THIS ANNOUNCEMENT AND THE
INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH
AFRICA OR THE UNITED STATES OR INTO ANY OTHER JURISDICTION WHERE TO
DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE
LAW.
THIS ANNOUNCEMENT IS NOT AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES AND
NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR
ANY CONTRACT OR COMMITMENT WHATSOEVER. SECURITIES MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN
EXEMPTION FROM REGISTRATION AND THE SECURITIES DESCRIBED HEREIN
WILL BE SOLD IN ACCORDANCE WITH ALL APPLICABLE LAWS AND
REGULATIONS.
THE DEFINED TERMS SET OUT AT THE END
OF THIS ANNOUNCEMENT APPLY.
18 November 2015
IXICO plc
("IXICO" or the
"Company")
Proposed Acquisition, Placing,
Broker Option, Rule 9 Waiver, Share Restructuring and Notice of
General Meeting
18 November 2015: IXICO plc (AIM: IXI), the brain health company, today
announces that it has entered into an Acquisition Agreement to
conditionally acquire the entire issued share capital of Optimal
Medicine in consideration for the issue of up to £1.5 million in
Consideration Shares at an effective issue price of 49 pence per
share (a 53.1 per cent. premium to the closing mid-market price of
32 pence on 17 November 2015, being the last dealing day prior to
announcement of the Proposals). The Company is also proposing to
raise approximately £2.7 million before expenses by way of a
conditional placing at the Placing Price of 30.5p per
share.
Commenting on today's announcement,
Professor Derek Hill, Chief Executive Officer of IXICO,
said:
"The
acquisition of Optimal Medicine helps us to accelerate our overall
strategy towards IXICO becoming a leader in Digital
Healthcare for Brain Health. Like
IXICO, Optimal Medicine specialises in Brain Health, in particular
in ADHD and behavioural health, and therefore expands our expertise into new
disease areas.
"Optimal Medicine is a personalised
medicine company which develops web based Digital Healthcare
products that aid clinical decision making to improve patient
outcomes. The addition of Optimal Medicine is in line with
the Company's stated strategy to broaden IXICO's product offering
through acquisition and gives it a foothold in the US, the biggest
Digital Healthcare market globally. Optimal Medicine, which has
developed clinical decision support technologies for diagnosing and
treating ADHD and behavioural health for US patients, will provide
IXICO with a US infrastructure, commercial and IT healthcare
expertise. Optimal Medicine has also
built an extensive database that is used by clinicians in the US
and complements IXICO's existing data and technology in dementia
and other neurodegenerative diseases."
"Optimal
Medicine provides IXICO with an operational base in the important
US market and should accelerate our growth into this key
geography. This
provides IXICO with the opportunity to grow our relationship with
pharmaceutical companies in the data analytics, real world evidence
and digital health fields. We look forward
to working closely with our new colleagues."
Summary of the Placing and Broker
Option
The Company is also proposing to
raise approximately £2.7 million, before expenses, by way of a
conditional placing of 8,852,459 Placing Shares at the Placing
Price of 30.5 pence per share with investors. The Placing
Price represents a discount of 4.7 per cent. to the closing middle
market price on 17 November 2015. The net proceeds of the
Placing will be used for growth capital for the Enlarged Group post
Admission.
The Company has also granted to Peel
Hunt the Broker Option to raise up to a further £100,000 through
the issue of up to 327,868 Broker Option Shares at the Placing
Price in order to allow existing and other investors to participate
in the Fundraising. The exercise of the Broker Option shall be at
the discretion of Peel Hunt (with the agreement of the Company) and
Peel Hunt is under no obligation to exercise the Broker
Option.
The Placing Shares and Broker Option
Shares are not being made available to the public and none of the
Placing Shares nor the Broker Option Shares are being offered or
sold in any jurisdiction where it would be unlawful to do
so.
The Invesco Funds, Imperial
Innovations and IP2IPO all intend to participate in the Placing.
Since funds managed by IAML on a discretionary basis are interested
in 41.81 per cent. of Imperial Innovations' equity share capital
and 25.37 per cent. of IPG's share capital, Imperial Innovations
and IPG are, by operation of the presumption contained in the City
Code, presumed to be acting in concert with IAML and the Invesco
Funds. Due to the relationship between IPG, IP2IPO, NETF,
Theragenetics and Mark Warne, these persons are also deemed to be
members of the Concert Party. The Concert Party therefore comprises
IAML, Imperial Innovations, IPG and IP2IPO, NETF, Theragenetics and
Mark Warne.
In the absence of a waiver from the
provisions of Rule 9 of the City Code being granted by the Panel,
the Concert Party would be obliged to make a general offer for the
Company. The Panel has agreed, subject to Resolution 2 being passed
on a poll of Independent Shareholders, to waive this
obligation.
A Circular setting out further
details on the proposed Placing and Broker Option, Acquisition and
Rule 9 Waiver is expected to be posted to shareholders no later
than 18 November 2015, with Admission expected to occur no later
than 8 December 2015.
For further information, please contact:
|
IXICO plc
|
Tel: +44 (0) 20 3763 7499
|
|
Derek Hill, CEO
|
|
|
Susan Lowther, CFO
|
|
|
Charles Spicer, VP Corporate Development
|
|
|
|
|
|
Peel Hunt LLP (Nominated Adviser and Broker)
|
Tel: +44 (0) 20 7418 8900
|
|
James Steel
|
|
|
Oliver Jackson
|
|
|
Sohail Akbar
|
|
|
|
|
|
FTI Consulting Limited (Investor Relations)
|
Tel: +44 (0) 20 3727 1000
|
|
Simon Conway
|
|
|
Mo Noonan
|
|
|
Matthew Moss
|
|
Peel Hunt LLP, which is authorised
and regulated by the Financial Conduct Authority in the United
Kingdom, is acting exclusively for IXICO and no one else in
connection with the Offer and will not be responsible to anyone
other than IXICO for providing the protections afforded to clients
of Peel Hunt LLP or for providing advice in connection with the
Offer, the content of this announcement or any matter or
arrangement referred to herein. Neither Peel Hunt LLP nor any of
its subsidiaries, branches or affiliates, owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Peel Hunt LLP in connection with this
announcement, any statement contained herein or
otherwise.
Note regarding forward-looking
statements:
This announcement contains certain
forward looking statements relating to the Company's future
prospects, developments and business strategies.
Forward looking statements are
identified by their use of terms and phrases such as "targets"
"estimates", "envisages", "believes", "expects", "aims", "intends",
"plans", "will", "may", "anticipates", "would", "could" or similar
expressions or the negative of those, variations or comparable
expressions, including references to assumptions.
The forward looking statements in
this announcement are based on current expectations and are subject
to risks and uncertainties which could cause actual results to
differ materially from those expressed or implied by those
statements.
These forward looking statements
relate only to the position as at the date of this announcement.
Neither the Directors nor the Company undertake any obligation to
update forward looking statements or risk factors, other than as
required by the AIM Rules for Companies or by the rules of any
other applicable securities regulatory authority, whether as a
result of the information, future events or otherwise.
You are advised to read this
announcement and, once available the Circular and the information
incorporated by reference therein, in their entirety for a further
discussion of the factors that could affect the Company's or the
Group's future performance and the industries in which they
operate. In light of these risks, uncertainties and
assumptions, the events described in the forward-looking statements
in this announcement may not occur.
Neither the content of the Company's
website (or any other website) nor any website accessible by
hyperlinks on the Company's website (or any other website) is
incorporated in, or forms part of, this announcement.
Any person receiving this
announcement is advised to exercise caution in relation to the
Fundraising. If in any doubt about any of the contents of this
announcement, independent professional advice should be
obtained.
This summary should be read in
conjunction with the full text of the announcement which
follows.
