TIDMTERN TIDMPIRI
RNS Number : 5292Q
Tern PLC
28 June 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
FOR IMMEDIATE RELEASE
28 June 2022
Recommended All-Share Offer
for
Pires Investments plc ( " Pires " )
by
Tern plc ( " Tern " )
to be implemented by means of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act 2006
Notice of Tern General Meeting and posting of a circular to Tern
Shareholders
On 1 June 2022 , it was announced that the Tern Directors and
Pires Directors had reached agreement on the terms of a recommended
all-share offer by Tern for the issued and to be issued share
capital of Pires, to be effected by means of a court-sanctioned
scheme of arrangement between Pires and Pires Shareholders under
Part 26 of the Companies Act 2006 (the "Acquisition")(the "2.7
Announcement").
Pires has announced that it will be posting the Scheme Document
to Pires Shareholders later today. The Scheme Document includes
notices of the Court Meeting and the General Meeting to be held on
21 July 2022.
The Tern Directors announce that a circular (the "Circular")
will be sent to Tern Shareholders later today which will include a
notice of a general meeting to be held at 11.00 a.m. on 21 July
2022 at the offices of Reed Smith LLP at The Broadgate Tower, 20
Primrose Street, London, EC2A 2RS, at which the Resolution will be
proposed. The Resolution, which will be proposed as an ordinary
resolution, is to authorise the Directors to allot up to 98,865,712
New Tern Shares (GBP19,773.14 in nominal value) in connection with
the Acquisition. This authority will expire on the date that all
consideration due pursuant to the terms of the Acquisition has been
satisfied.
A copy of the Circular will be available from Tern's website at
www.ternplc.com shortly.
Words and expressions defined in the Circular shall, unless the
context provides otherwise, have the same meanings in this
announcement.
The full text of Part 1 of the Circular, which includes detailed
information on the Pires investment portfolio and the Tern network
of companies, is set out below:
Dear Shareholder,
Recommended all-share offer for Pires Investments plc
and
Notice of General Meeting
1. Introduction
On 1 June 2022, the boards of directors of Pires and Tern
announced that they had reached agreement on the terms of a
recommended all-share offer whereby Tern will acquire the entire
issued and to be issued share capital of Pires in exchange for the
issue of New Tern Shares. The Acquisition is to be implemented by
means of a court-sanctioned scheme of arrangement under Part 26 of
the Act.
The implementation of the Acquisition is, among other things,
subject to Shareholders approving the Resolution to grant authority
to the Directors to issue the New Tern Shares as consideration
under the Acquisition.
The full text of the Resolution is set out within the Notice of
General Meeting at the end of this document.
The purpose of this document is to provide you with information
about the Acquisition and also to explain why the Directors
consider that the Acquisition is in the best interests of the
Company and Shareholders as a whole, and why the Directors
recommend that you vote in favour of the Resolution to be proposed
at the General Meeting, notice of which is set out at the end of
this document, as the Directors have irrevocably undertaken to do
in respect of their own beneficial holdings of Tern Shares.
The Acquisition has also been unanimously recommended to Pires
Shareholders by the Pires Board.
Shareholders are advised to read this document in its
entirety.
The information contained in this document does not purport to
be complete and should be read in conjunction with the full text of
the Scheme Document which will be available at
www.piresinvestments.com and www.ternplc.com and in hard copy at
the registered offices of Pires and Tern until the time of the
General Meeting. Shareholders should read the whole of the Scheme
Document, in particular the Letter of Recommendation from a
Non-Executive Director of Pires in Part One and the Explanatory
Statement in Part Two.
2. Summary of the terms and conditions of the Acquisition
2.1 Terms of the Acquisition
Under the terms of the Acquisition, which is subject to the
Conditions and the other terms set out in Part Three (Conditions to
the implementation of the Scheme and to the Acquisition) of the
Scheme Document, Scheme Shareholders on the register of members of
Pires at the Scheme Record Time will receive:
For each Pires Share held, 0.51613 New Tern Shares
Based on the Closing Price of 15.5 pence per Tern Share on 31
May 2022 (being the last Business Day before the date of the
Announcement), the Acquisition valued:
-- each Pires Share at 8.0 pence, a premium of 53.8 per cent. to
Pires' closing share price of 5.2 pence on 31 May 2022 (being the
last Business Day prior to the commencement of the Offer Period)
and a 31.1 per cent. premium to the average closing share price of
6.1 pence per Pires Share for the six months ended 31 May 2022;
-- the entire issued and to be issued share capital of Pires at
approximately GBP14.9 million; and
-- the Enlarged Group at a combined market capitalisation of
approximately GBP69.5 million (assuming completion of the
Acquisition).
Based on the Closing Price of 12.75 pence per Tern Share on the
Last Practicable Date, the Acquisition values each Pires Share at
6.58 pence and Pires' issued ordinary share capital on a fully
diluted basis at approximately GBP12.30 million, representing a
premium of:
-- 26.6 per cent. to the Closing Price of 5.2 pence per Pires
Share on 31 May 2022 (being the last Business Day prior to the
commencement of the Offer Period); and
-- 32.9 per cent. to the Closing Price of 4.95 pence per Pires
Share on the Last Practicable Date.
The New Tern Shares will be issued credited as fully paid and
will rank pari passu in all respects with the Tern Shares already
in issue, including the right to receive and retain dividends and
other distributions declared, made or paid by reference to a record
date falling after completion of the Acquisition. Application will
be made to the London Stock Exchange for the New Tern Shares to be
admitted to trading on AIM.
Upon completion of the Acquisition, Pires Shareholders will own
approximately 21.39 per cent. of the Estimated Enlarged Share
Capital.
If any dividend or other distribution or return of value is
proposed, declared, made, paid or becomes payable in respect of
Pires Shares on or after the date of the Scheme Document and prior
to the Acquisition becoming effective, Tern will have the right to
reduce the value of the consideration payable for each Pires Share
by up to the amount per Pires Share of such dividend, distribution
or return of value.
The New Tern Shares to be issued and allotted to Scheme
Shareholders in accordance with the Exchange Ratio will be rounded
up to the nearest whole number. Under the terms of the Acquisition,
Scheme Shareholders will receive 0.51613 New Tern Shares for every
Pires Share held. If a Scheme Shareholder holds only one Pires
Share, then one New Tern Share will be allotted and issued to such
Scheme Shareholder. If a Scheme Shareholder holds more than one
Pires Share, then the Scheme Shareholder will receive such number
of New Tern Shares as is equal to such number of Pires Shares the
Scheme Shareholder holds multiplied by 0.51613 and rounded up to
the nearest whole number. By way of illustration, if a Scheme
Shareholder holds 2,500 Pires Shares, they will receive 1,291 New
Tern Shares calculated as follows: 2,500 Pires Shares multiplied by
0.51613 equates to 1,290.325 New Tern Shares and 1,291 New Tern
Shares when rounded up to the nearest whole number.
2.2 Conditions of the Acquisition
Further details of the Conditions and further terms of the
Acquisition are set out in Part Three (Conditions to the
implementation of the Scheme and to the Acquisition) of the Scheme
Document.
3. Background to and reasons for the Acquisition
The Board believes that combining the two businesses by way of
the Acquisition has compelling strategic and financial rationale,
will be value accretive to Shareholders and will provide the
opportunity for the Enlarged Group to:
(a) establish a company of greater scale and potential interest to institutional investors;
(b) provide investors with increased diversity of exposure to
specialist technology businesses at different stages of
development;
(c) aid the development of the companies within each businesses'
portfolio given their synergistic nature;
(d) further enhance the existing Sure Valley Ventures
relationship through the businesses' combined investment;
(e) create a leadership position as the 'go to' investor in the
IoT sector and other deep technology sectors that include AI,
Machine Learning (ML) and Natural Language Processing (NLP);
(f) provide clear corporate synergistic benefits and cost
savings, most notably Pires' public company costs, benefiting from
the efficiencies created by the Enlarged Group;
(g) provide Pires and its portfolio companies with a greater
ability to expand outside of the UK, particularly given Tern's
North American presence, connections and history; and
(h) facilitate increased access to capital from a variety of
sources as part of a larger group, in addition to the proceeds from
potential exits of investments held by each business.
The Board believes that the terms of the Acquisition fairly
reflect both Tern's and Pires' respective standalone businesses and
their prospects as well as an appropriate sharing of the
anticipated synergies resulting from the Acquisition.
