REG - Archimed SAS Instem plc - Offer Update

InstemAnnouncement

30/10/2023 07:15

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RNS Number : 6254R  Archimed SAS  30 October 2023

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

30 October 2023

 

OFFER UPDATE

for Instem plc ("Instem")

by

Ichor Management Limited ("Bidco")

(a newly incorporated company controlled by funds managed by ARCHIMED SAS)

to be effected by means of a scheme of arrangement under Part 26 of the
Companies Act 2006

 

On 30 August 2023, the boards of Instem and Bidco announced that they had
reached agreement on the terms of a recommended cash acquisition of the entire
issued and to be issued ordinary share capital of Instem by Bidco (the
"Acquisition").

On 25 September 2023 the scheme document in respect of the Acquisition (the
"Scheme Document") was published and made available to Instem Shareholders.
Capitalised terms used and not defined in this Announcement have the meanings
given to them in the Scheme Document.

Under the terms of the Acquisition, which is subject to the Conditions and
other terms set out in Part 3 of the Scheme Document, Instem Shareholders will
receive 833 pence in cash for each Instem Share (the "Acquisition Price").

On 13 October 2023, Bidco announced that the financial terms of the
Acquisition, including the Acquisition Price, were final and would not be
increased (the "No Increase Statement"), except that Bidco reserves the right
to revise the financial terms of the Acquisition if (i) there is an
announcement on or after the date of the No Increase Statement of a firm offer
or a possible offer for Instem by a third party offeror or potential offeror
on more favourable terms than the Acquisition Price; or (ii) the Takeover
Panel otherwise provides its consent.

In accordance with Rule 35.1 of the Code, if the Acquisition lapses, except
with the consent of the Takeover Panel, Bidco will not be able to make an
offer for Instem for at least twelve months.

On 18 October 2023, Instem announced that it intended to adjourn the Court
Meeting and the General Meeting relating to the Acquisition scheduled to be
held on 19 October 2023 to 10.00 a.m. on 2 November 2023 in the case of the
Court Meeting, and 10.15 a.m. (or as soon thereafter as the Court Meeting
concludes or is adjourned) on 2 November 2023 in the case of the General
Meeting.  An updated expected timetable of principal events for the
implementation of the Scheme was published by Instem on 20 October 2023.

Independent Third Party Recommendation

Bidco notes that Glass, Lewis & Co., an independent third party, published
a report on October 4, 2023 about the Court Meeting and the General Meeting
initially planned on October 19, 2023 to recommend to Instem's shareholders
their opinion on the Acquisition. This report concluded that: "there is
sufficient evidence to support the board's view that the proposed transaction
is in the best interests of public shareholders."

Offer Update

Bidco notes that the Acquisition Price was agreed after a lengthy period of
negotiation between ARCHIMED and Instem. In addition to prior public knowledge
of Instem driven by ARCHIMED's interest in Instem dating back to 2019, Bidco
was able to carry out an extensive due diligence exercise on Instem ahead of
the announcement of the Acquisition which was reflected in the Acquisition
Price.

Since the completion of due diligence and the announcement of the Acquisition,
Instem has announced that Adjusted EBITDA for the current year is now less
than previously forecasted and expected to be no greater than £11.1m, as
noted in Instem's Half Year Report published on 15 September 2023.
 Furthermore, similar challenges are being faced by companies across the
sector, such as market leader Certara, who recently reported a 28% decline in
services bookings, resulting from more cautious spending among customers.

Against the backdrop of Instem's performance, combined with ARCHIMED's deep
sectoral knowledge and unique ability to support Instem under private
ownership, Bidco believes the Acquisition Price offers Instem shareholders a
compelling opportunity to crystalise value in the near term, which is at a
meaningful premium to where shares would trade in the absence of the
Acquisition.

Instem will benefit from ARCHIMED's scale of operations, as funds managed or
advised by ARCHIMED have deployed over $2 billion of capital in North America
and recently launched offices in Asia. In addition to its extensive industry
connections, ARCHIMED also fosters collaboration across its portfolio that
will help accelerate Instem's growth with biopharma and CROs due to the
support of portfolio companies including ActiGraph, NAMSA, Aliri, Title21,
Cube, Clean Biologics and PlasmidFactory.

Instem Shareholder Meetings

Shareholders are reminded that the Court Meeting and the General Meeting in
connection with the Offer (together the "Meetings") will both be held on 2
November 2023. The Court Meeting will start at 10.00 a.m. and the General
Meeting will start at 10.15 a.m. (or as soon thereafter as the Court Meeting
has concluded or been adjourned).

The Meetings will be held at the offices of Squire Patton Boggs (UK) LLP, No 1
Spinningfields, 1 Hardman Square, Manchester, M3 3EB. Further information is
set out in the Scheme Document.

