TIDMAVV
RNS Number : 4966E
AVEVA Group PLC
06 November 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND,
JAPAN, SINGAPORE, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO
DO SO WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION
PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY
JURISDICTION.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A
PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING IN THIS
ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE
RIGHTS ISSUE. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE
ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY NIL PAID RIGHTS, FULLY
PAID RIGHTS OR RIGHTS ISSUE SHARES MUST BE MADE ONLY ON THE BASIS
OF THE INFORMATION CONTAINED IN THE PROSPECTUS ONCE PUBLISHED.
COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE
ON ITS WEBSITE AT HTTPS://INVESTORS.AVEVA.COM.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
6 November 2020
AVEVA GROUP PLC
FULLY COMMITTED AND UNDERWRITTEN 7 FOR 9 RIGHTS ISSUE TO RAISE
GROSS PROCEEDS OF APPROXIMATELY GBP2.835 BILLION
Further to the announcement on 25 August 2020, AVEVA Group plc
("AVEVA" or the "Company"), a global leader in engineering and
industrial software, today announces a fully committed and
underwritten rights issue to raise gross proceeds of approximately
GBP2.835 billion (the "Rights Issue") to partly fund the
acquisition of OSIsoft, LLC ("OSIsoft") (the "Acquisition"), a
global leader in real-time industrial data software and services.
The Rights Issue will result in the issue of 125,739,796 new
ordinary shares of the Company (the "Rights Issue Shares").
Key Highlights
-- The net proceeds from the Rights Issue, together with the new
term loan announced on 12 October 2020, will fund the cash
consideration in relation to the Acquisition.
-- The Rights Issue is conditional upon, among other things, the
resolution needed to complete the Acquisition and to authorise the
directors to allot shares in connection with the Rights Issue and
the Acquisition (the "Resolution") having been passed by AVEVA
shareholders at the general meeting on 24 November 2020 (the
"General Meeting"). However, the Rights Issue is not conditional on
completion of the Acquisition ("Completion").
-- Schneider Electric SE, which currently indirectly holds
approximately 60% of the issued ordinary shares of AVEVA, has
irrevocably undertaken to vote in favour of the Resolution and to
take up its rights in full on a pro rata basis (the "SE Rights
Issue Shares") .
-- It is expected that dealings in the Rights Issue Shares (nil
paid) on the London Stock Exchange's main market will commence on
8.00 a.m. on 25 November 2020 and that dealings in the Rights Issue
Shares (fully paid) will commence on 8.00 a.m. on 10 December
2020.
Update on the Acquisition
-- The Acquisition will strengthen AVEVA's position as a global
leader in industrial software, with combined pro forma revenue of
c.GBP1.2 billion.
-- OSIsoft performed strongly in the seven months ended 31 July
2020 with revenue increasing by 9.5% compared to the seven months
ended 31 July 2019, and adjusted EBIT and operating cash flow
increasing by 110.1% and 33.3%, respectively. This positive trading
momentum has continued in recent months, with billings increasing
by approximately 12% in the first nine months of 2020 compared to
the same period last year.
-- The Directors believe that there is a significant opportunity
to generate material revenue synergies and realise run rate pre-tax
cash cost synergies of not less than GBP20 million per annum by the
end of AVEVA's financial year ending 31 March 2023.
-- Regulatory and antitrust approvals are on track. AVEVA has
already received antitrust approvals in several countries and
expects to receive all antitrust and regulatory approvals in
relation to the Acquisition (including approval from the Committee
on Foreign Investment in the United States ("CFIUS")) between
December 2020 and February 2021.
-- The Acquisition, because of its size in relation to the
Company, is a class 1 transaction for AVEVA under the Listing Rules
and is therefore conditional, inter alia, upon the approval by
shareholders at the General Meeting.
Details of the Rights Issue
-- The gross proceeds of the Rights Issue will amount to approximately GBP2.835 billion.
-- For every 9 existing ordinary shares of AVEVA (each an
"Existing Ordinary Share"), its holder is entitled to 7 Rights
Issue Shares (nil paid). The Company proposes to issue a total of
125,739,796 Rights Issue Shares.
-- The Rights Issue price of GBP22.55 (the "Rights Issue Price")
per Rights Issue Share represents a discount of 32.2% to the
theoretical ex-rights price (TERP) of GBP33.28 per Existing
Ordinary Share by reference to the closing price on 5 November 2020
(the last Business Day before the publication of this
announcement).
-- The Rights Issue Shares will confer to their holders the same
voting and economic rights as the Existing Ordinary Shares.
-- Entitlements to the Rights Issue Shares (nil paid) not taken
up shall automatically lapse at the end of the Rights Issue offer
period (being 11.00 a.m. on 9 December 2020) and, therefore,
Shareholders who take no action will not receive any Rights Issue
Shares and will be diluted.
-- The Rights Issue is fully committed (in relation to the SE
Rights Issue Shares) and, subject to certain customary conditions,
underwritten (save for the SE Rights Issue Shares) by J.P. Morgan
Securities plc and Numis Securities Limited, both of which are
acting as Joint Global Co-ordinators and Joint Bookunners, Barclays
Bank PLC and BNP PARIBAS, both of which are acting as Joint
Bookrunners, and Banco Santander S.A., acting as Lead Manager (the
"Underwriters").
Circular and Prospectus
The Company is pleased to announce that a combined class 1
circular and prospectus (the "Prospectus") setting out the full
details of the Rights Issue and the Acquisition, including the
expected timetable of principal events and Notice of General
Meeting, is expected to be published on AVEVA's website later today
(https://investors.aveva.com). The preceding summary should be read
in conjunction with the full text of the following announcement,
together with the Prospectus.