Introduction
IXICO today announces that it has
entered into an Acquisition Agreement to conditionally acquire the
entire issued share capital of Optimal Medicine in consideration
for the issue of up to £1.5 million in Completion Consideration
Shares and Deferred Consideration Shares at a price of 49 pence per
share (53.1 per cent. premium to the closing mid-market price of 32
pence on 17 November 2015, being the last dealing day prior to
announcement of the Proposals). Subject to certain warranties in
relation to the business and operations of Optimal Medicine and a
tax covenant, the Deferred Consideration Shares will be paid on 4
January 2017.
Optimal Medicine shall be a wholly
owned subsidiary of IXICO's wholly owned subsidiary, IXICO
Technologies. IXICO has also today entered into the Put and Call
Option Letters to acquire the shares issued by Optimal Medicine
following any future exercise of the Optimal Medicine Options in
consideration for the issue of the Optimal Medicine Option Shares
at a price of 49 pence per share. Optimal Medicine specialises in
Digital Healthcare products for clinical decision support in brain
disorders and has a newly recruited US-based sales team and early
post-launch revenues in the US.
The Company is also proposing to
raise approximately £2.7 million, before expenses, by way of a
conditional placing of 8,852,459 Placing Shares at the Placing
Price with investors. The net proceeds of the Placing will be used
for growth capital for the Enlarged Group post
Admission.
The Placing is conditional upon,
inter alia:
·
the passing of the Resolutions at the General
Meeting;
·
the Acquisition Agreement becoming unconditional
save as to admission of the Completion Consideration
Shares;
·
the Placing Agreement entered into between the
Company and Peel Hunt becoming unconditional in all relevant
respects and not having been terminated in accordance with its
terms prior to Admission; and
·
Admission becoming effective by no later than 8.00
a.m. on 8 December 2015 or such other date (being not later than
8.00 a.m. on 21 December 2015) as the Company and Peel Hunt may
agree.
The Company has also granted to Peel
Hunt the Broker Option to raise up to a further £100,000 through
the issue of up to 327,868 Broker Option Shares at the Placing
Price in order to allow existing and other investors to participate
in the Fundraising.
The Broker Option may be exercised
by Peel Hunt between 8.00 a.m. on 18 November 2015 and 7.00 p.m. on
4 December 2015 and, if exercised, shall require the Company to
issue up to a further 327,868 Broker Option Shares in addition to
the Placing Shares. The exercise of the Broker Option shall be at
the discretion of Peel Hunt (with the agreement of the Company) and
Peel Hunt is under no obligation to exercise the Broker
Option.
The New Shares (assuming all of the
Broker Option Shares are issued), will, when issued, represent
approximately 43.1 per cent. of the Company's Enlarged Issued
Ordinary Share Capital, and approximately 42.0 per cent. of
the Company's Fully Diluted Share Capital.
The Invesco Funds, Imperial
Innovations and IP2IPO all intend to participate in the Placing.
The Invesco Funds intend to increase their shareholding from 23.2
per cent. of the Enlarged Issued Ordinary Share Capital to 23.5 per
cent. assuming no take-up under the Broker Option. Imperial
Innovations and IP2IPO intend to increase their shareholdings in
the Enlarged Issued Ordinary Share Capital from 11.4 per cent. and
0.10 per cent. respectively to 13.7 per cent. and 20.3 per cent.
respectively assuming no take-up under the Broker
Option.
Under the City Code a company and
its associated companies are presumed to be acting in concert. For
this purpose, ownership or control of 20 per cent. or more of the
equity share capital of a company is regarded as the test of
associated company status.
Since funds managed by IAML on a
discretionary basis are interested in 41.81 per cent. of Imperial
Innovations' equity share capital and 25.37 per cent. of IPG's
share capital, Imperial Innovations and IPG are, by operation of
the presumption contained in the City Code, presumed to be acting
in concert with IAML and the Invesco Funds. Due to the relationship
between IPG, IP2IPO, NETF, Theragenetics and Mark Warne, these
persons are also deemed to be members of the Concert Party. The
Concert Party therefore comprises IAML, Imperial Innovations, IPG
and IP2IPO, NETF, Theragenetics and Mark Warne.
Each of IAML, Imperial Innovations
and IPG pursues its own independent investment objectives and makes
its own investment and divestment decisions in a manner which it
considers best suits its own (and its shareholders'), or, in the
case of IAML, its managed clients', interests and objectives.
Consequently, each of IAML, Imperial Innovations and IPG reserves
the right to seek to rebut the presumption if it deems it
appropriate to do so.
Following completion of the proposed
Placing and Acquisition, and assuming no take-up under the Broker
Option at Admission, the Concert Party would own, in aggregate,
15,905,912 Ordinary Shares, or 60.2 per cent. of the Enlarged
Issued Ordinary Share Capital and, following the issue of the
Deferred Consideration Shares and the Optimal Medicine Option
Shares, the Concert Party's interest in the capital of the Company
would be 16,419,846 Ordinary Shares or 60.5 per cent. of the
Company's Fully Diluted Share Capital. In the absence of a waiver
from the provisions of Rule 9 of the City Code being granted by the
Panel, the Concert Party would be obliged to make a general offer
for the Company. The Panel has agreed, subject to Resolution 2
being passed on a poll of Independent Shareholders, to waive this
obligation.
The Independent Directors
unanimously recommend that you vote in favour of the Whitewash
Resolution at the General Meeting, as they and their immediate
families and connected persons (within the meaning of section 252
of the Act) intend to do in respect of their aggregate holdings of
620,114 Ordinary Shares representing approximately 4.1 per cent. of
the Existing Ordinary Shares of the Company.
About IXICO
IXICO, the brain health company,
uses its innovative and proprietary digital platform technologies
to help those involved in researching and treating serious diseases
to make rapid, informed decisions targeted at improving patient
outcomes. IXICO has significant experience working with
global pharmaceutical and biotechnology companies supporting
clinical studies in the field of neuro-degenerative disorders
including dementia, Alzheimer's disease, Huntington's disease and
Multiple Sclerosis.
More information is available on
www.ixico.com
Background to and reasons for the
Placing and Acquisition
IXICO's mission is to be a leader in
digital healthcare for Brain Health delivering products and high
added value data solutions to key stakeholders in pharmaceutical
companies, healthcare providers (clinicians and hospitals) and
payers.
IXICO develops and provides
innovative technologies to improve research, diagnosis and
management of serious diseases of the brain, with an initial focus
on dementia, a disease with an estimated 36 million sufferers
worldwide at an estimated $600 billion cost to society.
IXICO has established commercial
success with the pharmaceutical industry in its clinical trial
services business, which was structurally profitable prior to the
investment of growth capital raised at the time of the Company's
admission to trading on AIM in 2013. Since admission in 2013, IXICO
has (i) strengthened its management capacity (ii) entered into a
commercial and operational alliance with US-based VirtualScopics,
Inc. (NASDAQ:VSCP) (iii) secured significant grant funding to
support product development and build collaborations and (iv)
further developed its new products, Assessa® and
MyBrainBook®.
The Group has been contracted by
nine of the leading global pharmaceutical companies since being
founded in 2004 and has averaged 12.5% revenue CAGR from 2011 to
2014. IXICO has historically generated its revenues from its
clinical trial services business, which is underpinned by the
TrialTracker™ proprietary and regulatory compliant image data and
query management products. Revenues are generated through the sale
of data management, project management, site management, and image
analysis related services. The Directors believe that IXICO's
capabilities in clinical trial services have recently been enhanced
by entering into a commercial and operational alliance with
VirtualScopics, Inc. This agreement enables the Group, through that
alliance, to provide the clinical trials industry with global
operational capabilities and a comprehensive range of therapeutic
area and modality expertise. The first award of a joint project to
this alliance by a leading pharmaceutical company was announced in
December 2014 to provide image analysis services for a Phase II
oncology clinical trial. In June 2015, the Company announced the
alliance had been awarded two further contracts with leading
pharmaceutical companies, one in metastatic solid tumours and one
in a rare neurodegenerative disease.