In addition, the Board believes that the issue of the New Tern
Shares will be value enhancing for Shareholders as there is
considerable unlocked potential within the Pires investment
portfolio (including unrealised value in the SVV1 investment
portfolio which is entering its mature stage having substantially
completed its investment stage) and that by using its hands-on
approach and wide network of connections the Tern management team
will quickly have an impact to realise such potential.
4. Information on Tern
Tern is a public limited company incorporated in England and
Wales whose shares are admitted to trading on AIM.
Tern is focused on value creation from IoT technology businesses
and its network of companies comprises Device Authority Limited,
Wyld Networks AB, InVMA Limited (trading as Konektio), FVRVS
Limited (trading as FundamentalVR) and Talking Medicines
Limited.
In March 2022, Tern announced that it had agreed to participate
in a new venture capital fund, the New SVV Fund alongside the
British Business Bank and other investors.
4.1 Tern's investment strategy
Tern's investment strategy is to invest in high-potential,
private, UK software companies that solve significant real-world
problems using new methods in large global markets.
Specifically, Tern targets investments in companies that have
developed disruptive innovations to healthcare and industrial
markets, employing the following technologies: AI, Machine
Learning, Next Generation IoT Networking, Security (e.g.,
Information Security (InfoSec)) and Immersive Technologies such as
AR and VR for the IoT.
Tern seeks to participate at the late seed stage or 'A' round,
where there is often an equity gap, typically leading the
investment round, bringing in other syndicate partners in later
rounds, to capitalise the investee company initially and provide
funding for future growth. When Tern invests in a company, it seeks
to secure a position of influence, typically a board seat as
chairperson. Subsequently, Tern provides substantial "hands on"
support and value add through the Tern team's operating expertise
and network, to accelerate the company's growth from the initial
investment to a position when it can hold a series 'B' investment
round. At the appropriate time, Tern will work to help the company
secure a new lead series 'B' investor, using the Tern team's
extensive network and working with the investee company's syndicate
of third-party investors.
Ultimately Tern will seek to exit its investments at the
appropriate time in order to crystalise value for Shareholders.
4.2 Details of the Tern Network of Companies
Tern's network of companies predominantly comprises:
(a) Device Authority Limited ('Device Authority')
Tern has a 53.8 per cent. holding in Device Authority. Device
Authority is a global leader in Identity and Access Management
(IAM) for the IoT; focused on securing and automating zero trust
for IoT industries in the automotive, medical device (IoMT),
industrial (IIoT) sectors and evolving government and defence
sectors.
Device Authority's KeyScaler(TM) platform provides zero-touch
provisioning and complete automated lifecycle management for
securing IoT devices and data at scale, with frictionless
deployment across device provisioning, authentication, credential
management, policy based end-to-end data security/encryption and
secure OTA (Over the Air) and HSM (Hardware Security Module)
updates.
KeyScaler(TM) is system agnostic and protects Device Authority's
customers' global IoT deployments at the edge, in the cloud and
integrating into complex policy-driven requirements, independent of
the customers' proprietary hardware and software environments.
KeyScaler(TM) is deployed both direct, and through key cloud
platform and system integrator partners such as Microsoft, Wipro,
Venafi and EnTrust.
In December 2021, as part of a US$2.9 million funding package,
Device Authority received a US$1.25 million strategic investment
from Venafi Inc ("Venafi"). Venafi is a privately held
cybersecurity company that develops software to secure and protect
cryptographic keys and digital certificates. In December 2020,
Thoma Bravo, a leading private equity investment firm focused on
the software and technology-enabled services sectors, with over
US$114 billion of assets under management as of 31 March 2022,
acquired a majority stake in Venafi in a deal valuing Venafi at
US$1.15 billion.
The transaction with Venafi, fulfilled Tern's goal of obtaining
an active strategic partner for Device Authority with solid
cybersecurity credentials and a large presence in the United
States. Following the Venafi investment Tern continues to hold a
majority equity stake in Device Authority.
Device Authority has continued its reported positive business
momentum following the strategic investment from Venafi, with the
business being particularly focused on growing its monthly
recurring revenues through its subscription base and its
modularised licence platform, KeyScaler(TM). Particularly strong
demand has come from the automotive sector, with the retail sector
and the US Government, both as a customer and as a result of the
effects of its policy, also being strong contributors to growth.
The executive order from US President Biden in May 2021 that tasked
the National Telecommunications and Information Administration
(NTIA) and the Commerce Department with defining the minimum
elements of a SBOM (software bill of materials), considered
critical to improving transparency and security in the software
supply chain and securing critical infrastructure, continue to
provide sales opportunities and leads for Device Authority.
With the target of growing monthly recurring revenues, Device
Authority started selling KeyScaler(TM) as a SaaS (KSaaS) product
in late 2021, with initial customers on this model coming from the
automotive, healthcare and retail sectors, enabling these customers
to more rapidly onboard and scale in a secure, hosted cloud
environment.
Other enhancements to Device Authority's product range include
the launch of KeyScaler(TM) Edge in October 2021, which Device
Authority believes is the first device identity centric IAM
designed to address the complex end-to-end challenges of IoT
security lifecycle management at the network edge. It is a
lightweight version of KeyScaler(TM) that has been created
specifically for network edge nodes, with the ability to register,
authenticate, and provision security certificates and tokens to
devices in the local network, independent of an available internet
connection. This allows organisations the ability to automate edge
deployments to drive efficiency at IoT scale and meet their
compliance and regulatory obligations for private local network
deployments, with safety, confidentiality, data theft/privacy,
brand reputation, revenue protection being important factors.
In addition to new customer wins, Device Authority also
continues to enter into further distribution partnerships. Device
Authority has partnerships with leading IoT ecosystem providers,
including Avnet, AWS, DigiCert, Entrust, Ericsson, HID Global,
Microsoft, PTC, Thales, Titan Automotive Solutions, Trusted
Objects, Venafi and Wipro, amongst others.
ABI Research reported in February 2022 that they consider Device
Authority as the current industry leader in their IoT device
identity lifecycle management competitive assessment.
Device Authority's website can be found at:
https://www.deviceauthority.com
(b) Wyld Networks AB ('Wyld Networks')
Tern has a 49.2 per cent. holding in Wyld Networks. Wyld
Networks' shares are quoted on the NASDAQ First North Growth Market
in Stockholm following an initial public offering in July 2021; the
first for one of Tern's portfolio companies.
Wyld Networks is a virtual satellite network operator that
develops and delivers innovative wireless technology solutions that
enable affordable connectivity for IoT devices and sensors,
potentially anywhere in the world - especially for the 85 per cent.
of the world's surface where there are no traditional cellular
networks. Wyld Networks' technology also enables mesh networks that
utilise location aware technology and wirelessly mesh devices in
areas where 4G or wifi are congested or not available.
Wyld's sensor-to-satellite module suite with LoRaWAN(R) allows
IoT sensors to communicate directly from sensor to Low Earth Orbit
satellites or in conjunction with terrestrial LoRa networks. Wyld's
modems, devices, and embedded technology are designed to enable
communication with the cloud, no matter the location, providing
global IoT coverage.
Wyld Networks is a member of the LoRa Alliance(R), the global
association of companies backing the open LoRaWAN(R) standard for
the IoT. In December 2021, LoRaWAN(R) was officially approved as a
standard by the International Telecommunication Union, the United
Nations specialised agency for information and communication
technologies. The LoRa Alliance(R) also provides a platform for
Wyld to showcase its technology to over 500 member companies. The
LoRaWAN(R) standard specification, developed and maintained by the
LoRa Alliance(R), is a Low Power, Wide Area networking protocol
designed to wirelessly connect battery operated 'things' to the
internet in regional, national or global networks, and targets key
IoT requirements such as bi-directional communication, end-to-end
security, mobility and localisation services.
Wyld Networks, together with Eutelsat Communications, Senet Inc
and TrakAssure, is also a founder member of the Multimodal IoT
Infrastructure Consortium(TM) ("MMIIC"). The consortium was set up
to bring integrated and interoperable terrestrial and satellite
LoRaWAN(R) IoT connectivity to customers across the globe, as
announced by Wyld Networks and Tern on 11 January 2022. The MMIIC
consortium is focused on integrating the parties' platforms, and
innovative sensor and hardware designs, coupled with providing
collaborative service delivery and compelling pricing, to target
the global supply chain, with container logistics and related asset
tracking, as the first and anchor applications. Eutelsat will
provide LoRaWAN(R) coverage via low earth orbiting satellites,
while Senet, which owns and operates the largest publicly available
LoRaWAN(R) network in the United States, is providing terrestrial
LoRaWAN(R) network connectivity.