The Prospectus will also include details for Shareholders on how
to participate in the Rights Issue. Unless the context otherwise
requires, words and expressions defined in the Prospectus shall
have the same meanings in this announcement.
Indicative abridged timetable
Publication and posting of the Prospectus, 6 November 2020
the Notice of General Meeting and
the Form of Proxy
Rights Issue Record Date close of business on
20 November 2020
General Meeting 9.30 a.m. on 24 November
2020
Admission of, and commencement of 8.00 a.m. on 25 November
dealings in, Nil Paid Rights on 2020
the London Stock Exchange
Latest time and date for acceptance, 11.00 a.m. on 9 December
payment in full and registration 2020
of renunciation of Provisional Allotment
Letters
Dealings in Rights Issue Shares, 8.00 a.m. on 10 December
fully paid, commence on the London 2020
Stock Exchange
AVEVA's Interim Results
AVEVA's interim results for the period ended 30 September 2020
were published yesterday. In H1 2021, AVEVA continued to make
strong operational and strategic progress, even though the
disruptions of the COVID-19 pandemic affected AVEVA's financial
results. The order pipeline for the remainder of FY 2020 is strong,
underpinned by a higher volume of contract renewals, including
major global account contracts, as well as the contracts that
slipped from the second quarter of FY 2021. As such, the Board
expects to see solid revenue growth in H2 2020 and remains
confident in its outlook for FY 2020.
AVEVA also reported that OSIsoft performed strongly in the seven
months ended 31 July 2020, with revenue increasing by 9.5% compared
to the seven months to 31 July 2019, and operating profit
increasing by 110.1%. This positive trading momentum has continued
in recent months, with billings increasing by approximately 12% in
the first nine months of 2020 compared to the same period last
year.
The information contained within this announcement is considered
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No.596/2014. Upon the publication
of this announcement via a Regulatory Information Service, this
inside information will be considered to be in the public
domain.
The person responsible for arranging for the release of this
announcement on behalf of the Company is James Kidd, Deputy CEO and
CFO.
Enquiries:
AVEVA Group plc
Philip Aiken (Chairman)
Craig Hayman (Chief Executive Officer)
James Kidd (Deputy CEO and CFO)
Matt Springett (Head of Investor Relations)
Tel: +44 7789 818 684
Lazard
Financial Adviser to AVEVA
Cyrus Kapadia
Keiran Wilson
Tel: +44 20 7187 2000
Numis Securities
Joint Corporate Broker and Sponsor to AVEVA, Joint Global
Co-ordinator and Joint Bookrunner
Simon Willis
Jamie Loughborough
Jonny Abbott
Jono Mawson
Tel: +44 20 7260 1000
J.P. Morgan Cazenove
Joint Corporate Broker to AVEVA, Joint Global Co-ordinator and
Joint Bookrunner
Bill Hutchings
Ed Digby
Tel: +44 20 7742 4000
FTI Consulting
PR Adviser to AVEVA
Edward Bridges
Dwight Burden
Tel: +44 20 3727 1017
Important Notices
This announcement has been issued by and is the sole
responsibility of the Company. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. No reliance may or should be placed by any
person for any purpose whatsoever on the information contained in
this announcement or on its accuracy or completeness. The
information in this announcement is subject to change.
This announcement is not a prospectus but an advertisement.
Neither this announcement nor anything contained in it shall form
the basis of, or be relied upon in conjunction with, any offer or
commitment whatsoever in any jurisdiction. Investors should not
acquire any Nil Paid Rights, Fully Paid Rights or Rights Issue
Shares referred to in this announcement except on the basis of the
information contained in the Prospectus to be published by the
Company in connection with the Rights Issue and the
Acquisition.
A copy of the Prospectus will, following publication, be
available on its website at https://investors.aveva.com. Neither
the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms
part of, this announcement. The Prospectus will provide further
details of the Rights Issue Shares, the Nil Paid Rights and the
Fully Paid Rights being offered pursuant to the Rights Issue.
This announcement (and the information contained herein) is not
for release, publication or distribution, directly or indirectly,
in whole or in part, in, into or within the United States of
America, its territories and possessions, any State of the United
States or the District of Columbia (collectively, the "United
States"). This announcement is for informational purposes only and
is not an offer of securities for sale in the United States.
Securities may not be offered or sold in the United States absent
registration under the US Securities Act of 1933, as amended (the
"US Securities Act"), or an exemption therefrom. The securities
referred to herein have not been and will not be registered under
the US Securities Act or under the securities laws of any state or
other jurisdiction of the United States, and may not be offered or
sold, taken up, resold, transferred or delivered in the United
States except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the US Securities
Act and in accordance with any applicable securities laws of any
state or other jurisdiction of the United States. There will be no
public offer of the securities referred to herein in the United
States.
This announcement (and the information contained herein) and the
Prospectus do not constitute a prospectus pursuant to the Swiss
Financial Services Act ("FinSA"), and neither this announcement nor
the Prospectus may be distributed or otherwise made available in
Switzerland in a manner which would require the publication of a
prospectus pursuant to the FinSA in Switzerland. The Nil Paid
Rights, Fully Paid Rights or Rights Issue Shares may not be
publicly offered directly or indirectly in or into Switzerland
within the meaning of the FinSA, except: (a) to any investor that
qualifies as a professional client within the meaning of the FinSA;
(b) to fewer than 500 investors (other than professional clients
within the meaning of the FinSA); or (c) in any other circumstances
falling within article 36 of the FinSA, provided, in each case,
that no such offer referred to in (a) through (c) above shall
require the publication of a prospectus pursuant to the FinSA. The
Nil Paid Rights, Fully Paid Rights or Rights Issue Shares will not
be listed or admitted to trading on any trading venue in
Switzerland.