While IXICO's focus has historically
been on Alzheimer's disease and other dementias, the Company has
more recently been developing its expertise in other
neurodegenerative indication areas including Huntington's disease,
where the Company has been awarded three contracts since May
2014.
The CNS clinical trial imaging
market is a modest market in which IXICO has been described as a
major player. IXICO is now leveraging its reputation and pharma
relationships in the CNS clinical trial imaging market by moving
into the brain health market, which is a major societal challenge
with 6.3 per cent. of the US healthcare budget spent on brain
health and a $600 billion global cost of dementia. Approximately 25
per cent. of adults in the US have a mental health disorder in a
given year. Digital therapies could drive savings of over $300
billion of US healthcare costs with the CNS drug market worth
approximately $80 billion and a potential digital therapies market
size of $32 billion. Growth in the relevant digital healthcare
market segments is expected to have a CAGR of 36 per cent. to 46
per cent. from 2013 to 2020.
The Directors believe that Digital
Healthcare is increasingly central to both healthcare providers'
aspirations to improve patient outcomes and the pharmaceutical
industry's clearly articulated need to 'sell outcomes not pills'.
In addition, the Directors believe that the successful aggregation
of data to optimise patient outcomes and cost effectiveness offers
a potentially valuable business opportunity for the Group. The
Directors therefore have concluded that there are opportunities for
IXICO to sell its digital technology outside of its core clinical
trial services business. Early progress has been demonstrated
through the multi-year software licence and support agreement for
IXICO's TrialTracker™ product with VirtualScopics, Inc. as
announced on 16 December 2014 and the award of a new project in the
area of Multiple Sclerosis, potentially using IXICO technology to
support an approved drug in the clinic.
Assessa® is IXICO's CE marked class
2a medical device for use on patients with a possible neurological
or psychiatric disorder. It can combine imaging, demographic,
cognitive and functional information to provide clinical decision
support and assist in stratification, differential diagnosis and
predict likely disease progression of dementia. Assessa® supports
clinical decisions by collating a patient's clinical data,
including imaging and cognitive assessment, analysing and quality
checking the data before comparing that data to reference data and
generating a patient report. Assessa® has regulatory approval to be
sold as a clinical decision support tool in the EU and Canada.
Further R&D investment since admission of the Company to
trading on AIM in 2013 has resulted in a product that is now being
piloted within the NHS. Commercialisation is being explored with
both healthcare service providers and pharmaceutical
companies.
Commercialisation with healthcare
service providers is initially focused on the UK with the intention
to target other European markets and Canada. The Group's current
intention is to initiate commercialisation in the US market
following demonstration of initial clinical and commercial progress
in these markets, and to seek any required US regulatory
approvals.
IXICO is in the early-stage launch
of MyBrainBook®, an on-line digital hub that aims to address the
care needs of elderly people with cognitive impairment, including
those with dementia, by improving the co-ordination of care.
MyBrainBook® stores parameters concerning each patient including a
personal profile containing likes and dislikes, interests and
hobbies, contacts, diary, photographs and music. This is
supplemented by clinical, social care and care planning information
including personal support and urgent care plans, other clinical
information and outcome measurement tools. MyBrainBook® uses a
facilitated care model, in which a trained individual (such as a
healthcare professional providing post-diagnostic support to a
patient) helps set up the relevant information. This can be
supplemented by others caring for the patient, including family
members, and for early stage disease, the patient
themselves.
IXICO has been able to leverage
brain health sector credibility and has identified early
opportunities to deploy its Digital Healthcare platforms. This
includes MyBrainBook® on a pilot basis with NHS healthcare
providers, social care commissioners and third sector organisations
such as charities commissioned by the NHS to provide post-diagnosis
support. The Directors believe this should drive clinical
acceptance by proving and improving the products in the clinical
setting. The Directors anticipate that MyBrainBook® will generate
initial revenue through sales to organisations currently providing
care and support to patients with cognitive problems and that other
market segments can be accessed through commercial
partnerships.
IXICO has experience providing
pharmaceutical companies with TrialTracker™ and associated services
for electronic data capture and analysis in clinical trials. This
has resulted in the Group being familiar with the pharmaceutical
industry's requirement for an evidence based approach to drug
development, and the wider regulatory environment in which a
pharmaceutical company operates. The Directors believe this
experience provides the Group with strong foundations for
commercial success as its technology is being translated into
products to support clinical practice, a market that they believe
offers significant growth opportunity. Specifically, this
experience has provided IXICO with opportunities to work with
pharmaceutical companies configuring and adapting Assessa® to
support pharmaceutical products in the clinic. Such products used
to support pharmaceutical companies' business can be referred to as
'Digital Healthcare Companion Products' which the Directors believe
offer long term revenue opportunities for IXICO.
On 9 October 2015, IXICO announced
that it has been awarded a strategic collaboration with a leading
pharmaceutical company to develop and pilot an adapted version of
Assessa® for the clinical management of multiple sclerosis. Under
the terms of the multi-stage collaboration, IXICO will develop an
adapted version of Assessa®, its CE marked digital healthcare
platform, to assist in the monitoring and management of a side
effect known as PML of a blockbuster drug in people receiving
approved pharmaceutical treatments for multiple sclerosis ('MS') in
certain territories in the EU and Canada. The project started in
October 2015 and it is anticipated that the digital platform will
be deployed in a clinical setting in 2016. The directors expect
this collaboration to make a material contribution to IXICO
revenues in the next 12-18 months.
The Company has a pipeline of other
opportunities using a similar framework with other companies and
indications.
The Directors have identified a
pipeline of other comparable opportunities for Assessa® (or
Assessa® combined with MyBrainBook®) with pharmaceutical companies.
These would make use of existing functionality of IXICO products,
configured and adapted to work alongside specific drugs under
development.
IXICO is currently in collaboration
with several leading global pharmaceutical companies on a variety
of different projects and initiatives. IXICO's stated strategy
since admission to trading on AIM has been to continue to build a
Digital Healthcare company focussed on brain health with ambitions
to enhance organic growth through further potential mergers and
acquisitions with complementary businesses where appropriate. This
strategy seeks to:
·
build on existing revenues from the Group's core
business and grow new revenue lines both organically and through
acquisition where appropriate;
·
leverage the Group's relationships with leading
pharmaceutical companies and its focus on brain health;
·
expand into complementary Digital Healthcare
technologies and data; and
·
build strong commercial teams in key
markets.
The Directors believe this strategy
will enable IXICO to build on early revenue from its partnerships
with pharmaceutical companies to develop further Digital Healthcare
companion products that work alongside specific pharmaceuticals to
impact patient outcomes.
The Directors wish to pursue a
growth strategy which includes a progressive M&A strategy,
providing increased momentum in the business and generation of
positive newsflow, pursuing a path towards profitability and
positive cash flow. The Acquisition is the first step in this
strategy. IXICO intends to continue to evaluate M&A
opportunities in the future, and the Board continues to track and
evaluate opportunities that include revenue generating products and
complementary digital technology.
Acquisition of Optimal Medicine
Optimal Medicine is a private UK
company, founded in 2009, and has been backed by IP2IPO and NETF
with invested capital of approximately £3 million. The Optimal
Medicine Group has eight employees, including five in the US (three
of those being within a US-based commercial team), as well as
technology experts and a founder CEO with clinical experience, Dr.
Janet Munro.
The Optimal Medicine Group develops
Digital Healthcare products for clinical decision support. Its
first product is mehealth™ for ADHD, a decision support technology
for physicians diagnosing and treating patients with possible ADHD.
This was in-licensed from Cincinnati Children's Hospital in 2013
and has had early sales in the US to community
physicians.
The value proposition of the
technology is that it improves ADHD care, saves doctors' time and
assists in their continuing professional development. The diagnosis
and treatment of childhood ADHD involves the physician assessing
the patient, taking account of the child's symptoms and behaviour
at home and at school. Mehealth™ for ADHD provides computer and
mobile device interfaces to allow the parents and teachers to
complete validated questionnaires electronically and for the
information to be automatically analysed and reported, to support
the physician's assessment and treatment, via an integrated
platform. The Optimal Medicine CTO, Kenneth Tubman, has experience
of integrating software and data with other US healthcare systems.