Wyld Networks continues its focus on the development of Wyld
Connect (a satellite IoT terminal and module) and Wyld Fusion (a
provisioning and payment platform). In particular, Wyld has
completed the hardware development of Wyld Connect, the world's
first Long Range-Frequency Hopping Spread Spectrum (LR-FHSS)
sensor-to-satellite modem, to enable satellites to connect to
devices/sectors across remote areas around the globe. Wyld is also
continuing with the development of Wyld Fusion in preparation for
the commercial launch of Wyld's end-to-end satellite IoT solution,
planned for later in 2022.
Wyld Networks has signed agreements with customers in a number
of market areas, including energy and agriculture with customers
such as Chevron, Bayer, AgriSound, Treevia, as well as with system
integrators such as Fujitsu and Wezen. These include revenue
generating contracts, for example, the 23 March 2022 announced
purchase order for its Wyld Connect IoT module from a Brazilian
company for deployment in the forestry sector. This purchase order
had a total value of SEK 11.3 million (approximately GBP900,000)
over a three-year period, starting in 2022. On 10 March 2022 Wyld
Networks announced purchase orders for its Wyld Connect IoT modules
with a total value of US$1.7 million over a four-year period,
starting in April 2022. The Wyld Connect solution being supplied in
this instance will allow the customer, a South African company, to
deploy IoT sensors in the agricultural sector to collect data
directly from satellites.
Wyld Networks' website can be found at:
https://wyldnetworks.com
(c) FVRVS Limited (trading as 'FundamentalVR')
Tern has a 20.0 per cent. holding in FundamentalVR.
FundamentalVR is a leading virtual reality training and data
analysis technology platform with its initial applications being in
surgical training.
FundamentalVR is led by surgical training experts and leading
technologists with a mission to revolutionise surgical training by
bringing simulation into the hands of medical professionals around
the world, using low cost and easily accessible technology.
FundamentalVR's software platform takes advantage of readily
available virtual reality software and devices, such as the
Facebook owned Oculus Quest, and combines it with cutting edge
haptics (being technology based on the sense of touch) to create a
simulation system that can be used on any modern computer set up.
Using computer learning, the software platform works together with
haptic hardware devices to simulate the physical sensation of
operating on human tissue. It also has the capability to provide
artificial intelligence (AI) driven real-time feedback, procedure
correction data and best practice insight. The result is a
simulation system that provides surgeons with a more hands-on
experience and aims to better prepare them for real life
situations, resulting in better patient outcomes.
As previously announced by Tern, the adoption of FundamentalVR's
haptics virtual reality simulation solutions, as a credible
alternative to in-person and on human learning, has accelerated as
a result of the challenges of social distancing and the reduction
in elective surgeries due to the Covid-19 pandemic. The business is
maintaining its focus on the strategic areas of the market where
they see high growth potential, in particular ophthalmology,
interventional, robotics and regenerative, and where their platform
is most differentiated. The sales and marketing efforts are making
steady progress within all these areas.
Tern has announced a number of new contract wins for
FundamentalVR over the past year, including: a GBP0.6 million, four
year contract in the area of interventional medicine, a
strategically important area for FundamentalVR, to create a
simulation platform in an area that can directly benefit from the
fidelity and realism of the FundamentalVR platform; a GBP1 million
four year contract with a new client within the fast-moving
Robotics Assisted Surgical Systems (RASS) sector; and a GBP0.3
million contract with a major US medical institution with a
globally renowned virtual hospital and hands-on clinical training
facility to create a virtual education facility.
On 31 May 2022 it was announced that FundamentalVR had raised a
total of GBP7 million in a Series B fund raising from existing
investors and a new institutional investor, with an additional
GBP1.2 million of convertible loan notes being converted, including
the approximately GBP570,000 in loan notes held by Tern. The
FundamentalVR Series B is intended to provide FundamentalVR with
funding to enable to grow in line with its strategy, including
expanding its US activities.
The quality of FundamentalVR's technology was recognised at a
number of awards in 2021 and more recently. At the UK National
Technology Awards 2021 FundamentalVR won both 'Virtual or Augmented
Reality Product of the Year' and 'Healthcare Tech of the Year'. The
business was also the recipient of the 'Frost & Sullivan
Entrepreneurial Company of the Year' award in 2021. In May 2020,
FundamentalVR's Fundamental Surgery platform won 'Best Mixed
Reality Solution' at the XR Awards.
Validation work with partners is additionally being published,
with New York University Langone issuing a validation study in
September 2021 highlighting the improved skills transfer of
FundamentalVR's HapticVR service over normal VR. This was backed up
by a smaller study by the NHS.
FundamentalVR's website can be found at:
https://www.fundamentalvr.com
(d) InVMA Limited (trading as Konektio) ('Konektio')
Tern has a 36.8 per cent. holding in Konektio. Konektio helps
industrial and manufacturing companies prosper by converging their
physical assets with new transformational digital insights.
Konektio provides an Industrial IoT SaaS platform to original
equipment manufacturers (OEMs) and aftermarket customers, as well
as the connected product market. The software enables remote asset
monitoring and management to drive productivity improvements. Their
primary product, AssetMinder(R), is machine agnostic and allows
manufacturers to diagnose issues and proactively prescribe services
plans, ultimately reducing downtime and improving operational
efficiency.
Konektio's AssetMinder(R) is a modular, industry 4.0, IoT SaaS
platform, using a wide range of analytical tools and AI and machine
learning algorithms to connect up whole factory floors and
processes, as well as managing resources into and out of the
factory. AssetMinder(R) assesses the effectiveness and efficiencies
of entire operations, putting customers in control of their assets
and therefore directly impacting productivity, efficiency and
business outcomes.
AssetMinder(R) captures usage and performance data from smart
sensors, providing advanced insights to unlock data-driven
intelligence that optimises processes, condition monitoring,
machine uptime and profitability across a range of industries
including manufacturing, transportation, utilities, smart
infrastructure, and food processing. AssetMinder's technology is
already deployed across thousands of assets, providing valuable
insights and recommendations to people maintaining and managing
critical devices and infrastructure.
The business rebranded from InVMA to Konektio in December 2021.
The name change reflected its ambition to be a company that creates
true connected Industrial IoT communication and collaboration
solutions for a wide range of businesses, taking advantage of the
industrial sector's desire for digital transformation. This is
being achieved by rolling out AssetMinder(R) with customisable
features to allow customers to choose what is right for them.
Konektio enjoyed a significant increase in sales of
AssetMinder(R) in 2021. This business growth led to the recent
recruitment of additional staff in the UK and the USA, accelerated
product development, an increased channel and partner sales
network, a material investment in new branding and the strategic
decision to open its first overseas office in North Carolina, in
the USA.
Konektio completed a GBP2,125,000 equity fund raise in December
2021, including GBP1,925,000 from institutional investors Mercia
and Foresight and the founders, and GBP200,000 from Tern, to fund
their future development.
Konektio is continuing to build momentum, with AssetMinder being
in demand from customers who are looking for contactless monitoring
of factory and remote assets. In particular, Konektio has benefited
from Covid-19 accelerating the need and demand for contactless
monitoring of factory and remote assets. Konektio has a strong
sales pipeline, including opportunities in Europe and North
America, and is continuing to build its recurring revenue base.
Konektio appointed Dr Ron Black as its Non-Executive Chairman in
January 2022. Dr Black, who has recently taken on the role of Chief
Executive Officer at Codasip, a leading supplier of processing
solutions for integrated circuit designers, brings with him a
wealth of technology, innovation, and global business scale-up
experience, through his previous roles which have included Chief
Executive Officer of Imagination Technologies and Chief Executive
Officer of Rambus.
Konektio's website can be found at: https://konektio.com
(e) Talking Medicines Limited ('Talking Medicines')
Tern has a 23.8 per cent. holding in Talking Medicines, the most
recent company to join the Tern portfolio in November 2020.