No prospectus has been or will be filed with any securities
commission or similar regulatory authority in Canada in connection
with the offer and sale of securities. Any offer and sale of
securities in Canada will be made on a private placement basis only
in accordance with the terms and conditions set out in the
Prospectus, is exempt from the requirement that the issuer prepares
and files a prospectus under applicable Canadian securities laws
and is available only to investors that: (a) purchase as principal,
or are deemed to be purchasing as principal in accordance with
applicable Canadian securities laws, for investment only and not
with a view to resale or redistribution; (b) are "accredited
investors" as such term is defined in section 1.1 of National
Instrument 45-106 Prospectus Exemptions or, in Ontario, as such
term is defined in section 73.3(1) of the Securities Act (Ontario);
and (c) are "permitted clients" as such term is defined in section
1.1 of National Instrument 31-103 Registration Requirements,
Exemptions and Ongoing Registrant Obligations.
The information contained in this announcement and the
Prospectus is not for release, publication or distribution to
persons in the United States, Australia, Canada, New Zealand,
Japan, Singapore, South Africa or any other jurisdiction where the
extension or availability of the Rights Issue (and any other
transaction contemplated thereby) would breach any applicable law
or regulation, and, subject to certain exceptions, should not be
distributed, forwarded to or transmitted in or into any
jurisdiction, where to do so might constitute a violation of local
securities laws or regulations.
The distribution of this announcement, the Prospectus, the
Provisional Allotment Letter and the offering or transfer of Nil
Paid Rights, Fully Paid Rights or Rights Issue Shares into
jurisdictions other than the United Kingdom may be restricted by
law, and, therefore, persons into whose possession this
announcement, the Prospectus, the Provisional Allotment Letter
and/or any accompanying documents comes should inform themselves
about and observe any such restrictions. Any failure to comply with
any such restrictions may constitute a violation of the securities
laws of such jurisdiction. In particular, subject to certain
exceptions, this announcement, the Prospectus (once published) and
the Provisional Allotment Letters (once printed) should not be
distributed, forwarded to or transmitted in or into the United
States, Australia, Canada, New Zealand, Japan, Singapore, South
Africa or any other jurisdiction where the extension or
availability of the Rights Issue (and any other transaction
contemplated thereby) would breach any applicable law or
regulation. Recipients of this announcement should conduct their
own investigation, evaluation and analysis of the business, data
and property described in this announcement and/or if and when
published the Prospectus to be published by the Company in
connection with the Rights Issue.
This announcement does not constitute a recommendation
concerning any investor's options with respect to the Rights Issue.
The price and value of securities can go down as well as up. Past
performance is not a guide to future performance. The contents of
this announcement are not to be construed as legal, business,
financial or tax advice. Each shareholder or prospective investor
should consult his, her or its own legal adviser, business adviser,
financial adviser or tax adviser for legal, financial, business or
tax advice.
Notice to all investors
Lazard & Co., Limited ("Lazard"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority
(the "FCA"), is acting exclusively as financial adviser to AVEVA
and no one else in connection with the Rights Issue and the
Acquisition and will not regard any other person (whether or not a
recipient of this announcement) as a client in relation to the
Rights Issue or the Acquisition and will not be responsible to
anyone other than AVEVA for providing the protections afforded to
the clients of Lazard nor for giving advice in relation to the
Rights Issue, the Acquisition or any transaction, arrangement or
any other matters referred to in this announcement.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
as sponsor, joint broker, joint global co-ordinator and joint
bookrunner to AVEVA and no one else in connection with the Rights
Issue and the Acquisition and will not regard any other person
(whether or not a recipient of this announcement) as a client in
relation to the Rights Issue or the Acquisition and will not be
responsible to anyone other than AVEVA for providing the
protections afforded to the clients of Numis nor for giving advice
in relation to the Rights Issue or the Acquisition or any
transaction, arrangement or any other matter referred to in this
announcement.
J.P. Morgan Securities plc (which conducts its UK investment
banking business as J.P. Morgan Cazenove), which is authorised in
the United Kingdom by the Prudential Regulation Authority (the
"PRA") and regulated in the United Kingdom by the FCA and the PRA,
is acting exclusively as joint broker, joint global co-ordinator
and joint bookrunner to AVEVA and no one else in connection with
the Rights Issue and will not regard any other person (whether or
not a recipient of this announcement) as a client in relation to
the Rights Issue and will not be responsible to anyone other than
AVEVA for providing the protections afforded to the clients of J.P.
Morgan Cazenove nor for giving advice in relation to the Rights
Issue or any transaction, arrangement or any other matter referred
to in this announcement.
Barclays Bank PLC ("Barclays"), which is authorised in the
United Kingdom by the PRA and regulated in the United Kingdom by
the FCA and the PRA, is acting exclusively for AVEVA and no one
else in connection with the Rights Issue and will not regard any
other person (whether or not a recipient of this announcement) as a
client in relation to the Rights Issue and will not be responsible
to anyone other than AVEVA for providing the protections afforded
to the clients of Barclays nor for giving advice in relation to the
Rights Issue or any transaction, arrangement or any other matter
referred to in this announcement.
BNP PARIBAS, which is lead supervised by the European Central
Bank ("ECB") and the Autorité de Contrôle Prudentiel et de
Résolution ("ACPR") (and its London Branch is authorised by the
ECB, the ACPR and the PRA and subject to limited regulation by the
FCA and the PRA), is acting exclusively for AVEVA and no one else
in connection with the Rights Issue and will not regard any other
person (whether or not a recipient of this announcement) as a
client in relation to the Rights Issue and will not be responsible
to anyone other than AVEVA for providing the protections afforded
to the clients of BNP PARIBAS nor for giving advice in relation to
the Rights Issue or any transaction, arrangement or any other
matter referred to in this announcement.
