confident in the ongoing
execution of Spectris' Strategy for Sustainable Growth and that its continued
successful delivery will create significant value for shareholders.
Background to the Acquisition
The Spectris Board did not solicit an offer for Spectris, although it
regularly considers all options for driving and improving shareholder value.
The possible offers for Spectris from Advent and KKR were unsolicited and made
to the Board of Spectris separately of each other. The Spectris Directors have
considered and assessed the proposals received from each party independently
of each other, and of other alternatives.
The initial unsolicited proposal from KKR was received on 2 June 2025 at
£30.25 per Spectris Share. The Spectris Board felt the proposal from KKR was
not at a level which reflected an appropriate valuation of Spectris and its
future prospects. Accordingly, the Spectris Board rejected KKR's initial
proposal. On 5 June 2025, KKR made a further proposal at £33.00 per Spectris
Share. This revised proposal by KKR was rejected on the same basis.
On 9 June 2025, following press speculation, Spectris announced that it had
received a conditional proposal from Advent regarding a possible cash offer
for Spectris at £37.63 per Spectris Share (including an interim dividend of
28 pence per Spectris Share, subject to Spectris Board approval). This
proposal followed an initial unsolicited proposal received from Advent at
£30.50 per Spectris Share and four further proposals from Advent to the
Spectris Board.
On 9 June 2025, the Spectris Board received a request from KKR pursuant to the
Code for access to equivalent due diligence information as provided by
Spectris to Advent. Spectris provided KKR with access to this information and
subsequently engaged in discussions with KKR in the interest of delivering the
best value to Spectris Shareholders.
On 13 June 2025, following press speculation, Spectris announced that the
Spectris Board had received a proposal regarding a possible cash offer from
KKR which had been subsequently rejected.
On 23 June 2025, the board of Metron Bidco, an indirect subsidiary of funds
managed and/or advised by Advent, and the Spectris Board announced that they
had reached agreement on the terms of a recommended cash acquisition by Metron
Bidco of Spectris at a total offer value of £37.63 per Spectris Share (the
"Advent Offer").
On 1 July 2025, following a period of engagement between Spectris and KKR, KKR
confirmed a revised proposal regarding a possible cash offer for Spectris of
£40.00 per Spectris Share (including an interim dividend of 28 pence per
Spectris Share, subject to Spectris Board approval) (the "KKR Offer").
Considerations in respect of the KKR Offer
While the Spectris Board remains confident in its ability to deliver
sustainable value for shareholders, the Spectris Directors at the time of the
Advent Offer concluded that the Advent Offer represented an attractive
opportunity for Spectris Shareholders to realise an immediate and certain cash
value for their investment relative to the risks inherent in the execution of
Spectris' strategy over the medium to longer-term.
The Spectris Board has, together with its financial advisers, carefully
considered the financial terms of the KKR Offer and concluded that the KKR
Offer represents a superior offer for Spectris Shareholders as compared to the
Advent Offer.
Accordingly, the Spectris Board has decided unanimously to withdraw its
recommendation for the Advent Offer and intends to unanimously recommend the
KKR Offer to Spectris Shareholders.
In considering the financial terms of the KKR Offer and determining whether
they reflect an appropriate valuation of Spectris and its future prospects,
the Spectris Directors took into account a number of factors including that:
· The KKR Offer represents a significant 6.3 per cent. increase to the
Advent Offer, meaning that Spectris Shareholders will receive an additional
£2.37 per Spectris Share and, in aggregate across all Spectris Shareholders,
an additional £240 million;
· the KKR Offer reflects the strength of Spectris' business and its
future prospects, and provides an opportunity for Spectris Shareholders to
crystallise, in cash, the value of their investments at a fair and reasonable
value;
· the KKR Offer represents an attractive premium of:
o 96.3 per cent. to the Closing Price of £20.38 on 6 June 2025 (being the
last Business Day before the commencement of the Offer Period);
o 85.6 per cent. to the volume-weighted average price in the three months to 6
June 2025 of £21.55; and
o 66.8 per cent. to the volume-weighted average price in the six months to 6
June 2025 of £23.97;
· the KKR Offer implies an enterprise value multiple of approximately
19.5x Spectris' EBITDA for the 12 months ended 31 December 2024 and
approximately 23.0x Spectris' EBIT for the 12 months ended 31 December 2024;
· the certainty of the KKR Offer should be weighed against the inherent
uncertainty of the delivery of future value that exists in the business, in
particular given the current uncertainty in the global macroeconomic
environment; and
· the KKR Offer is expected to deliver more risk-adjusted near-term
value to Spectris Shareholders than other options considered by the Spectris
Board, including (i) the Advent Offer; and (ii) a break-up of Spectris with
the associated execution and market risks, time to implement and expected
areas of value leakage, such as tax and transaction costs.
In considering the KKR Offer, the Spectris Board has taken into account KKR's
stated intentions for the business and all its stakeholders, including its
employees, customers and broader network of partners. The Spectris Board also
welcomes KKR's statements regarding its intention to support Spectris'
commitment to the Spectris Foundation and its charitable work.
The Spectris Board also notes that, like Advent, KKR has an established track
record of investing in high quality industrial companies. Taking into account
KKR's experience and its intentions for the business, the Spectris Board
believes that KKR is able to support the next chapter of the development of
Spectris' businesses.
Accordingly, following careful consideration of the financial terms of the KKR
Offer, the combination of value and certainty that the terms of the KKR Offer
provides to Spectris shareholders, and the above factors, the Spectris
Directors intend to unanimously recommend that Spectris Shareholders vote in
favour of the Scheme at the Court Meeting and the Resolutions to be proposed
at the General Meeting.
6 INFORMATION RELATING TO BIDCO AND KKR
Bidco
Bidco is a special purpose vehicle formed under the laws of England and Wales.
It is indirectly wholly-owned by funds advised by KKR and is intended to be
used for the purposes of the Acquisition. Bidco has not traded since its date
of incorporation, nor has it entered into any obligations other than in
connection with the Acquisition.
The current directors of Bidco are Joshua Weisenbeck, Christopher Drewsen and
Sophia Kakarakis. Further details in relation to Bidco will be contained in
the Scheme Document.
KKR
KKR is a leading global investment firm with approximately US$664 billion in
assets under management as of 31 March 2025. KKR invests globally across
private equity, credit and real assets like infrastructure and real estate,
and also offers capital markets and insurance solutions. KKR aims to generate
attractive investment returns by following a patient and disciplined
investment approach, employing world-class people, and supporting growth in
its portfolio companies and the communities in which they operate.
KKR will invest in the Acquisition largely through a combination of KKR's
European and North American Private Equity strategies with participation by
its private wealth vehicles, reflecting the global nature of Spectris'
business. As of 31 March 2025, KKR's global private equity platform has US$209
billion in assets under management.
KKR has a long history of making investments in the industrial sector and has
a track record of investing in high quality, highly engineered and leading
industrial companies and working collaboratively with such companies to scale
them as global leaders and transform their operations through identified value
creating strategies enabled by impassioned, highly aligned employees with a
participation in the shareholder value that they help create. Examples of
KKR's current and recent past investments in the sector globally include
Marmic Fire & Safety, Chase Corporation, Potter Global Technologies,
CIRCOR International, Fortifi Food Processing Solutions, Ingersoll Rand,
Hensoldt, Flow Control Group and Novaria Group.
The Acquisition would further strengthen KKR's presence and investment
activity in the UK, where KKR has a long track record. KKR's first investment
in the UK was in 1996 and its office in London was opened in 1999, which has
since grown to approximately 130 investment professionals and around 340
employees in London. KKR has invested over US$25 billion of equity across
private equity and real assets, completing over 50 transactions. Today, KKR's
portfolio companies employ around 35,000 people in the UK. KKR's recent
investments in the UK include Citation, ContourGlobal, ERM and Viridor, and
the firm currently has 22 investments in UK companies across its private
equity and infrastructure strategies.
7 SPECTRIS TRADING UPDATE
Spectris continues to expect to deliver full-year performance in line with
market expectations, including the contribution from acquisitions and the
execution of its Profit Improvement Programme.
Results for the five months to 31 May 2025 were resilient with Spectris Group
reported sales of £507 million (4.8 per cent. higher year-on-year, 6.6 per
cent. higher ex-Red Lion Controls), with an improving trend in both reported
and LFL sales against easier year-on-year comparators into the second quarter.
On a LFL basis, Spectris Group sales were 1.5 per cent. lower than the prior
period (7.9 per cent. lower at the end of Q1), driven by declines in
automotive and semiconductor, partially offset by good growth in academia,
materials and life sciences.
By division, Spectris Scientific sales were 16.4 per cent. higher on a
reported basis and 0.4 per cent. lower on a LFL basis (11.0 per cent. lower
LFL at the end of Q1) and Spectris Dynamics sales were flat on a reported
basis and 3.0 per cent. lower on a LFL basis (3.4 per cent. lower on an LFL
basis at the end of Q1). All three acquisitions completed in 2024 -
Micromeritics, SciAps and Piezocryst - continue to perform well in line with
management expectations. The Spectris Group order book ended the period at
£526 million, with a Book-to-Bill Ratio of 1.04x.
The Profit Improvement Programme remains on track to deliver at least £30
million of savings in 2025, which will be weighted to the second half of the
financial year.
Net debt at the end of May 2025 was approximately £500 million. Returning
leverage back within Spectris' 1-2x target remains a key priority, supported
by the Spectris Group's track record of strong cash conversion.
Spectris will announce its half year results for the six months ended 30 June
2025 on 7 August 2025.
8 INFORMATION RELATING TO THE SPECTRIS GROUP
Spectris combines leading technical expertise and deep domain knowledge to
provide its customers with critical insights through high quality precision
measurement solutions that enable them to solve some of their greatest
challenges, making the world cleaner, healthier, and more productive.
Spectris is well positioned to compete across its customer offering and
employs c.7,400 people located in more than 30 countries, all united behind
its purpose to deliver significant value for all its stakeholders. Spectris is
headquartered in London and focuses on two strong divisions, with a global
network of c.2,200 sales and service employees and best in class manufacturing
facilities and labs.
Spectris operates through two divisions:
· Spectris Scientific: a global leader in advanced material measurement
and characterisation, operating in attractive end markets, such as
pharmaceutical, semiconductor, primary and advanced materials and advanced
research. Spectris Scientific comprises Malvern Panalytical, Particle
Measuring Systems and Servomex. Through these three companies, Spectris
Scientific provides leading scientific instruments and services, measuring
particles down to the nano scale, helping customers better understand and
shape everything from proteins, metals and polymers to controlling aseptic
manufacturing.
· Spectris Dynamics: a global leader in advanced integrated virtual and
physical testing, and high precision sensing solutions through its business,
HBK. Spectris Dynamics is strategically placed, offering broad solutions, with
the ability to integrate both the physical and virtual worlds of test and
measurement. Spectris Dynamics supports some of the world's leading machine
manufacturing, aerospace, automotive, electronics and advanced research
customers.
For the financial year ended 31 December 2024, Spectris reported sales of
£1,299 million, EBITDA of £239 million, and adjusted operating profit of
£203 million. Spectris completed the acquisition of three high-quality,
complementary businesses during 2024 (SciAps Incorporated, Micromeritics
Instrument Corporation, and Piezocryst Advanced Sensorics), delivering
material synergies. Micromeritics and SciAps will be integrated into Malvern
Panalytical in Spectris Scientific, while Piezocryst will be integrated into
Spectris Dynamics. Spectris also completed the disposal of Red Lion Controls
in April 2024.
As at 6 June 2025, being the last Business Day prior to the commencement of
the Offer Period, Spectris' market capitalisation was £2.1 billion.
Spectris' shares are publicly listed on the London Stock Exchange under the
symbol SXS.L. For more information, visit www.spectris.com.
9 STRATEGIC PLANS AND INTENTIONS WITH REGARD TO MANAGEMENT, EMPLOYEES AND PLACES OF BUSINESS
KKR has a long-tenured and extensive track record of investing in high
quality, highly engineered and leading industrial companies.
Strategic plans for Spectris
KKR has closely followed Spectris over several years and believes that
Spectris is a high-quality company with superior products and solutions. KKR
further notes management's impressive progress to date in repositioning
Spectris as a pure-play, premium precision measurement solutions business
focused on attractive sectors with long-term secular tailwinds. KKR also
recognises the distinct culture and values of Spectris and its emphasis on
employee well-being and engagement and deeply shares these values. KKR also
notes Spectris' commitment to the deployment of the Spectris Business System,
and also has a commitment to operational excellence and continuous improvement
and looks forward to continuing to invest in the growth and development of
these value creating strategies. KKR envisions building a global leader in
precision measurement headquartered in the UK.
KKR views Spectris as a highly attractive business group with strong organic
and inorganic growth potential and is highly confident in each of its
divisions. In particular, KKR sees significant long-term growth potential in
Spectris' broad offering of technical products with excellent precision and
accuracy for critical customer applications, its leading positions in the
large and diverse testing, measurement and instrumentation industry, and its
exposure to a diverse range of end segments, geographies, as well as
customers. KKR has also been impressed by Spectris management's successful
pursuit and execution of recent strategic M&A to add complementary
capabilities to the existing portfolio.
KKR believes that private ownership would allow the Spectris management team
much greater focus on strategic, commercial, operational, financial and
M&A activities without the ongoing shorter-term requirements of being a
publicly listed company.
KKR's vision is to support Spectris in capitalising on the long-term growth
potential within each of its brands, support margin enhancement initiatives,
and significantly accelerate inorganic growth through M&A. KKR believes
that it would be an excellent partner to Spectris in pursuing these objectives
on a global scale. By leveraging KKR's experience, global footprint and
capital resources, KKR anticipates meaningful opportunities to work closely
with management to further drive growth and profitability. An example of KKR's
long-term value creation strategy is the formation and expansion of Fortifi
Food Processing Solutions, led by the KKR Industrials team. KKR first acquired
Bettcher, a provider of innovative protein processing tools, in 2021. The
following year, KKR supported Bettcher's transformative acquisition of
Frontmatec, a global supplier of automated protein processing solutions,
forming an end-to-end provider of protein processing solutions and creating
the foundation of the Fortifi platform. Since Frontmatec, Fortifi has
completed seven additional strategic add-on acquisitions, each selected for
its complementary capabilities, strong customer reception and alignment with
the Fortifi platform's long-term goal to become a global leader in full-line
food processing automation equipment. Through KKR's focused buy-and-build
approach, Fortifi's revenue has more than tripled since the initial
acquisition of Bettcher.
Prior to this Announcement, Bidco has been granted access to the Spectris'
senior management for the purposes of confirmatory due diligence. However,
Bidco has not yet had access to sufficiently detailed operational information
to formulate an agreed strategy for Spectris. Following the Scheme becoming
Effective, Bidco intends to conduct, together with the Spectris management
team, a detailed evaluation of Spectris' business and operations to determine
investment and growth priorities and an optimal organisational structure. The
scope of the evaluation will include: (i) a detailed review of Spectris'
existing portfolio of businesses and embedded growth opportunities;
(ii) identifying and executing acquisition opportunities and any appropriate
divestitures; (iii) assessing Spectris' capital structure and ongoing capital
requirements with a view to maximising the opportunities available to
Spectris; (iv) evaluating the internal reporting lines of the various
business units comprising Spectris; and (v) through site visits, planning
sessions and collaborative problem solving, ways to improve profitability (the
"Evaluation"). No specific acquisition or divestment opportunities have been
identified at the time of this Announcement.
