NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO
MAKE AN OFFER OR TO PURSUE ANY OTHER TRANSACTION UNDER RULE 2.7 OF THE CITY
CODE ON TAKEOVERS AND MERGERS (THE "TAKEOVER CODE"). ACCORDINGLY, VINDON
HEALTHCARE SHAREHOLDERS ARE ADVISED THAT THERE CAN BE NO CERTAINTY THAT A
FORMAL OFFER FOR VINDON HEALTHCARE WILL BE MADE.
FOR IMMEDIATE RELEASE
15 July 2013
SOURCE BIOSCIENCE PLC ("SOURCE BIOSCIENCE" OR THE "COMPANY")
POSSIBLE OFFER FOR VINDON HEALTHCARE PLC ("VINDON HEALTHCARE")
The Board of Source BioScience (the "Board") the international diagnostic and
genetic analysis services business, announces that it is at an advanced stage
of discussions with the board of Vindon Healthcare, a leading provider of
controlled environment services and products to the pharmaceutical and life
sciences sectors in the UK, Ireland, Europe and North America, regarding a
possible all cash offer (the "Possible Offer") for the entire issued and to be
issued share capital of Vindon Healthcare not already owned by Source
BioScience, at a price of 13.7 pence per Vindon Healthcare share (the "Possible
Offer Price"). The Possible Offer would value the entire issued and to be
issued share capital of Vindon Healthcare at approximately £12.2 million.
The Board of Source BioScience believes that an offer at this price would
represent a very compelling 44% premium for Vindon Healthcare shareholders
compared to the closing mid market price on 15 July 2013, being the last
trading day before this announcement. Further information on an offer for the
entire issued and to be issued share capital of Vindon Healthcare (the
"Offer"), if made, would be contained in an offer document to be posted to
Vindon Healthcare shareholders following the subsequent announcement of a firm
intention to make an offer, in accordance with Rule 2.7 of the Takeover Code.
In anticipation of making the Possible Offer, Source BioScience has today
procured from the director shareholders of Vindon Healthcare irrevocable
undertakings to accept the Possible Offer, if made at the Possible Offer Price,
in respect of their existing holdings in Vindon Healthcare, amounting in
aggregate to 24.68 per cent. of the existing issued share capital of Vindon
Healthcare. Details of these irrevocable commitments are set out below. The
Board reasonably expects that the Possible Offer would receive a unanimous
recommendation from the Vindon Healthcare directors, subject to the receipt by
them of appropriate independent advice in accordance with Rule 3 of the
Takeover Code. This statement is being made with the consent of Vindon
Healthcare.
The Board believes that Vindon Healthcare represents a significant opportunity
in the context of Source BioScience's growth and stated acquisition strategy.
The Board considers Vindon Healthcare to be an excellent strategic fit with
Source BioScience's business and believes that completion of the Possible Offer
will provide a number of commercial, operational and financial benefits which
would be expected to create value for Source BioScience shareholders. The
anticipated benefits for Source BioScience of a completed acquisition of Vindon
Healthcare include: geographic expansion in the United States, the United
Kingdom and Ireland, a broadening of its product and service portfolio,
particularly in relation to its offering to the pharma/biotechnology industry
and Contract Research Organisation customers, operational benefits from sharing
greater infrastructure, an enlarged customer base and cross selling
opportunities, and financial benefits including potential earnings accretion
and EBITDA1 margin enhancement for the enlarged business in the first full year
of ownership.2 Further information on the merits of the Possible Offer is set
out below.
The making of any offer by Source BioScience remains subject to completion and
certain other pre-conditions, including but not limited to the unanimous
recommendation of such an offer by the directors of Vindon Healthcare, and the
arrangement of suitable funding which is also addressed below. Source
BioScience reserves the right to waive any of the pre-conditions, including
that in relation to the unanimous recommendation in the event of a competing
offer or proposed offer.