Talking Medicines, based in Glasgow and London, and with a
recently opened US office, is a social intelligence company
designed specifically for the pharmaceutical industry. Through a
combination of artificial intelligence and industry expertise,
Talking Medicines has developed a next generation data platform,
PatientMetRx(R), to deliver social listening for pharmaceutical
companies. Its PatientMetRx(R) platform is driven by artificial
intelligence models that use machine learning and natural language
processing to scale real world data collection to a scale that is
transformational versus traditional research. By structuring and
translating the patient's voice into a Patient Confidence Score
(PCS), Talking Medicines helps pharmaceutical companies understand
patient confidence in their medicines, allowing marketing to be
targeted and ultimately with the goal of delivering better patient
outcomes.
Talking Medicines welcomed Boston based life science investor
Mark Bamforth in January 2022, when his family office joined
existing investors to invest in the GBP1.59 million funding round.
This provided Talking Medicines with the funds to support its
expansion, particularly in the United States. This has already
enabled them to gain further US recognition for their PatientMetRx
platform, launched in February 2021, and continue to build their
subscription base.
The company is focusing on expanding its PatientMetRx(R)
subscription base amongst pharma brand teams and pharma marketing
agencies. Talking Medicines has established an office in New
Jersey, USA, to support these plans.
The business has been awarded a number of accolades, being
included in the First 100 UK Digital Health Companies by the UK
Government's Department of Trade and Industry.
Talking Medicines website can be found at:
https://talkingmedicines.com
(f) The New SVV Fund
In March 2022, Tern announced that it had agreed to participate
in the New SVV Fund alongside the British Business Bank and other
investors. The New SVV Fund will invest in a range of private UK
software companies with a focus on companies in the immersive
technology and metaverse sectors, including augmented and virtual
reality, artificial intelligence, the IoT and security.
Tern believes its participation in the New SVV Fund is an
excellent way to broaden Tern's exposure to exciting early-stage
private UK technology companies with a modest capital commitment,
whilst delivering a number of other potentially significant
benefits in addition to the attractive financial returns it
envisages from its participation. Tern believes its participation
in the New SVV Fund will provide important technology insights,
assist with business development and increase its network, thereby
significantly enhancing the Tern ecosystem.
Tern has committed to invest up to GBP5.0 million in total over
the 10 year life of the New SVV Fund, which would result in an
interest in the New SVV Fund of approximately 5.9 per cent. The
Tern Directors believe they will be able to fund investments into
the New SVV Fund from Tern's ongoing available resources.
5. Information on Pires
Pires is an investment company quoted on AIM focused on
investment in next generation technologies. It invests both
directly and through certain investment funds.
Pires' current investment portfolio can be analysed as
follows:
(a) Sure Valley Ventures Fund 1
Pires originally invested in SVV1 in November 2019. The fund is
a venture capital fund focused on investing in the software
technology sector, specifically focused on the high growth AI,
AR/VR and IoT sectors. This will enable investors to gain access to
potentially high growth companies through a publicly listed
company.
In February 2021, Pires increased its exposure to SVV1 through
the purchase of 1.5 million shares in SV, a listed specialist fund,
from existing SV shareholders using new Pires Shares as
consideration. As a result of this transaction, Pires achieved an
aggregate (direct and indirect) interest in SVV1 of around 20 per
cent., which comprises its original direct 13 per cent. interest in
SVV1 and an indirect interest through its 28 per cent. shareholding
in SV plc.
As at the date of this document, SVV1 had a portfolio of 14
investee companies at different stages of development spanning a
range of sectors. The portfolio provides Pires with exposure to a
number of key, cutting-edge and rapidly growing technology sectors.
Further details of the portfolio companies and recent developments
are set out below:
Artificial intelligence
Ambisense Provides an AI platform to deliver environmental
(Ambisense Limited) risk assessment to allow real-time gas
and environmental monitoring using both
IoT and sensor solutions. The company
has already been awarded a number of
major contracts and has a substantial
pipeline of opportunities.
--------------------------------------------------
Buymie An artificial intelligence-based same
(Buymie Technologies) day grocery delivery company operating
in both the UK and Ireland working with
companies such as Tesco, Lidl, Asda
and the Co-op. Also recently announced
a partnership with Asda in Leeds and
Bristol.
--------------------------------------------------
Security
Nova Leah An artificial intelligence cyber-security
(Nova Leah Limited) assessment and protection platform for
connected medical devices.
--------------------------------------------------
Getvisibility An artificial intelligence security
(Visibility Blockchain company addressing the substantial problem
Limited) faced by corporations in storing, sorting,
accessing and protecting data. Recently
raised additional funds at a significant
premium and has been voted as one of
Ireland's top 18 start-ups.
--------------------------------------------------
PreCog A security solution platform company
(Polence Limited) that provides data intelligence to combat
crime, terrorism and protect vulnerable
people. The company completed a GBP1
million fundraising round in March 2021.
Customers include leading law enforcement
and security agencies, and transport
infrastructure groups.
--------------------------------------------------
Smarttech247 A global artificial intelligence based
cyber security cloud business that protects
enterprises as they migrate to cloud-based
IT operations. The company has recently
won a major new contract with a Fortune
Global 1000 company employing over 100,000
staff and already has a purchase order
under this contract for EUR6 million.
It is also currently pursuing a listing
by way of a reverse takeover process.
(Zefone Limited)
--------------------------------------------------
Immersive Technologies
Engage XR A developer of virtual reality and immersive
(Engage XR Holdings experiences with a specific focus on
plc) education and enterprise learning and
development. The company is quoted on
AIM, has over 100 commercial customers
and is rapidly growing revenue and margins.
It recently raised EUR9 million in new
funds.
--------------------------------------------------
Admix A platform enabling the monetisation
(WAM Group Limited) of interactive programmatic brand placements
in, for example, video games and other
AR/VR applications. The company is rapidly
growing revenues and numbers of active
users.
--------------------------------------------------
Warducks A game development studio known for
(Warducks Limited) the production of leading games and
is soon to launch an AR game that could
be the next Pokémon Go.
--------------------------------------------------
VividQ A deep tech software company which has
(VividQ Limited) developed a framework for real - time
3D holographic displays for use in heads
- up displays and AR headsets and glasses.
The company recently completed an GBP11
million funding round at a significant
premium.
--------------------------------------------------
Volograms A deep learning company that uses AI
(Volograms Limited) to create 3D AR from 2D photos and videos.
The company has launched a consumer
AR Camera app called Volu and has pro
- user and enterprise versions in development.
--------------------------------------------------
Virtex A company building a platform for the
(Virtex Limited) next-generation of live, immersive entertainment
within the VR gaming and e-sports industries.
It is actively developing its new Stadium
app.
--------------------------------------------------
Internet of things
CameraMatics A platform enabling transport fleet
(MySafe Drive managers to reduce risk, increase driver
Limited) safety and comply with growing industry
governance and compliance. It recently
raised EUR4 million at a 300 per cent.
uplift in valuation. The company is
growing revenues considerably and building
its presence in the very significant
US market where it has already won a
number of new contracts.
--------------------------------------------------
Wia Provides a platform solution for smart
(WIA Technologies buildings. Its platform provides full
Limited) device and application management, security,
data capture and storage, analysis and
control.
--------------------------------------------------
The investment in SVV1 has already proven successful for Pires
with a realisation and a cash distribution being achieved soon
after the investment. This was as a result of the sale of one of
the portfolio companies, Artomatix, in 2019 at a valuation of
nearly 500 per cent. of the price of SVV1's original investment in
the company. Following the progress made by Engage XR, which is
quoted on AIM, in 2020, SVV1 also realised the value of its
original investment through the partial disposal of its holding.
This was the second cash realisation to be made from Pires'
investment in SVV.
The success of the direct SVV1 investment provided the rationale
to increase Pires' exposure to this portfolio by acquiring a
shareholding in SV in February 2021, particularly when it was
possible to do so on attractive terms.
SVV1 has now substantially completed its deployment phase and is
moving more towards a realisation phase which should lead to
further returns to Pires and its shareholders.
(b) New SVV Fund
In March 2022, Pires agreed to participate in the New SVV Fund,
alongside the British Business Bank, SV, Tern and other investors.
Pires has initially invested approximately GBP90,000 in the New SVV
Fund and expects to invest up to GBP5 million in total over the
life of the New SVV Fund, which would provide it with an interest
of around 5.9 per cent. in the New SVV Fund. The New SVV Fund will
invest in a range of private UK software companies with a focus on
companies in the immersive technology and metaverse sectors,
including AR and VR, AI, the IoT and security and will be managed
by the same SVV1 team.