Bidco expects that the Evaluation will be completed within a period of
approximately three to nine months from the Effective Date.
Intentions for employees and management
Bidco attaches great importance to the skills and experience of Spectris'
management and employees, recognising the contributions they have made to
Spectris' achievements to date and the crucial role they will play in its
future success. Bidco is looking forward to working with Spectris' management
and employees to support the future development of Spectris, and the quality
of its customer offering, and to ensure that it continues to thrive as a
private company.
KKR intends to fully safeguard and observe the existing contractual and
statutory rights and terms and conditions of employment, including pension
obligations, of the management and employees of Spectris and its subsidiaries
in accordance with applicable law, and does not envisage making any material
changes to the conditions of employment of the Spectris employees.
Like Spectris, KKR believes that great businesses are built by an empowered
and engaged workforce, which is why supporting employees is a core tenet of
KKR's investment approach. KKR places employee voice at the centre of its
workforce strategy across portfolio companies. Consistent with Spectris'
current practice, KKR encourages management at portfolio companies to engage
employees directly to inform decisions, such as through engagement surveys,
town halls, and listening sessions. Engagement surveys are regularly used to
gather feedback, measure progress and hold leaders accountable to workforce
outcomes, and KKR shares Spectris' management's view that these are useful
tools for driving employee engagement. As an example, at Charter Next
Generation, a KKR Industrials portfolio company, this focus on employee voice
led to a dramatic improvement in both engagement scores and retention rates.
KKR has also invested in cultivating empathetic leadership to improve
workforce culture and employee connection. Preliminary research findings have
shown that empathy among executives correlates with higher engagement and
lower attrition. KKR has launched a voluntary pilot program across its
portfolio which is focused on building empathy as a measurable, trainable
leadership trait, among leaders across its portfolio companies. The training
is complemented by practices such as skip-level meetings, surveys and
employee-directed capital investments, which give leaders deeper insight into
frontline experiences and facilitate greater connectivity with employees. KKR
aims to support the full spectrum of worker well-being, including safety,
personal financial management and emergency preparedness. Safety is a
paramount focus in KKR's portfolio companies, and KKR was attracted to
Spectris' already strong performance in this fundamental area. While safety
protects employees in the workplace, personal financial management provides
them with the knowledge and tools to plan their lives beyond it, easing
financial stress and supporting long-term well-being. Complementing this, KKR
has implemented personal financial management coaching programs in over 25
portfolio companies. From corporate finance education to one-on-one coaching,
these programs help employees understand how their work connects to business
performance and how to build financial resilience. Additionally, KKR has
supported the deployment of Employee Assistance Funds at portfolio companies.
These cash grants have provided vital relief in moments of crisis, such as
aiding employees at Chase Corporation (a KKR Industrials portfolio company)
after a devastating tornado.
It is intended that, with effect from the Effective Date, each of the
non-executive directors of Spectris shall resign from office. A number of
PLC-related functions are expected to be impacted upon Spectris ceasing to
operate as a publicly listed company, which may impact a number of roles.
Additionally, KKR also intends to continue to support the existing delivery of
management's current Profit Improvement Programme. KKR also intends to work
with management in identifying and executing additional profit improvement
opportunities, in addition to the Profit Improvement Programme, that can
further enhance the competitiveness and resilience of the Spectris Group,
including by leveraging KKR's in-house operational advisors and resources,
where appropriate. Bidco has not yet developed proposals relating to any
associated headcount reductions, nor how any such headcount reductions would
be implemented. Any affected individuals will be treated, and where necessary
consulted, in a manner consistent with applicable law and Spectris' high
standards, values and practices, and the relevant employees' existing
entitlements.
Save as in accordance with the Profit Improvement Programme, which is being
implemented in 2025, KKR does not intend to make any material reduction to the
headcount or any material change to the conditions of employment or to the
balance of skills and functions of the Spectris Group's employees or
management.
Incentive arrangements
KKR has pioneered a global movement regarding broad-based ownership and
employee engagement as part of its commitment to enabling all colleagues
across its businesses to participate in the benefits of ownership over KKR's
investment period in its portfolio companies. To date, KKR has rolled out over
65 broad-based ownership programs at its portfolio companies, impacting over
160,000 non-senior employees. Bidco is exploring, following completion of the
Acquisition, potentially offering every Spectris employee not eligible for
managerial incentives at Spectris a form of employee ownership participation.
No decision has been made in respect of the terms of, or timing for
implementation of, such incentive scheme.
KKR has not entered into, and has not discussed any form of incentivisation
arrangements with, members of Spectris' management. Bidco expects to put in
place certain incentive arrangements for the management teams of Spectris and
its business units following the Effective Date.
Pension schemes
KKR recognises the importance of upholding Spectris' pension obligations and
ensuring that its pension schemes are appropriately funded in accordance with
statutory and trust deed requirements.
Spectris currently operates a defined benefit pension scheme in the UK which
was closed to accrual of pensionable service in 2009. The Acquisition will not
impact the rights of beneficiaries in this scheme. This pension scheme was
estimated to be in surplus on a technical provisions basis at its most recent
actuarial valuation as at 31 December 2023, and an agreement is currently in
place for Spectris to make further contributions with a view to the scheme
becoming fully funded on a termination or buy-out basis by 2030.
KKR has held constructive discussions with the trustee of the scheme and
intends to provide an escrow account to hold these further contributions, with
a reasonable risk buffer, from completion of the Acquisition so that they are
available to the pension scheme, which will allow the pension trustee to start
the process of securing benefits with an insurer. KKR intends to continue
working with the trustee with a view to putting in place a memorandum of
understanding prior to the Effective Date in order to provide appropriate
comfort regarding the future funding of the scheme.
KKR does not intend to change the current benefits or eligibility criteria for
the UK defined benefit pension scheme.
In addition, Spectris operates a number of smaller defined benefit
arrangements in other jurisdictions, and a number of defined contribution
arrangements in the UK and other jurisdictions. KKR does not intend to change
the current benefits, eligibility criteria or contribution arrangements for
these arrangements.
Intentions for headquarters, locations, fixed assets and research and
development
Bidco does not intend to undertake any material restructurings or change in
the locations of the Spectris Group's fixed assets or places of business,
subject to the outcome of the Evaluation mentioned above. Bidco does not
intend to change the location or functions of Spectris' headquarters in
London, other than in respect of a number of PLC-related functions which will
no longer be required upon Spectris ceasing to operate as a publicly listed
company.
Spectris Foundation
KKR commends the excellent work by the Spectris Foundation in enhancing and
improving access to high-quality educational opportunities in Science,
Technology, Engineering and Mathematics (STEM) for students from all
backgrounds.
The activities of the Spectris Foundation align closely with KKR's commitment
to building a better world through philanthropy, youth engagement and
sustainable community programmes. KKR has a longstanding commitment to the
community of the firm and its portfolio companies. Many KKR portfolio
companies establish annual charitable budgets, and employees are encouraged to
play an active role in selecting mission-aligned nonprofit partners, ensuring
that giving efforts resonate with company values. For instance, at CHI
Overhead Doors, employees chose to support Homes for Our Troops, honouring
their veteran teammates and donating garage doors for homes of veterans. Other
examples include Gardner Denver's partnership with Drop in the Bucket to
increase access to clean water in Uganda, Capital Safety's partnership with
Habitat for Humanity to create safer construction sites and Capsugel's
partnership with Vitamin Angels to support prenatal care for underserved
communities. These efforts underscore KKR's belief that shared success
includes positive impact in the communities where its companies operate.
Following completion, KKR intends to continue to support Spectris in its
existing commitments to the Spectris Foundation, including the continuing
provision of certain current support services and a minimum £1 million annual
contribution, in each case, from Spectris to the Spectris Foundation to
support their enviable work. In addition, KKR intends to explore opportunities
to expand the Spectris Foundation's activities through strategic initiatives
and partnerships with KKR's other charitable endeavours.
Trading facilities
Spectris Shares are currently listed on the Official List and admitted to
trading on the Main Market of the London Stock Exchange.
As set out in paragraph 14, subject to the Acquisition becoming Effective,
it is intended that requests will be made to the FCA to cancel the listing of
the Spectris Shares on the Official List and to the London Stock Exchange to
cancel trading in Spectris Shares on the London Stock Exchange's main market
for listed securities.
Following completion of the Acquisition, Bidco intends to re-register Spectris
as a private company.
None of the statements in this paragraph 9 is a "post-offer undertaking" for the purposes of Rule 19.5 of the Code.
10 FINANCING OF THE ACQUISITION
The Cash Consideration payable by Bidco to Spectris Shareholders will be
financed by a combination of:
· equity to be drawn from funds, vehicles and/or accounts advised
and/or managed by KKR, which includes a passive minority co-investment by
certain investment entities managed or advised by Neuberger Berman and/or its
affiliates; and
· debt to be provided under the Interim Facilities Agreement.
Other potential equity investors may take indirect minority interests in Bidco
during the Offer Period or once the Acquisition completes.
In respect of the Interim Facilities Agreement, Bidco has agreed that, subject
to certain customary carve-outs, it shall not, without the approval of Interim
Lenders, waive certain conditions contained in Appendix 1 to this Announcement
where such waiver would be materially adverse to the interests of the Interim
Lenders.
J.P. Morgan Cazenove, as financial adviser to Bidco, is satisfied that
sufficient resources are available to Bidco to satisfy in full the Cash
Consideration payable to Spectris Shareholders pursuant to the terms of the
Acquisition.
Information on Neuberger Berman
Neuberger Berman is an employee-owned, private, independent investment manager
founded in 1939 with over 2,800 employees in 26 countries. The firm manages
US$508 billion of equities, fixed income, private equity, real estate and
hedge fund portfolios for global institutions, advisors and individuals.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
11 ACQUISITION RELATED ARRANGEMENTS
Confidentiality Agreement
Kohlberg Kravis Roberts & Co. Partners LLP ("KKR LLP") and Spectris
entered into the Confidentiality Agreement on 10 June 2025 pursuant to which
KKR LLP has undertaken to keep certain information relating to the Acquisition
and Spectris confidential and not to disclose such information to third
parties (except to certain permitted parties, including certain providers of
debt or equity in certain circumstances), unless required by applicable laws
or regulations, and to use such confidential information for the sole purpose
of evaluating, negotiating, advising upon, financing or implementing the
potential Acquisition.
The Confidentiality Agreement also contains undertakings from KKR LLP that,
for a period of 18 months from the date of the Confidentiality Agreement, KKR
LLP shall not approach certain of Spectris' employees or officers without the
prior written consent of Spectris nor shall KKR LLP or its affiliates employ
or otherwise engage certain of Spectris' employees (save as set out in the
Confidentiality Agreement).
The Confidentiality Agreement also includes customary standstill arrangements
that restrict KKR LLP's ability to make announcements or acquire interests in
Spectris Shares. These restrictions ceased to apply on 23 June 2025 upon the
release of the Advent Announcement.
Clean Team Agreement
KKR LLP and Spectris entered into a clean team agreement on 12 June 2025 which
sets out, among other things, certain procedures and principles to be followed
to ensure adequate treatment of certain commercially sensitive confidential
information between Spectris and KKR LLP's clean team individuals and/or
external advisers.
Joint Defence Agreement
On 17 June 2025, KKR LLP, Spectris and their respective legal counsel entered
into the Joint Defence Agreement to ensure that any exchange and/or disclosure
of confidential information relating to the parties and in relation to, in
particular, the anti-trust workstream, only takes place between their
respective legal counsel and external experts, does not diminish in any way
the confidentiality of such materials, and does not result in a waiver of any
privilege, right or immunity that might otherwise be available.
Co-operation Agreement
Bidco and Spectris entered into the Co-operation Agreement on or around the
date of this Announcement pursuant to which: (i) Spectris has agreed to
co-operate with Bidco to assist the satisfaction of certain regulatory
conditions and Bidco has entered into commitments in relation to obtaining
regulatory clearances; (ii) Bidco has agreed to provide Spectris with certain
information for the purposes of the Scheme Document and to otherwise assist
with the preparation of the Scheme Document; (iii) Bidco has agreed to certain
provisions if the Scheme should switch to a Takeover Offer; and (iv) Spectris
and Bidco have agreed certain arrangements in respect of employees and the
Spectris Share Plans.
In addition, Bidco has agreed not to (and to procure that each investment fund
within KKR's private markets strategies group at such time, will not) take any
actions which would, or would be reasonably likely to, prevent or delay the
satisfaction of the regulatory conditions (provided that such obligation shall
not apply to any portfolio company which is not controlled by an investment
fund(s) within KKR's private markets strategies group at such time).
The Co-operation Agreement may be terminated, inter alia:
(i) if the Acquisition is withdrawn, terminates or lapses, except in certain circumstances including, but not limited to, where Bidco is exercising its right to switch to a Takeover Offer in accordance with the terms of the Co-operation Agreement;
(ii) if, prior to the Long Stop Date, any Condition is (or has become) incapable of satisfaction;
(iii) if, prior to the Long Stop Date, a third party announces a firm intention to make an offer for the entire issued, and to be issued, share capital of Spectris, which completes, becomes effective or is declared or becomes unconditional in all respects;
(iv) at Bidco's election if the Spectris Directors withdraw their unanimous recommendation of the Acquisition or if the Spectris Directors recommend a competing proposal;
(v) if the Scheme does not become Effective in accordance with its terms by the Long Stop Date; or
(vi) otherwise as agreed between Bidco and Spectris.
12 SPECTRIS SHARE PLANS
Participants in the Spectris Share Plans shall be contacted regarding the
effect of the Acquisition on their options and awards under the Spectris Share
Plans and appropriate proposals will be made to such participants in due
course.
Details of the impact of the Scheme on each of the Spectris Share Plans and
the proposals will be set out in the Scheme Document and in separate letters
to be sent to participants in the Spectris Share Plans.
13 STRUCTURE OF AND CONDITIONS TO THE ACQUISITION
It is intended that the Acquisition will be implemented by means of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act,
although Bidco reserves the right to implement the Acquisition by means of a
Takeover Offer (subject to Panel consent and the terms of the Co-operation
Agreement).
The purpose of the Scheme is to provide for Bidco to become the owner of the
entire issued and to be issued share capital of Spectris. This is to be
achieved by the transfer of Spectris Shares to Bidco, in consideration for
which the Spectris Shareholders who are on the Spectris register of members at
the Scheme Record Time shall receive the Cash Consideration in respect of each
of their Spectris Shares on the basis set out in paragraph 2 of this
Announcement.
Any Spectris Shares issued before the Scheme Record Time will be subject to
the terms of the Scheme. The Resolutions to be proposed at the General Meeting
will, among other matters, provide that the Spectris Articles be amended to
incorporate provisions requiring any Spectris Shares issued or transferred
after the Scheme Record Time (other than to Bidco and or its nominee(s)) to be
automatically transferred to Bidco on the same terms as the Acquisition (other
than terms as to timings and formalities, and subject to the Scheme becoming
Effective). The provisions of the Spectris Articles (as amended) will avoid
any person (other than Bidco and its nominee(s)) holding shares in the capital
of Spectris after the Effective Date.
The Acquisition is subject to the Conditions and certain further terms set out
in Appendix 1 to this Announcement and to the full terms and conditions to
be set out in the Scheme Document, including, among other things:
· the approval of the Scheme by a majority in number of the Scheme
Shareholders who are present and vote, whether in person or by proxy, at the
Court Meeting and who represent not less than 75 per cent. in value of the
Scheme Shares held by those Scheme Shareholders;
· the passing of the Resolutions by the requisite majority of Spectris
Shareholders at the General Meeting;
· the Scheme being sanctioned by the Court (without modification, or
with modification on terms agreed by Bidco and Spectris) and an office copy of
the Court Order being delivered to the Registrar of Companies; and
· the receipt of certain antitrust approvals including in the EU, US
and China and certain foreign investment approvals including in the UK.