Banco Santander S.A. ("Santander"), which is authorised by the
Bank of Spain and is enrolled in the Administrative Register of the
Bank of Spain with number 0049, and is subject to supervision by
the ECB and by the Bank of Spain, and subject to limited regulation
in the United Kingdom by the FCA and the PRA, is acting exclusively
for AVEVA and no one else in connection with the Rights Issue and
will not regard any other person (whether or not a recipient of
this announcement) as a client in relation to the Rights Issue and
will not be responsible to anyone other than AVEVA for providing
the protections afforded to the clients of Santander nor for giving
advice in relation to the Rights Issue or any transaction,
arrangement or any other matter referred to in this
announcement.
Apart from the responsibilities and liabilities, if any, which
may be imposed on Lazard and the Underwriters by the Financial
Services and Markets Act 2000, as amended ("FSMA") or the
regulatory regime established thereunder or under the regulatory
regime of any jurisdiction where the exclusion of liability under
the relevant regulatory regime would be illegal, void or
unenforceable, none of Lazard, the Underwriters, nor any of their
respective affiliates, directors, officers, employees or advisers,
accepts any responsibility or liability whatsoever nor makes any
representation or warranty, express or implied concerning the
contents of this announcement, including its accuracy, completeness
or verification, or regarding the legality of any investment in the
Rights Issue Shares, the Nil Paid Rights or the Fully Paid Rights
by any person under the laws applicable to such person, or
concerning any other statement made or purported to be made by
AVEVA, or on AVEVA's behalf, or by any of Lazard or the
Underwriters, or on behalf of any of Lazard or the Underwriters in
connection with AVEVA, the Rights Issue Shares, the Nil Paid
Rights, the Fully Paid Rights, the Rights Issue or the Acquisition
and nothing in this announcement is or shall be relied upon as a
promise or representation in this respect, whether as to the past,
present or future. To the fullest extent permitted by law, each of
Lazard, the Underwriters and their respective affiliates,
directors, officers, employees and advisers accordingly disclaim
all and any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) which they might otherwise have in respect of this
announcement or any such statement.
In connection with the Rights Issue, the Underwriters and any of
their respective affiliates may, in accordance with applicable
legal and regulatory provisions, take up a portion of the Rights
Issue Shares, the Nil Paid Rights and the Fully Paid Rights as a
principal position and in that capacity may retain, purchase, sell,
offer to sell or otherwise deal for their own account in the
securities of AVEVA and related or other securities and instruments
(including Rights Issue Shares, Nil Paid Rights and Fully Paid
Rights) and may offer or sell such securities other than in
connection with the Rights Issue. Accordingly, references in this
document to Rights Issue Shares, Nil Paid Rights and Fully Paid
Rights being offered should be read as including any offering of
Rights Issue Shares, Nil Paid Rights and Fully Paid Rights to any
of the Underwriters or any of their respective affiliates acting in
such capacity. In addition, certain Underwriters or their
affiliates may enter into financing arrangements (including margin
loans) with investors in connection with which such Underwriters
(or their affiliates) may from time to time acquire, hold or
dispose of Rights Issue Shares, Nil Paid Rights and Fully Paid
Rights. Except as required by applicable law or regulation, none of
the Underwriters or their respective affiliates propose to make any
public disclosure in relation to such transactions.
In the event that the Underwriters acquire Rights Issue Shares
which are not taken up by Qualifying Shareholders, the Underwriters
may co-ordinate disposals of such shares in accordance with
applicable law and regulation. Except as required by applicable law
or regulation, the Underwriters and their respective affiliates do
not propose to make any public disclosure in relation to such
transactions.
Ashurst LLP is acting as legal adviser to AVEVA in connection
with the Rights Issue.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product
Governance Requirements) may otherwise have with respect thereto,
the Rights Issue Shares, the Nil Paid Rights and the Fully Paid
Rights have been subject to a product approval process, which has
determined that such securities are: (x) compatible with an end
target market of investors who meet the criteria of retail and
professional clients and eligible counterparties, each as defined
in MiFID II; and (y) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "Target
Market Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Rights Issue Shares, the Nil
Paid Rights and the Fully Paid Rights may decline and investors
could lose all or part of their investment, the Rights Issue
Shares, the Nil Paid Rights and the Fully Paid Rights offer no
guaranteed income and no capital protection; and an investment in
the Rights Issue Shares, the Nil Paid Rights and the Fully Paid
Rights is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are
capable of evaluation the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses
that may result therefrom. The Target Market Assessment is without
prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Rights Issue.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, the Underwriters will only procure investors who meet
the selling restrictions including the criteria of professional
clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Rights Issue
Shares, the Nil Paid Rights and the Fully Paid Rights.
Each distributor is responsible for undertaking its own Target
Market Assessment in respect of the Rights Issue Shares, the Nil
Paid Rights and the Fully Paid Rights and determining appropriate
distribution channels.
Forward-Looking Statements
This announcement contains forward-looking statements, including
with respect to financial information, that are based on current
expectations or beliefs, as well as assumptions about future
events. These forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts.
In some cases, forward-looking statements use words such as
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "will", "may", "should", "would", "could", "is
confident", or other words of similar meaning.