The New SVV Fund will be managed by the same SVV team which, to
date, has been highly successful in achieving a number of cash
realisations from, and upward revaluations of, companies in the
SVV1 portfolio. The profit share arrangements within the New SVV
Fund are designed to encourage the involvement of the Private
Investors alongside the BBB, meaning that Pires and the other
Private Investors would expect to receive a significantly enhanced
share of the total return generated by the fund compared to
industry standards.
In March 2022, the New SVV Fund invested in RETiniZE Limited.
RETìnÃZE is one of Europe's fastest-growing creative-tech
companies. It was founded in 2019 by father and son team, Phil
Morrow (Chief Executive Officer), and Jack Morrow (Chief Technology
Officer). Their roots and reputations were formed in high-end
global film and television. The company originally spun out of Wild
Rover Productions, formerly one of Ireland's leading independent TV
producers. Until now, RETìnÃZE has been best known for its
award-winning VR, AR and immersive multi-screen experiences.
However, since 2019 the company has been in stealth mode,
developing Animotive, its immersive animation production tool that
is harnessing the latest VR technologies to transform the 3D
animation production process. RETìnÃZE clients include BBC,
National Geographic, World Health Organisation, Save the Children,
BMW, Tourism NI and Seagate.
(c) Sure Ventures plc
SV is a fund listed on the main market of the London Stock
Exchange (ticker SURE) whose principal investments are a 25.9 per
cent. stake in SVV1 (details of which are above), a holding in
VividQ, a Cambridge-based deep-tech company with world-leading
expertise in 3D holography and holdings two listed companies,
Immotion plc and Engage XR.
Pires acquired 1.5 million shares in SV, at a price of 130 pence
per share, in February 2021. The shares held by Pires constituted a
holding of 28 per cent. of the issued share capital of SV at the
date of purchase. The investment into SV also increased Pires'
total holding in SVV1 at the time of acquisition as SV held a 25.9
per cent. interest in SVV1. Combined with Pires' direct holding of
13 per cent. in SVV1, the purchase of the interest in SV enabled
Pires to increase its overall effective interest in SVV1 to
approximately 20 per cent.
(d) Visibility Blockchain Limited ('Getvisibility')
Getvisibility is an AI security company addressing the
substantial problem faced by corporations in storing, sorting,
accessing and protecting data. The company is a leader in data
visibility and control, using state-of-the-art AI to classify and
secure unstructured information. Getvisibility also provides risk
and compliance assessments as well as enforcing protection on
sensitive data.
Getvisibility has developed proprietary software that uses
artificial intelligence to discover, classify and protect
unstructured data typically contained in PDFs, spreadsheets, emails
and text documents. In doing so Getvisibility helps organisations
better visualise their data footprint to ensure more proactive
management and security. Getvisibility utilises the latest in deep
learning AI enterprise architecture to provide fast and accurate
visibility of all the data within a client's environment.
The company operates across the US, Europe, the Middle East and
North Africa with a presence in several industry sectors including
banking, healthcare and the public sector. Getvisibility's clients
include a number of international blue-chip companies including
leading insurance, healthcare, data provision and finance firms as
well as a leading global producer of energy and chemicals, a major
airport group, one of the largest financial institutions in the
Middle East as well as US government entities in the pharmaceutical
and manufacturing sectors.
Pires made its original investment of EUR250,000 into
Getvisibility in March 2020, with a follow-on investment of
EUR62,000 in June 2021, as part of a EUR1.1 million funding round
led by a new lead investor Herb Hribar, who has also become
Chairman of the company. A further investment was made in March
2022 when Getvisibility raised a further EUR10 million from new
investors including Alpha Intelligence Capital, a global venture
capital firm which invests in deep artificial intelligence/machine
learning technology - based companies and Fortino Capital Partners,
a leading B2B software venture capital and growth equity firm.
Pires has a further interest in Getvisibility through the
investments made in the company by SVV1 and SV.
(e) Polience Limited ('PreCog')
PreCog is a security solution platform company that provides
data intelligence to combat crime, terrorism and protect vulnerable
people. With governments, organisations and the owners of assets
being increasingly focused on identifying parties and individuals
who may represent a security threat, security services and
organisations are investing in real time solutions that can help
provide them with additional intelligence to use their resources
more efficiently and effectively, so they can act in a more
proactive and preventative way.
PreCog provides a comprehensive security solution that, through
their software platform and IoT hardware infrastructure, can
monitor people flow and detect the movement of persons of interest
thereby ensuring that locations are protected from those who wish
to cause damage. PreCog is able to collect and analyse data to
provide unique, scalable and actionable intelligence that helps its
clients to combat organised crime, human trafficking and
terrorism.
PreCog was incorporated in January 2020 and has participated in
and been supported by the Microsoft for Startups programme and,
through this programme, has established a partnership with Arrow
ECS, a world-leading distributor and contract manufacturer. As part
of this relationship, Arrow is manufacturing the hardware
components for the PreCog system.
Pires made an investment of GBP250,000 into PreCog in March 2021
as part of a GBP1 million fundraising round.
(f) Low 6 Limited ('Low6')
Low6 is a leader in sports gaming technology that powers
franchises with their own branded gaming experiences to engage and
monetise their digital fan bases. The company provides a
white-labelled mobile platform to sports teams and franchises that
enable them to offer a pooled sports betting experience to users of
their fan- based apps. The company's directors believe there is a
significant market opportunity for sports betting products that are
designed to enhance the excitement of watching sports whilst, at
the same time, being engaging and simple to use.
Under its B2B business model, Low6 will enter into a partnership
with a sports team or franchise which enables the Low6 product to
gain access to the partner's established fan base thereby reducing
customer acquisition costs and strengthening brand and customer
loyalty, which ultimately enhances customer retention. At the same,
Low6's business model enables the underlying partner to share in
the revenue generated from the Low6 platform, an aspect which
should be particularly attractive to fans of the sports team or
franchise concerned. Low6 can either embed its platform within a
partner's app or build the app for its partners. The company
believes that this partnership model is also highly scalable and
Low6 expects to generate revenue from retaining a percentage of the
stakes placed by the users of the platform.
Low6 already has several contracts with sports teams and
franchises, including football clubs in the UK Championship and
Scottish Premiership leagues. In addition, it also has partnerships
with Sky Business and Yinzcam Inc.
Low6 has a three-year exclusive partnership with Yinzcam Inc, a
US-based company which provides the apps for a number of the fan
bases of leading sports teams and franchises with over 90 million
installs of its mobile apps worldwide. It is currently involved
with more than 190 professional teams, leagues and venues in the
US, Canada, Spain and Australia. This relationship provides Low6
with access to this extensive client base. Low6 has also been
working with Sky Business to develop a digitalised pub quiz product
called Pubwars.
Pires made an initial investment equity investment of GBP200,010
in Low6 in December 2020 as part of a GBP1.5 million funding round.
Subsequently, in February 2021, Pires made a further investment of
GBP35,000 into Low6 by way of a convertible loan note as part of an
extended funding round which raised a total of A$6 million
(approximately GBP3.3 million) in convertible notes. Low6 has
raised over GBP8 million to date. In February 2022, the company
announced that is planning to achieve a listing by way of a reverse
takeover of a company listed on the TSX Venture Exchange.
(g) Pluto Digital plc ('Pluto')
In December 2020, Pires completed its first investment in the
digital assets sector through an investment of US$200,000 in De
Tech Studio Limited ('De Tech') , which was developing a
decentralised finance technology platform ('YOP') and YOP tokens.
Certain YOP tokens were sold to realise a cash profit and the
balance of the investment was used to subscribe for shares in
Pluto. At the time of the initial investment, Pires held a 15 per
cent. equity interest in De Tech.
Pluto is a crypto venture capital and technology company that
connects Web 3.0 decentralised technologies to the global economy.
Pluto invests in, incubates and advises digital asset projects
based on decentralised technologies (DeTech), decentralised finance
(DeFi) and networks such as Ethereum and Polkadot. The company has
a focus to bring DeFi and Metaverse (blockchain gaming and NFTs) to
the global economy. Additionally, Pluto supports the operation of
proof-of-stake networks by staking and operating validator
nodes.
In 2021, Pluto invested in Maze Theory Limited ('Maze Theory'),
a London-based digital entertainment studio, with a view to
developing high quality games that incorporate token economics. As
part of this arrangement, Pluto and Maze Theory formed a new gaming
blockchain and metaverse studio joint venture, called Emergent
Games. Given the experience of the team at Maze Theory and the work
that they have done, Pluto is planning to extend its relationship
with Maze Theory as it believes that this is a sector that provides
an exciting growth opportunity.