The Scheme shall lapse if:
· the Court Meeting and the General Meeting are not held on or before
the 22nd day after the expected date of the Court Meeting and the General
Meeting to be set out in the Scheme Document (or such later date, if any as
(i) Bidco and Spectris may agree or (ii) (in a competitive situation) as may
be specified by Bidco with the consent of the Panel, and in each case that, if
so required, the Court may allow);
· the Court Sanction hearing is not held by the 22nd day after the
expected date of such hearing to be set out in the Scheme Document in due
course (or such later date, if any as (i) Bidco and Spectris may agree or (ii)
(in a competitive situation) as may be specified by Bidco with the consent of
the Panel, and in each case that, if so required, the Court may allow); or
· the Scheme does not become effective by no later than 11.59 p.m. on
the Long Stop Date,
provided, however, that the deadlines for the timing of the Court Meeting, the
General Meeting and the Court Sanction hearing as set out above may be waived
by Bidco.
It is expected that the Scheme Document, containing further information about
the Acquisition and notices of the Court Meeting and General Meeting, together
with Forms of Proxy, will be published within 28 days of the date of this
Announcement (unless a later date is agreed with the Panel).
Subject to the satisfaction or waiver of all relevant conditions, including
the Conditions and certain further terms set out in Appendix 1 to this
Announcement and to be set out in the Scheme Document, and subject to the
approval and availability of the Court, it is expected that the Scheme will
become Effective in or by Q1 2026. An expected timetable of principal events
relating to the Acquisition will be included in the Scheme Document.
On the Scheme becoming Effective: (i) it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the General Meeting (and, if they attended and voted, whether
or not they voted in favour of the Scheme at the Court Meeting or in favour of
or against the Resolutions at the General Meeting); and (ii) share
certificates in respect of Scheme Shares will cease to be valid and should be
returned to Spectris or destroyed and entitlements to Scheme Shares held
within the CREST system will be cancelled. The consideration payable under the
Scheme will be despatched to Scheme Shareholders by Bidco within 14 days of
the Effective Date.
The Scheme will be governed by English law and will be subject to the
jurisdiction of the Court. The Scheme will be subject to the applicable
requirements of the Code, the Panel, the London Stock Exchange, the Court and
the FCA.
14 CANCELLATION OF ADMISSION TO LISTING AND RE-REGISTRATION AS A PRIVATE COMPANY
It is intended that dealings in Spectris Shares will be suspended shortly
before the Effective Date at a time to be set out in the Scheme Document. It
is further intended that applications will be made to the London Stock
Exchange to cancel trading in Spectris Shares on the Main Market of the London
Stock Exchange, and to the FCA to cancel the listing of Spectris Shares on the
Commercial Companies (Equity Shares) category of the Official List, in each
case with effect from or shortly following the Effective Date.
On the first Business Day after the Effective Date, entitlements to Spectris
Shares held within the CREST system will be cancelled, and share certificates
in respect of Spectris Shares will cease to be valid.
It is also intended that, following the Effective Date, Spectris will be
re-registered as a private limited company under the relevant provisions of
the Companies Act.
15 INTERESTS IN SPECTRIS SHARES
As at the Last Practicable Date, neither Bidco, the Bidco Directors, nor, so
far as Bidco is aware, any person acting in concert with Bidco for the
purposes of the Acquisition, had:
(i) any interest in, or right to subscribe for, any relevant securities of Spectris;
(ii) any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, any relevant securities of Spectris;
(iii) procured an irrevocable commitment or letter of intent to accept the terms of the Acquisition in respect of relevant securities of Spectris;
(iv) borrowed or lent, or entered into any financial collateral arrangements or dealing arrangements in respect of, any relevant securities of Spectris; or
(v) is party to any Dealing Arrangement in relation to relevant securities of Spectris.
16 OVERSEAS SHAREHOLDERS
The availability of the Acquisition and the distribution of this Announcement
to Spectris Shareholders who are not resident in the United Kingdom may be
affected by the laws and regulations of the relevant jurisdiction in which
they are located. Such persons should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdiction. Spectris
Shareholders who are in any doubt regarding such matters should consult an
appropriate independent professional adviser in the relevant jurisdiction
without delay.
Further details in relation to Spectris Shareholders in overseas jurisdictions
will be contained in the Scheme Document.
This Announcement does not constitute an offer for sale of any securities or
an offer or an invitation, or solicitation of an offer, to purchase any
securities. Spectris Shareholders are advised to read carefully the Scheme
Document and related Forms of Proxy once these have been despatched.
17 DOCUMENTS AVAILABLE ON WEBSITE
Copies of the following documents will be available promptly on Bidco's and
Spectris' websites at
https://www.documentdisplay.com/possible-offer-for-spectris/
(https://www.documentdisplay.com/possible-offer-for-spectris/) and
www.spectris.com, respectively by no later than 12 noon on the Business Day
following the date of this Announcement, subject to certain restrictions
relating to persons residing in Restricted Jurisdictions until the end of the
Offer Period:
(i) this Announcement;
(ii) the Confidentiality Agreement;
(iii) the Clean Team Agreement;
(iv) the Joint Defence Agreement;
(v) the Co-operation Agreement;
(vi) the documents entered into for the financing of the Acquisition referred to in paragraph 10 above;
(vii) the consent letters from each of BofA Securities, Barclays, Goldman Sachs, Rothschild & Co and J.P. Morgan Cazenove referred to in paragraph 19 below.
None of the content of any of the websites referred to in this Announcement
nor the content of any website accessible from hyperlinks is incorporated
into, or forms part of, this Announcement.
18 RESERVING THE RIGHT TO PROCEED BY WAY OF A TAKEOVER OFFER
Subject to obtaining the consent of the Panel and the terms of the
Co-operation Agreement, Bidco reserves the right to elect to implement the
Acquisition by way of a Takeover Offer as an alternative to the Scheme.
In such event, the Takeover Offer will be implemented on the same terms and
conditions, so far as applicable, as those which would apply to the Scheme
subject to appropriate amendments to reflect the change in method of effecting
the Acquisition, including (without limitation) the inclusion of an acceptance
condition set at a level permitted by the Panel, being in any case more than
50 per cent. of the voting rights normally exercisable at a general meeting of
Spectris, including, for this purpose, any such voting rights attaching to
Spectris Shares that are issued before the Takeover Offer becomes or is
declared unconditional, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise.
19 GENERAL
The Acquisition will be subject to the Conditions and other terms set out in
Appendix 1 to this Announcement and to the full terms and conditions which
will be set out in the Scheme Document. The Scheme Document will be despatched
to Spectris Shareholders within 28 days of the date of this Announcement
(unless a later date is agreed with the Panel).
In deciding whether or not to vote or procure votes to approve the Scheme at
the Court Meeting or to vote or procure votes in favour of the Resolutions
relating to the Scheme at the General Meeting in respect of their Spectris
Shares, Spectris Shareholders should rely on the information contained, and
follow the procedures described, in the Scheme Document.
BofA Securities, Barclays, Goldman Sachs, Rothschild & Co and J.P. Morgan
Cazenove have each given and not withdrawn their consent to the publication of
this Announcement with the inclusion in this Announcement of the references to
their names in the form and context in which they appear.
The bases and sources for certain financial information contained in this
Announcement are set out in Appendix 2 to this Announcement. The details
and bases of belief of each of the Spectris Profit Forecasts are contained in
Appendix 3. The defined terms used in this Announcement are set out in
Appendix 4 to this Announcement.
Enquiries
Spectris
Teneo
(PR Adviser to Spectris)
Martin Robinson +44 79 7707 1178
Giles Kernick
+44 78 1791 3082
Goldman Sachs International +44 20 7774 1000
(Lead Financial Adviser to Spectris)
Anthony Gutman
Nick Harper
Harry Webster
Cara Pazdon
Rothschild & Co +44 20 7280 5000
(Lead Financial Adviser to Spectris)
Ravi Gupta
Sabina Pennings
Alistair Allen
Nick Ivey
BofA Securities +44 20 7628 1000
(Rule 3 Adviser, Joint Financial
Adviser and Corporate Broker to Spectris)
Ed Peel
James Robertson
Rowland Phillips
George Whitlam
Tom Brown
Barclays +44 20 7623 2323
(Joint Financial Adviser and Corporate
Broker to Spectris)
Neal West
Adrian Beidas
Callum West
Eoin Healy
Bidco
J.P. Morgan Cazenove +44 20 3493 8000
(Sole Financial Adviser to KKR and Bidco)
Richard Walsh
Dwayne Lysaght
Jonty Edwards
Stuart Jempson
FGS Global +44 20 7251 3801
(PR Adviser to KKR and Bidco)
Faeth Birch
Alastair Elwen
Slaughter and May is acting as legal adviser to Spectris.
Kirkland & Ellis International LLP and Simpson Thacher & Bartlett LLP
(regulatory) are acting as legal advisers to KKR and Bidco.
The person responsible for arranging the release of this Announcement on
behalf of Spectris is Rebecca Dunn, Spectris Head of Corporate Affairs.
Important notices relating to financial advisers
Goldman Sachs International ("Goldman Sachs"), which is authorised by the PRA
and regulated by the FCA and the PRA in the United Kingdom, is acting
exclusively for Spectris and no one else in connection with the matters
referred to in this Announcement and will not be responsible to anyone other
than Spectris for providing the protections afforded to clients of Goldman
Sachs, or for providing advice in relation to the matters referred to in this
Announcement.
N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is
authorised and regulated by the FCA in the United Kingdom, is acting
exclusively as financial adviser to Spectris and for no one else in connection
with the matters referred to in this Announcement and will not be responsible
to anyone other than Spectris for providing the protections afforded to
clients of Rothschild & Co, nor for providing advice in relation to the
matters referred to in this Announcement. Neither Rothschild & Co nor any
of its affiliates (nor their respective directors, officers, employees or
agents) owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Rothschild & Co in
connection with this Announcement, any statement contained in this
Announcement or otherwise. No representation or warranty, express or implied,
is made by Rothschild & Co as to the contents of this Announcement.
Merrill Lynch International ("BofA Securities"), which is authorised by the
Prudential Regulatory Authority and regulated by the Financial Conduct
Authority and the Prudential Regulatory Authority in the United Kingdom, is
acting exclusively for Spectris and for no one else in connection with the
Acquisition and will not be responsible to anyone other than Spectris for
providing the protections afforded to its clients or for providing advice in
relation to the matters referred to in this Announcement. Neither BofA
Securities, nor any of its affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of BofA
Securities in connection with this Announcement, any statement contained
herein or otherwise.
Barclays Bank PLC, acting through its investment bank ("Barclays"), which is
authorised by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for Spectris and no one else in connection
with the Acquisition and will not be responsible to anyone other than Spectris
for providing the protections afforded to clients of Barclays nor for
providing advice in relation to the Acquisition or any other matter referred
to in this Announcement.
In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the US Exchange Act, Barclays and its affiliates will continue to
act as exempt principal trader in Spectris securities on the London Stock
Exchange. These purchases and activities by exempt principal traders which are
required to be made public in the United Kingdom pursuant to the Code will be
reported to a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com. This information
will also be publicly disclosed in the United States to the extent that such
information is made public in the United Kingdom.
J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove") and which is authorised in
the United Kingdom by the PRA and regulated in the United Kingdom by the PRA
and the FCA, is acting as financial advisor exclusively for KKR and Bidco and
no one else in connection with the Acquisition and will not regard any other
person as its client in relation to the Acquisition and will not be
responsible to anyone other than KKR and Bidco for providing the protections
afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for
providing advice in relation to the Acquisition or any other matter or
arrangement referred to herein.
Further information
This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer, solicitation or invitation to
purchase, otherwise acquire, subscribe for, exchange, sell or otherwise
dispose of, any securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any
sale, purchase issuance or transfer of securities of Spectris in any
jurisdiction in contravention of applicable law. The Acquisition will be
implemented solely through the Scheme Document (and the accompanying Forms of
Proxy), which will contain the full terms and conditions of the Acquisition,
including details of how to vote in respect of the Acquisition. Any decision
in respect of the Acquisition should be made only on the basis of the
information in the Scheme Document (or, if the Acquisition is implemented by
way of a Takeover Offer, the Takeover Offer document).
This Announcement does not constitute a prospectus, prospectus equivalent or a
prospectus exempted document.
This Announcement has been prepared for the purpose of complying with English
law and the Code and the information disclosed may not be the same as that
which would have been disclosed if this Announcement had been prepared in
accordance with the laws of jurisdictions outside England and Wales.
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.
Overseas Shareholders
The release, publication or distribution of this Announcement in whole or in
part, directly or indirectly, in, into or from jurisdictions other than the UK
and the availability of the Acquisition to Spectris Shareholders who are not
resident in the UK may be restricted by law and therefore any persons who are
not resident in the UK or who are subject to the laws of any jurisdiction
other than the UK (including Restricted Jurisdictions) should inform
themselves about, and observe, any applicable legal or regulatory
requirements. In particular, the ability of persons who are not resident in
the UK or who are subject to the laws of another jurisdiction to participate
in the Acquisition or to vote their Spectris Shares in respect of the Scheme
at the Court Meeting, or to execute and deliver Forms of Proxy appointing
another to vote at the Court Meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located or to which they
are subject. Any failure to comply with applicable legal or regulatory
requirements of any jurisdiction may constitute a violation of securities laws
or regulations in that jurisdiction. To the fullest extent permitted by
applicable law and regulation, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Bidco or required by the Code, and permitted by
applicable law and regulation, the Acquisition shall not be made available,
directly or indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
The Acquisition will be subject to the applicable requirements of English law,
the Code, the Panel, the London Stock Exchange and the FCA.
Copies of this Announcement and any formal documentation relating to the
Acquisition are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in or into or from any Restricted
Jurisdiction or any jurisdiction where to do so would constitute a violation
of the laws or regulations of such jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported vote in
respect of acceptance of the Acquisition. If the Acquisition is implemented by
way of Takeover Offer (unless otherwise permitted by applicable law or
regulation), the Takeover Offer may not be made, directly or indirectly, in or
into, from, or by use of the mails or any other means or instrumentality
(including, without limitation, facsimile, email or other electronic
transmission, telex or telephone) or interstate or foreign commerce of, or any
facility of a national, state or other securities exchange of any Restricted
Jurisdiction and the Takeover Offer will not be capable of acceptance by any
such use, means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Spectris Shareholders in overseas jurisdictions
will be contained in the Scheme Document.
Additional information for U.S. investors
U.S. Spectris Shareholders should note that the Acquisition relates to an
offer for the shares of a UK company and is being made by means of a scheme of
arrangement provided for under English company law. The Acquisition is
therefore not subject to the tender offer rules or the proxy solicitation
rules under the U.S. Exchange Act, as amended. Accordingly, the Acquisition is
subject to the requirements and practices applicable to a scheme of
arrangement involving a target company in the UK listed on the London Stock
Exchange, which differ from the requirements of the U.S. tender offer and
proxy solicitation rules. If, in the future, Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer and determines to extend
the Takeover Offer into the U.S., the Acquisition will be made in compliance
with applicable U.S. tender offer rules and regulations.
