Abzena PLC (AIM:ABZA) Recommended Cash Offer for Abzena plc

Astro Bidco Limited, a company wholly-owned by WCAS XII-Astro, L.P.

Summary

·     The board of directors of Abzena plc (“Abzena” or the “Company”) and the board of directors of Astro Bidco Limited (“BidCo”) are pleased to announce that they have reached agreement on the terms of a recommended all cash offer to be made by BidCo for all of the issued and to be issued share capital of Abzena (the “Acquisition”). It is intended that the Acquisition will be effected by means of Court-sanctioned scheme of arrangement between Abzena and the Abzena Shareholders under Part 26 of the Companies Act 2006.

 

·     Under the terms of the Acquisition, Abzena Shareholders will be entitled to receive: 

16 pence in cash for each Abzena Share

·     The Acquisition values the entire issued share capital of Abzena at approximately £34.4 million on a fully diluted basis.

·     The Acquisition represents a premium of approximately:

 

167 per cent. to the Closing Price per Abzena Share of 6.0 pence on 15 August 2018 (being the latest practicable date before the date of this Announcement);

36 per cent. to the average Closing Price per Abzena Share of 11.8 pence in the three months to 15 August 2018 (being the latest practicable date before the date of this Announcement).

·   BidCo is a newly incorporated company which is wholly-owned by the WCAS Fund and which has been established for the purpose of making and implementing the Acquisition.  Further information in relation to BidCo, the WCAS Fund and Welsh, Carson, Anderson & Stowe (“WCAS”) is set out in paragraphs 8 and 9 of this Announcement.

·    The Abzena Directors, who have been so advised by N+1 Singer as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. N+1 Singer is providing independent financial advice to the Abzena Directors for the purposes of Rule 3 of the City Code on Takeovers and Mergers (the “Code”). In providing its financial advice to the Abzena Directors, N+1 Singer has taken into account the commercial assessment of the Abzena Directors.

·     Accordingly, the Abzena Directors intend to recommend unanimously that Abzena Shareholders vote in favour of the Scheme at the Court Meeting and the resolution relating to the Acquisition to be proposed at the Abzena General Meeting, as the Abzena Directors who hold Abzena Shares have irrevocably undertaken to do in respect of their own beneficial holdings, amounting in aggregate to 3,730,038 Abzena Shares and representing approximately 1.7 per cent. of the existing issued share capital of Abzena as at 15 August 2018 (being the latest practicable date prior to publication of this announcement). Further details are set out in Appendix III of this announcement.

·   In addition to the irrevocable undertakings from the Abzena Directors, BidCo has received irrevocable undertakings from certain other Abzena Shareholders holding, in aggregate, 163,393,837 Abzena Shares representing approximately 76.3 per cent. of the existing issued share capital of Abzena to vote in favour of the Scheme at the Court Meeting and the resolution relating to the Acquisition to be proposed at the Abzena General Meeting. Further details are set out in Appendix III of this announcement.

 

·    Consequently, BidCo has received irrevocable undertakings with respect to, in aggregate, 167,123,875 Abzena Shares representing approximately 78.0 per cent. of the existing issued share capital of Abzena.

·     The Company has 214,220,399 ordinary shares in issue as at 15 August 2018 (being the latest practicable date prior to the publication of this announcement).

·     Abzena has confirmed to the counterparty with whom it had been in discussions in relation to the monetisation of potential royalties from certain of the ABZENA Inside products, that it no longer wishes to proceed with that transaction. Negotiations with that counterparty have been terminated and will not now be consummated.

 

The Scheme will also be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.

The Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the Abzena General Meeting, including an indicative timetable for the implementation of the Scheme, will be set out in the Scheme Document, which, together with the Forms of Proxy is expected to be dispatched to Abzena Shareholders as soon as reasonably practicable and, in any event, within 28 days of the date of this announcement.

 

Peel Hunt LLP is acting as financial adviser to BidCo, the WCAS Fund and WCAS. Ropes & Gray International LLP is providing legal advice to BidCo, the WCAS Fund and WCAS.

 

N+1 Singer is acting as financial adviser and broker to Abzena in respect of the Acquisition. Pinsent Masons LLP is acting as legal adviser to Abzena.

 

Commenting on the Acquisition, Jonathan Goldman, Operating Partner of WCAS, said:

“Abzena is a highly respected company with a world class team of employees that offers differentiated and integrated solutions to customers. WCAS is excited to partner with the Abzena team to grow the company and maintain the standards of excellence and quality expected by customers and regulators.”

Brian Regan, General Partner, of WCAS, added:

“WCAS has a long history of investing in market leading companies in life sciences. Abzena has grown significantly in recent years and has an excellent reputation as a pharmaceutical services organization.  We look forward to partnering with the Abzena team and investing to add further capabilities and scale in order to allow Abzena to realize its potential as a WCAS portfolio company.”

 

Commenting on the Acquisition, Ken Cunningham, Chairman of Abzena, said:

“The Board recognises the expertise and successful track record of WCAS in backing businesses in the life sciences services space, including contract research, development and manufacturing organisations like Abzena. We considered several options for future financing including remaining on the public markets. However we believe the Acquisition by WCAS will better meet the needs of Abzena’s shareholders, customers and staff alike, and provide a platform for further growth in the coming years.”

 

John Burt, Chief Executive Officer of Abzena, added:

“We are pleased to have attracted the long-term support of a specialist investor of the calibre of WCAS. WCAS will provide us with immediate working capital for the business, followed by additional investment, post completion that will enable us to scale up the business and fund further development. We look forward to working with the WCAS team to continue to capitalise on the growing market opportunity for Abzena.

 

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