No undue reliance should be placed on any such statements
because they speak only as at the date of this announcement and, by
their very nature, they are subject to known and unknown risks and
uncertainties and can be affected by other factors that could cause
actual results, and the Company's plans and objectives, to differ
materially from those expressed or implied in the forward-looking
statements. No representation or warranty is made that any
forward-looking statement will come to pass. You are advised to
read the Prospectus when published and the information incorporated
by reference therein in their entirety, and, in particular, the
section of the Prospectus headed "Risk Factors", for a further
discussion of the factors that could affect the Group or the
Enlarged Group's future performance and the industry in which it
operates. In light of these risks, uncertainties and assumptions,
the events described in the forward-looking statements, including
statements regarding prospective financial information, in this
announcement may not occur. In addition, even if the Group or the
Enlarged Group's actual results of operations, financial condition
and the development of the business sectors in which it operates
are consistent with the forward-looking statements contained in
this document, those results or developments may not be indicative
of results or developments in subsequent periods. These statements
are not fact and should not be relied upon as being necessarily
indicative of future
results, and readers of this announcement are cautioned not to
place undue reliance on the forward-looking statements, including
those regarding prospective financial information.
No statement in this announcement is intended as a profit
forecast, and no statement in this announcement should be
interpreted to mean that underlying operating profit for the
current or future financial years would necessarily be above a
minimum level, or match or exceed the historical published
operating profit or set a minimum level of operating profit.
Neither the Company nor any of the Underwriters are under any
obligation to update or revise publicly any forward-looking
statement contained within this announcement, whether as a result
of new information, future events or otherwise, other than in
accordance with their legal or regulatory obligations (including,
for the avoidance of doubt, the Prospectus Regulation Rules, the
Listing Rules and Disclosure Guidance and Transparency Rules).
AVEVA GROUP PLC
PROPOSED ACQUISITION OF OSISOFT, LLC
PROPOSED 7 FOR 9 RIGHTS ISSUE OF 125,739,796 RIGHTS ISSUE SHARES
AT GBP22.55 PER RIGHTS ISSUE SHARE TO RAISE APPROXIMATELY GBP2.835
BILLION
1. Introduction
On 25 August 2020, AVEVA announced the proposed acquisition of
the OSIsoft Group, at an enterprise value of $5 billion, on a
cash-free and debt-free basis, assuming a normalised level of
working capital and subject to customary completion
adjustments.
Today, AVEVA announces the fully committed and underwritten
Rights Issue to raise gross proceeds of approximately GBP2.835
billion to partly fund the Acquisition. The Rights Issue has been
underwritten by the Underwriters pursuant to the terms and
conditions of the Underwriting Agreement, with the exception of the
75,576,398 Rights Issue Shares which Schneider Electric has
irrevocably committed to take up (or cause to be taken up) in full
on a pro rata basis in accordance with the terms of the Equity
Financing Deed and the Support Agreement. Schneider Electric
currently indirectly holds 97,169,655 Existing Ordinary Shares,
representing approximately 60% of the issued ordinary share capital
of AVEVA as at the Latest Practicable Date. Accordingly, the Rights
Issue is fully committed and underwritten, taking into account the
Equity Financing Deed, the Support Agreement and the Underwriting
Agreement.
The Rights Issue will result in the issue of 125,739,796 Rights
Issue Shares at a price of GBP22.55 per share. The Rights Issue is
conditional upon, amongst other things, Shareholders' approval of
the Resolution.
The Acquisition, because of its size in relation to the Company,
is a Class 1 transaction for AVEVA under the Listing Rules and is
therefore conditional, inter alia, upon the approval by
Shareholders who together represent a simple majority of the
Ordinary Shares being voted (whether in person or by proxy) at the
General Meeting to be held at 9.30 a.m. on 24 November at AVEVA
Group plc, 30 Cannon Street, London, EC4M 6AH. Schneider Electric
has irrevocably undertaken to vote (or procure a vote) in favour of
the Resolution at the General Meeting, as described in Section 3
.
It is expected that dealings in the Rights Issue Shares (nil
paid) on the London Stock Exchange's main market will commence on
8.00 a.m. on 25 November 2020 and that dealings in the Rights Issue
Shares (fully paid) will commence on 8.00 a.m. on 10 December
2020.
The notice of the General Meeting and related Form of Proxy are
being distributed to Shareholders today subject to approval by the
FCA.
2. Principal terms of the Rights Issue
AVEVA proposes to raise gross proceeds of approximately GBP2.835
billion by way of the Rights Issue (approximately GBP2.807 billion
after deduction of estimated transaction-related fees and
expenses).
The Rights Issue is being made to all Qualifying Shareholders on
the register of members of AVEVA at the close of business on 20
November 2020 pursuant to the terms and conditions set out in Part
IV (Terms and Conditions of the Rights Issue) of the Prospectus.
Pursuant to the Rights Issue, AVEVA is proposing to offer
125,739,796 Rights Issue Shares by way of rights to Qualifying
Shareholders at the Right Issue Price of GBP22.55 per Rights Issue
Share payable in full on acceptance by no later than 11.00 a.m. on
9 December 2020. The Rights Issue Price represents a 32.2% discount
to the theoretical ex-rights price (TERP) of GBP33.28 per Existing
Ordinary Share by reference to the closing price on 5 November 2020
(the last Business Day before the publication of this
announcement). The Directors believe that the Rights Issue price,
and the discount which it represents, is appropriate to ensure the
success of the Rights Issue.
The Rights Issue will be made on the basis of:
7 Rights Issue Shares for every 9 Existing Ordinary Shares
registered in the name of each Qualifying Shareholder at the
close of business on the Rights Issue Record Date and so in
proportion for any other number of Existing Ordinary Shares then
registered in the name of such Qualifying Shareholder. Qualifying
Shareholders with fewer than 2 Existing Ordinary Shares will not be
entitled to any Rights Issue Shares. Entitlements to Rights Issue
Shares under the Rights Issue will be rounded down to the nearest
whole number and fractions of Rights Issue Shares will not be
provisionally allotted to Qualifying Shareholders.
The Rights Issue is fully committed and underwritten, taking
into account the Equity Financing Deed, the Support Agreement and
the Underwriting Agreement. Further details of the terms of Equity
Financing Deed, the Support Agreement and the Underwriting
Agreement are set out in Section 9.1(c) of Part XIV (Additional
Information) of the Prospectus.