The financial information with respect to Spectris included in this
Announcement and to be included the Scheme Document has been or will have been
prepared in accordance with IFRS and thus may not be comparable to financial
information of U.S. companies or companies whose financial statements are
prepared in accordance with generally accepted accounting principles in the
U.S.
It may be difficult for U.S. Spectris Shareholders to enforce their rights and
any claims they may have arising under the U.S. federal securities laws in
connection with the Acquisition, since Spectris and Bidco are each located in
a country other than the United States, and some or all of their respective
officers and directors may be residents of countries other than the United
States. U.S. Spectris Shareholders may not be able to sue Spectris or Bidco,
or their respective officers or directors in a non-U.S. court for violations
of the U.S. securities laws. Further, it may be difficult to compel Spectris
or Bidco and their respective affiliates to subject themselves to the
jurisdiction or judgment of a U.S. court for violations of the U.S. securities
laws.
The receipt of Cash Consideration pursuant to the Scheme by U.S. Spectris
Shareholders as consideration for the transfer of its Spectris Shares pursuant
to the Scheme may be a taxable transaction for U.S. federal income tax
purposes and under applicable U.S. state and local, as well as foreign and
other, tax laws. Each Spectris Shareholder (including U.S. Spectris
Shareholders) is urged to consult their independent professional adviser
immediately regarding the tax consequences of the Acquisition applicable to
them.
Neither the SEC nor any U.S. state securities commission has approved,
disproved or passed judgment upon the fairness or the merits of the
Acquisition or determined if this Announcement is adequate, accurate or
complete. Any representation to the contrary is a criminal offence in the U.S.
In accordance with normal United Kingdom practice and pursuant to Rule
14e-5(b) of the U.S. Exchange Act, Bidco, certain of its affiliated companies
and their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, shares or other securities
of Spectris outside of the U.S., other than pursuant to the Acquisition, until
the date on which the Acquisition and/or Scheme becomes effective, lapses or
is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the US
Exchange Act, J.P. Morgan Cazenove (and/or certain of its affiliates) will
continue to act as exempt principal traders in Spectris shares on the London
Stock Exchange. If such purchases or arrangements to purchase were to be made,
they would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and would comply with applicable law,
including the U.S. Exchange Act. Any information about such purchases or
arrangements to purchase 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 at www.londonstockexchange.com
(http://www.londonstockexchange.com) .
Forward-looking statements
This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and Spectris contain statements which are, or
may be deemed to be, "forward-looking statements". All statements, other than
statements of historical fact are, or may be deemed to be, forward-looking
statements. Forward-looking statements are prospective in nature and are not
based on historical facts, but rather on assumptions, expectations,
valuations, targets, estimates, forecasts and projections of Bidco and
Spectris about future events, and are therefore subject to risks and
uncertainties which could cause actual results, performance or events to
differ materially from those expressed or implied by the forward-looking
statements. The forward-looking statements contained in this Announcement
include statements relating to the expected effects of the Acquisition on the
Bidco Group, the Spectris Group and the Enlarged Group, the expected timing
and scope of the Acquisition and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified by the use
of forward-looking words such as "plans", "prepares", "expects" or "does not
expect", "is expected to", "is subject to", "budget", "targets", "aims",
"scheduled", "estimates", "forecast", "intends", "anticipates", "seeks",
"prospects", "potential", "possible", "assume" or "believes", or variations of
such words and phrases or statements that certain actions, events or results
"may", "could", "should", "would", "might" or "will" be taken, occur or be
achieved. Although Bidco and Spectris believe that the expectations reflected
in such forward-looking statement are reasonable, Bidco and Spectris can give
no assurance that such expectations will prove to be correct. By their nature,
forward-looking statements involve risks (known and unknown) and uncertainties
(and other factors that are in many cases beyond the control of Bidco and/or
Spectris) because they relate to events and depend on circumstances that may
or may not occur in the future.
There are a number of factors that could affect the future operations of the
Bidco Group, the Spectris Group and/or the Enlarged Group and that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements. These factors include the
satisfaction (or, where permitted, waiver) of the Conditions, as well as
additional factors, such as: domestic and global business and economic
conditions; asset prices; market related risks such as fluctuations in
interest rates and exchange rates, industry trends, competition, changes in
the behaviour of other market participants, changes in government and
regulation, changes in the policies and actions of governments and/or
regulatory authorities (including changes related to capital, tax and
tariffs), changes in political and economic stability (including exposures to
terrorist activities, the UK's exit from the European Union, Eurozone
instability, the Russia-Ukraine conflict, the ongoing conflict in the Middle
East, disruption in business operations due to reorganisation activities,
interest rate, inflation, deflation and currency fluctuations), the timing
impact and other uncertainties of future or planned acquisitions or disposals
or offers, the inability of the Enlarged Group to realise successfully any
anticipated benefits or savings when the Acquisition is implemented (including
changes to the board and/or employee composition of the Enlarged Group), the
inability of the Bidco Group to integrate successfully the Spectris Group's
operations and programmes when the Acquisition is implemented, the Enlarged
Group incurring and/or experiencing unanticipated costs and/or delays
(including IT system failures, cyber-crime, fraud and pension scheme
liabilities), or difficulties relating to the Acquisition when the Acquisition
is implemented. Other unknown or unpredictable factors could affect future
operations and/or 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.
Each forward-looking statement speaks only as of the date of this
Announcement. Neither the Bidco Group nor the Spectris Group, nor any of their
respective associates or directors, officers or advisers, provides any
representation, warranty, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this
Announcement will actually occur. Forward-looking statements involve inherent
risks and uncertainties. All forward-looking statements contained in this
Announcement are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Readers are cautioned not
to place undue reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including under the
Code, the UK Market Abuse Regulation and the DTRs), neither the Bidco Group
nor the Spectris Group is under or undertakes any obligation, and each of the
foregoing expressly disclaims any intention or obligation, to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
No profit forecasts or estimates or quantified financial benefits statements
Each of the Spectris Profit Forecasts is a profit forecast for the purposes of
Rule 28 of the Code. Each of the Spectris Profit Forecasts, and the
assumptions and basis of preparation on which each such Spectris Profit
Forecast is based, as well as the relevant Spectris Directors' confirmation,
in each case, as required by Rule 28.1 of the Code, are set out in Appendix 3
of this Announcement.
Other than the Spectris Profit Forecasts, nothing in this Announcement is
intended, or is to be construed, as a profit forecast, profit estimate or
quantified financial benefits statement for any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
share for Bidco or Spectris for the current or future financial years, will
necessarily match or exceed the historical published earnings or earnings per
share for Bidco or Spectris, as appropriate.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following the
commencement of the Offer Period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th Business Day following the announcement in which any
securities exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm (London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by Spectris Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Spectris may be
provided to Bidco during the Offer Period as required under section 4 of
Appendix 4 to the Code to comply with Rule 2.11(c) of the Code.
Publication on a website and availability of hard copies
This Announcement and the documents required to be published pursuant to Rule
26 of the Code will be available, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, on Bidco's website at
https://www.documentdisplay.com/possible-offer-for-spectris/
(https://www.documentdisplay.com/possible-offer-for-spectris/) and on
Spectris' website at www.spectris.com by no later than 12 noon (London time)
on the Business Day following the publication of this Announcement. Neither
the content of the websites referred to in this Announcement nor the content
of any website accessible from hyperlinks in this Announcement is incorporated
into, or forms part of, this Announcement.
Spectris Shareholders, persons with information rights and participants in the
Spectris Share Plans may, subject to applicable securities laws, request a
hard copy of this Announcement (and any information incorporated into it by
reference to another source) by contacting Spectris' registrars, Equiniti,
between 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (excluding
public holidays in England and Wales) on 0371 384 2030 within the United
Kingdom or on +44 121 415 7047 from overseas, or by submitting a request in
writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex,
BN99 6DA, United Kingdom, with an address to which the hard copy may be sent.
Calls are charged at the standard geographic rate and will vary by provider.
For persons who receive a copy of this Announcement in electronic form or via
a website notification, a hard copy of this Announcement will not be sent
unless so requested. Spectris Shareholders may, subject to applicable
securities laws, also request that all future documents, announcements and
information to be sent in relation to the Acquisition should be in hard copy
form.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Appendix 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION
The Acquisition will be subject to the terms and conditions set out in this
Appendix and in the Scheme Document.
Part A
Long Stop Date
1. The Acquisition is conditional on the Scheme becoming
unconditional and Effective, subject to the Code, by no later than 11.59 p.m.
(London Time) on the Long Stop Date.
Scheme approval
2. The Scheme will be subject to the following conditions:
2.1
(i) its approval by a majority in number of Scheme
Shareholders who are on the register of members of Spectris at the Scheme
Voting Record Time and who, in each case, are present and vote, whether in
person or by proxy, at the Court Meeting and who represent not less than 75
per cent. in value of the Scheme Shares held by those Scheme Shareholders (or
the relevant class or classes thereof, if applicable); and
(ii) such Court Meeting (and any separate class meeting which
may be required by the Court) being held on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme Document in due
course (or such later date as: (a) Bidco and Spectris may agree; or (b) (in a
competitive situation) as may be specified by Bidco with the consent of the
Panel, and in each case that, if so required, the Court may allow);
2.2
(i) the Resolutions being duly passed by the requisite
majority or majorities of Spectris Shareholders at the General Meeting; and
(ii) the General Meeting being held on or before the 22nd day
after the expected date of the Court Meeting to be set out in the Scheme
Document in due course (or such later date as: (a) Bidco and Spectris may
agree or: (b) (in a competitive situation) as may be specified by Bidco with
the consent of the Panel, and in each case that, if so required, the Court may
allow); and
2.3
(i) the sanction of the Scheme by the Court (with or without
modification but subject to any such modification being acceptable to Bidco
and Spectris) (the "Court Sanction") and the delivery of a copy of the Court
Order to the Registrar of Companies; and
(ii) the Sanction Hearing being held on or before the 22nd day
after the expected date of the Sanction Hearing to be set out in the Scheme
Document in due course (or such later date, if any as: (a) Bidco and Spectris
may agree; or (b) (in a competitive situation) as may be specified by Bidco
with the consent of the Panel, and in each case that, if so required, the
Court may allow).
In addition, subject as stated in Part B below and to the requirements of
the Panel, the Acquisition will be conditional on the following Conditions
and, accordingly, the necessary actions to make the Scheme Effective will not
be taken unless the following Conditions (as amended, if appropriate) have
been satisfied or, where relevant, waived:
3. Antitrust
3.1 China
3.1.1 China's State Administration for Market Regulation ("SAMR")
issuing a notice confirming that it will not conduct further review of the
Acquisition or approving the Acquisition with or without conditions, on terms
reasonably satisfactory to Bidco; or the applicable review period pursuant to
the PRC Anti-Monopoly Law, including any extension of such period, having
elapsed and no prohibitions having been raised or restrictive conditions that
are not on terms reasonably satisfactory to Bidco having been imposed by SAMR
in relation to the Acquisition;
3.2 European Union
3.2.1 the European Commission issuing a decision on terms
reasonably satisfactory to Bidco, under Articles 6(1)(a), 6(1)(b), 6(2), 8(1)
or 8(2) of Council Regulation (EC) 139/2004 (as amended) (the "Regulation"),
in relation to the Acquisition or any matter arising from or relating to the
Acquisition (or being deemed to have taken such a decision under Article 10 of
the Regulation); and
3.3 United States
3.3.1 insofar as the Acquisition satisfies the premerger
notification thresholds identified in the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"): all filings
having been made and all or any applicable waiting periods (including any
extensions thereof or any time periods set forth in any timing agreements with
the United States antitrust authorities) under the HSR Act and the rules and
regulations thereunder having expired, lapsed or been terminated as
appropriate in each case in respect of the Acquisition, or any matters arising
from the Acquisition; and no law, injunction (whether temporary, preliminary
or permanent), or legal order having been enacted, entered, promulgated or
enforced by any United States federal or state court or antitrust authority of
Competent jurisdiction which prevents, makes illegal, prohibits, restrains or
enjoins the consummation of the Acquisition.
4. Foreign direct investment and national security
4.1 Australia
4.1.1 either: (A) Bidco having received written notice from the
Commonwealth Treasurer (or his delegate) under the Australian Foreign
Acquisitions and Takeovers Act 1975 (Cth) or its successor legislation
("FATA") to the effect that the Commonwealth Government does not object to the
Acquisition, on either an unconditional basis or subject to conditions
reasonably satisfactory to Bidco; or (B) following notice of the Acquisition
having been given by Bidco under FATA, the Commonwealth Treasurer (or his
delegate) ceasing to be empowered to make an order in respect of the
Acquisition due to the expiry of the applicable statutory waiting period under
Division 2 of Part 3 of FATA;
4.2 Austria
4.2.1 insofar as the Acquisition constitutes a notifiable
transaction pursuant to the Austrian Investment Control Act (the "ICA"), the
Austrian Federal Ministry for Economy, Energy and Tourism: (A) having granted
a legally binding non-jurisdiction decision or such a decision being deemed to
have been granted; (B) having granted unconditional and legally binding
clearance under the ICA; (C) having granted unconditional and legally binding
clearance by means of the expiry of the deadline provided by the ICA for the
review of the Acquisition without the adoption of an express decision; or (D)
having granted conditional clearance under the ICA on terms reasonably
satisfactory to Bidco;
4.3 Belgium
4.3.1 insofar as the Acquisition constitutes a notifiable
transaction within the meaning of Article 4 of the Belgian Cooperation
Agreement of 30 November 2022 establishing a foreign direct investment
screening mechanism (the "Belgian Cooperation Agreement"), the Interfederal
Screening Commission (the "ISC"): (A) having granted (or being deemed as of
right, or by operation of the Belgian Cooperation Agreement, to have been
granted by the ISC) unconditional clearance under the Belgian Cooperation
Agreement; (B) having granted unconditional clearance by means of the expiry
of the deadline provided by the Belgian Cooperation Agreement for the review
of the Acquisition without the adoption of an express decision; or (C) having
granted (or being deemed as of right, or by operation of the Belgian
Cooperation Agreement, to have been granted by the ISC) conditional clearance
under the Belgian Cooperation Agreement on terms reasonably satisfactory to
Bidco;
4.4 Denmark
4.4.1 insofar as the Acquisition constitutes a notifiable
transaction pursuant to the Consolidated Act No. 1256 of 27 October 2023 on
Screening of Certain Foreign Direct Investments in Denmark as amended and
supplemented ("Danish FDI Law"), the Danish Business Authority: (A) having
granted unconditional clearance under the Danish FDI law; (B) having granted
conditional clearance under the Danish FDI Law on terms reasonably
satisfactory to Bidco; or (C) having confirmed that it does not assume
jurisdiction over the Acquisition;
4.5 France
4.5.1 either: (A) the necessary authorisation of the Acquisition
by the French Minister for Economy pursuant to Articles L. 151-3 et seq.
and/or R. 151-1 et seq. of the French Monetary and Financial Code has been
obtained, either on an unconditional basis or subject to conditions reasonably
satisfactory to Bidco; or (B) a no-action letter per which the French Minister
for Economy confirms that the Acquisition does not fall within the scope of
Article L. 151-3 of the French Monetary and Financial Code has been obtained;
4.6 Germany
4.6.1 the German Federal Ministry for Economic Affairs and Energy
(Bundesministerium für Wirtschaft und Energie - "BMWE"): (A) having cleared
the Acquisition, either on an unconditional basis or subject to conditions
reasonably satisfactory to Bidco; or (B) having granted a certificate of
non-objection; or (C) the applicable review periods having expired or elapsed
without the BMWE having delivered a decision to either open formal review
proceedings or to prohibit the Acquisition; or (D) has confirmed that it does
not assume jurisdiction over the Acquisition;
4.7 Ireland
4.7.1 insofar as the Acquisition constitutes a notifiable
transaction pursuant to the Screening of Third Country Transactions Act 2023
("Irish FDI Law"), a notification to the Minister for Enterprise, Trade and
Employment (the "Irish FDI Minister") having been made and either: (A) the
Irish FDI Minister having issued a screening decision that the Acquisition
does not affect, or would not be likely to affect, the security or public
order of Ireland; (B) the Irish FDI Minister having issued a screening
decision that the Acquisition affects, or would be likely to affect, the
security or public order of Ireland but makes a direction to the effect that
the Acquisition may be completed subject to conditions that are reasonably
satisfactory to Bidco; (C) the Irish FDI Minister having elected not to issue
a screening notice on the grounds that the Acquisition does not constitute a
notifiable transaction; or (D) any applicable time period within which the
Irish FDI Minister is required to issue a screening decision pursuant to the
Irish FDI Law having expired such that the Acquisition is deemed to be subject
to a screening decision to the effect that it has not affected, or would not
be likely to affect, the security or public order of Ireland;
4.8 Italy
4.8.1 insofar as the Acquisition constitutes a notifiable
transaction pursuant to Article 1 or Article 2 of Italian Law Decree No.