Furthermore, completion of the Offer, if made, would be conditional upon,
amongst other things, Source BioScience shareholder approval under the Listing
Rules and in order to obtain authority to issue new shares to partially fund
it.
This announcement does not constitute an announcement of a firm intention to
make an offer or to pursue any other transaction under Rule 2.7 of the Takeover
Code. Accordingly, Vindon Healthcare shareholders are advised that there can be
no certainty that a formal offer for Vindon Healthcare will be made, even if
the pre-conditions to the Possible Offer are satisfied or waived.
1 Earnings before interest, tax, depreciation and amortisation
2 This should not be construed as a profit forecast or interpreted to mean that
the future earnings per share, profits, margins or cashflows of the Source
BioScience group will necessarily be greater than the historic published
figures.
Background to, reasons for and expected benefits of the possible acquisition
The Board believes that Vindon Healthcare represents a significant opportunity
in the context of Source BioScience's growth and stated acquisition strategy.
It considers Vindon Healthcare to be an excellent strategic fit with Source
BioScience and believes that completion of the Offer, if made, would provide a
number of commercial, operational and financial benefits which are expected to
create value for Source BioScience shareholders. In particular:
* The acquisition of Vindon Healthcare will provide the enlarged group with
US-based facilities and operational infrastructure allied to an existing
commercial network of customers and partners. This offers Source BioScience
the opportunity to extend its LifeSciences and Healthcare Diagnostic
activities into North America to address a substantial US-based market for
its products and services. The US market is currently under-exploited by
Source BioScience and Vindon Healthcare's established infrastructure
significantly de-risks market entry into this important territory for
Source BioScience. Further, the current location of the Vindon Healthcare
infrastructure on both the East and West coasts of the US is aligned with
the major centres of life science research activity and the distribution of
potential customers. In particular, Source BioScience anticipates being
able to launch its DNA sequencing services promptly in these new locations
following completion of the acquisition;
* Vindon Healthcare's environmentally controlled storage solutions will also
allow Source BioScience to further internationalise its products business,
particularly with respect to clone products. If the acquisition is
completed, Source BioScience envisages operating a network of -80oC
temperature storage facilities in key satellite locations worldwide which,
when coupled with the extended reach of Source BioScience's products
business, would reduce the risk of investment in infrastructure with the
potential to increase revenue from environmentally controlled storage
services and Source BioScience's products business in parallel. Currently
the geographic reach of Source BioScience's clone business is constrained
because of the need to ship these products to customers on dry ice from the
UK, which is both logistically challenging and costly;
* Source BioScience's service expertise, particularly in diagnostic testing
and genetic analysis services, will add breadth and depth to Vindon
Healthcare's existing services. This will enable Vindon Healthcare's
storage service customers, especially those pharmaceutical and regenerative
medicine customers, access to Source BioScience's tissue and gene-based
analysis testing services and technologies. Customers' samples stored with
Vindon Healthcare often represent unique and valuable biological resources.