General

The expected timetable of principal events for the implementation of the
Scheme is as set out in Appendix II to the announcement made by Instem on 20
October 2023. If any of the dates and / or times in the expected timetable
change, the revised dates and / or times will be notified by announcement
through a Regulatory Information Service.

Enquiries

ARCHIMED SAS

Vincent Guillaumot
 
Tel: +33 4 81 11 35 33

Brian Sheridan

Sandrine Laporte

 

Moelis & Company UK LLP (Financial Adviser to ARCHIMED and Bidco)

Philippe Gallone
 
Tel: +44 (0) 20 7634 3500

Chris Raff

François Saint-Lo

Simon Chaudhuri

 

Latham & Watkins (London) LLP are retained as legal adviser to ARCHIMED
and Bidco.

 

 

Disclaimers

Moelis & Company UK LLP ("Moelis"), which is regulated by the FCA in the
United Kingdom, is acting exclusively for ARCHIMED and Bidco and no one else
in connection with the Acquisition and other matters set out in this
Announcement and will not be responsible to anyone other than ARCHIMED and
Bidco for providing the protections afforded to clients of Moelis, or for
providing advice in connection with the Acquisition or any matter referred to
herein. Neither Moelis nor any of its affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Moelis in connection with this Announcement, any statement contained
herein or otherwise.

Further information

This Announcement is for information purposes only and is not intended to and
does not constitute, or form any part of, an offer to sell or subscribe for or
any invitation to purchase or subscribe for any securities or the solicitation
of any vote or approval in any jurisdiction pursuant to the Acquisition or
otherwise. The Acquisition will be made solely through and on the terms set
out in the Scheme Document (or, in the event that the Acquisition is to be
implemented by means of a Takeover Offer, the Offer Document) and the
accompanying Forms of Proxy, which will contain the full terms and conditions
of the Acquisition, including details of how to vote in respect of the
Acquisition. Any vote, approval, decision or other response to the Acquisition
should be made only on the basis of the information in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document). Scheme Shareholders are strongly advised to read the formal
documentation in relation to the Acquisition once it has been dispatched.

This Announcement does not constitute a prospectus or prospectus exempted
document.

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 forth in this Announcement since such
date.

Overseas shareholders

This Announcement has been prepared for the purpose of complying with English
law, the AIM Rules and the Code and the information 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 jurisdictions outside the United
Kingdom.

The laws of the relevant jurisdictions may affect the availability of the
Acquisition to persons who are not resident in the United Kingdom. Persons who
are not resident in the United Kingdom, or who are subject to laws of any
jurisdiction other than the United Kingdom, should inform themselves about,
and observe any applicable requirements. Any person (including, without
limitation, nominees, trustees and custodians) who would, or otherwise intends
to, forward this Announcement, the Scheme Document or any accompanying
document to any jurisdiction outside the United Kingdom should refrain from
doing so and seek appropriate professional advice before taking any action. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their Instem Shares at the Court Meeting or the General Meeting, or to
execute and deliver Forms of Proxy appointing another to vote their Instem
Shares in respect of the Court Meeting or the General Meeting on their behalf,
may be affected by the laws of the relevant jurisdiction in which they are
located.

Any failure to comply with the applicable legal or regulatory requirements may
constitute a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law, the companies
and persons involved in the Acquisition disclaim any responsibility and
liability for the violation of such restrictions by any person.

The Acquisition will not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including, without
limitation, telephonic or electronic) of interstate or foreign commerce of, or
any facility of a national, state or other securities exchange of, a
Restricted Jurisdiction, and the Acquisition will not be capable of acceptance
by any such use, means, instrumentality or facility or from within a
Restricted Jurisdiction. Accordingly, copies of this Announcement and formal
documentation relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded or distributed in, into
or from a Restricted Jurisdiction and persons receiving this Announcement
(including custodians, nominees and trustees) must not distribute or send it
into or from a Restricted Jurisdiction. In the event that the Acquisition is
implemented by way of a Takeover Offer and extended into the US, Bidco will do
so in satisfaction of the procedural and filing requirements of US securities
laws at that time, to the extent applicable thereto. The Acquisition relates
to the shares of a company incorporated in England and it is proposed to be
made by means of a scheme of arrangement provided for under English law. The
Scheme will relate to the shares of a UK company that is a "foreign private
issuer" as defined under Rule 3b-4 under the US Exchange Act. A transaction
effected by means of a scheme of arrangement is not subject to any shareholder
vote, proxy solicitation and tender offer rules under the US Exchange Act.
Accordingly, the Scheme is subject to the disclosure requirements and
practices applicable in the UK to schemes of arrangement, which differ from
the disclosure requirements and practices of US shareholder vote, proxy
solicitation or tender offer rules. Financial information included in the
relevant documentation will have been prepared in accordance with accounting
standards applicable in the UK and may not be comparable to the financial
information of, or the accounting standards applicable to, US companies.
However, if Bidco were to elect to implement the Acquisition by means of a
Takeover Offer, such Takeover Offer shall be made in compliance with all
applicable laws and regulations, including section 14(e) of the US Exchange
Act and Regulation 14E thereunder, if applicable. Such Takeover Offer would be
made in the US by Bidco and no one else. In addition to any such Takeover
Offer, Bidco, certain affiliated companies and the nominees or brokers (acting
as agents) may make certain purchases of, or arrangements to purchase, shares
in Instem outside such Takeover Offer during the period in which such Takeover
Offer would remain open for acceptance. If such purchases or arrangements to
purchase are made they would be made outside the United States in compliance
with applicable law, including the US Exchange Act. It may be difficult for a
US-based investor to enforce his or her rights and any claim he or she may
have arising under US securities laws, since the Scheme relates to the shares
of a company located in the UK, and some or all of its officers and directors
may be residents of non-US jurisdictions. A US-based investor may not be able
to sue a company located in the UK, or its officers or directors, in a foreign
court for alleged violations of US securities laws, and it may be difficult to
compel a foreign company and its affiliates to subject themselves to a US
court's judgment.