In the past year, the Optimal Medicine Group has invested in an
e-marketing campaign targeting community physicians and has
recently appointed two experienced sales executives in the US. In
addition to mehealth™, the Optimal Medicine Group has a behavioural
health product in very early commercialisation.
The Directors believe IXICO offers
complementary expertise to the Optimal Medicine business with its
established commercial infrastructure, experienced pharmaceutical
business development team, credibility in neuroscience within the
clinical and pharmaceutical communities as well as specific
knowledge of the pharmaceutical industry's evolving interest in
Digital Healthcare. The Directors believe this expertise could
accelerate revenue growth from Optimal Medicine products. The
Optimal Medicine Group provides IXICO with initial US commercial
infrastructure and expertise with a newly appointed US business
development team that has experience of the high priority US
market. In particular, the Directors believe the US primary care
market is a key opportunity for MyBrainBook®. Optimal Medicine's
products, initial revenues and patient data are expected to provide
additional potential revenue streams in the field of brain health.
The Directors also believe IXICO will benefit from Optimal
Medicine's expertise in software integration with US healthcare
systems and it is intended that the Enlarged Group will have the
expertise to develop an enhanced ADHD product for pharmaceutical
and healthcare companies using IXICO's current data analytics
capabilities.
The Optimal Medicine Group's current
CEO, Dr Janet Munro, and CTO, Kenneth Tubman, will join the IXICO
management team following completion of the Acquisition and will
strengthen the leadership of the Enlarged Group's clinical science
and software development teams. In addition, Mr David Brister will
join the Board of IXICO as a Non-Executive Director and Deputy
Chairman. Mr Brister has over twenty years' experience in a variety
of private equity, venture capital and operational
roles.
Revenues for the Optimal Medicine
Group for the full year to August 2014 were £35,000, with losses of
£728,000 (unaudited). The cash balance of Optimal Medicine on 30
June 2015 was £0.494 million.
Post completion of the Acquisition,
the Directors believe IXICO will be a more international business
with a clear positioning as a UK leader in Digital Healthcare and
initial steps into the key US digital healthcare market with early
customers and a broader product offering with potential high growth
markets. As such, the Directors believe that the Enlarged Group
will have an opportunity to be a consolidator and market leader in
Digital Healthcare and the Enlarged Group will have stronger
foundations from which to drive M&A and organic
growth.
As part of the integration of
Optimal Medicine into the Enlarged Group, there will be a review of
the Optimal Medicine Group product portfolio with regard to further
commercialisation of the Optimal Medicine Group products with both
healthcare service providers and the pharmaceutical
industry.
The Directors believe that the
Enlarged Group will have a stronger commercial team following
completion of the Acquisition, with a portfolio of brain health
products that can be more effectively sold into the healthcare
service provider and pharmaceutical industry markets. The Directors
further believe that this will accelerate revenue growth and
provide a path to profitability and cash generation.
IXICO's presence in high growth
markets will provide an opportunity for a two pronged growth
strategy combining organic growth from the existing product
portfolio with accelerated growth through undertaking strategic
acquisitions.
Current Trading and
Prospects
The Company announced its interim
results for the period ending 31 March 2015 on 18 May 2015. Please
refer to the Company's announcement, as notified through the
Regulatory Information Service and made available on the Company's
website at www.ixico.com.
Revenue in the six months ended 31
March 2015 increased by 36% to £1.6 million (1H 2014 £1.2 million),
and included preliminary revenues from the Group's Digital
Healthcare products. Growth in revenue also benefited from
expansion in clinical trials business, particularly in Huntington's
Disease.
Highlights of the Interim
Results:
·
Extension of two clinical trials in Huntington's
Disease, valued at approximately £2.5m over three years
·
VirtualScopics, Inc. alliance delivering
commercial value
o Won
first joint project for top 15 pharmaceutical company
o Licence of TrialTracker™ proprietary image data and query
management platform
·
Partner in the European Prevention of Alzheimer's
dementia Initiative (EPAD)
·
Strengthened capabilities, technology and IP on
healthcare data analytics
·
Financial performance underpinned by strong
revenue growth of 36% to £1.6 million
o Total income (revenue plus other income) up 40% to £2.0
million
o Loss
reduced by 58% to £0.6 million despite increased investment in
R&D
·
Loss per share 4.1p (2014 loss per share
10.5p)
·
Cash of £1.95 million at 31 March 2015 with second
half cash inflows to include committed grant funding
Post-Period Highlights and Current Trading
Since the end of the financial period to 31 March
2015, the Company has seen the following developments:
·
Third contract award in Huntington's Disease within 12 months
·
Launch of the Project Cygnus digital platform to support patients
with the diseases that cause dementia
·
IXICO is the lead partner working alongside The Northern Health
Science Alliance Network, several NHS Trusts in the North of
England and MRC Technology
· UK
Government funded project to support accurate differential
diagnosis of CNS diseases
· The
Group has benefitted from grant income totalling £1.1 million in
the past 18 months and has an additional £2.3 million of potential
income from awarded grants to be recognised in the next 3 to 5
years. The Group had cash of £2.158 million as at 30 June 2015
·
Awarded significant long term contract with leading pharma company
in August 2015 generating approximately $1 million of revenue per
annum for at least seven years
·
Signed a strategic collaboration with a leading pharmaceutical
company to develop and pilot an adapted version of Assessa® for the
clinical management of multiple sclerosis, which is expected to
make a material contribution to revenue during the next 12 - 18
months
On 19 October 2015, IXICO announced a pre-close
trading update ahead of its preliminary results for the year ended
30 September 2015.
Revenues for the year were at £3.1 million and other
income at £1.0 million, in line with market expectations, giving
combined total income of £4.1 million for the year. This compares
to £4.3 million of total income (£3.4 million of revenue and £0.9
million of other income) for the 16 month period to 30 September
2014. Revenues in the year were achieved in the clinical trials
business, including new contracts in Huntington's Disease, together
with initial revenues from the Company's proprietary digital
healthcare platform.
Operating expenses have been tightly controlled which
has contributed towards a net cash figure at 30 September 2015 of
£1.92 million which is ahead of market expectations and reflects a
modest reduction from the net cost figure of £1.95 million at 31
March 2015.
Current trading continues to perform in line with the
Company's expectations.
No significant change
There has been no significant change in the financial
or trading position of the Company since 31 March 2015, being the
end of the period covered by the Company's latest half yearly
report.
Board Composition
The Board is pleased to announce the appointment,
conditional on Admission, of Mr David John Brister, 53, as a
Non-Executive Director and Deputy Chairman of the Company. Mr
Brister is currently chair of Optimal Medicine, Crysalin Limited
and HealthiQ Limited and a non-executive director of Green
Biologics Limited. He was formerly a venture capitalist with MVM
and 3i plc. Mr Brister has over twenty years' experience in a
variety of private equity, venture capital and operational
roles.
In the past five years, Mr Brister has also been a
director of Enzyme Partners Limited, Hare Hatch Holdings Limited,
Mabey Holdings Limited, Mabey and Johnson Limited, Optimal Brain
Medicine Limited, Ulive Limited, Ulive Enterprises Limited, Veryan
Holdings Limited and Veryan Medical Limited.
The services of Mr David Brister as Non-Executive
Director are provided under the terms of an appointment letter from
the Company to him dated 18 November 2015 which provides for a base
fee of £30,000 per annum, such appointment being effective on
Admission and terminable on 3 months' notice.
There are no other disclosures required in relation
to Rule 17 or paragraph (g) of Schedule 2 of the AIM Rules for
Companies.
Ms Maina Bhaman, Non-Executive Director, has decided
to step down from the Board at Admission, following five years of
service. The Board would like to thank Maina Bhaman for her
contribution to the Company.