21/2012, converted by Italian Law No. 56/2012 ("Italian FDI Law"), the Italian
Presidency of the Council of Ministers ("Presidency"): (A) having granted
unconditional clearance under the Italian FDI law or having declared that the
Acquisition does not fall within the scope of the Italian FDI Law; (B) having
granted unconditional clearance by means of the expiry of the deadline
provided by the Italian FDI Law for the review of the Acquisition without the
adoption of an express decision; or (C) having granted conditional clearance
under the Italian FDI Law on terms reasonably satisfactory to Bidco;
4.9 The Netherlands
4.9.1 insofar as the Acquisition constitutes a notifiable
transaction pursuant to the Dutch National Security Investments, Mergers, and
Acquisitions Act (the "Vifo Act"), the Dutch Bureau Toetsing Investeringen:
(A) having issued a written statement or decision that the execution and
performance of this Agreement does not fall within the scope of the Vifo Act;
(B) having rendered a decision that no approval, authorisation, consent,
waiver or clearance is required under the Vifo Act; (C) having rendered a
decision giving the approval, authorisation, consent, waiver or clearance
required under the Vifo Act; (D) having granted unconditional clearance by
means of the expiry of the deadline provided by the Vifo Act for the review of
the Acquisition without the adoption of an express decision; or (E) having
granted conditional clearance under the Vifo Act on terms reasonably
satisfactory to Bidco;
4.10 Spain
4.10.1 insofar as the Acquisition constitutes a notifiable transaction
pursuant to Spanish Law 19/2003 and Royal Decree 571/2003 (the "Spanish FDI
Laws"), either: (A) the Spanish Council of Ministers or the Directorate
General on International Trade and Investment (the "DGITI") or Directorate
General of Arms and Materials (the "DGAM"), as applicable, having granted
unconditional authorisation under the Spanish FDI Laws; (B) the DGITI or the
DGAM or any applicable Spanish authority pursuant to the Spanish FDI Laws
issuing a binding resolution stating that no authorisation is required for the
Acquisition pursuant to the Spanish FDI Laws; or (C) the Spanish Council of
Ministers or the DGITI or the DGAM, as applicable, having granted conditional
clearance under the Spanish FDI Laws on terms reasonably satisfactory to
Bidco;
4.11 Sweden
4.11.1 insofar as the Acquisition constitutes a notifiable transaction
under the Swedish FDI Act (Sw. lagen (2023:560) om granskning av utländska
direktinvesteringar), the requisite notification having been made and the
Inspectorate of Strategic Products either (A) having confirmed that no further
action will be taken under the Swedish FDI Act in relation to the Acquisition,
or (B) having granted an approval decision under the Swedish FDI Act in
respect of the Acquisition, the provisions of which allow the Acquisition to
proceed either unconditionally or conditionally on terms reasonably
satisfactory to Bidco; and
4.12 United Kingdom
4.12.1 if the Acquisition is a notifiable acquisition under the NSI
Act, the requisite notification having been made and the Secretary of State
either (A) confirming that no further action will be taken under the NSI Act
in relation to the Acquisition, or (B) making a final order under the NSI Act
in respect of the Acquisition, the provisions of which allow the Acquisition
to proceed on terms reasonably satisfactory to Bidco; or
4.12.2 if, prior to the date on which all other Conditions are
satisfied or waived, the Secretary of State issues a call-in notice within the
meaning of the NSI Act in relation the Acquisition, the Secretary of State:
(A) confirming that no further action will be taken under the NSI Act in
relation to the Acquisition; or (B) making a final order under the NSI Act in
respect of the Acquisition, the provisions of which allow the Acquisition to
proceed on terms reasonably satisfactory to Bidco.
5. Notifications, waiting periods and authorisations
5.1 other than in respect of or in connection with the matters
referred to in Conditions 3 or 4 above, all:
5.1.1 notifications, filings or applications in any jurisdiction
which are necessary having been made;
5.1.2 waiting periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction which are necessary
having expired, lapsed or been terminated (as appropriate); and
5.1.3 necessary statutory or regulatory obligations in any
jurisdiction having been complied with,
in each case in respect of the Acquisition including, without limitation, the
proposed direct or indirect acquisition of any shares or other securities in,
or control of, Spectris or any member of the Wider Spectris Group by any
member of the Wider Bidco Group;
5.2 other than in respect of or in connection with the matters
referred to in Conditions 3 or 4 above, all material Authorisations which
are necessary in any jurisdiction in respect of the Acquisition including,
without limitation, the proposed direct or indirect acquisition of any shares
or other securities in, or control of, Spectris or any member of the Wider
Spectris Group by any member of the Wider Bidco Group (other than pursuant to
Chapter 3 of Part 28 of the Companies Act) having been obtained in terms and
in a form reasonably satisfactory to Bidco from all appropriate Third Parties
or persons with whom any member of the Wider Spectris Group has entered into
contractual arrangements; and
5.3 other than in respect of or in connection with the matters
referred to in Conditions 3 or 4 above, all Authorisations which are necessary
to carry on the business of any member of the Wider Spectris Group having been
obtained and remaining in full force and effect and all filings necessary for
such purpose having been made and there being no notice or intimation of any
intention to revoke, suspend, restrict, modify or not to renew any of the
same.
General antitrust and regulatory
6. No Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference (and, in each case, not having withdrawn the same), or
having required any action to be taken or otherwise having done anything, or
having enacted, made or proposed any statute, regulation, decision, order or
change to published practice (and, in each case, not having withdrawn the
same), and there not continuing to be outstanding any statute, regulation,
decision or order, which in each case is or would reasonably be expected to:
6.1 require, prevent or materially delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture by any
member of the Wider Bidco Group or any member of the Wider Spectris Group of
all or any material portion of their respective businesses, assets or property
or impose any material limitation on the ability of any of them to conduct
their respective businesses (or any part of them) or to own, control or manage
any of their respective assets or properties or any part thereof which, in any
such case, is material in the context of the Wider Bidco Group or the Wider
Spectris Group in each case taken as a whole;
6.2 require, prevent or delay, or materially alter the terms
envisaged for, any proposed divestiture by any member of the Wider Bidco Group
of any shares or other securities in any member of the Wider Spectris Group or
member of the Wider Bidco Group;
6.3 impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Bidco Group to acquire or to
hold or to exercise effectively, in each case directly or indirectly, all or
any rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent) in any
member of the Wider Spectris Group or to exercise voting or management control
over any such member, in each case to an extent which is material in the
context of the Wider Bidco Group or the Spectris Group in each case taken as a
whole;
6.4 otherwise materially adversely affect any or all of the
business, assets, profits or prospects of member of the Wider Bidco Group or
of any member of the Wider Spectris Group, in each case to an extent which is
material in the context of the Wider Bidco Group or the Spectris Group in each
case taken as a whole;
6.5 make the Acquisition or the acquisition or proposed
acquisition by Bidco or any member of the Wider Bidco Group of any shares or
other securities in, or control or management of Spectris void, illegal,
and/or unenforceable under the laws of any relevant jurisdiction, or
otherwise, directly or indirectly, materially restrain, restrict, prohibit or
materially delay the same, or impose additional material conditions or
obligations with respect thereto, or otherwise materially challenge, impede or
interfere with the Acquisition or any part thereof;
6.6 require (save as envisaged in the terms of the Acquisition or
sections 974 to 991 (inclusive) of the Companies Act) any member of the Wider
Bidco Group or the Wider Spectris Group to acquire or to offer to acquire any
shares or other securities (or the equivalent) or interest in any member of
the Wider Spectris Group or any asset owned by any third party which is
material in the context of the Wider Bidco Group or the Wider Spectris Group,
in each case taken as a whole;
6.7 impose any material limitation on in the ability of any member
of the Wider Bidco Group to conduct, integrate or coordinate its business, or
any part of it, with the businesses or any part of the businesses of any other
member of the Wider Spectris Group in a manner which is materially adverse in
the context of the Wider Bidco Group or Wider Spectris Group, in each case
taken as a whole;
6.8 result in any member of the Wider Spectris Group or any member
of the Wider Bidco Group ceasing to be able to carry on business under any
name under which it presently does so to an extent which is material in the
context of the Wider Spectris Group and/or Wider Bidco Group or in the context
of the Acquisition, or
6.9 and all applicable waiting and other time periods (including
any extensions thereof) during which any such Third Party could decide to
take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of any
jurisdiction in respect of the Acquisition or the acquisition or proposed
acquisition of any Spectris Shares or otherwise intervene having expired,
lapsed or been terminated.
Certain matters arising as a result of any arrangement, agreement, etc.
7. Except as Disclosed, there being no provision of any
agreement, arrangement, licence, permit, lease, franchise or other instrument
to which any member of the Wider Spectris Group is a party or by or to which
any such member or any of its assets is or may be bound, entitled or subject,
or any event or circumstance which, in each case as a consequence of the
Acquisition or the proposed acquisition of any shares or other securities (or
equivalent) in Spectris or because of a change in the control of any member of
the Wider Spectris Group or otherwise, would or would reasonably be expected
to result in (in each case to an extent which is or would be material and
adverse in the context of the Wider Spectris Group taken as a whole):
7.1 any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any member of the
Wider Spectris Group, being or becoming repayable or capable of being declared
repayable immediately or earlier than their or its stated maturity date or
repayment date or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn or inhibited or being capable of becoming or
being withdrawn or inhibited;
7.2 any such agreement, arrangement, licence, permit, lease,
franchise or other instrument or the rights, liabilities, obligations or
interests of any member of the Wider Spectris Group thereunder being
terminated or adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken or arising thereunder;
7.3 any assets or interests of any such member being or falling to
be disposed of or charged or ceasing to be available to any member of the
Wider Spectris Group or any right arising under which any such asset or
interest could be required to be disposed of or charged or could cease to be
available to any such member other than in the ordinary course of business;
7.4 other than in the ordinary course of business, the creation or
enforcement of any mortgage, charge or other security interest over the whole
or any part of the business, property, assets or interest of any member of the
Wider Spectris Group or any such mortgage, charge or other security interest
(whenever arising or having arisen) becoming enforceable;
7.5 the rights, liabilities, obligations or interests of any
member of the Wider Spectris Group under any agreement, arrangement, licence,
permit, lease, franchise or other interest in, or the business or interests of
any such member with, any person, firm, company or body (or any arrangement or
arrangements relating to any such interest or business) being or likely to
become terminated, adversely modified or affected;
7.6 the value or the financial or trading position or prospects of
any member of the Wider Spectris Group being prejudiced or adversely affected;
7.7 any member of the Wider Spectris Group ceasing to be able to
carry on business under any name under which it presently does so;
7.8 save as set out in the Co-operation Agreement, any liability
of any member of the Wider Spectris Group to make any severance, termination,
bonus or other payment to any of its directors or other officers, save in the
ordinary course of business;
7.9 the creation or acceleration of any liability, actual or
contingent, by any member of the Wider Spectris Group (including any tax
liability or any obligation to obtain or acquire any Authorisation from any
Third Party or any person) other than trade creditors or other liabilities
incurred in the ordinary course of business; or
7.10 save in connection with the Spectris Share Plans, any requirement
on any member of the Wider Spectris Group to acquire, subscribe, pay up or
repay any shares or other securities (or the equivalent),
and, except as Disclosed, no event having occurred which, under any provision
of any agreement, arrangement, licence, permit, lease, franchise or other
instrument to which any member of the Wider Spectris Group is a party or by or
to which any such member or any of its assets may be bound, entitled or
subject, would or might reasonably be expected to result in any of the events
or circumstances as are referred to in paragraphs 7.1 to 7.10 of this
Condition.