Also, during 2021 Pluto fully acquired the YOP platform and has
been actively developing this platform to help enable users to
operate in and navigate the DeFi space, which has been growing
rapidly.
Pires currently holds 32,518,876 shares in Pluto and warrants
over 24 million new ordinary shares, subject to certain vesting
conditions. Six million of the warrants have already vested.
Final results for the year ended 31 December 2021
Pires released its final results for the year ended 31 December
2021 on 15 June 2022. For the period under review, Pires reported a
profit before taxation of GBP1,491,000 (for the 14 -- month period
ended 31 December 2020: loss of GBP687,000). The profit or loss for
Pires includes unrealised gains/losses in their portfolio of quoted
equity investments which are marked to market, plus any return from
and adjustment to the carrying value of its unlisted investments in
the technology sector.
6. Pires Warrants
The Scheme will extend to any Pires Shares which are allotted,
issued or transferred to satisfy the exercise of Pires Warrants
prior to 30 June 2022 (being the date on which the Pires Warrants
lapse in accordance with their terms), save where a holder of Pires
Warrants gives notice of exercise of the Pires Warrants by 29 June
2022 conditional on the Scheme becoming Effective.
7. Intentions regarding management and locations
Following the Acquisition, Tern intends for Pires' future
business to continue to be that of an investment company. On the
Effective Date, the Board intends that the existing business
activities of Pires will be transferred to Tern.
By way of background, Pires currently has three employees who
are its three directors. Tern currently has eight employees, of
which six are its directors.
On the Effective Date, it is proposed that Nicholas Lee will
join the Board as a non-executive director and that John May and
David Palumbo, currently the other non-executive directors of Pires
will resign from the Pires Board. Mr. Lee's appointment to the
Board is subject to approval from Tern's Nominated Adviser after
completion of the customary director due diligence process to
satisfy itself as to Board composition and independence and the
suitability of a potential director for the purposes of the AIM
Rules for Nominated Advisers.
Tern has no intention to redeploy any material xed assets of
Pires. Tern intends to move Pires' location of business and
headquarters to those of Tern as soon as practicable following
completion of the Acquisition. Owing to the nature of the business,
Pires has no research and development function. Tern has no plans
to change this. Additionally, Pires has no existing pension schemes
for its employees. Tern has no plans to change this.
Notwithstanding the above, no proposals have been made on the
terms of any incentive arrangement for Nicholas Lee and there have
been no discussions in respect of the terms of these
arrangements.
Following the Acquisition, Tern's business will continue to be
that of an investment company with an investment strategy that is
focused on technology businesses. Tern does not intend for the
Acquisition to result in changes to the continued employment of its
current employees and all of the current members of Tern's Board
and management will remain in their positions following completion
of the Acquisition, with the only change to the Board being the
addition of Nicholas Lee as a non-executive director. Tern does not
intend for the Acquisition to bring about any material changes in
the conditions of employment or the balance of skills or functions
in relation to Tern's current employees and management.
Additionally, Tern does not intend for the Acquisition to bring
about any material changes to Tern's places of business, the
location of its headquarters or its headquarters functions.
8. Scheme structure
The Acquisition is being implemented by way of a
Court-sanctioned scheme of arrangement between Pires and the Scheme
Shareholders under Part 26 of the Act, although Tern reserves the
right to elect to implement the Acquisition by way of an Offer
(subject to the consent of the Panel and Pires). The procedure
involves an application by Pires to the Court to sanction the
Scheme, which will involve the Scheme Shares being transferred to
Tern, in consideration for which Scheme Shareholders will receive
0.51613 New Tern Shares for every Pires Share held (on the basis
described in paragraph 2 above).
To become Effective, the Scheme requires, among other things,
the approval of a majority in number of the Scheme Shareholders
present and voting (and entitled to vote), either virtually or by
proxy at the Court Meeting, representing 75 per cent. or more in
value of the Scheme Shares held by such Scheme Shareholders present
and voting at the Court Meeting (or any adjournment of the Court
Meeting) and the passing of the Pires Special Resolution necessary
to implement the Scheme at the Pires General Meeting (or any
adjournment of the Pires General Meeting). The Scheme is also
conditional on the approval by Tern Shareholders of the Resolution
at the General Meeting to approve the issue of New Tern Shares as
the consideration for the Acquisition.
Following the Court Meeting and the Pires General Meeting and
the satisfaction (or, where applicable, waiver) of the other
Conditions, the Scheme must also be sanctioned by the Court. The
Scheme will only become Effective upon a copy of the Court Order
being delivered to the Registrar of Companies for registration.
Prior to the Scheme becoming effective, application will be made
to the London Stock Exchange for the admission to trading on AIM of
the Pires Shares to be cancelled.
If the Scheme becomes Effective, it will be binding on all
Scheme Shareholders, irrespective of whether or not they voted in
favour of, or against, the Scheme at the Court Meeting or in favour
of, or against, or abstained from voting on the Pires Special
Resolution at the Pires General Meeting. On the Scheme becoming
Effective, Pires will become a wholly owned subsidiary of Tern on
the Effective Date and Pires Shareholders will receive the New Tern
Shares referred to above. Application will be made to the London
Stock Exchange for the New Tern Shares to be admitted to trading on
AIM. It is expected that Admission will become effective and that
trading in the New Tern Shares will commence on AIM on the Business
Day following the Effective Date. Tern would then re-register Pires
as a private company under the relevant provisions of the Act as
soon as practicable after cancellation of trading of the Pires
Shares on AIM.
Further details of the Scheme, including an indicative timetable
for its implementation together with notices of the Pires Court
Meeting and Pires General Meeting, are contained in the Scheme
Document which is available at www.piresinvestments.com and
www.ternplc.com and in hard copy at the registered offices of Pires
Investments plc and Tern plc until the time of the General
Meeting.
9. Conditions of the Scheme
The Acquisition will be subject to the satisfaction (or, where
applicable, waiver) of the Conditions and to the further terms set
out in Part Three (Conditions to the implementation of the Scheme
and to the Acquisition) of the Scheme Document, including, among
other things:
-- the Scheme being approved by a majority in number of the
Scheme Shareholders representing not less than 75 per cent. in
value of the Scheme Shares held by such Scheme Shareholders present
and voting, either in person or by proxy, at the Court Meeting and
at any separate class meeting which may be required by the Court or
at any adjournment of any such meeting;
-- the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable
to Tern and Pires) and the delivery of a copy of the Court Order to
the Registrar of Companies for registration;
-- the Scheme becoming effective by no later than 30 September
2022 or such later date as Pires and Tern may agree with (where
applicable) the consent of the Panel and the approval of the Court
(if required), failing which the Scheme will lapse;
-- approval by the Shareholders of the Resolution at the General
Meeting, to authorise the allotment of New Tern Shares to Scheme
Shareholders and otherwise pursuant to the Acquisition; and
-- confirmation by the London Stock Exchange of Admission on or
before the Long Stop Date.
10. Irrevocable undertaking and lock-in agreement in relation to the Scheme
Prior to the release of the Announcement, Tern received an
irrevocable undertaking to vote, or procure to vote, in favour of
the Scheme at the Court Meeting and the resolutions at the Pires
General Meeting (or, if the Acquisition is implemented by way of an
Offer to accept, or procure the acceptance, of the Offer) from RGO,
in respect of an aggregate of 30,914,193 Pires Shares, representing
approximately 19.15 per cent. of the issued ordinary share capital
of Pires as at the last Business Day prior to the release of the
Announcement.
On 16 June 2022, Pires announced that it had received
notifications for the exercise of Pires Warrants over 4,939,200
Pires Shares, which included notification of the exercise of Pires
Warrants over 4,814,200 Pires Shares held by RGO. Application was
made to the London Stock Exchange to admit the Pires Shares
resulting from the warrant exercises to trading on AIM, which
occurred on 21 June 2022. Accordingly, the irrevocable undertaking
from RGO is now in respect of 35,728,393 Pires Shares representing
21.48 per cent. of Pires's issued share capital as at the date of
this document.