The Rights Issue is conditional, inter alia, on:
-- the Resolution having been passed by the Shareholders at the
General Meeting without material amendment;
-- no condition of the Acquisition as set out in the Stock and
Unit Purchase Agreement having become incapable of satisfaction and
the Stock and Unit Purchase Agreement continuing to have full force
and effect, not having lapsed, been rescinded, terminated (in whole
or in part) or ceasing to be capable of completion in accordance
with its terms (in each case) prior to Rights Issue Admission;
-- the Underwriting Agreement having become unconditional in all
respects (save for the conditions relating to Rights Issue
Admission) and not having been rescinded or terminated in
accordance with its terms prior to Rights Issue Admission; and
-- Rights Issue Admission becoming effective at 8.00 a.m. on 25
November 2020 (or such later time and/or date as the Company and
the Joint Global Co-ordinators may determine provided such date is
no later than 27 November 2020).
The Underwriting Agreement is not capable of termination
following Rights Issue Admission.
The Company has given certain undertakings, including an
undertaking that it shall not, without the prior written consent of
the Joint Global Co-ordinators undertake certain actions in
relation to its share capital, including issuing further shares,
for a period of 180 days from the date of settlement of the
Underwriters' payment obligations to the Company pursuant to the
Underwriting Agreement, subject to certain exceptions, including
the issue of the Rights Issue Shares and the Consideration
Shares.
The Rights Issue is not conditional on Completion. The Rights
Issue may therefore complete while the Acquisition does not. In the
event that Rights Issue Admission is effected but Completion does
not occur, the Directors' current intention is that the proceeds of
the Rights Issue will be invested on a short term basis in
government bonds, or other high-quality, highly liquid assets,
while the Directors evaluate alternative uses of the funds. If no
such uses can be found, the Directors will consider how best to
return surplus capital to Shareholders. Such a return could carry
fiscal costs for certain Shareholders, will have costs for AVEVA
and would be subject to applicable securities laws.
The Rights Issue Shares will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to all dividends or other distributions made,
paid or declared by reference to a record date on or after the date
of their issue, including the right to receive the proposed interim
dividend announced on 5 November 2020 expected to be paid on 5
February 2021 to Shareholders on the Company's register of members
as at 8 January 2021.
3. Intentions of Schneider Electric and of the Directors
Schneider Electric, which currently indirectly holds 97,169,655
Existing Ordinary Shares, representing approximately 60% of the
issued ordinary share capital of AVEVA as at the Latest Practicable
Date, has irrevocably committed to: (a) vote (or procure a vote) in
favour of the Resolution at the General Meeting pursuant to the
Equity Financing Deed and the Support Agreement; and (b) take up
(or cause to be taken up) in full its Nil Paid Rights in the Rights
Issue on a pro rata basis, amounting to 75,576,398 Rights Issue
Shares (the "Schneider Electric Rights Issue Shares"). At
Completion, following the Rights Issue and the issue of the
Consideration Shares, Schneider Electric's shareholding will fall
from its current level of 60.1% to approximately 57.4% of the
Enlarged Share Capital (assuming no acquisition of Ordinary Shares
by Schneider Electric prior to the date of Completion other than
the Schneider Electric Rights Issue Shares and that no Ordinary
Shares other than the New AVEVA Shares are issued prior to
Completion). Schneider Electric has notified the Board that it
currently intends to acquire Ordinary Shares to ensure that its
shareholding will remain at approximately 60% of the Enlarged Share
Capital following Completion. Such acquisitions may include
purchases of: (i) Nil Paid Rights during the trading period; (ii)
Rights Issue Shares not taken up under the Rights Issue; and/or
(iii) Ordinary Shares
in the market in the short term, whether prior to or following
the date of Completion.
The Directors intend to vote in favour of the Resolution in
relation to their beneficial holdings, which amount to
approximately 0.1% of AVEVA's existing issued ordinary share
capital as at the Latest Practicable Date. Certain Directors have
confirmed their intention to subscribe for Rights Issue Shares.
4. Background to and strategic rationale for the Acquisition
AVEVA is a global leader in engineering and industrial software,
founded more than 50 years ago and headquartered in Cambridge, UK,
with offices across 40 countries. AVEVA is recognised as one of the
world's leading engineering, planning and operations, asset
performance, and monitoring and control software companies,
providing mission-critical software solutions to many of the
world's largest companies in the process, batch and hybrid
industries. AVEVA's consolidated revenue for FY 2020 was GBP833.8
million.
OSIsoft is a global leader in data historian and information
management software based in San Leandro, California, US with
offices around the world. OSIsoft's PI System enables its customers
to connect disparate sources of sensor-based time-series data in an
efficient and cost-effective manner, allowing customers to draw
insights and make business decisions based on the data. OSIsoft has
carried out installations in 127 countries and is widely used
across the oil and gas, manufacturing, energy, utilities,
pharmaceuticals and life sciences sectors, as well as in data
centres, facilities and the process industries. The Directors
believe there is a strong strategic rationale for an Acquisition of
the OSIsoft Group. The Acquisition will enable AVEVA to broaden and
deepen its relationships with existing and new clients and bring a
more comprehensive product portfolio to market. The Enlarged Group
will have a compelling financial profile that has a high proportion
of recurring revenue and a diverse revenue base.
Significantly Enhanced Product Offering
The Acquisition of OSIsoft will combine the complementary
product offerings of AVEVA and OSIsoft - bringing together AVEVA's
industrial software and OSIsoft's data management - and further
enhance AVEVA's portfolio of applications. The Enlarged Group will
continue to lead the digitisation of the industrial world through
helping customers accelerate their digital transformation and
reduce their operating and capital expenses. AVEVA's enhanced
product offering will deepen and entrench its relationships with
existing and new customers, with efficiency, flexibility,
sustainability and resilience becoming increasingly urgent
requirements for customers.