Certain events occurring since Last Accounts Date
8. Except as Disclosed, no member of the Wider Spectris Group
having, since the Last Accounts Date:
8.1 issued or agreed to issue, authorised or proposed or announced
its intention to authorise or propose, the issue of additional shares of any
class or transferred or sold or agreed to transfer or sell or authorised or
proposed the transfer or sale of any shares out of treasury, save as between
Spectris and wholly-owned subsidiaries of Spectris or pursuant to the exercise
of options and vesting of awards granted under the Spectris Share Plans in
accordance with the rules thereof (including by the issue or transfer out of
treasury of Spectris Shares);
8.2 issued, or agreed to issue, authorised or proposed or
announced its intention to authorise or propose the issue of securities
convertible into shares of any class or rights, warrants or options to
subscribe for, or acquire, any such shares or convertible securities save as
between Spectris and wholly-owned subsidiaries of Spectris or for the grant of
options and awards and other rights under the Spectris Share Plans in
accordance with the rules thereof;
8.3 recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other distribution (whether
payable in cash or otherwise), other than dividends (or other distributions)
paid or made by any wholly-owned subsidiary of Spectris to Spectris or any of
its wholly-owned subsidiaries and each of the Permitted Dividend;
8.4 save for the Acquisition and any transactions between Spectris
and its wholly-owned subsidiaries or between such wholly-owned subsidiaries,
authorised, implemented or announced any merger, demerger, reconstruction,
amalgamation or scheme or acquired or disposed of or transferred, mortgaged,
charged or created any security interest over any assets or any right, title
or interest in any asset (including shares and trade investments or the
equivalent thereof) or authorised or proposed or announced any intention to
propose any merger, demerger, reconstruction, amalgamation, scheme,
acquisition, disposal, transfer, mortgage, charge or security interest, in
each case, other than in the ordinary course of business or which is material
and adverse in the context of the Wider Spectris Group taken as whole;
8.5 save for transactions between Spectris and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries, made or authorised or
proposed or announced an intention to propose any material and adverse change
in its loan capital (or the equivalent thereof);
8.6 issued, authorised or proposed the issue of, or made any
change in or to, any debentures or (save for transactions between Spectris and
its wholly-owned subsidiaries or between such wholly-owned subsidiaries or in
the ordinary course of business), incurred or increased any indebtedness or
become subject to or increased any liability (actual or contingent);
8.7 purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in paragraph 8.1 or 8.2 above,
made any other change to any part of its share capital;
8.8 entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long-term, onerous or unusual nature
or magnitude or which is or is likely to be materially restrictive on the
businesses of any member of the Wider Spectris Group or the Wider Bidco Group
and which, in any such case, is material in the context of the Wider Spectris
Group taken as a whole;
8.9 been unable or deemed unable, or admitted in writing that it
is unable, to pay its debts as they fall due or having stopped or suspended
(or threatened to stop or suspend) payment of its debts generally or ceased or
threatened to cease carrying on all or a substantial part of its business;
8.10 other than in respect of a member of the Wider Spectris Group
which is dormant and was solvent at the relevant time, taken or proposed any
corporate action or steps or had any legal proceedings started or threatened
against it in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrative receiver,
administrator, manager, trustee or similar officer of all or any of its assets
or revenues or any analogous or equivalent steps or proceedings in any
jurisdiction or appointed any analogous or equivalent person in any
jurisdiction or had any such person appointed which is material in the context
of the Wider Spectris Group taken as a whole;
8.11 commenced negotiations with any of its creditors or taken any
step, in each case in connection with financial difficulties of the Wider
Spectris Group, with a view to rescheduling or restructuring any of its
indebtedness or entered into a composition, compromise, assignment or
arrangement with any of its creditors whether by way of a voluntary
arrangement, scheme of arrangement, deed of compromise or otherwise, or
entered into any agreement with any of its creditors to refinance, reschedule
or restructure any of its indebtedness which is material in the context of the
Wider Spectris Group taken as a whole;
8.12 other than in respect of claims between Spectris and wholly-owned
subsidiaries of Spectris or between such wholly-owned subsidiaries, waived,
settled or compromised any claim (otherwise than in the ordinary course of
business), which is material in the context of the Wider Spectris Group taken
as a whole;
8.13 made any alteration to its constitutional or other governing or
incorporation documents (other than in connection with the Scheme);
8.14 except in relation to changes made or agreed as a result of, or
arising from, law or changes to applicable law, made or agreed or consented to
any change to:
8.14.1 the terms of the trust deeds, scheme rules or other
documentation constituting the pension scheme(s) established by any member of
the Wider Spectris Group for its directors, employees or their dependents;
8.14.2 the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable thereunder;
8.14.3 the basis on which qualification for, or accrual or entitlement
to, such benefits or pensions are calculated or determined; or
8.14.4 the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued, made, agreed or consented to,
in each case, which has or is reasonably likely to have a material adverse
effect on the Wider Spectris Group taken as a whole;
8.15 other than as detailed in the Co-operation Agreement, proposed,
agreed to provide or modified the terms of any of the Spectris Share Plans or
other benefit constituting a material change relating to the employment or
termination of employment of a material category of persons employed by the
Wider Spectris Group or which constitutes a material change to the terms or
conditions of employment of any senior employee of the Wider Spectris Group,
save as agreed by the Panel (if required) and by Bidco, or entered into or
changed the terms of (or made any offer (which remains open for acceptance) to
enter into or change the terms of) any contract, service agreement, commitment
or arrangement with any director or, except for salary increases, bonuses or
variations of terms in the ordinary course, senior executive of any member of
the Wider Spectris Group, in each case which is material in the context of the
Wider Spectris Group taken as a whole;
8.16 terminated or varied the terms of any agreement or arrangement
between any member of the Wider Spectris Group and any other person in a
manner which would or might reasonably be expected to have a material adverse
effect on the financial position of the Wider Spectris Group taken as a whole;
8.17 entered into, implemented or authorised the entry into, any joint
venture, asset or profit sharing arrangement, partnership or merger of
business or corporate entities which, is material in the context of the Wider
Spectris Group taken as a whole;
8.18 on or after the date of this Announcement, and other than with
the consent of Bidco, taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the approval of
Spectris Shareholders in a general meeting in accordance with, or as
contemplated by, Rule 21.1 of the Code; or
8.19 entered into any contract, commitment, arrangement or agreement
or passed any resolution or made any offer (which remains open for acceptance)
with respect to or announced any intention to, or to propose to, effect any of
the transactions, matters or events referred to in this Condition;
No adverse change, litigation or regulatory enquiry
9. Except as Disclosed, since the Last Accounts Date:
9.1 no adverse change or deterioration having occurred and no
circumstances having arisen which would or might reasonably be expected to
result in any adverse change in the business, assets, financial or trading
position, profits, prospects or operational performance of any member of the
Wider Spectris Group which, in any such case, is material in the context of
the Spectris Group taken as a whole;
9.2 no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider Spectris Group is or may
become a party (whether as a claimant, defendant or otherwise) and no enquiry,
review or investigation by, or complaint or reference to, any Third Party or
other investigative body against or in respect of any member of the Wider
Spectris Group, having been instituted, announced, implemented or threatened
by or against or remaining outstanding in respect of any member of the Wider
Spectris Group which in any such case has had or might reasonably be expected
to have a material adverse effect on the Wider Spectris Group taken as a
whole;
9.3 no contingent or other liability of any member of the Wider
Spectris Group having arisen or become apparent to Bidco or increased other
than in the ordinary course of business which has had or might reasonably be
expected to affect the business, assets, financial or trading position,
profits or prospects of any member of the Wider Spectris Group to an extent
which is material in the context of the Wider Spectris Group taken as a whole
or in the context of the Acquisition;
9.4 no member of the Wider Spectris Group having conducted its
business in breach of any applicable laws and regulations which in any case is
material in the context of the Spectris Group taken as a whole; and
9.5 no steps having been taken and no omissions having been made
which are reasonably likely to result in the withdrawal, cancellation,
termination or modification of any Authorisation held by any member of the
Wider Spectris Group which is necessary for the proper carrying on for its
business and the withdrawal, cancellation, termination or modification of
which has had or might reasonably be expected to have a material adverse
effect on the Wider Spectris Group taken as a whole.
10. No discovery of certain matters
10.1 Except as Disclosed, Bidco not having discovered that, in each
case to an extent which is material in the context of the Spectris Group taken
as a whole:
10.1.1 any financial, business or other information concerning the
Wider Spectris Group publicly disclosed at any time by or on behalf of any
member of the Wider Spectris Group prior to the date of this Announcement is
materially misleading, contains a material misrepresentation of fact or omits
to state a fact necessary to make that information not misleading; or
10.1.2 any member of the Wider Spectris Group is subject to any
liability (actual or contingent).
10.2 Except as Disclosed, Bidco not having discovered that, in each
case to an extent which is material in the context of the Spectris Group taken
as a whole:
10.2.1 any past or present member of the Wider Spectris Group has
failed to comply with any and/or all applicable legislation, regulation or
other requirement, of any jurisdiction or any Authorisations with regard to
the use, treatment, handling, storage, carriage, disposal, spillage, release,
discharge, leak or emission of any waste or hazardous substance or any
substance likely to impair the environment (including property) or harm human
health or animal health or otherwise relating to environmental matters or the
health and safety of humans, or that there has otherwise been any such use,
treatment, handling, storage, carriage, disposal, spillage, release,
discharge, leak or emission (whether or not the same constituted a
non-compliance by any person with any such legislation or regulations or other
requirement, and wherever the same may have taken place) any of which storage,
carriage, disposal, spillage, release, discharge, leak or emission would be
likely to give rise to any liability (actual or contingent) or cost on the
part of any member of the Wider Spectris Group;
10.2.2 there is, or is reasonably likely to be, any obligation or
liability (actual or contingent) of any past or present member of the Wider
Spectris Group (or on its behalf) to make good, remediate, repair, reinstate
or clean up any property, asset or any controlled waters now or previously
owned, occupied, operated or made use of or controlled by any such past or
present member of the Wider Spectris Group (or on its behalf) or by any person
for which a member of the Wider Spectris Group is or has been responsible, or
in which any such member may have or previously have had or be deemed to have
had an interest, under any environmental legislation, common law, regulation,
notice, circular, Authorisation or order of any Third Party in any
jurisdiction or to contribute to the cost thereof or associated therewith or
indemnify any person in relation thereto;
10.2.3 circumstances exist (whether as a result of the making of the
Acquisition or otherwise) which would be reasonably likely to lead to any
Third Party instituting, or whereby any member of the Bidco Group or any
present or past member of the Wider Spectris Group would be reasonably likely
to be required to institute, an environmental audit or take any other steps
which would in any such case be reasonably likely to result in any liability
(whether actual or contingent) to improve, modify existing or install new
plant, machinery or equipment or carry out changes in the processes currently
carried out or make good, remediate, repair, re-instate or clean up any land
or other asset or property of any description currently or previously owned,
occupied or made use of by any past or present member of the Wider Spectris
Group (or on its behalf) or by any person for which a member of the Wider
Spectris Group is or has been responsible, or in which any such member may
have or previously have had or be deemed to have had an interest; or
10.2.4 circumstances exist whereby a person or class of persons would
be reasonably likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein currently or previously
manufactured, sold or carried out by any past or present member of the Wider
Spectris Group.
Anti-corruption, economic sanctions, criminal property and money laundering
11. Except as Disclosed, Bidco not having discovered that:
11.1 any past or present member, director, officer or employee of the
Wider Spectris Group or any person that performs or has performed services for
or on behalf of the Wider Spectris Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence under the
Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption or anti-bribery law, rule or regulation or any
other applicable law, rule or regulation concerning improper payments or
kickbacks;
11.2 any asset of any member of the Wider Spectris Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition) or proceeds of crime
under any other applicable law, rule or regulation concerning money laundering
or proceeds of crime or any member of the Wider Spectris Group is found to
have engaged in activities constituting money laundering under the Proceeds of
Crime Act 2002 or any other applicable law, rule or regulation concerning
money laundering;
11.3 (i) any member of the Wider Spectris Group or any past or present
member, director, officer or employee of the Wider Spectris Group, or any
other person for whom any such person may be liable or responsible, is or has
engaged in any transaction or conduct which would cause any member of the
Wider Spectris Group to be in breach of (or would cause Bidco or any member of
the Wider Bidco Group to be in breach of or to be reasonably likely to become
the subject of sanctions under, following completion of the Acquisition)
applicable economic sanctions of the UK, the United Nations, the U.S., the
European Union or any of its member states or any other Relevant Authority
including those administered by the United States Office of Foreign Assets
Control or HM Treasury, save that this shall not apply if and to the extent
that it is or would be unenforceable by reason of breach of any applicable
Blocking Law; or (ii) any past or present member, director, officer or
employee of the Wider Spectris Group or any other person for whom any such
person may be liable or responsible, has knowingly dealt with, made any
investments in, made any funds or assets available to or received any funds or
assets from: (A) any government, entity or individual in respect of which
U.S., UK or European Union persons, or persons operating in those territories,
are prohibited from engaging in activities or doing business, or from
receiving or making available funds or economic resources, by U.S., UK or
European Union or any of its member states' laws or regulations, including the
economic sanctions administered by the United States Office of Foreign Assets
Control, or HM Treasury; or (B) any government, entity or individual targeted
by any of the economic sanctions of the United Nations, the U.S., the UK, the
European Union or any of its member states, which, in each case, would cause
any member of the Wider Spectris Group to be in breach of (or would cause
Bidco or any member of the Wider Bidco Group to be in breach of or to be
reasonably likely to become the subject of sanctions under, in each case
following completion of the Acquisition) any economic sanctions laws
applicable to the Wider Spectris Group, save that this shall not apply if and
to the extent that it is or would be unenforceable by reason of breach of any
applicable Blocking Law; or
11.4 any past or present member of the Wider Spectris Group or any
past or present director, officer or employee of the Wider Spectris Group, or
any other person for whom any such person may be liable or responsible:
11.4.1 has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations including, but not limited to the
U.S. Anti-Terrorism Act;
11.4.2 has knowingly engaged in conduct which would violate any
relevant anti-boycott law, rule or regulation or any applicable export
controls, including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State;
11.4.3 has engaged in conduct which would violate any relevant laws,
rules, or regulations concerning human rights, including but not limited to
any law, rule or regulation concerning false imprisonment, torture or other
cruel and unusual punishment, or child labour; or
11.4.4 is debarred or otherwise rendered ineligible to bid, as a
result of a breach of applicable law, for or to perform contracts for or with
any government, governmental instrumentality or international organisation or
found to have violated any applicable law, rule or regulation concerning
government contracting or public procurement.
Part B
Waiver and invocation of the Conditions
1. Subject to the requirements of the Panel in accordance with
the Code, Bidco reserves the right in its sole discretion to waive, in whole
or in part, all or any of the Conditions Part A of this Appendix 1,
except for Conditions 1 (Long Stop Date), 2.1(i), 2.2(i) and 2.3(i)
(Scheme Approval), which cannot be waived. If any of Conditions 1 (Long
Stop Date), 2.1(ii), 2.2(ii) and 2.3(ii) (Scheme Approval) is not
satisfied by the relevant deadline specified in the relevant Condition (or
such later date, if any as: (a) Bidco and Spectris may agree; or (b) (in a
competitive situation) as may be specified by Bidco with the consent of the
Panel, and in each case that, if so required, the Court may allow), Bidco
shall make an announcement by 8.00 a.m. on the Business Day following such
deadline confirming whether, subject to paragraph 3 below, it has invoked the
relevant Condition, waived the relevant deadline or extended the relevant
deadline.
2. Subject to the terms of the Co-operation Agreement, for
such time as it is continuing, Bidco shall be under no obligation to waive (if
capable of waiver), to determine to be or remain satisfied or to treat as
satisfied any of the Conditions in Part A of Appendix 1 above by a date or
time earlier than the latest date and time for the fulfilment of the relevant
Condition notwithstanding that the other Conditions to the Acquisition may at
such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such Conditions may not
be capable of fulfilment.
3. Subject to paragraph 4 below, under Rule 13.5(a) of the
Code, Bidco may only invoke a Condition so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn with the consent of the Panel. The Panel
will normally only give its consent if the circumstances which give rise to
the right to invoke the Condition are of material significance to Bidco in the
context of the Acquisition. This will be judged by reference to the facts of
each case at the time that the relevant circumstances arise.
4. Each of Conditions 1 (Long Stop Date), 2.1, 2.2 and 2.3
(Scheme Approval) (and, if applicable, any acceptance condition if the
Acquisition is implemented by means of a Takeover Offer) are not subject to
Rule 13.5(a) of the Code.
5. Any Condition that is subject to Rule 13.5(a) of the Code
may be waived by Bidco.
6. The Acquisition will not become Effective unless the
Conditions have been fulfilled or (to the extent capable of waiver) waived or,
where appropriate, have been determined by Bidco to be or remain satisfied by
no later than 11.59 p.m. (London Time) on the Long Stop Date.
7. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
8. Save as disclosed in this Announcement, there is no
agreement or arrangement to which Bidco is a party which relates to the
circumstances in which it may or may not invoke a Condition.
Part C
Implementation by way of Takeover Offer
1. Subject to the terms of the Co-operation Agreement (while
the Co-operation Agreement is continuing), and obtaining the consent of the
Panel, Bidco reserves the right to elect to implement the Acquisition by way
of a Takeover Offer as an alternative to the Scheme. In such event, such
Takeover Offer will be implemented on the same terms and conditions, so far as
applicable, as those which would apply to the Scheme subject to appropriate
amendments to reflect the change in method of effecting the Acquisition,
including (without limitation), the inclusion of an acceptance condition set
at a level permitted by the Panel, being in any case more than 50 per cent. of
the voting rights normally exercisable at a general meeting of Spectris,
including, for this purpose, any such voting rights attaching to Spectris
Shares that are issued before the Takeover Offer becomes or is declared
unconditional, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise.