This undertaking will remain binding in the event of a competing
offer being made unless the value of such competing offer is an
improvement of more than 10 per cent. of the value of the
consideration under the Acquisition and is not matched or bettered
by Tern (where such competing offer has been announced as a firm
intention to make an offer in accordance with Rule 2.7 of the Code)
or if the Scheme Document is not published within 28 days of the
Announcement or the Scheme lapses or is otherwise withdrawn.
The irrevocable undertaking ceases to be binding if:
(a) Tern announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement scheme or offer is
announced in accordance with Rule 2.7 of the Code at the same
time;
(b) the Acquisition lapses or is withdrawn; or
(c) the Acquisition has not become wholly unconditional by the Long Stop Date.
In addition, this irrevocable undertaking also contains a
contractual lock-in arrangement with Tern and Allenby Capital in
respect of up to 18,440,496 New Tern Shares which will be issued to
RGO should the Acquisition be completed, representing, in
aggregate, approximately 4.09 per cent. of the Estimated Enlarged
Share Capital. Pursuant to this lock-in agreement, RGO has agreed
that for the period of one month from Admission it will not, and
will use all its reasonable endeavours to procure that its
connected persons will not, directly or indirectly effect or agree
to effect a disposal of any legal or beneficial interest in any New
Tern Shares issued to it following completion of the Acquisition.
Thereafter, for a further two months, RGO shall only dispose of any
New Tern Shares it holds in an orderly manner as Allenby Capital
shall reasonably determine.
Further details of this irrevocable undertaking are set out in
paragraph 9 of Part Seven (Additional Information) of the Scheme
Document. A copy of the undertaking is available on Tern's website
at www.ternplc.com and on Pires' website at
www.piresinvestments.com, and will remain on display until
completion of the Acquisition.
11. Admission of the New Tern Shares
The New Tern Shares will be issued in registered form and will
be capable of being held in certificated and uncertificated
form.
Following the completion of the Acquisition, the New Tern Shares
will be issued as fully paid and will rank pari passu in all
respects with the Tern Shares in issue at the time the New Tern
Shares are issued, including in relation to the right to receive
notice of, and to attend and vote at, general meetings of Tern, and
the right to receive and retain any dividends and/or other
distributions declared, made or paid, or any other return of
capital (whether by reduction of share capital or share premium
account or otherwise) made, by Tern in respect of the Tern Shares
with a record date falling after completion of the Acquisition and
to participate in the assets of Tern upon a winding-up of Tern.
Irrespective of the date on which completion of the Acquisition
falls, Pires Shareholders will not be entitled to receive any
dividend declared, made or paid by Tern for the benefit of the
Shareholders by reference to a record date falling on or before the
date on which the Acquisition completes.
Application will be made to the London Stock Exchange for the
New Tern Shares to be admitted to trading on AIM. It is expected
that Admission will become effective and that dealings for normal
settlement in respect of the New Tern Shares at 8.00 a.m. on the
first Business Day following the Effective Date.
No application has been made or is currently intended to be made
by Tern for the New Tern Shares to be admitted to listing or
trading on any other exchange.
12. General Meeting
Set out at the end of this document is a notice convening the
General Meeting to be held on 21 July 2022 at the offices of Reed
Smith LLP at The Broadgate Tower, 20 Primrose Street, London, EC2A
2RS at 11.00 a.m., at which the Resolution will be proposed. The
Resolution, which will be proposed as an ordinary resolution, is to
authorise the Directors to allot up to 98,865,712 New Tern Shares
(GBP19,773.14 in nominal value) in connection with the Acquisition.
This authority will expire on the date that all consideration due
pursuant to the terms of the Acquisition has been satisfied.
13. Action to be taken
A Form of Proxy for use at the General Meeting accompanies this
document. The Form of Proxy should be completed and signed in
accordance with the instructions thereon and returned to the
Company's registrars, Share Registrars Limited, 3 The Millennium
Centre, Crosby Way, Farnham, Surrey GU9 7XX as soon as possible,
but in any event so as to be received by no later than 11.00 a.m.
on 19 July 2022. Proxies can also be registered through the online
portal by logging on to www.shareregistrars.uk.com, clicking on the
"Proxy Vote" button and then following the on-screen instructions,
no later than 11.00 a.m. on 19 July 2022, or if the meeting is
adjourned, not later than 48 hours before the time fixed for the
adjourned meeting. 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.
14. Recommendation and irrevocable undertakings
The Directors consider the Acquisition to be in the best
interests of Shareholders as a whole and recommend unanimously that
Shareholders vote in favour of the Resolution, as those Directors
who are interested in Tern Shares have irrevocably undertaken to,
or to direct (and to use all reasonable endeavours to procure that)
their nominees, do in respect of their own beneficial holdings (and
the beneficial holdings which are under their control) of
21,100,898 Tern Shares representing, in aggregate, approximately
5.99 per cent. of Tern's issued ordinary share capital as at the
Last Practicable Date.
Yours faithfully
Ian Ritchie
Non-Executive Chairman
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2022 (4)
Despatch of this document 28 June
Despatch of the Scheme Document 28 June
Latest time and date for lodging of 11.00 a.m. on 19 July
Forms of Proxy for the General Meeting (1)
General Meeting Voting Record Time 11.00 a.m. on 19 July
General Meeting 11.00 a.m. on 21 July
Pires Court Meeting 11.00 a.m. on 21 July
Pires General Meeting 11.10 a.m. on 21 July
(2)
Last day of dealings in, and time 5.00 p.m. on 28 July
for registration of transfers of, (3)
and disablement in CREST of, Pires
Shares
Scheme Record Time 6.00 p.m. on 28 July
(3)
Scheme Court Hearing to sanction the 28 July (3)
Scheme
Expected Effective Date of the Scheme 29 July (3)
Suspension of trading, and dealings, 7.30 a.m. on 29 July
in Pires Shares (3)
Cancellation of admission to trading 7.00 a.m. on 1 August
of Pires Shares on AIM (3)
New Tern Shares issued to Pires Shareholders By 8.00 a.m. on 1 August
(3)
Admission and commencement of dealing 8.00 a.m. on 1 August
on AIM in New Tern Shares (3)
Crediting of New Tern Shares to CREST As soon as possible
accounts after 8.00 a.m. on
1 August (3)
Despatch of definitive certificates Within 14 days from
for the New Tern Shares the Effective Date
(3)
Long Stop Date 11.59 p.m. on 30 September
Notes
(1) Forms of Proxy for the General Meeting must be lodged not
later than 48 hours (excluding weekends and public holidays) prior
to the time appointed for the General Meeting.
(2) The Pires General Meeting will commence at 11.10 a.m. or, if
later, immediately after the conclusion of the Pires Court
Meeting.
(3) These dates are indicative only and will depend, among other
things, on the date upon which the Court sanctions the Scheme and
the dates on which the Scheme Court Order is delivered to the
Registrar of Companies. If any of the times and/or dates above
change, the revised times and/or dates will be notified by Tern to
Shareholders through a Regulatory Information Service.
(4) References to the time of day are to London time.
KEY STATISTICS
Number of Existing Tern Shares in issue prior 352,014,701
to the Acquisition (1)
Expected number of New Tern Shares issued
pursuant to the Acquisition 98,865,712 (2)
Expected number of Tern Shares in issue immediately 450,880,413
following Admission (1)(2)
Expected number of New Tern Shares as a percentage 21.93 per cent.
of the Estimated Enlarged Share Capital (1)(2)
Expected market capitalisation of the Enlarged GBP57.5 million
Group on Admission (3)
ISIN number GB00BFPMV798
TIDM of the Enlarged Group TERN
Notes
(1) Being the number of Tern Shares in issue as at the Last Practicable Date.
(2) Based on the number of Tern Shares and Pires Shares in issue
as at the Last Practicable Date, and on the assumptions that: (i)
all of the Pires Warrants are exercised and the Pires Shares issued
to satisfy the exercise of the Pires Warrants are acquired by Tern
pursuant to the Acquisition and (ii) 2,419,361 New Tern Shares are
issued to Cairn and RiverFort Global Capital Limited in
satisfaction of certain fees payable by Pires in connection with
the Acquisition, resulting in a total of 98,865,712 New Tern Shares
being issued pursuant to the Acquisition.
(3) Based on the Closing Price of Tern Shares of 12.75 pence on the Last Practicable Date.