The New Shares
The New Shares, being the New Ordinary Shares to be
issued pursuant to the Placing, the Broker Option (if exercised),
and the Completion Consideration Shares to be issued pursuant to
the Acquisition, will, when issued, be credited as fully paid and
will rank pari passu in all respects with the Ordinary Shares of
the Company, including the right to receive all dividends and other
distributions declared, made or paid after Admission.
Consideration Shares issued to the Optimal Medicine
Vendors except for NETF will be subject to a lock-up period of 12
months. Any trading in respect of the Consideration Shares during
the 12 month period following the end of the 12 month lock-up
period shall be through IXICO's brokers. NETF will be subject to a
lock-up period of six months. Any trading in respect of the
Consideration Shares by NETF during the 18 month period following
the end of the six month lock-up period shall be through IXICO's
brokers.
Application will be made for all of the New Shares to
be admitted to trading on AIM. On the assumption that, inter alia,
the Resolutions are approved by Shareholders, it is expected that
Admission will become effective and that dealings will commence at
8 a.m. on 8 December 2015. It is expected that the New Shares will
be delivered into CREST on 8 December 2015 or, as applicable, that
share certificates for any of the New Shares will be dispatched by
no later than 22 December 2015.
Use of Proceeds
It is the intention of the Directors that the net
proceeds of the Placing (estimated to be £2.45 million) will be
used to support and fund the Enlarged Group in the following
approximate proportions:
· 40%
for general working capital to support the operations and to
facilitate and where appropriate co-investment in pharmaceutical
Digital Healthcare Companion Product deals;
· 30%
to recruit and support US and European business development
employees; and
· 30%
to develop further US Healthcare IT infrastructure, delivery and
deployment.
Any funds raised through the Broker Option will be
applied towards general working capital purposes.
The Placing Agreement
The Placing Agreement has been entered into between
the Company and Peel Hunt. Pursuant to the Placing Agreement, Peel
Hunt has agreed to use its reasonable endeavours to arrange for
Placees to subscribe at the Placing Price for the Placing Shares
and the Company has granted the Broker Option to Peel Hunt in order
to allow existing and other investors to participate in the
Fundraising.
This agreement is conditional upon Admission having
taken place and certain other conditions having been fulfilled or
waived on or before 7 December 2015 or such later date as Peel Hunt
and the Company agree, but in any event not later than 18 December
2015.
The Placing Agreement contains certain warranties
from the Company in favour of Peel Hunt in relation to, inter alia,
the accuracy of the information contained in the Circular and
certain other matters relating to the Company, its business, the
Acquisition, the Placing and the Broker Option. In addition, the
Company has agreed to indemnify Peel Hunt in relation to certain
liabilities that Peel Hunt may incur in respect of the Placing and
the Broker Option.
Subject to Admission, the Company will pay to Peel
Hunt a combined corporate finance and commission fee for its
services. The agreement provides for the Company to pay all
expenses incidental to the Placing and the application for
Admission, including the fees and costs of other professional
advisers, and all costs relating to the Placing, including
printing, advertising and distribution charges, the fees of the
Registrars and the fees payable to the London Stock Exchange and
the Panel.
Peel Hunt may terminate the Placing Agreement in
specified circumstances prior to Admission, principally in the
event of a material breach of the Placing Agreement or of any of
the warranties contained in it or where any event or omission
relating to the Group is, or will in the opinion of Peel Hunt, be
materially prejudicial to the successful outcome of the Placing and
the Broker Option.
Peel Hunt is entitled to terminate the Placing
Agreement if, amongst other things: (a) prior to Admission, there
is a material adverse change in the financial or trading position,
business or prospects of the Group (in the opinion of Peel Hunt
acting in good faith); (b) prior to Admission, Peel Hunt becomes
aware that there has been a material breach of any of the
warranties given by the Company in the Placing Agreement; (c) prior
to Admission, the Company has failed to comply with certain of its
obligations under the Placing Agreement; or (d) prior to Admission,
certain force majeure events occur which would make it inadvisable
or impractical to proceed with the Placing or the Broker Option (in
the opinion of Peel Hunt acting in good faith).
Details of the Share Restructuring
The Company is proposing to undertake a restructuring
of share capital of the Company, which has become necessary as a
result of the share value as traded on AIM falling below the
nominal value of the Existing Ordinary Shares. Under the Act, a
company is not permitted to issue new shares at a subscription
price less than the nominal value of the shares in question and
accordingly it is not practical for the Company to raise additional
capital through the issue of new equity shares when the minimum
subscription price would have to be 50 pence per Ordinary Share and
the current price as at 17 November 2015 (being the latest
practicable date prior to publication of this document) was 32
pence per Existing Ordinary Share.
It is therefore proposed to sub-divide and
re-designate each Existing Ordinary Share into one Ordinary Share
of 1 pence and one Deferred Share of 49 pence. The Ordinary Shares
will retain all the rights currently attaching to the Existing
Ordinary Shares in respect of dividends, voting and any return on
capital. Other than the change in nominal value therefore, the
Ordinary Shares will be identical to the Existing Ordinary Shares.
No new certificates will be issued in respect of the Ordinary
Shares arising as a result of the Share Restructuring and the
existing share certificates in respect of Existing Ordinary Shares
will be valid and will continue to be accepted as evidence of title
for the Ordinary Shares.
The Deferred Shares carry minimal rights thereby
rendering them effectively valueless. The rights attaching to the
Deferred Shares can be summarised as follows:
(i) the holders thereof do not have any
right to participate in the profits or income or reserves of the
Company;
(ii) on a return of capital on a winding up the
holders thereof will only be entitled to an amount equal to the
nominal value of the Deferred Shares but only after the holders of
Ordinary Shares have received £10,000,000 in respect of each
Ordinary Share;
(iii) the holders thereof have no right to receive
notice of or attend or vote at any general meeting of the Company;
and
(iv) the Company may acquire the Deferred Shares for
a nominal consideration at any time.
No application will be made to the London Stock
Exchange for the Deferred Shares to be admitted to trading on AIM
or any other stock exchange. No share certificates will be issued
for any Deferred Shares. Pursuant to Resolution 4, the Company is
seeking Shareholder approval to buy back the Deferred Shares for a
nominal consideration pursuant to a purchase contract, following
which it is expected that the Deferred Shares will be
cancelled.
Assuming that all the Resolutions are passed, the
nominal value of each new Ordinary Share will be 1 pence. The
number of ordinary shares before and subsequent to the Share
Restructuring will remain at 15,215,664 and, therefore, the Share
Restructuring will not have a direct impact on the share price of
the Company.
The Share Restructuring is conditional upon
Shareholder approval at the General Meeting, at which Shareholders
will be asked to consider and, if thought fit, approve the Share
Restructuring. As the Share Restructuring will change the nominal
value of the Existing Ordinary Shares, the adoption of the New
Articles of Association will need to be approved by a special
resolution at the General Meeting. Details of the General Meeting
are set out below and the notice is set out at the end of this
document.
The City Code on Takeovers and Mergers
The proposed issue of the New Shares gives rise to
certain considerations under the City Code. Brief details of the
Panel, the City Code and the protections they afford are described
below.
The City Code is issued and administered by the
Panel. The City Code applies to all takeover and merger
transactions, however effected, where the offeree company is, inter
alia, a listed or unlisted public company resident in the United
Kingdom (and to certain categories of private limited companies).
The Company is a listed public company and its Shareholders are
entitled to the protections afforded by the City Code.
Under Rule 9 of the City Code, where any person
acquires, whether by a series of transactions over a period of time
or not, an interest in shares which (taken together with shares
already held by him and an interest in shares held or acquired by
persons acting in concert with him) carry 30 per cent. or more of
the voting rights of a company which is subject to the City Code,
that person is normally required to make a general offer to all the
holders of any class of equity share capital or other class of
transferable securities carrying voting rights in that company to
acquire the balance of their interests in the company.