2. In accordance with normal United Kingdom practice and
pursuant to Rule 14e-5(b) of the U.S. Exchange Act, Bidco, its nominees or its
brokers (acting as agents), may from time to time make certain purchases of,
or arrangements to purchase, shares or other securities of Spectris outside of
the U.S., other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or in
private transactions at negotiated prices. Any information about such
purchases or arrangements to purchase shall be disclosed as required in the
UK, shall be reported to a Regulatory Information Service and shall be
available on the London Stock Exchange website at www.londonstockexchange.com.
Part D
Certain further terms of the Acquisition
1. If Bidco is required by the Panel to make a mandatory offer
for Spectris Shares under Rule 9 of the Code, Bidco may make such alterations
to the above Conditions and terms of the Acquisition as are necessary to
comply with Rule 9 of the Code.
2. The Acquisition is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national, state or other securities exchange of, any
jurisdiction where to do so would violate the laws of that jurisdiction.
Consequently, the availability of the Acquisition to persons not resident in
the UK may be affected by the laws of the relevant jurisdiction. Persons who
are not resident in the UK should inform themselves about, and observe, any
applicable requirements. Spectris Shareholders who are in any doubt about such
matters should consult an appropriate independent professional adviser in the
relevant jurisdiction without delay and observe any applicable requirements.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
3. The Spectris Shares will be acquired by Bidco fully paid
and free from all liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights or interests whatsoever and
together with all rights existing as at the Effective Date, including (without
limitation) the right to receive and retain, in full, all dividends and other
distributions (if any) declared, made or paid or any other return of capital
(whether by way of reduction of share capital or share premium account,
repurchase or redemption or otherwise) made on or after the Effective Date in
respect of Spectris Shares, in each case other than the Permitted Dividend.
4. Other than the Permitted Dividend, if any dividend,
distribution or other return of value is announced, declared, made, paid or
becomes payable in respect of Spectris Shares on or after the date of this
Announcement and before the Effective Date, Bidco reserves the right (without
prejudice to the right of Bidco to invoke, with the consent of the Panel, the
Condition set out in paragraph 8 of Part A of Appendix 1 above) to reduce the
Cash Consideration payable in respect of each Spectris Share by the amount of
all or part of any such dividend, distribution or other return of value, in
which case any reference in this Announcement to the Cash Consideration
payable under the terms of the Acquisition will be deemed to be a reference to
the Cash Consideration as so reduced. If Bidco exercises this right or makes
such a reduction in respect of a dividend, distribution or return of value,
Spectris Shareholders will be entitled to receive and retain that dividend,
distribution or other return of value. Bidco also reserves the right to reduce
the Cash Consideration payable under the Acquisition in such circumstances as
are, and by such amount as is, permitted by the Panel. Any exercise by Bidco
of its rights referred to in this paragraph 4 shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded as
constituting any revision or variation of the Acquisition.
5. This Announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed
by the laws of England and Wales and be subject to the jurisdiction of the
courts of England and Wales. The Acquisition will also be subject to the
Conditions and further terms set out in this Announcement and to be set out in
the Scheme Document and such further terms as may be required to comply with
the Listing Rules and the provisions of the Code. The Acquisition and the
Scheme will comply with the applicable requirements of the FCA, the London
Stock Exchange and the Court, as well as with the Panel and the Code.
6. This Announcement does not constitute, or form part of, an
offer or invitation to purchase Spectris Shares or any other securities.
Appendix 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been used:
1. As at the close of business on the Last Practicable Date,
Spectris had in issue 104,446,214 ordinary shares of five pence each, each
carrying one vote. Spectris holds 5,136,330 shares in treasury. The total
number of voting rights in Spectris is therefore 99,309,884.
2. The fully diluted ordinary share capital of Spectris as at
the Last Practicable Date is 101,444,044 Spectris Shares, based on:
2.1 99,309,884 Spectris Shares in issue as at the close of
business on the Last Practicable Date, excluding shares held in treasury; and
2.2 an additional 2,134,160 Spectris Shares that may be issued on
or after the date of this Announcement to satisfy the exercise of awards and
options under the Spectris Share Plans, adjusted to include matching shares
relating to the Spectris Share Incentive Plan in excess of Spectris Shares
currently held by the Spectris employee benefit trust to satisfy the Spectris
Share Incentive Plan.
3. The value attributed to the entire issued and to be issued
ordinary share capital of Spectris of £4.1 billion, is calculated based on:
3.1 the Cash Consideration payable by Bidco to Scheme Shareholders
under the terms of the Acquisition of £39.72 for each Scheme Share,
multiplied by the fully diluted share capital of Spectris set out in paragraph
2 above; and
3.2 the Permitted Dividend of 28 pence per Spectris Share,
multiplied by an estimated 99,350,000 Spectris Shares expected to be eligible
for the Permitted Dividend.
4. The enterprise value of Spectris implied by the terms of
the Acquisition is based on:
4.1 the value of Spectris' entire issued and to be issued ordinary
share capital set out in paragraph 3 above; less
4.2 cash and cash equivalents of £106 million as of 31 December
2024; less
4.3 investments in associates of £33 million as of 31 December
2024; plus
4.4 total current and non-current borrowings of £655 million as
of 31 December 2024; plus
4.5 capitalised lease liabilities of £77 million as of 31
December 2024; plus
4.6 pension liabilities of £7 million as of 31 December 2024;
4.7 cash settled share payments of £4 million based on the Cash
Consideration of £39.72 per Spectris share multiplied by 90,997 Spectris
Shares representing the total cash settled awards under the Spectris Share
Plans as of the Last Practicable Date.
5. The implied EBITDA multiple for Spectris of approximately
19.5x is calculated by reference to:
5.1 Spectris' enterprise value set out in paragraph 4 above;
divided by
5.2 Spectris' Adjusted EBITDA for the twelve months ended 31
December 2024 of £239 million.
6. The implied EBIT multiple for Spectris of approximately
23.0x is calculated by reference to:
6.1 Spectris' enterprise value set out in paragraph 4 above;
divided by
6.2 Spectris' Adjusted EBIT for the twelve months ended 31
December 2024 of £203 million.
7. Unless otherwise stated, financial information relating to
Spectris has been extracted from the Annual Report and Accounts of Spectris
for the financial year ended 31 December 2024.
8. Unless otherwise stated, all prices for Spectris Shares are
the relevant Closing Price for the Spectris Shares as at the relevant date.
9. The volume weighted average prices are derived from
Bloomberg data and have been rounded to the nearest decimal place.
Certain figures in this Announcement have been subject to rounding
adjustments.
Appendix 3
SPECTRIS DIRECTORS' CONFIRMATION
1. Spectris FY24 Results and ARA Profit Forecast
On 28 February 2025, Spectris released its full-year results and accompanying
presentation in respect of the financial year ended 31 December 2024 and, on
21 March 2025, its annual report and accounts for the financial year ended 31
December 2024 (the "Spectris 2024 Annual Report"). Included within the results
statement, and reiterated in the Spectris 2024 Annual Report, was the
following statement in respect of the financial year ending 31 December 2025:
"While the pace of end market recovery remains unclear, the decisive actions
we have taken on cost and our focused portfolio, mean we entered 2025 with
good momentum, underpinning progress towards our medium-term financial
targets. In 2025, building on the actions we took in 2024, we expect the Group
to trade in line with market expectations returning to strong levels of growth
in adjusted operating profit" (the "Spectris FY24 Results and ARA Profit
Forecast").
The Panel has confirmed that the Spectris FY24 Results and ARA Profit Forecast
constitutes a profit forecast made before the commencement of an offer period,
to which the requirements of Rule 28.1(c)(i) of the Code apply.
2. Spectris Q1 2025 Trading Update Statement
On 30 April 2025, Spectris published a trading update in respect of the first
quarter of the financial year ending 31 December 2025. Included within the
results statement were the following statements in respect of the financial
year ending 31 December 2025:
"Execution of our cost savings initiatives is well underway and is ahead of
target, with at least £30m of savings to be delivered in 2025, weighted to
the second half, and at least £50 million of full run-rate savings by 2026.
The Group remains focused on costs and is well placed to respond to evolving
market dynamics."
"We expect to be able to mitigate the direct impact of tariffs and, combined
with the strong contribution from acquisitions and the execution of our Profit
Improvement Programme, we currently continue to expect strong levels of growth
in adjusted operating profit in 2025 in-line with market expectations. We are
mindful, though, of the uncertain macroeconomic environment and the potential
tariff impact on end market demand… The combination of our Profit
Improvement Programme and contribution from acquisitions completed in 2024
will provide over £60m of incremental profit contribution in 2025. With our
leading positions in attractive growth markets, Spectris is well placed to
benefit strongly when markets recover."
(together, the "Spectris Q1 2025 Trading Update Statement").
The Panel has confirmed that the Spectris Q1 2025 Trading Update Statement
constitutes an ordinary course profit forecast for the purposes of Rule 28.1
of the Code, to which the requirements of Rule 28.1(c)(i) of the Code apply.
3. Spectris Medium-Term Profit Forecast
On 21 March 2025, Spectris released the Spectris 2024 Annual Report. Included
within the Spectris 2024 Annual Report was the following guidance in respect
of the medium-term:
· "On track to deliver against our 2027 commitments
· Organic sales growth of 6-7% through the cycle
· Adjusted operating margin of 20%+
· Return on gross capital employed (ROGCE) in the mid-teens %
(together, the "Spectris Medium-Term Profit Forecast")"
Spectris first announced its medium-term targets at its Capital Markets Day on
19 October 2022 and has repeated the same statements regularly since that
date.
The Panel has confirmed that the requirements of Rule 28.1(c)(i) of the Code
apply to the statements on the basis that they are repeated in this
Announcement.
4. Spectris Current Trading Update Profit Forecast
On 23 June 2025 and in this Announcement, Spectris published a trading update
in respect of the five months to 31 May 2025. Included within the trading
update section of this Announcement is the following statement in respect of
the financial year ending 31 December 2025:
"Spectris continues to expect to deliver full-year performance in line with
market expectations, including by the contribution from acquisitions and the
execution of our Profit Improvement Programme" (the "Spectris Current Trading
Update Profit Forecast").
The Panel has confirmed that the Spectris Current Trading Update Profit
Forecast constitutes an ordinary course profit forecast for the purposes of
Rule 28.1 of the Code, to which the requirements of Rule 28.1(c)(i) of the
Code apply.
5. Basis of preparation
Each of the Spectris Profit Forecasts has been compiled on the basis of the
assumptions set out below and the basis of the accounting policies used in
each of the Spectris Profit Forecast is consistent with the existing
accounting policies of the Spectris Group.
6. Directors' confirmations
The Spectris Directors have considered the Spectris Profit Forecasts and
confirm that, as at the date of this Announcement, each of the Spectris Profit
Forecasts remains valid, has been properly compiled on the basis of the
assumptions set out below and the basis of accounting used is consistent with
the Spectris Group's existing accounting policies.
7. Assumptions
The Spectris Directors have made the following assumptions in respect of each
of the Spectris Profit Forecasts and the periods they cover.
Factors outside the influence or control of the Spectris Directors include:
· no material changes in existing prevailing macroeconomic or political
conditions in the markets and regions in which Spectris operates that would
materially affect Spectris;
· no material changes in the foreign exchange, inflation, and tax rates
in the markets and regions in which Spectris operates from the prevailing
rates;
· no material adverse events or disruption that could have a
significant impact on Spectris' financial performance, including litigation,
adverse weather events or natural catastrophes that affect key products,
supply chain or markets;
· no material impact from tariffs or uncertainty related to potential
tariffs;
· no material changes in market conditions impacting either customer
demand or competitive environment;
· no material impact on stakeholder relationships arising from the
Acquisition;
· no material adverse outcome from any ongoing or future disputes with
any customer, competitor, regulator or tax authority;
· no material changes in employee attrition rates and no material
change in Spectris' labour costs, including medical and pension and other
post-retirement benefits driven by external parties or regulations; and
· no material changes in legislation, taxation, regulatory
requirements, applicable standards or the position of any regulatory bodies
impacting on Spectris' operations, expenditure, or its accounting policies.
Factors within the influence or control of the Spectris Directors include:
· no material changes in the present management of Spectris;
· no material changes in the operational structure and strategy of
Spectris;
· no material changes in the scale, scope and delivery plan for the
synergies related to the acquisitions completed by Spectris in 2024 or the
Profit Improvement Plan cost saving initiatives ongoing;
· no material corporate acquisitions or disposals, developments,
partnership or joint venture agreements being entered into by Spectris (for
the avoidance of doubt, other than the Acquisition);
· no material changes in Spectris' accounting policies, i.e. consistent
application over the forecast period; and
· no material changes in the dividend or capital allocation policies of
Spectris.
Other important factors and information are contained in Spectris' most recent
annual report and accounts for the 12 months ended 31 December 2024 (including
risks summarised in the section entitled "Principal Risks and uncertainties")
and Spectris' other periodic filings and statements are available at
https://www.spectris.com.