Enabling storage and downstream analysis to be conducted at a single,
accredited facility, will eliminate the need for costly sample transport
and de-risks the process for the customer;
* Vindon Healthcare's expertise in environmentally controlled storage will
also directly benefit the enlarged group in a number of ways which the
Board believes could be rapidly crystallised. Source BioScience currently
offers a portfolio of more than 20 million cDNA clones which are stored in
-80°C freezers at Source BioScience's facilities in Cambridge with a
duplicate archive maintained in Nottingham. Vindon Healthcare will be able
to bring immediate benefits from its international storage solution
expertise, to the advantage of the enlarged group;
* Vindon Healthcare's service offering will add breadth and depth to Source
BioScience's existing products and services portfolio and enhance the
combined customer base and geographical reach of the enlarged group. This
would considerably strengthen Source BioScience's pool of innovative
technology and know-how, and its proposition across the range of specialist
products and support services to the customers and prospective customers of
both Source BioScience and Vindon Healthcare;
* Significant cross selling opportunities are likely to arise from each
company selling its respective services to the other's customer base,
including into new territories when compared to the existing geographic
market reach of the two businesses;
* The Board believes that the enlarged group would have greater potential
access to funding and other resources required to pursue organic and
acquisitive growth than either of the separate companies of Source
BioScience and Vindon Healthcare;
* The combination of Source BioScience and Vindon Healthcare will provide
complementary infrastructure and technology platforms to further
crystallise opportunities for organic growth;
* The acquisition will potentially provide acceleration of geographic
expansion into other territories holding significant commercial
opportunities for the enlarged group, but where the prior lack of locally
owned infrastructure has previously been an impediment to realising these
opportunities, or where the product or service offering of each of the
standalone businesses was previously too narrow to be likely to generate a
sufficient return on investment; and
* Completion of the Possible Offer would be expected to result in accretion
to the enlarged company's earnings per share and EBITDA1 margin enhancement
in the first full financial year following completion of the acquisition of
Vindon Healthcare and the firm placing of new shares in Source BioScience
to part fund it.2
1 Earnings before interest, tax, depreciation and amortisation
2 This should not be construed as a profit forecast or interpreted to mean that
the future earnings per share, profits, margins or cashflows of the Source
BioScience group will necessarily be greater than the historic published
figures.
Funding arrangements
Source BioScience is in the process of finalising funding arrangements for the
Possible Offer, to include a firm placing of new shares (the "Firm Placing")
and drawdown under a new debt facility under negotiation with its lending bank.
Source BioScience intends to contact existing and prospective new institutional
investors in order to secure firm commitments for the placing element of the
funding. The Board's view is that the Firm Placing should be conducted at or
around the current share price.
Irrespective of whether the Possible Offer is made (or, if made, whether it
completes), Source BioScience intends to launch an open offer (the "Open
Offer") to existing shareholders to provide additional growth capital for its
business, to enable the Company to capitalise on other organic and selected
acquisitive growth initiatives. Should the Possible Offer proceed to be made as
anticipated, the Open Offer will also provide an opportunity for existing
shareholders to reduce the effects of dilution that would arise from the firm
placing.
Source BioScience is progressing draft legal documentation in relation to the
new debt facility, which the Board believes will be finalised on appropriate
commercial terms having already received positive indication of commitment from
its existing lender. Assuming completion of the Possible Offer, the new debt
facility would also be expected to provide debt refinancing in respect of the
Company's and Vindon Healthcare's existing indebtedness.
Further information relating to the possible Firm Placing and the Open Offer is
expected to be contained in the prospectus to be issued in due course to Source
BioScience shareholders if the Possible Offer proceeds as anticipated.
Takeover Code
Source BioScience notes that Rule 2.6(a) of the Takeover Code requires that
Source BioScience, by not later than 5.00 p.m. on Monday 12 August 2013 (the
"relevant deadline"), either announces a firm intention to make an offer for
Vindon Healthcare in accordance with Rule 2.7 of the Takeover Code or announces
that it does not intend to make an offer, in which case the announcement will
be treated as a statement to which Rule 2.8 of the Takeover Code applies.
The relevant deadline will cease to apply to Source BioScience if another
offeror announces, prior to the relevant deadline, a firm intention to make an
offer for Vindon Healthcare. In such circumstances, Source BioScience will be
required to clarify its intentions in accordance with Rule 2.6(d) of the
Takeover Code. The relevant deadline may be extended in certain circumstances
with the consent of the Panel and Vindon Healthcare.
In accordance with Rule 2.10 of the Takeover Code, Source BioScience announces
that as at close of business on 15 July 2013, the issued share capital of the
Company comprised 204,783,266 ordinary shares of 2 pence each ("Ordinary
Shares"), with ISIN number GB0009739649. All of these Ordinary Shares carry
voting rights of one vote per Ordinary Share. Source BioScience holds no
Ordinary Shares in treasury.