Forward-looking statements

This Announcement, oral statements made regarding the Acquisition, and other
information published by Instem, Bidco and ARCHIMED may contain certain
"forward-looking statements" with respect to Instem, Bidco and ARCHIMED. 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 or terms of similar meaning or the negative thereof. Forward-looking
statements include, for example, statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies of ARCHIMED and/or
Bidco and the expansion and growth of Instem and potential synergies resulting
from the Acquisition; and (iii) the effects of government regulation on the
business of Instem.

These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
developments to differ materially from those expressed in or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding present and future strategies and environments.
None of ARCHIMED, Bidco or Instem, nor any of their respective associates,
directors, officers, employees 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.
You are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent oral or
written forward-looking statements attributable to ARCHIMED, Bidco or Instem
or any person acting on their behalf are expressly qualified in their entirety
by the cautionary statement above. 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.
None of ARCHIMED, Bidco or Instem assume any obligation to update publicly or
revise forward-looking or other statements contained in this Announcement,
whether as a result of new information, future events or otherwise, except to
the extent legally required.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate
for ARCHIMED, Bidco or Instem in respect of any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
Instem Share for the current or future financial years would necessarily match
or exceed the historical published earnings or earnings per Instem Share.

Right to switch to a Takeover Offer

Subject to the terms of the Co-operation Agreement, Bidco reserves the right
to elect, with the consent of the Takeover Panel, to implement the Acquisition
by way of a Takeover Offer for the entire issued and to be issued ordinary
share capital of Instem as an alternative to the Scheme. In such an event, the
Takeover Offer will be made in accordance with the terms and conditions set
out in this Announcement which would apply to the Scheme (with any
modifications or amendments to such terms and conditions as may be required by
the Takeover Panel or which are necessary as a result of Bidco's election to
implement the Acquisition by way of a Takeover Offer), in accordance with the
Co-operation Agreement and subject to the amendment referred to in Appendix I
to this Announcement.

Publication on website

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be
made available (subject to certain restrictions relating to persons resident
in Restricted Jurisdictions), free of charge, on Instem's website at
https://investors.instem.com and on Bidco's website at www.Ichor-offer.com by
no later than 12:00 noon on the Business Day following the date of this
Announcement. Neither the contents of this website nor the content of any
other website accessible from hyperlinks on such websites is incorporated
into, or forms part of, this Announcement.

Requesting hard copies

In accordance with Rule 30.3 of the Code, a person so entitled may request a
hard copy of this Announcement, free of charge, by contacting Instem's
registrar, Computershare Investor Services PLC during business hours (8.30
a.m. to 5.30 p.m.) on +44 (0)370 703 6041 or by submitting a request in
writing to Computershare Investor Services PLC at The Pavilions, Bridgwater
Road, Bristol, BS13 8AE. For persons who receive a copy of this Announcement
in electronic form or via a website notification, a hard copy of this
Announcement will not be sent unless so requested. In accordance with Rule
30.3 of the Code, a person so entitled may also request that all future
documents, announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.

Electronic communications - information for Instem Shareholders

Please be aware that addresses, electronic addresses and certain information
provided by Instem Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Instem may be provided
to Bidco during the Offer Period as required under section 4 of Appendix 4 of
the Code to comply with Rule 2.11(c) of the Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of Instem 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) Instem 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
Instem 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
per cent. or more of any class of relevant securities of Instem or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of Instem 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) Instem 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 Instem 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 Instem and by any offeror,
and Dealing Disclosures must also be made by Instem, 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 (http://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
Takeover 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.

General

If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriate authorised
independent financial adviser.

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