Rule 9 of the City Code also provides that, among
other things, where any person who, together with persons acting in
concert with him, is interested in shares which in aggregate carry
not less than 30 per cent. but not more than 50 per cent. of the
voting rights of a company which is subject to the City Code, and
such person, or any person acting in concert with him, acquires an
additional interest in shares which increases the percentage of
shares carrying voting rights in which he is interested, then such
person is normally required to make a general offer to all the
holders of any class of equity share capital or other class of
transferable securities carrying voting rights of that company to
acquire the balance of their interests in the company.
An offer under Rule 9 must be in cash (or with a cash
alternative) and at the highest price paid within the preceding 12
months for any shares in the company by the person required to make
the offer or any person acting in concert with him.
Rule 9 of the City Code further provides, among other
things, that where any person who, together with persons acting in
concert with him is interested in shares carrying over 50 per cent.
of the voting rights of a company, acquires an interest in shares
which carry additional voting rights, then they will not generally
be required to make a general offer to the other shareholders to
acquire the balance of their shares.
In summary, IAML, the Invesco Funds, IP2IPO, IPG,
NETF, Theragenetics, Mark Warne and Imperial Innovations are
treated as a concert party under the City Code.
Following approval of the Placing and Acquisition,
and assuming that the Placing and Acquisition complete, and there
is no take up of the Broker Option, and assuming no other person
has exercised any option or any other right to subscribe for shares
in the Company following the date of this document, immediately
following Admission, the Concert Party will, due to the
acquisitions of Ordinary Shares described in this document, be
interested in 15,905,912 Ordinary Shares carrying approximately
60.2 per cent. of the voting rights of the Company. Without a
waiver of the obligations under Rule 9 of the City Code, this would
oblige the Concert Party to make a Rule 9 Offer.
Shareholders should note that:
On Admission, the Concert Party will hold Ordinary
Shares carrying more than 50% of the voting rights of the Company
and (for so long as they continue to be treated as acting in
concert) the Concert Party (and any person acting in concert with
them) will be able to acquire further Ordinary Shares without
incurring an obligation to make a general offer to Shareholders
under Rule 9 of the City Code. However, any individual members of
the Concert Party will not be able to increase their percentage
interest in the voting rights of the Company to 30 per cent. or
more or increase his or its interest between 30 and 50 per cent. of
the voting rights of the Company without Panel consent. If they did
so they would incur an obligation to make a Rule 9 Offer.
Following Admission any individual Concert Party
member interested in less than 30 per cent. of the Company's voting
rights will be free to acquire interests in shares in the Company
without being required to make a Rule 9 Offer providing his or its
holding remains less than 30 per cent of the voting rights of the
Company.
Shareholders should also note that as the Concert
Party will hold Ordinary Shares carrying more than 50 per cent. of
voting rights, the Concert Party might, collectively, have
significant influence if they vote together on the passing of any
proposed resolutions at future general meetings of the Company.
Dispensation from General Offer
Under Note 1 of the Notes on the Dispensations from
Rule 9 of the City Code, the Takeover Panel will normally waive the
requirement for a general offer to be made in accordance with Rule
9 of the City Code if, inter alia, the shareholders of the company
who are independent of the person who would otherwise be required
to make an offer and any person acting in concert with him pass an
ordinary resolution on a poll at a general meeting approving such a
waiver.
The Panel has agreed to such waiver, subject to the
Whitewash Resolution being passed.
Accordingly, by voting in favour of the Resolutions
to be proposed at the General Meeting, the Placing, Broker Option,
the Acquisition and the issue of the Completion Consideration
Shares and the Deferred Consideration Shares can be effected
without the requirement for the Concert Party to make a general
offer for the Company.
The Concert Party and other non-independent parties
will not vote on the Whitewash Resolution. The Concert Party or any
member of the Concert Party will not be restricted from making an
offer for the Ordinary Shares which it will not own
post-Admission.
Related Party Transaction
The proposed participation of IAML and Imperial
Innovations in the Placing will constitute a related party
transaction under the AIM Rules by reason of IAML holding 23.2 per
cent. of the issued share capital of the Company and Imperial
Innovations holding 11.3 per cent. of the Company. The Independent
Directors consider, having consulted with Peel Hunt, Nominated
Adviser to the Company, that the terms of the transaction are fair
and reasonable insofar as its Shareholders are concerned. In
providing advice to the Independent Directors, Peel Hunt has taken
into account the commercial assessments of the Independent
Directors.
Founder Concert Party
The Panel has previously ruled that certain other
persons within the IXICO share register are deemed to be acting in
concert, as defined in the City Code.
Under the City Code, the Founders are presumed to be
acting in concert. The Founders comprise Derek Hill and his
Associates, Joseph Hajnal and his Associates, Professor David
Hawkes, Professor Daniel Rueckert and Thomas Hartkens.
The Founders pursue their own independent investment
objectives in a manner which they consider best suit their own
interests and objectives. Consequently, each of the Founders
reserves the right to seek to rebut the presumption if they deem it
appropriate to do so.
Until the presumption is rebutted, however, the
Founders will, following completion of the Fundraising, together
own 6.5 per cent. of the Enlarged Issued Ordinary Share Capital,
and following the issue of the Deferred Consideration Shares and
the Optimal Medicine Option Shares, together own 6.3 per cent. of
the Fully Diluted Share Capital.
Share Option Pool
The Directors propose in respect of the Company's
employee incentivisation arrangements that the aggregate dilution
limit applicable to options granted under the Company's schemes is
increased from 10 per cent. to 12.5 per cent. of the Fully Diluted
Share Capital. Whilst the Directors have no firm plans or
intentions as to how the increased option pool will be awarded they
do believe it would be appropriate for a proportion of the Share
Option Pool to be granted to executive Directors and other key
employees with an exercise price equal to the Issue Price so that
interests are aligned with shareholders who participate in the
Fundraising.
Share issuance authorities
The Directors currently have existing authorities
under Section 551, Section 570 and Section 573 of the Act which
were obtained at the Company's Annual General Meeting held on 6
March 2015. However, these would be insufficient to enable the
Company to allot and issue the full amount of the New Shares and
the Deferred Consideration Shares. Accordingly, in order for the
Company to allot and issue the New Shares and the Deferred
Consideration Shares, the Company needs to obtain approval from its
Shareholders to grant the Board additional authority to issue
Ordinary Shares in connection with the Proposals and to disapply
statutory pre-emption rights which would otherwise apply to the
issue of the Placing Shares and the Broker Option Shares. The
Company is therefore seeking Shareholders' consent to increase the
Directors' general authority to allot securities and disapply
pre-emption rights pursuant to Section 551 of the Act and Sections
570, 571 and 573 of the Act respectively.
General Meeting
A notice convening the General Meeting of the Company
to be held at the offices of FTI Consulting, 200 Aldersgate Street,
London, EC1A 4HD at 9.30 a.m. on 7 December 2015 is set out at the
end of the Circular.
The Resolutions to be proposed at the General Meeting
are as follows:
· Resolution 1 is an ordinary
resolution to authorise the directors to allot Ordinary Shares
pursuant to the Acquisition and the Fundraising and to provide the
Directors with a general authority to allot further Ordinary Shares
following completion of the Fundraising up to an aggregate amount
of one third of the Fully Diluted Share Capital (and also in
respect of the Share Option Pool);
·
Resolution 2 is an ordinary resolution for Independent Shareholders
to approve, on a poll, the grant of a waiver by the Panel on
Takeovers and Mergers of any requirement under Rule 9 of the City
Code for the Concert Party to make a general offer to shareholders
of the Company;
·
Resolution 3 is an ordinary resolution to approve the Share
Restructuring;
·
Resolution 4 is an ordinary resolution to approve the off-market
purchase by the Company of 15,215,664 Deferred Shares following
Admission at an aggregate price of £1 as set out in the Purchase
Contract (within the meaning of Section 693 of the Act);
·
Resolution 5 is a special resolution to disapply statutory
pre-emption rights that would otherwise apply to the issue of the
Ordinary Shares being conditionally issued in the Fundraising and
Acquisition and up to 44.4 per cent. of the Fully Diluted Share
Capital; and
·
Resolution 6 is a special resolution to adopt the New Articles of
Association required to reflect the Share Restructuring, which
results in a change to the nominal value of the Existing Ordinary
Shares and the creation of the Deferred Shares.