Opening Position Disclosure:
In accordance with Rule 8.1, Source BioScience owns 150,000 ordinary shares in
Vindon Healthcare, in addition to the irrevocable rights to acquire shares
amounting to 21,923,349 ordinary shares in aggregate described below.
Details of Irrevocable Commitments
The following table sets out the required disclosure in accordance with Note 3
of Rule 2.11 of the Takeover Code:
No. of Percentage of Vindon
Party Ordinary Shares Healthcare
Issued Share Capital
Richard Hughes 15,200,349 17.11
Martin Liam Ferguson 4,150,000 4.67
Thomas Patrick Jackson 2,273,000 2.56
Martin Burrill 300,000 0.34
Total 21,923,349 24.68
All of the above irrevocable undertakings anticipate that any offer will be
made at the Possible Offer Price and provided that the offer is made on terms
which, in the reasonable opinion of Vindon Healthcare's Rule 3 adviser, do not
represent a diminution in value of the proposed terms of the offer set out in
the irrevocable undertakings and will continue to be binding on such persons.
Each of the above irrevocable undertakings has been entered into by the
relevant director only as a shareholder of Vindon Healthcare and not in their
capacity as a director; nothing contained in the undertakings requires any of
the Vindon Healthcare Directors to take or not to take any decision or action
in their capacity as a director of Vindon Healthcare.
The above irrevocable undertakings will cease to be binding if:
* a firm intention to make an offer or an offer for Vindon Healthcare is not
announced in accordance with Rule 2.7 of the Code by 11.59 pm on 15 August
2013 (or such later time and/or date as Source BioScience and Vindon
Healthcare may agree but in any event no later than in any event by 11.59
pm on 30 August 2013); or
* The offer document relating to the above announced offer is not posted to
Vindon Healthcare shareholders within 28 days of the date of the above
announcement, unless otherwise agreed with the Takeover Panel (with the
consent of Vindon Healthcare); or,
* The offer, having been announced, lapses or is withdrawn.
For further information, please contact:
Source BioScience plc
Dr Nick Ash, CEO
Tel: +44 (0) 115 973 9010
Email: enquiries@sourcebioscience.com
www.sourcebioscience.com
For investor and media enquiries:
N+1 Singer (Financial Advisor, Sponsor and Broker to Source BioScience)
Aubrey Powell/Joseph Stroud
Tel: +44 (0)20 7426 3000
www.n1singer.com
College Hill (PR Agency to Source BioScience)
Melanie Toyne-Sewell/Stefanie Bacher/Claire Dickinson
Tel: +44 (0)20 7457 2020
Email: SourceBioScience@collegehill.com
Nplus1 Singer Advisory LLP ("N+1 Singer"), which is authorised and regulated in
the United Kingdom by the Financial Conduct Authority, is acting as exclusively
as financial adviser to Source BioScience in connection with the contents of
this announcement and the Possible Offer and no one else and will not be
responsible to anyone other than Source BioScience for providing the
protections afforded to clients of N+1 Singer nor for providing advice in
relation to the Possible Offer or any other matter referred to in this
announcement.
This announcement has been prepared in accordance with English law and the
Takeover Code and information disclosed may not be the same as that which would
have been prepared in accordance with the laws of jurisdictions outside
England.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom and the availability of any future offer to
shareholders in Vindon Healthcare who are not resident in the United Kingdom
may be affected by the laws or regulations of any such jurisdictions.
Accordingly, any persons who are subject to the laws or regulations of any
jurisdiction other than the United Kingdom should inform themselves of, and
observe, any applicable requirements.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of Source
BioScience and its subsidiaries and certain plans and objectives of the boards
of directors of Source BioScience and Vindon Healthcare. These forward-looking
statements can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words of similar
meaning. These statements are based on assumptions and assessments made by the
Board in light of its experience and perception of historical trends, current
conditions, expected future developments and other factors it believes
appropriate. By their nature, forward-looking statements involve risk and
uncertainty, and the factors described in the context of such forward-looking
statements in this announcement could cause actual results and developments to
differ materially from those expressed in or implied by such forward-looking
statements. Should one or more of these risks or uncertainties materialise, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in this announcement. Source BioScience and
Vindon Healthcare assume no obligation to update or correct the information
contained in this announcement, whether as a result of new information, future
events or otherwise, except to the extent legally required.
