TIDMTERN
RNS Number : 3395T
Tern PLC
21 July 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.
21 July 2022
Tern Plc
("Tern" or the "Company")
Strategic Update
Tern Plc (AIM:TERN), the company focused on value creation from
Internet of Things ("IoT") technology businesses, is providing an
update on the Company's strategy following the termination of its
proposed acquisition of Pires Investments plc ("Pires"), announced
earlier today.
The board of Tern (the "Board") believes that the last two years
have been pivotal for all of Tern's network of companies* and
believes that they are all now well positioned for the future.
Tern has, with its hands-on approach, supported the growth of
its companies from their early start-up days to now, alongside
validation from independent third-party investors, who invested
after conducting thorough due diligence. The Board believes that
these third-party investments demonstrate confidence in the
companies' management teams, business models, market focus and
future prospects. These actions in the past eighteen months have
resulted in uplifts in their carried values for our shareholders,
delivered important investors to help them achieve market relevance
and have enabled them to gain important commercial traction and
grow their monthly recurring revenues ("MRR").
Whilst the Board believes that all of the companies in Tern's
network are capable of further value enhancing growth under Tern's
stewardship, the Board recognises the views expressed by a segment
of the Company's shareholders who wish to see further
demonstrations of the ability of the Tern business model to
crystalise value for shareholders, specifically through the exit of
an existing holding before further companies are added to the
network of companies.
July 2021 saw the first IPO of one of Tern's companies, Wyld
Networks AB, on the NASDAQ First North Growth Market in Stockholm,
transforming Tern's holding from one of a venture investor to an
institutional investor. The public quotation of Wyld Networks now
provides Tern with access to capital and ultimately a route to exit
its participation at the appropriate time, to further maximise
value for Tern shareholders. However, the Board believes that Wyld
Networks has significant future potential and that a sizable
reduction in Tern's holding would not be in shareholders' or the
Company's best interests at the present time.
The Board is therefore reviewing all of Tern's other holdings
with a target to achieve a realisation of one or more of the
Company's participations as soon as economically prudent and
feasible. Whilst there can be no guarantee that buyers will be
available at an appropriate price for any of Tern's holdings,
particularly given the current financial market conditions, the
Board is focused on achieving this target as soon as it is
appropriate and realistic in the Board's view.
The Board also recognises both the desire to protect Tern's
current positions in its network of companies and the limited
appetite of some shareholders to see further companies added to
Tern's network, at least until one or more exits have been
achieved. Therefore, the Board's current intention is not to add
any new companies to the Tern network of companies, other than to
meet any commitment the Company may have in relation to the Sure
Valley Ventures UK Software Technology Fund, until it has received
a capital return from an exit of one of its current
investments.
However, it is important to note that Tern's companies are all
in an MRR growth phase and may require further funding if they are
to realise their full potential and deliver appropriate returns to
all their shareholders, including Tern and its shareholders.
Funding therefore may be required ahead of the receipt of any exit
proceeds and in that event the Board will seek to explore all the
funding sources and options available to the Company, together with
the appropriateness of participating in any capital raise being
undertaken by one of Tern's companies, in order to protect the
gains and value creation already achieved for Tern's shareholders
and to ensure the Company is able to negotiate from a position of
strength.
The focus, therefore, at least in the short to medium term, will
be on Tern's existing companies and the Company's existing
significant pipeline of exciting and disruptive potential
investment opportunities will be put on hold at the present time.
In light of this, the Board will also be assessing its structure to
ensure that it is configured to best meet the Company's and its
network of companies' immediate needs.
Further announcements will be made in due course, as
appropriate.
*Tern's "network of companies" or "Tern's companies" comprise:
Device Authority Limited, Wyld Networks AB, InVMA Limited (trading
as Konektio), FVRVS Limited (Trading as FundamentalVR) and Talking
Medicines Limited, which are companies that Tern has interests in,
together with Tern's holding in the Sure Valley Ventures UK
Software Technology Fund.
Commenting Al Sisto, CEO of Tern, said :
"As was outlined in the various transaction announcements and
the circular to Tern shareholders, we believed that the acquisition
of Pires could have delivered substantial benefits to Tern
shareholders. Therefore, whilst it is disappointing that the
acquisition of Pires has not proceeded, we are determined to
continue to execute our strategy and maximise value for Tern
shareholders, both in the short and long term.
"Tern's companies have all made important progress in the last
eighteen months, despite the pandemic, and we recognise the desire
of many shareholders to see this demonstrated through an exit. We
will therefore be carefully evaluating how best this may be
achieved, whilst continuing to improve those in our network of
companies that we believe have the potential to deliver
significantly higher returns to their shareholders, including Tern
and its shareholders.
"The Board remains fully focussed on continuing to maximise
value for Tern shareholders and I look forward to making further
announcements in due course."
Enquiries
Tern Plc via IFC Advisory
Al Sisto (CEO)
Sarah Payne (CFO)
Allenby Capital Limited Tel: 0203 328 5656
(Nominated Adviser and Broker)
David Worlidge / Alex Brearley (Corporate
Finance)
Matt Butlin / Kelly Gardiner (Sales
and Corporate Broking)
IFC Advisory Tel: 0203 934 6630
(Financial PR and IR) tern@investor-focus.co.uk
Tim Metcalfe
Graham Herring
Florence Chandler
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