All the Resolutions other than Resolutions 5 and 6
will require a simple majority of those voting in person or on a
poll in favour of the Resolutions. Resolutions 5 and 6 will require
approval by not less than 75 per cent. of the votes cast by
shareholders voting in person or on a poll. As described above,
only Independent Shareholders will vote on Resolution 2.
Resolutions 1 and 4 are conditional upon the passing of Resolution
2 and 3 so that if Resolutions 2 and 3 are not passed, the Placing,
the Broker Option and the Acquisition will not proceed and the
Company will not be provided with certain authorities to issue
Ordinary Shares or buy-back Ordinary Shares over the next 12
months.
The attention of Shareholders is also drawn to the
voting intentions of the Directors and the Independent Directors as
set out below. In accordance with Section 571(5) of the Act, the
Directors believe that the proposed disapplication of pre-emption
rights as detailed in Resolution 5 will be necessary in order to
carry out the allotment and issue of the Placing Shares and, if
applicable, the Broker Option Shares.
Action to be Taken
Whether or not you intend to be present at the
meeting you are requested to complete and return the Form of Proxy
in accordance with the instructions printed thereon and return it
to the Company's registrars, Equiniti Limited at Aspect House,
Spencer Road, Lancing, West Sussex, BN99 6DA, as soon as possible,
but in any event so as to be received by no later than 9.30 a.m. on
3 December 2015. The completion and return of a Form of Proxy will
not preclude Shareholders from attending the General Meeting and
voting in person should they so wish.
Recommendation
The Independent Directors, who have been so advised
by Peel Hunt, believe that the proposed Fundraising, Acquisition,
Share Restructuring and Whitewash Resolution are fair and
reasonable and in the best interests of the Shareholders and the
Company as a whole. Accordingly, the Independent Directors
recommend that Shareholders vote in favour of the Resolutions, as
they have irrevocably undertaken to do in respect of their own
shareholdings, amounting in aggregate to 620,114 Ordinary Shares
(representing 4.1 per cent.) of the Existing Ordinary Shares).
Maina Bhaman is not considered independent as she is an employee of
Imperial Innovations, a member of the Concert Party, and has
therefore taken no part in the recommendation.
Irrevocable Undertakings
The Company has received irrevocable undertakings
from IAML, Imperial Innovations and IP Group and their respective
associates to vote in favour of all Resolutions, excluding
Resolution 2, on which IAML, Imperial Innovations and IP Group will
not vote, since it relates to the approval of the Rule 9 Waiver in
respect of their own shareholdings, in respect of 5,266,781
Ordinary Shares in aggregate, representing 34.6 per cent. of the
Existing Ordinary Shares.
In total, the Company has therefore received
irrevocable undertakings to vote in favour of Resolutions 1, 3, 4,
5 and 6 in respect of 5,886,895 Ordinary Shares, representing 38.7
per cent. of the Existing Ordinary Shares and in favour of
Resolution 2 in respect of 620,114 Ordinary Shares, representing
4.1 per cent. of the Existing Ordinary Shares held by Independent
Shareholders.
Expected timetable of principal events
|
Announcement of the Proposals and posting of Circular
and Form of Proxy
|
18 November 2015
|
|
|
|
|
Latest time and date for receipt of Forms of Proxy
for the General Meeting
|
9.30 a.m. on 3 December 2015
|
|
General Meeting
|
9.30 a.m. on 7 December 2015
|
|
Record Date for the Share Restructuring
|
6.00 p.m. on 7 December 2015
|
|
Admission of and commencement of dealings in the New
Shares on AIM
|
8 December 2015
|
|
Expected completion date of the Acquisition
|
8 December 2015
|
|
Expected date for CREST accounts to be credited with
New Shares to be issued in uncertificated form
|
8 December 2015
|
|
Expected date for dispatch of definitive share
certificates in respect of New Shares to be issued in certificated
form
|
22 December 2015
|
|
Expected date of issue of Deferred Consideration
Shares
|
4 January 2017
|
Definitions
|
''Acquisition''
|
the proposed acquisition of the entire issued share
capital of Optimal Medicine
to be effected pursuant to the Acquisition
Agreement
|
|
''Acquisition Agreement''
|
the agreement dated 18 November 2015 between the
Optimal Medicine Vendors and the Company under which the Company
has conditionally agreed to acquire the entire issued and to be
issued share capital of Optimal Medicine. Details of which are set
out in Part 3 of the Circular
|
|
''Act''
|
the Companies Act 2006 (as amended)
|
|
''Admission''
|
the admission of the New Shares to trading on AIM
becoming effective in accordance with the AIM Rules
|
|
"AIM''
|
AIM, a market operated by the London Stock
Exchange
|
|
''AIM Rules''
|
the rules and guidance notes for AIM companies and
their nominated advisers issued by the London Stock Exchange from
time to time relating to AIM traded securities and the operation of
AIM
|
|
''Broker Option''
|
the option granted by the Company to Peel Hunt to
procure the subscription of the Broker Option Shares, pursuant to
the terms of the Placing Agreement
|
|
''Broker Option Shares''
|
the up to 327,868 Ordinary Shares to be subscribed
for by existing and other investors at the Placing Price, pursuant
to the Broker Option and the terms of the Placing Agreement
|
|
''Circular''
|
the circular issued by the Company dated 18 November
2015, of which the Notice of General Meeting forms part
|
|
''City Code''
|
the City Code on Takeovers and Mergers
|
|
''Company'' or ''IXICO''
|
IXICO plc, a company incorporated in England and
Wales with registered number 03131723 and having its registered
office at c/o 4th Floor, 15 Long Lane, London EC1A 9PN
|
|
''Completion Consideration Shares''
|
the 2,357,463 Ordinary Shares to be issued to the
Optimal Medicine Vendors at the Consideration Share Price upon
Admission, pursuant to and subject to the terms of the Acquisition
Agreement
|
|
''Concert Party''
|
together, IAML, the Invesco Funds, IP2IPO, IPG, NETF,
Theragenetics, Mark Warne and Imperial Innovations
|
|
''Consideration Shares''
|
the Completion Consideration Shares, the Deferred
Consideration Shares and the Optimal Medicine Option Shares
|
|
''Consideration Share Price''
|
the price of 49 pence per Ordinary Share at which the
Consideration Shares are to be issued to the Optimal Medicine
Vendors
|
|
''CREST''
|
the computerised settlement system (as defined in the
CREST Regulations) operated by Euroclear which facilitates the
transfer of title to shares in uncertificated form
|
|
''CREST Regulations''
|
the Uncertificated Securities Regulations 2001 (SI
2001/3755) including any variation thereof
|
|
''Deferred Consideration Shares''
|
the up to 590,093 Ordinary Shares expected to be
issued no later than 4 January 2017 pursuant to the terms of the
Acquisition Agreement
|
|
''Deferred Shares''
|
the deferred shares of 49 pence each in the share
capital of the Company, following the implementation of the
Share
Restructuring and the passing of the Resolutions at
the General Meeting, the rights of which are set out in this
document
|
|
''Derek Hill and his Associates''
|
together, Professor Derek Hill, Adrian Hill, Andrew
McLeish and Kate McLeish
|
|
''Directors'' or ''Board''
|
the directors of the Company
|
|
''Enlarged Group''
|
the Group following completion of the Acquisition
|
|
''Enlarged Issued Ordinary Share
Capital''
|
the 26,753,454 Ordinary Shares in issue immediately
following Admission, comprising the current issued share capital as
at the date of this announcement and the New Shares, assuming full
take up under the Broker Option
|
|
''Euroclear"
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Euroclear UK & Ireland Limited
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''Existing Ordinary Shares''
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the 15,215,664 ordinary shares of 50 pence each in
issue at the date of this document
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''Form of Proxy''
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the form of proxy for use in connection with the
General Meeting
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''Founders'' or "Founder Concert Party"
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together, Derek Hill and Associates, Joseph Hajnal
and Associates, Professor David Hawkes, Professor Daniel Rueckert
and Thomas Hartkens
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''Fully Diluted Share Capital''
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the 27,457,215 Ordinary Shares in issue following
admission of the Deferred Consideration Shares and assuming the
issue of all Optimal Medicine Option Shares, comprising the
Enlarged Issued Ordinary Share Capital, the Deferred Consideration
Shares and the Optimal Medicine Option Shares
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''Fundraising''
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the Placing and Broker Option
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''General Meeting''
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the general meeting of the Company to be held at 9.30
a.m. on 7 December 2015 at the offices of FTI Consulting, 200
Aldersgate Street, London, EC1A 4HD or any adjournment thereof
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''the Group'' or ''IXICO Group''
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the Company and its subsidiaries
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''IAML''
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Invesco Asset Management Limited, a company
incorporated in England andWales with registered number 00949417
and having its registered office at Perpetual Park, Perpetual Park
Drive, Henley on Thames, Oxfordshire RG9 1HH, a wholly owned
subsidiary of Invesco Limited, acting as agent for and on behalf of
its discretionary managed clients
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''Imperial Innovations''
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Imperial Innovations Group plc, a company
incorporated in England and Wales with registered number 05796766
and having its registered office at 52 Princes Gate, Exhibition
Road, London SW7 2PG and its subsidiaries