Enquiries:
Tern plc via IFC Advisory
Al Sisto, Chief Executive Officer
Sarah Payne, Chief Financial Officer
Allenby Capital Limited
Financial Adviser, Nominated Adviser and
Broker to Tern
David Worlidge / Alex Brearley / Freddie
Wooding (Corporate Finance) +44 (0) 20 3328
Matt Butlin (Sales and Corporate Broking) 5656
IFC Advisory +44 (0) 20 3934
PR advisers to Tern 6630
Tim Metcalfe / Graham Herring / Florence tern@investor-focus.co.uk
Chandler
Important notices
Neither this announcement nor any of the documents referred to
herein do or are intended to constitute or form part of any offer
or invitation to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any
vote or approval pursuant to the Scheme or otherwise, in any
jurisdiction in which such offer, invitation or solicitation is
unlawful, nor shall there be any sale of any securities in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
The release, publication or distribution of this announcement
and/or any of the documents referred to herein (in whole or in
part) in, into or from jurisdictions other than the United Kingdom
may be restricted by the laws of those jurisdictions and therefore
persons into whose possession this announcement comes should inform
themselves about, and observe, any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction.
Allenby Capital, which is authorised and regulated by the FCA in
the UK, is acting as financial adviser, nominated adviser and joint
broker exclusively for Tern and no one else in connection with the
Acquisition and this announcement and will not be responsible to
anyone other than Tern for providing the protections afforded to
clients of Allenby Capital or for providing advice in relation to
the Acquisition, the content of this announcement or any matter
referred to herein. Allenby Capital's responsibilities as Tern's
Nominated Adviser under the AIM Rules for Companies and AIM Rules
for Nominated Advisers are owed solely to London Stock Exchange and
no other person. Allenby Capital has not authorised and is not
making any representation or warranty, express or implied, as to
the contents of this announcement.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of: (i) the offeree company; and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of: (i) the offeree
company; and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 p.m. (London time) on the
business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Forward-looking statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Offer, and other information published by Pires and Tern contain
certain forward-looking statements, beliefs or opinions with
respect to the financial condition, results of operations and
business of the Wider Pires Group and the Tern Group. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts.
Forward-looking statements may often, but not always, be
identified by the use of forward-looking terms such as "may",
"will", "expects", "believes", "hopes", "anticipates", "aims",
"plans", "estimates", "projects", "targets", "intends",
"forecasts", "outlook", "impact", "potential", "confidence",
"improve", "continue", "optimistic", "deliver", "comfortable",
"trend", "seeks" or variations of such words and phrases or
statements that certain actions, events or results "could",
"should", "would" or "might" be taken, occur or be achieved or the
negative of such terms or other variations on such terms or
comparable terminology.
Such statements are qualified in their entirety by the inherent
risks and uncertainties surrounding future expectations. These
statements are based on assumptions and assessments made by Pires
and/or Tern, as the case may be, in light of their experience and
their perception of historical trends, current conditions, future
developments and other factors that they believe appropriate. By
their nature, forward-looking statements involve risk and
uncertainty, because they relate to events and depend on
circumstances that will occur in the future and the factors that
could cause actual results and developments to differ materially
from those expressed in or implied by such forward-looking
statements are unknown.
Although it is believed that the expectations reflected in such
forward-looking statements were reasonable at the time the
statements were made, no assurance is given by Pires and/or Tern
that such expectations or the assumptions and assessments
underlying them will prove to have been correct and the
circumstances may change. You are, therefore, cautioned not to
place undue reliance on these forward-looking statements. Neither
Pires nor Tern assumes any obligation, and Pires and Tern disclaim
any intention or obligation, to update or correct the information
contained in this announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law or regulation.
Save as specifically stated in this announcement, any such
forward-looking statements have not been reviewed by the auditors
of Pires or Tern or their respective financial advisers. Such
forward-looking statements involve known and unknown risks and
uncertainties that could significantly affect expected results and
are based on certain key assumptions. There are many factors which
could cause actual results to differ materially from those
expressed or implied in forward-looking statements. Among the
factors that could cause actual results to differ materially from
those described in the forward-looking statements is the
satisfaction of any conditions to the Offer, as well as additional
factors such as changes in global, political, economic, business,
competitive, market and regulatory forces (including as a result of
governmental, business or individual responses to the COVID-19
pandemic and any variant thereof), future exchange and interest
rates, changes in tax rates and future business combinations or
dispositions. Such forward looking statements should, therefore, be
construed in the light of such factors. Neither Pires nor Tern, nor
any of their respective associates or directors, officers or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur.
No Profit Forecasts or Estimates
No statement in this announcement (including any statement of
estimated synergies) is intended as a profit forecast or estimate
for any period and no statement in this announcement should be
interpreted to mean that earnings or earnings per share or dividend
per share for Tern, Pires or the Enlarged Group, as appropriate,
for the current or future financial years would necessarily match
or exceed the historical published earnings or earnings per share
or dividend per share for Tern, Pires or the Enlarged Group, as
appropriate.
Publication on websites
Pursuant to Rule 26.1 of the Code, a copy of this announcement
and other documents in connection with the Acquisition will,
subject to certain restrictions, be available for inspection on
Tern's website at www.ternplc.com and on Pires' website at
www.piresinvestments.com no later than 12 noon (London time) on the
business day following this announcement. The contents of the
websites referred to in this announcement are not incorporated
into, and do not form part of, this announcement.
Overseas jurisdictions
The release, publica ti on or distribu ti on of this
announcement in or into jurisdic ti ons other than the United
Kingdom may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the United
Kingdom should inform themselves about, and observe, any applicable
legal or regulatory requirements. Any failure to comply with the
applicable restric ti ons may cons ti tute a viola ti on of the
securi ti es laws of such jurisdic ti on. To the fullest extent
permi tt ed by applicable law, the companies and persons involved
in the Acquisi ti on disclaim any responsibility or liability for
the viola ti on of such restric ti ons by any person. Neither this
announcement nor any of the documents referred to herein do or are
intended to cons ti tute or form part of any offer or invita ti on
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of, any securi ti es or the solicita ti on of any vote or
approval pursuant to the Scheme or otherwise, in any jurisdic ti on
in which such offer, invita ti on or solicita ti on is unlawful.
The Scheme Document and the accompanying Forms of Proxy have been
prepared for the purposes of complying with English law, the rules
of the London Stock Exchange, the AIM Rules and the Code, and the
informa ti on disclosed may not be the same as that which would
have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdic ti ons outside of England and
Wales.
Unless otherwise determined by Tern or required by the Code, and
permi tt ed by applicable law and regula ti on, the Acquisi ti on
will not be made available, directly or indirectly, in, into or
from a Restricted Jurisdic ti on where to do so would violate the
laws in that jurisdic ti on and no person may vote in favour of the
Acquisi ti on by any such use, means, instrumentality or form
within a Restricted Jurisdic ti on or any other jurisdic ti on if
to do so would cons ti tute a viola ti on of the laws of that
jurisdic ti on. Accordingly, copies of the this announcement and
all documents relating to the Acquisi ti on are not being, and must
not be, directly or indirectly, mailed, transmi tt ed or otherwise
forwarded, distributed or sent in or into or from any Restricted
Jurisdic ti on or any other jurisdic ti on where to do so would
constitute a violation of the laws of that jurisdic ti on, and
persons receiving such documents (including agents, custodians,
nominees and trustees) must not mail or otherwise forward,
distribute or send such documents in or into or from any Restricted
Jurisdic ti on. Doing so may render invalid any related vote in
respect of the Acquisi ti on.
The availability of the New Tern Shares under the Acquisi ti on
to Pires Shareholders who are not resident in the United Kingdom or
the ability of those persons to hold such shares may be affected by
the laws or regulatory requirements of the relevant jurisdic ti ons
in which they are resident (which may affect the ability of such
Pires Shareholders to vote their Pires Shares with respect to the
Scheme and the Acquisition at the Mee ti ngs, or to execute and
deliver Forms of Proxy appoin ti ng another to vote at the Mee ti
ngs on their behalf). The New Tern Shares may not be offered, sold
or delivered, directly or indirectly in, into or from any
Restricted Jurisdic ti on or to, or for the account or benefit of,
any Restricted Persons except pursuant to an applicable exemp ti on
from, or in a transac ti on not subject to, applicable securi ti es
laws of those jurisdic ti ons, or otherwise permi tt ed under
applicable securi ti es laws of those jurisdic ti ons.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
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use the personal data you provide us, please see our Privacy
Policy.
END
NOGPPUWAQUPPGAR
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June 28, 2022 12:00 ET (16:00 GMT)
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