Appendix 4
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context otherwise requires:
"£", "GBP" or "pence" the lawful currency of the United Kingdom from time to time
"Acquisition" the proposed acquisition by Bidco of the entire issued and to be issued share
capital of Spectris by means of the Scheme, or should Bidco so elect (with the
consent of the Panel and subject to the terms of the Co-operation Agreement),
by means of a Takeover Offer and, where the context admits, any subsequent
revision, variation, extension or renewal thereof
"Adjusted EBIT" Adjusted EBITDA, including a charge for depreciation and amortisation
"Adjusted EBITDA" statutory operating profit before depreciation, amortisation and impairment of
property, plant and equipment and intangible assets, and excluding certain
items that are considered to be significant in nature or quantum and
exceptional. For 2024 these consist of restructuring costs, net
transaction-related costs and fair value adjustments, Spectris Foundation
contribution, and configuration and customisation costs carried out by third
parties on material SaaS projects
"Advent" Advent International, L.P., acting in its capacity as adviser and/or manager
of certain private equity funds
"Advent Announcement" has the meaning given in paragraph 4 of this Announcement
"Advent Offer" has the meaning given in paragraph 5 of this Announcement
"Advent Shareholder Meetings" the Court meeting and the general meeting of Spectris Shareholders proposed to
be held in respect of the Advent Offer, as further described in the Advent
Announcement
"Announcement" this announcement
"Authorisation(s)" authorisations, agreements, orders, notices, waivers recognitions, grants,
consents, determinations, clearances, confirmations, concessions,
certificates, exemptions, licences, permissions, permits or approvals
"Barclays" Barclays Bank PLC, acting through its investment bank
"Belgian Cooperation Agreement" has the meaning given in paragraph 4.3.1 of Part A of Appendix 1 of this
Announcement
"Bidco" Project Aurora Bidco Limited, a company incorporated in England & Wales
with registered number 16440737
"Bidco Directors" the directors of Bidco as at the date of this Announcement or, where the
context so requires, the directors of Bidco from time to time
"Bidco Group" Bidco and its subsidiary and parent undertakings from time to time
"Blocking Law" (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996
(or any law or regulation implementing such Regulation in any member state of
the European Union); or (ii) any provision of Council Regulation (EC) No
2271/1996 of 22 November 1996, as it forms part of domestic law of the United
Kingdom by virtue of the European Union (Withdrawal) Act 2018
"BMWE" has the meaning given in paragraph 4.6.1 of Part A of Appendix 1 of this
Announcement
"BofA Securities" Merrill Lynch International
"Book-to Bill Ratio" the ratio of order intake to sales within the relevant financial period
"Business Day" a day, not being a public holiday, Saturday or Sunday, on which banks in
London are open for normal business
"Cash Consideration" £39.72 per Spectris Share
"Clean Team Agreement" the clean team agreement described in paragraph 11
"Closing Price" the closing middle market price of a Spectris Share as derived from Bloomberg
on any particular date
"Co-operation Agreement" the co-operation agreement dated on or around the date of this Announcement
between Spectris and Bidco as described in paragraph 11 of this
Announcement
"Code" the City Code on Takeovers and Mergers issued by the Panel, as amended from
time to time
"Companies Act" the Companies Act 2006, as amended from time to time
"Condition(s)" the conditions of the Acquisition, as set out in Part A of Appendix 1 to
this Announcement and to be set out in the Scheme Document
"Confidentiality Agreement" the confidentiality agreement dated 10 June 2025 between KKR LLP and Spectris,
as described in paragraph 11 of this Announcement
"Court" the High Court of Justice of England and Wales
"Court Meeting" the meeting or meetings of Spectris Shareholders (or of any class or classes
thereof) to be convened by an order of the Court pursuant to section 896 of
the Companies Act, notice of which will be set out in the Scheme Document, for
the purposes of considering, and if thought fit, approving the Scheme (with or
without amendment) including any adjournment, postponement or reconvening
thereof
"Court Order" the order of the Court sanctioning the Scheme under section 899 of the
Companies Act
"Court Sanction" has the meaning given in Condition 2.3(i) (Scheme approval) in Part A of
Appendix 1 to this Announcement
"CREST" the system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by Euroclear UK &
International Limited
"Danish FDI Law" has the meaning given in paragraph 4.4.1 of Part A of Appendix 1 of this
Announcement
"Dealing Arrangement" an arrangement of the kind referred to in Note 11(a) in the definition of
acting in concert in the Code
"Dealing Disclosure" an announcement pursuant to Rule 8 of the Code containing details of dealings
in relevant securities of a party to an offer
"DGAM" has the meaning given in paragraph 4.10.1 of Part A of Appendix 1 of this
Announcement
"DGITI" has the meaning given in paragraph 4.10.1 of Part A of Appendix 1 of this
Announcement
"Disclosed" the information which has been disclosed by or on behalf of Spectris: (i)
fairly in writing before the date of this Announcement to Bidco, KKR, KKR LLP
or their or their affiliates' (if applicable) professional advisers (in their
capacity as such in relation to the Acquisition) (including, in connection
with the Acquisition, in the virtual data room operated by or on behalf of
Spectris or any replies to information requests and any correspondence in
connection therewith); (ii) to Bidco, KKR or KKR LLP (or their respective
officers, employees, agents or advisers) orally in calls and during any
management due diligence sessions held by Spectris in respect of the
Acquisition; (iii) in the Annual Report and Financial Statements of Spectris
for the year ended 31 December 2024; (iv) in this Announcement; or (v) in any
other announcement made by Spectris via a Regulatory Information Service in
the 24 months before the date of this Announcement
"DTRs" the Disclosure Guidance and Transparency Rules made by the FCA under FSMA and
forming part of the FCA's handbook, as amended from time to time
"Effective" in the context of the Acquisition: (i) if the Acquisition is implemented by
way of the Scheme, the Scheme having become effective pursuant to its terms;
or (ii) if the Acquisition is implemented by way of a Takeover Offer, the
Takeover Offer having been declared or having become unconditional in
accordance with the requirements of the Code
"Effective Date" the date on which the Acquisition becomes Effective
"Enlarged Group" the enlarged group following completion of the Acquisition comprising the
Bidco Group and the Spectris Group
"Eurozone" the Member States of the European Union that have adopted the euro as their
common currency and sole legal tender
"Excluded Shares" any Spectris Shares to be listed in the Scheme Document as excluded from the
Scheme, including those:
(i) beneficially owned by Bidco or any other member of the Bidco
Group; or
(ii) held by Spectris in treasury
"FATA" has the meaning given in paragraph 4.1.1 of Part A of Appendix 1 of this
Announcement
"FCA" the UK Financial Conduct Authority or its successor from time to time
"Forms of Proxy" the forms of proxy in connection with each of the Court Meeting and the
General Meeting, which shall accompany the Scheme Document
"FSMA" the Financial Services and Markets Act 2000, as amended from time to time
"FY25" means the financial year ending 31 December 2025
"General Meeting" the general meeting of Spectris Shareholders to be convened in connection with
the Scheme for the purpose of considering and, if thought fit, approving, the
Resolutions (with or without amendment), notice of which shall be contained in
the Scheme Document, including any adjournment, postponement or reconvening
thereof
"Goldman Sachs" Goldman Sachs International
"HSR Act" has the meaning given in paragraph 3.3.1 of Part A of Appendix 1 of this
Announcement
"ICA" has the meaning given in paragraph 4.2.1 of Part A of Appendix 1 of this
Announcement
"Interim Facilities Agreement" the interim facilities agreement entered into on or around the date of this
Announcement by, among others, Bidco and the Interim Lenders
"Interim Lenders" the lenders under the Interim Facilities Agreement (being Crédit Agricole
Corporate and Investment Bank, JPMorgan Chase Bank, N.A., London Branch,
Jefferies Finance LLC and KKR Corporate Lending (UK) LLC)
"Irish FDI Law" has the meaning given in paragraph 4.7.1 of Part A of Appendix 1 of this
Announcement
"Irish FDI Minister" has the meaning given in paragraph 4.7.1 of Part A of Appendix 1 of this
Announcement
"ISC" has the meaning given in paragraph 4.3.1 of Part A of Appendix 1 of this
Announcement
"Italian FDI Law" has the meaning given in paragraph 4.8.1 of Part A of Appendix 1 of this
Announcement
"J.P. Morgan Cazenove" J.P. Morgan Securities plc (which conducts its UK investment banking
activities as J.P. Morgan Cazenove)
"Joint Defence Agreement" the joint defence agreement between KKR LLP, Spectris and their respective
antitrust counsels dated 17 June 2025 and as amended from time to time, a
summary of which is set out in paragraph 11 of this Announcement
"KKR" Kohlberg Kravis Roberts & Co. L.P. and its affiliates
"KKR LLP" Kohlberg Kravis Roberts & Co. Partners LLP
"KKR Offer" has the meaning given in paragraph 5 of this Announcement
"Last Accounts Date" 31 December 2024
"Last Practicable Date" 1 July 2025
"LFL" the relevant financial result year over year, at constant currency, excluding
the contribution from acquisitions and disposals
"Listing Rules" the listing rules made under FSMA by the FCA and contained in the FCA's
publication of the same name, as amended from time to time
"London Stock Exchange" the London Stock Exchange plc or its successor
"Long Stop Date" 2 July 2026 or such later date, if any as: (i) Bidco and Spectris may agree;
or (ii) (in a competitive situation) as may be specified by Bidco with the
consent of the Panel, and in each case that, if so required, the Court may
allow
"Metron Bidco" has the meaning given in paragraph 4 of this Announcement
"Neuberger Berman" Neuberger Berman Group LLC
"NSI Act" the National Security and Investment Act 2021 as amended from time to time
"Offer Period" the offer period (as defined by the Code) relating to Spectris, which
commenced on 9 June 2025
"Offer Value" £40.00 per Spectris Share, comprising: (i) the Cash Consideration and (ii)
the Permitted Dividend
"Official List" the daily Official List published by the London Stock Exchange
"Opening Position Disclosure" an announcement pursuant to Rule 8 of the Code containing details on interests
or short positions in, or rights to subscribe for, any relevant securities of
a party to the Acquisition
"Overseas Shareholders" Shareholders (or nominees of, or custodians or trustees for, Shareholders) who
are resident in, ordinarily resident in, or nationals or citizens of,
jurisdictions outside the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Permitted Dividend" has the meaning given in the paragraph 2 of this Announcement
"PRA" the Prudential Regulation Authority
"Presidency" has the meaning given in paragraph 4.8.1 of Part A of Appendix 1 of this
Announcement
"Profit Improvement Programme" the general cost and efficiency measures announced by Spectris in October 2024
at the release of its third quarter trading update which are expected to
deliver c.£50 million of full run rate benefits during 2025 and 2026, with
c.£30 million expected in 2025 and an additional c.£20 million in 2026
"Regulation" has the meaning given in paragraph 3.2.1 of Part A of Appendix 1 of this
Announcement
"Regulatory Information Service" any information service authorised from time to time by the FCA for the
purposes of disseminating regulatory announcements
"Relevant Authority" any central bank, ministry, governmental, quasigovernmental, supranational
(including the European Union), statutory, regulatory or investigative body,
authority or tribunal (including any national or supranational antitrust,
competition or merger control authority (including the European Commission and
the UK Competition and Markets Authority), any sectoral ministry or regulator
and any foreign investment review body), national, state, municipal or local
government (including any subdivision, court, tribunal, administrative agency
or commission or other authority thereof), any entity owned or controlled by
them, any private body exercising any regulatory, taxing, importing or other
authority, any trade agency, association, institution or professional or
environmental body in any jurisdiction
"relevant securities" shall be construed in accordance with the Code
"Resolutions" the resolutions to be proposed at the General Meeting necessary to implement
the Scheme, including, among other things, a resolution to amend the Spectris
Articles by, inter alia, the adoption and inclusion of a new article under
which any Spectris Shares issued or transferred after the Scheme Record Time
(other than to Bidco and/or its nominees) shall be automatically transferred
to Bidco on the same terms as the Acquisition (other than terms as to timings
and formalities)
"Restricted Jurisdiction(s)" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available to Spectris Shareholders in that
jurisdiction or would result in a requirement to comply with any governmental
or other consent or any registration, filing or other formality which Bidco
regards as unduly onerous
"Rothschild & Co" N.M. Rothschild & Sons Limited
"SAMR" has the meaning given in paragraph 3.1.1 of Part A of Appendix 1 of this
Announcement
"Sanction Hearing" the hearing of the Court at which Spectris will seek an order sanctioning the
Scheme pursuant to Part 26 of the Companies Act and any adjournment,
postponement or reconvening thereof
"Scheme" the proposed scheme of arrangement under Part 26 of the Companies Act between
Spectris and the Scheme Shareholders in connection with the Acquisition, with
or subject to any modification, addition or condition approved or imposed by
the Court and agreed by Spectris and Bidco
"Scheme Document" the document to be sent to Spectris Shareholders containing, among other
things, the Scheme and notices of the Spectris Meetings
"Scheme Record Time" the time and date to be specified in the Scheme Document, by reference to
which the entitlements of Scheme Shareholders under the Scheme will be
determined, currently expected to be 6.00 p.m. on the Business Day immediately
preceding the Effective Date (or such other date as Bidco and Spectris may
agree)
"Scheme Shareholders" holders of Scheme Shares at any relevant date or time
"Scheme Shares" all Spectris Shares:
(i) in issue as at the date of the Scheme Document;
(ii) (if any) issued after the date of the Scheme Document and
before the Scheme Voting Record Time; and / or
(iii) (if any) issued at or after the Scheme Voting Record Time and
before the Scheme Record Time, either on terms that the original or any
subsequent holders thereof shall be bound by the Scheme or in respect of which
the holders thereof shall have agreed in writing to be bound by the Scheme,
in each case, and where the context requires, which remain in issue at the
Scheme Record Time but excluding any Excluded Shares
"Scheme Voting Record Time" the time and date to be specified in the Scheme Document by reference to which
entitlement to vote on the Scheme will be determined
"SEC" the United States Securities and Exchange Commission
"Significant Interest" in relation to an undertaking, a direct or indirect interest of 20 per cent.
or more of: (i) the total voting rights conferred by the equity share capital
(as defined in section 548 of the Companies Act) of such undertaking; or (ii)
the relevant partnership interest
"Spanish FDI Laws" has the meaning given in paragraph 4.10.1 of Part A of Appendix 1 of this
Announcement
"Spectris" Spectris plc, a company incorporated in England and Wales with registered
number 02025003
"Spectris Articles" the articles of association of Spectris from time to time
"Spectris Current Trading Update Profit Forecast" has the meaning given in Appendix 3 to this Announcement
"Spectris Directors" or "Spectris Board" the directors of Spectris as at the date of this Announcement or, where the
context so requires, the directors of Spectris from time to time
"Spectris FY24 Results and ARA Profit Forecast" has the meaning given in Appendix 3 to this Announcement
"Spectris Group" Spectris and its subsidiary undertakings from time to time
"Spectris Medium-Term Profit Forecast" has the meaning given in Appendix 3 to this Announcement
"Spectris Meetings" the Court Meeting and the General Meeting
"Spectris Profit Forecasts" together, the Spectris Current Trading Update Profit Forecast, the Spectris
FY24 Results and ARA Profit Forecast, the Spectris Medium-Term Profit Forecast
and the Spectris Q1 2025 Trading Update Profit Forecast
"Spectris Q1 2025 Trading Update Profit Forecast" has the meaning given in Appendix 3 to this Announcement
"Spectris Share Plans" means:
(i) the Spectris Long Term Incentive Plan adopted by the Spectris
Board on 5 December 2019;
(ii) the Spectris Performance Share Plan adopted by the Spectris
Board on 17 May 2006;
(iii) the Spectris Reward Plan adopted by the Spectris Board on 5
December 2019;
(iv) the Spectris Deferred Bonus Plan adopted by the Spectris Board on
5 December 2019; and
(v) the Spectris Share Incentive Plan approved by Spectris
Shareholders on 25 May 2018,
each as amended from time to time
"Spectris Shareholders" holders of Spectris Shares
"Spectris Shares" the ordinary shares of five pence each in the capital of Spectris
"Takeover Offer" if (with the consent of the Panel), Bidco elects to effect the Acquisition by
way of a takeover offer (as defined in Chapter 3 of Part 28 of the Companies
Act), the offer to be made by or on behalf of Bidco to acquire the entire
issued and to be issued ordinary share capital of Spectris (excluding any
Excluded Shares) on the terms and subject to the conditions to be set out in
the related offer document and, where the context permits, any subsequent
revision, variation, extension or renewal of such takeover offer
"Third Party" any Relevant Authority or any other body or person whatsoever in any
jurisdiction
"UK" or "United Kingdom" United Kingdom of Great Britain and Northern Ireland
"UK Market Abuse Regulation" Regulation (EU) No. 597/2014 of the European Parliament and the Council of 16
April 2014 on market abuse as it forms part of retained EU law as defined in
the European Union (Withdrawal) Act 2018, as amended from time to time
"U.S." or "United States" the United States of America, its territories and possessions, any state of
the United States and the District of Columbia
"U.S. Exchange Act" the U.S. Securities Exchange Act of 1934, as amended from time to time, and
the rules and regulations promulgated thereunder
"U.S. Securities Act" the U.S. Securities Act of 1933, as amended from time to time, and the rules
and regulations promulgated thereunder
"Vifo Act" has the meaning given in paragraph 4.9.1 of Part A of Appendix 1 of this
Announcement
"Wider Bidco Group" Bidco and its parent undertakings and such parent undertakings' subsidiary
undertakings, funds advised by KKR and their respective associated
undertakings, and any other body corporate, partnership, joint venture or
person in which Bidco and all such undertakings (aggregating their interests)
have a Significant Interest
"Wider Spectris Group" the members of the Spectris Group and their respective associated undertakings
and any other body corporate, partnership, joint venture or person in which
Spectris and all such undertakings (aggregating their interests) have a
Significant Interest
In this Announcement: (a) "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings given
to them in the Companies Act; (b) all times are London times, unless otherwise
stated; and (c) references to the singular include the plural and vice versa.
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