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''Independent Directors''
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all of the Directors excluding Maina Bhaman
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''Independent Shareholders''
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those Shareholders who are independent of the Concert
Party
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''Invesco Funds''
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the discretionary managed clients of IAML who own
3,536,370 Ordinary Shares, as at the date of this announcement
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''IP2IPO''
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IP2IPO Limited, a company incorporated in England and
Wales with registered number 04072979 and having its registered
office at 24 Cornhill, London EC3V 3ND, a wholly owned subsidiary
of IPG
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''IPG''
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IP Group plc, a company incorporated in England and
Wales with registered number 04204490 and having its registered
office at 24 Cornhill, London EC3V 3ND
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''IPG Optimal Medicine Shareholders''
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together, IP2IPO, NETF, Mark Warne and
Theragenetics
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''IP Group''
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together, IPG, IP2IPO, NETF and their subsidiary
undertakings
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''IXICO Technologies''
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IXICO Technologies Limited, a company incorporated in
England and Wales with registered number 05313505 and having its
registered office at 4th Floor, Griffin Court, 15 Long Lane,
London, EC1A 9PN
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'Joseph Hajnal and his Associates''
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together, Professor Joseph Hajnal, Paula
Hajnal-Konyi, Saki Hajnal, Elizabeth Corob, and Charterhouse Square
Finance Company Ltd
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''London Stock Exchange''
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London Stock Exchange plc
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''NETF''
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The North East Technology Fund L.P., a limited
partnership incorporated in England and Wales with registered
number LP013737 and having its registered office at 24 Cornhill,
London, EC3V 3ND, acting by its general partner North East
Technology (GP) Limited, a company registered in England and Wales
with registered number 06628835, being a fund managed by Top
Technology Ventures Limited, a company registered in England and
Wales with registered number 01977742 and having its registered
office at 24 Cornhill, London, EC3V 3ND (a subsidiary of IPG)
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''New Articles of Association''
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the new articles of association proposed to be
adopted following approval of the Shareholders in the General
Meeting pursuant to Resolution 6 set out in the Notice of General
Meeting
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''New Shares''
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the Placing Shares, the Broker Option Shares and the
Completion Consideration Shares
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''Notice of General Meeting''
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the notice convening the General Meeting
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''Ordinary Shares''
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redenominated ordinary shares of 1 pence each in the
capital of the Company immediately following the implementation of
the Share Restructuring
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''Optimal Medicine''
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Optimal Medicine Limited, incorporated in England and
Wales with registered number 07004137 and having its registered
office at Campus North Sunco House, 5 Carliol Square, Newcastle
Upon Tyne, Tyne and Wear NE1 6UF
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''Optimal Medicine Group''
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together, Optimal Medicine, Optimal Medicine SARL and
Optimal Medicine Inc
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''Optimal Medicine Optionholders''
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together Dr Janet Christine Munro, Dr David John
Brister, Kenneth Tubman, Lisa Weldon and Brad Allen
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''Optimal Medicine Options''
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the options over 3,008 ordinary shares in the share
capital of Optimal Medicine held by the Optimal Medicine
Optionholders before deductions in lieu of tax
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''Optimal Medicine Option Shares''
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the up to 113,668 Ordinary Shares to be issued
pursuant to acquisitions by IXICO in accordance with the Put and
Call Option Lettersfollowing the exercise of the Optimal Medicine
Options
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''Optimal Medicine Vendors''
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together, the IPG Optimal Medicine Shareholders and
the other Optimal Medicine Shareholders
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''Other Optimal Medicine Shareholders''
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together, Dr Janet Christine Munro, Dr Robert
Nicholas McBurney and Mr David John Brister
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''Panel'' or ''Takeover Panel''
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the Panel on Takeovers and Mergers
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''Peel Hunt''
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Peel Hunt LLP, the Company's Nominated Adviser and
Broker
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''Placing Agreement''
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the conditional agreement dated 18 November 2015 made
between (1) the Company and (2) Peel Hunt relating to the Placing
and the Broker Option
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''Placing Price''
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30.5 pence per Ordinary Share
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''Placing''
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the conditional placing of the Placing Shares at the
Placing Price pursuant to the Placing Agreement
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''Placing Shares''
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the 8,852,459 Ordinary Shares to be issued pursuant
to the Placing subject to the passing of Resolutions
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''Proposals''
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the Company's proposal to enter into the Placing, the
Broker Option, the Share Restructuring, and the Acquisition
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''Put and Call Option Letters''
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the put and call option letters between each of the
Optimal Medicine Optionholders, IXICO Technologies and IXICO
pursuant to which IXICO Technologies may acquire up to 3,008
ordinary shares in the share capital of Optimal Medicine following
the exercise of the Optimal Medicine Options in consideration for
the issue of Optimal Medicine Option Shares
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''R&D''
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research and development
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''Resolutions''
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the resolutions to be proposed at the General
Meeting, details of which are set out in the Notice of General
Meeting
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''Rule 9 Offer''
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a general offer for the shares of the Company in
accordance with Rule 9 of the City Code
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''Rule 9 Waiver''
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the waiver agreed by the Panel and to be approved by
the Independent Shareholders of the obligation that would otherwise
fall upon the Concert Party pursuant to Rule 9 of the City Code to
make a Rule 9 Offer as a result of the Proposals being
implemented
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''Shareholders''
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the persons who are registered as holders of Ordinary
Shares
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''Share Option Pool''
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the share option pool of the Company
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''Share Restructuring''
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the sub-division and redenomination of each Existing
Ordinary Share into 1 Ordinary Share and 49 Deferred Shares in
accordance with the terms of, and subject to the passing of, the
Resolutions
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'Theragenetics''
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Theragenetics Limited, a company incorporated in
England and Wales with registered number 05740995 and having its
registered office at Unit 651G, Street 5 Thorp Arch Estate,
Wetherby, West Yorkshire LS23 7FZ, a wholly owned subsidiary of
Avacta Group plc (a company in which IP2IPO holds over 20% of the
share capital)
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''United States'' or ''US''
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the United States of America, its territories and
possessions, any state of the United States of America and the
District of Columbia
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''Whitewash Resolution''
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an ordinary resolution to approve the Rule 9 Waiver,
which must be passed on a poll at a general meeting by the
Independent Shareholders
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