Customer Diversification
The Acquisition will further diversify AVEVA's industry exposure
as well as customer base within each industry segment. The
Acquisition will strengthen AVEVA's position in the power and
utilities, chemicals, pharmaceutical, food and beverage and life
sciences segments. Following Completion, the Enlarged Group's
exposure to oil and gas is expected to decrease as oil and gas
customers of AVEVA contributed 40% of revenue in FY 2020 whilst oil
and gas accounted for 24% of OSIsoft billings for OSIsoft FY
2019.
In addition to industry diversification, the broadening of
AVEVA's customer base and product portfolio creates a further
opportunity to build a less concentrated revenue base. This would
represent a more secure financial profile that will be
well-positioned to weather any market uncertainty or
disruption.
Geographic Market Penetration
AVEVA's market reach includes an expansive network of direct
sales, 4,300 SI partners, 1,200 OEM partners, and 150 distributors.
Combining this commercial reach with OSIsoft's existing product
suite has the potential to expand OSIsoft's reach and distribution
and deepen AVEVA's relationships with its existing customers. The
Acquisition of OSIsoft will increase AVEVA's penetration across the
Americas, EMEA and Asia Pacific and increase the potential for
cross-selling opportunities due to the high level of
complementarity between AVEVA and OSIsoft's respective product
portfolios. In addition, AVEVA is well positioned to strengthen
OSIsoft's presence in underrepresented countries such as Japan and
Germany.
Potential for Material Revenue and Cost Synergies
The Directors believe there is an opportunity to generate cost
and significant revenue synergies over the medium term following
Completion.
The Directors believe that a combination between OSIsoft and
AVEVA will strengthen AVEVA's position in engineering and
industrial software and create significant value for Shareholders.
With the addition of OSIsoft's PI System, the Directors are
confident that the Enlarged Group can achieve cost and significant
revenue synergies in the following areas:
Complementary product sets offer extensive cross-selling
opportunities - The Directors believe there is a compelling
opportunity to cross-sell AVEVA's portfolio of over 70 applications
into the customer base of OSIsoft, which has an installed base of
over 14,000 sites across 127 countries. Applications where the
Directors expect immediate opportunities include AVEVA's Predictive
Analytics / AI, Unified Operations Center, Asset Performance and
Reliability and Production Operations, all of which complement
OSIsoft's core offering of industrial and infrastructure data
management. Additional cross-selling opportunities exist within
AVEVA's broad HMI / SCADA installed base, where the Company has a
leading position, as well as other areas within Manufacturing
Execution Systems ("MES") and Maintenance Management. OSIsoft's PI
System provides HMI SCADA customers, OEMs and value-added resellers
with additional capabilities to extend the value of their existing
systems; customers with AVEVA's MES and Maintenance systems also
provide additional opportunities for upselling and
cross-selling.
Expanding OSIsoft's global reach - AVEVA is one of the largest,
global, independent software companies serving the industrial and
infrastructure markets with a large installed base at over 100,000
sites across vertical segments. AVEVA's open and agnostic systems
are connected to over 20 billion connected points managing over 10
trillion transactions and 12 petabytes of data with over 90% of
this data from non-Schneider Electric systems. AVEVA's market reach
includes an expansive network of direct sales, 4,300 SI partners,
1,200 OEM partners, and 130 distributors. With the strength of
AVEVA's global footprint and breadth and depth of AVEVA's installed
base, AVEVA can support OSIsoft to accelerate its penetration of
underrepresented regions and customer segments as well as
broadening its business model to offer greater choices to its
customers both commercially and technologically. Areas where
OSIsoft is underrepresented and where the Directors expect short to
medium-term revenue opportunities include countries such as Japan
and Germany and adjacent markets such as Consumer Packaged Goods,
OEM and Marine, which AVEVA serves today.
Unique go-to-market proposition with Schneider Electric - AVEVA
has a unique relationship with Schneider Electric which provides it
with access to Schneider Electric's global market presence and
customer relationships while maintaining AVEVA's position as an
independent global leader in industrial software. The Acquisition
will provide OSIsoft with access to Schneider Electric's customers,
allowing it to accelerate its penetration of many key accounts. The
expected benefits to OSIsoft include additional market access, and
new avenues for growth in buildings, data centres, infrastructure
and industry, leveraging Schneider Electric's leadership in
industrial automation and energy management with the most
comprehensive combined product portfolio across these fields.
Enhanced Digital Twin potential, leveraging unrivalled
combination of engineering and operational data - The deployment of
Digital Twin solutions has emerged as a key element of digital
transformation initiatives across all segments of the industrial
sector. AVEVA is a market leader in the authoring and management of
asset-centric engineering information. OSIsoft is a market leader
in the aggregation and management of operational information. The
combination of operational and engineering information, augmented
by AVEVA's rich functional capability in visualisation and its
performance applications for asset reliability, supply chain
efficiency and operational excellence, all combine to create a
unique opportunity for a comprehensive Digital Twin solution
offering. AVEVA is already delivering such solutions supporting the
digital transformation initiatives of customers in the Power and
Energy segments, and the Acquisition will allow AVEVA to further
commercialise the solution, enabling highly scalable deployment and
faster time to value across additional customer groups.