The statements contained in this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and
service of this announcement shall not give rise to any implication that there
has been no change in the facts set out in this announcement since such date.
Nothing contained in this announcement shall be deemed to be a forecast,
projection or estimate of the future financial performance of Source BioScience
or Vindon Healthcare except where expressly stated.
Publication on Website
In accordance with Rule 30.4 of the Takeover Code, a copy of this announcement
will be available free of charge, subject to certain restrictions relating to
persons resident in restricted jurisdictions, at www. Source BioScience.com by
no later than 12 noon (London time) on 16 July 2013 (being the business day
following the date of this announcement).
About Source BioScience:
Source BioScience plc (LSE: SBS) is an international diagnostics and genetic
analysis business serving the healthcare and research markets. The LifeSciences
division provides core laboratory research support from conceptualisation to
implementation, calling upon a wide range of innovative technology platforms
including an online catalogue of biomolecular . Source BioScience is a trusted
provider of a complete range of sophisticated microarray, next generation and
conventional sequencing services. GLP, GCP and CPA accreditations make the
sequencing offerings very attractive for applications in regulatory studies or
clinical settings. The Healthcare operations provide screening and reference
laboratory diagnostic testing for cancer and other diseases and additional
predictive testing for treatment optimisation for clinicians and patients.
Source BioScience has its headquarters in Nottingham, UK. For more information,
see www.sourcebioscience.com.
About Vindon Healthcare:
Vindon Healthcare plc (AIM: VDN) along with its subsidiaries, is engaged in the
manufacture of environmental control products for the pharmaceutical industry,
life sciences and food sectors together with the provision of related services.
The company provides products and services for the management of temperature,
humidity and light, where controlled storage is required. Its product range
includes controlled environment rooms and storage chambers, blood bank storage
units and plant growth chambers. Vindon Healthcare also offers controlled
environment storage facilities for its clients at its site in Rochdale. For
more information, see www.vindonhealthcare.com.
Information on this announcement
This announcement is not for release, publication or distribution in whole or
in part, in, into or from the United States or any jurisdiction where to do so
would constitute a violation of the relevant laws of such jurisdiction.
This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities or the
solicitation of an offer to buy any securities pursuant to this announcement or
to the Offer, if made, or otherwise. There is no certainty that the Possible
Offer referred to in this announcement will lead to a binding agreement or
transaction between the parties.
If made, the Offer will be made solely by an offer document and a form of
acceptance, which will contain the full terms and conditions of any offer made
by Source BioScience for the entire issued and to be issued share capital of
Vindon Healthcare not already owned by Source BioScience, including details of
how that offer may be accepted. If the Offer is made, any acceptance or other
response to the Offer will need to be made on the basis of the information in
that Offer document and form of acceptance.
The distribution of this announcement in jurisdictions other than the United
Kingdom may be affected by the laws of relevant jurisdictions. Therefore any
persons who are subject to the laws of any jurisdiction other than the United
Kingdom will need to inform themselves about, and observe, any applicable
requirements.
This is an announcement falling under Rules 2.2(e), 2.4 and 2.5 of the Takeover
Code and does not constitute an announcement of a firm intention to make an
offer under Rule 2.7 of the Takeover Code.
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any paper
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 paper 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 paper offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business day following
the commencement of the offer period and, if appropriate, by no later than 3.30
pm (London time) on the 10th business day following the announcement in which
any paper offeror is first identified. Relevant persons who deal in the
relevant securities of the offeree company or of a paper 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
paper offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any paper 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 paper 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 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a paper 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.