Enhanced technology, innovation and scale - With the support of
over 1,700 people engaged in research and development and one of
AVEVA's company-wide investment priorities being Cloud, where
approximately GBP25 million is being invested per annum, the
Directors believe that the market adoption and future expansion of
OSIsoft's Cloud products, in particular OCS, and other cloud-based
offerings can be accelerated. AVEVA has successfully migrated many
of its traditional on-premise offerings to the Cloud over the past
five years to also be available as SaaS and transitioned its
business model to include a high percentage of subscription
revenue, and the Directors believe that AVEVA has the experience
and key learnings to support and accelerate OSIsoft's Cloud journey
and broaden its offering to customers. By combining OSIsoft's OCS
offering with AVEVA's complementary Cloud capabilities, there is a
unique opportunity to develop this newly created offering through
AVEVA's sales channels. This will unlock additional value for both
new and existing customers and drive growth for AVEVA.
Operational efficiency benefits - The Directors expect the
Acquisition to allow AVEVA to drive operational efficiencies
through the optimisation of cost structures. The deployment of
standard operating practices and elimination of cost overlaps
across the research and development, customer success and sales and
marketing functions, the consolidation of overlapping office
locations, the elimination of duplicate IT systems and the
reduction of duplicate costs across support functions, are all
areas expected to deliver cost savings as compared to AVEVA and
OSIsoft as standalone propositions.
The Directors expect to realise pre-tax cash cost synergies from
the Acquisition of not less than GBP20 million per annum on a run
rate basis by the end of the second full financial year following
Completion, which is expected to be the year ending 31 March
2023.
Compelling Financial Benefits
The Directors believe that the Acquisition will enhance the
growth profile of the Enlarged Group and lead to cost and
significant revenue synergies which will support AVEVA's track
record of delivering superior shareholder returns. The Acquisition
is expected to be accretive to earnings in AVEVA's financial year
ended 31 March 2022, before synergies in part due to the material
tax savings which the Directors believe will be created over a 15
year period as a result of intangible assets created by the
Acquisition that can be amortised for tax purposes.
Combined Development Expertise
The combination of AVEVA and OSIsoft's first-class development
and engineering teams has the potential to accelerate and improve
the development of new software and technology. The Acquisition
will bring together two of the leading development teams in the
industrial software space, laying the foundations for a culture of
continued, long-term innovation and product development.
Enhanced Combined Customer Base
The Acquisition will enable AVEVA to broaden and deepen its
relationships with both existing and new customers across the
highly complementary, global customer bases. AVEVA and OSIsoft have
a significant shared customer base, which provides synergies in
multiple industries, enabling product integration and customer
value.
OSIsoft has a large, growing customer base of leading blue chip
companies and is used by its customers across 14,000 sites in 127
countries. OSIsoft's systems are widely used in industries such as
energy, utilities, pharmaceuticals and life sciences, as well as
within data centre facilities and across the public sector
including federal government. OSIsoft works with over 1,000 of the
world's leading power and utilities companies, 38 of the Global
Fortune Top 40 oil and gas companies, all of the Global Fortune Top
10 metals and mining companies, 37 of the 50 largest chemical and
petro-chemical companies and nine of the Global Fortune Top 10
pharmaceutical companies. As businesses deploy increasing levels of
sensor-enabled equipment, more assets are streaming more data,
which the Directors believe will increase the need for and value
derived from the PI System.
Strengthened Business Resilience
The combined group will benefit from OSIsoft's high retention
rate of customers, with churn of 2.7% or less in all years from
2007 to 2019, with an average churn rate of only 1.3% over the same
period. OSIsoft's customer base has consistently grown in each year
since 2006. OSIsoft also has a high proportion of recurring revenue
(which includes subscription and maintenance revenue), in line with
AVEVA's own. This is a high quality revenue base that is
well-positioned to cope with any market shocks and economic cycles,
and a strong base on which to continue OSIsoft's growth.
5. Summary of the key terms of the Acquisition
Stock and Unit Purchase Agreement
On 25 August 2020, AVEVA, OSIsoft and the Sellers (or their
representatives, as applicable) entered into an agreement (the
"Stock and Unit Purchase Agreement") under which AVEVA has agreed,
on the terms and subject to the conditions of the Stock and Unit
Purchase Agreement to acquire, directly or indirectly, all of the
issued and outstanding ownership units of OSIsoft in exchange for:
(a) the issue and delivery of 13.7 million Consideration Shares
(after adjustment to take account of the Rights Issue) to
Estudillo; and (b) approximately $4.4 billion of cash
consideration. On Completion, OSIsoft will become an indirect
wholly-owned subsidiary of AVEVA
Break fee
AVEVA will also be required to pay a termination fee of $85
million to the Sellers if the Stock and Unit Purchase Agreement is
terminated due to either: (a) Completion not having occurred by 20
December 2020 as a result of a failure to satisfy the Break Fee
Conditions, provided that such date will be extended to 31 March
2021, and subsequently to 30 June 2021, where any of the Break Fee
Conditions (other than the Shareholder approval condition) have not
been satisfied (without regard being had to the satisfaction or
otherwise of the Shareholder approval condition); or (b) a
government authority having prohibited the Acquisition by way of a
final non-appealable order under an antitrust law or issued by
CFIUS, provided that, in either case, at the time of such
termination all other conditions to AVEVA's obligations to effect
the Acquisition have been satisfied or would have been satisfied at
Completion, and OSIsoft has not committed a material breach of the
Stock and Unit Purchase Agreement which was the principal cause of
Completion not having occurred and the Stock and Unit Purchase
Agreement being terminated.
6. Further information
Your attention is drawn to the Risk Factors set out in the
Prospectus, and to the information set out in the section entitled
"Important Information" in the Prospectus.
You should not subscribe for any Rights Issue Shares except on
the basis of information contained or incorporated by reference
into the Prospectus.
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END
MSCQQLBBBFLEFBQ
(END) Dow Jones Newswires
November 06, 2020 13:40 ET (18:40 GMT)
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