RNS Number:3339D
Concateno plc
05 September 2007
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF
SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
5 September 2007
RECOMMENDED CASH OFFER
by
CONCATENO PLC
for
COZART PLC
Summary
Further to the announcement released by Cozart on 4 September 2007 in accordance
with rule 2.4 of the Code, the Concateno Directors and the Independent Directors
announce that they have reached agreement on the terms of a recommended cash
offer for the entire issued and to be issued ordinary share capital of Cozart.
Highlights
* The Offer is being made at 57.5 pence in cash for each Cozart Share and represents:
- a premium of approximately 41 per cent. to the Closing Price of 40.75 pence
per Cozart Share on 3 September 2007, the last business day prior to the
commencement of the Offer Period;
- a premium of approximately 50 per cent. to the average Closing Price of 38.4
pence per Cozart Share for the six month period prior to the commencement of the
Offer Period; and
- a premium of approximately 77 per cent. to the 2007 lowest Closing Price of
32.5 pence per Cozart Share.
* The Offer values the existing issued ordinary share capital of Cozart at
approximately #64.4 million.
*In view of the fact that Dr. Christopher Hand has agreed to become a
Non-Executive Director of Concateno following the Offer becoming or being
declared unconditional in all respects and of the Incentive Arrangements,
he is not deemed to be independent for the purposes of the Offer and has not
taken part in the recommendation by the Independent Directors in relation to the
Offer nor has he expressed his views or opinions in relation to it.
*The Independent Directors are not connected with Concateno and have taken
responsibility for considering the Offer on behalf of CozartShareholders and
for making the recommendation that Cozart Shareholders accept the Offer
and vote in favour of the Resolution.
*The Independent Directors, who have been so advised by Numis, consider the
terms of the Offer to be fair and reasonable and unanimouslyrecommend that
Cozart Shareholders accept the Offer. In providing advice to the Independent
Directors, Numis has taken into account the Independent Directors'
commercial assessments.
*The Independent Directors have given irrevocable undertakings to accept the
Offer and to vote in favour of the Resolution in respect of their entire
beneficial and connected holdings of Cozart Shares totalling, in aggregate,
35,102,509 Cozart Shares, representing approximately 31 per cent. of the
existing issued share capital of Cozart.
*Concateno has also received an irrevocable undertaking from Dr. Christopher
Hand to accept the Offer in respect of his entire
beneficial and connected holding of Cozart Shares totaling, in aggregate,
15,475,799 Cozart Shares, representing approximately 14 per cent. of the
existing issued share capital of Cozart.
*Avlar Bioventures Limited acting on behalf of Avlar Bioventures Fund I
Limited Partnership and MDY Healthcare plc have also given Concateno
irrevocable undertakings to accept, or procure the acceptance, of the
Offer and vote in favour, or procure that the registered holder votes in favour,
of the Resolution in respect of their holdings of Cozart Share totaling, in
aggregate, 7,388,364 Cozart Shares, representing approximately 7 per cent. of
the existing issued share capital of Cozart.
*Accordingly, Concateno has received, in aggregate, irrevocable
undertakings to accept the Offer in respect of 57,966,672 Cozart Shares,
representing approximately 52 per cent. of the existing issued ordinary
share capital of Cozart and irrevocable undertakings to vote in favour of the
Resolution in respect of 42,490,873 Cozart Shares, representing approximately 38
per cent. of the issued share capital of Cozart.
Commenting on the Offer, Keith Tozzi, Chairman of Concateno, said:
"With its focus on point of care testing and manufacturing capabilities we
believe Cozart represents the ideal next step in Concateno's development. We
believe that the acquisition of Cozart will enhance the ability of Concateno to
exploit opportunities within our existing markets and to expand our operation
further into Europe. The Concateno Board is particularly excited about the many
opportunities that exist between the two businesses and the future development
of the commercialization agreement with Philips."
Commenting on the Offer on behalf of the Independent Directors, Sir Brian
Richards, Chairman of Cozart said:
"Since listing on AIM in 2004 at 30p per share and with a market capitalisation
of #27 million, Cozart has expanded operationally and geographically, it has
substantially increased its revenues and become a profitable business. We
believe that this cash offer provides shareholders with a significant premium to
the prevailing price before the announcement of the deal and reflects the growth
potential of the business."
Collins Stewart is acting as financial adviser to Concateno and Numis is acting
as financial adviser to Cozart.
This summary should be read in conjunction with the accompanying full text of
the following announcement which sets out further details of the Offer and which
forms an integral part of this announcement. The Offer will be subject to the
conditions set out in Appendix A to this announcement and the conditions and
further terms, which will be set out in the Offer Document. Appendix D contains
definitions of certain expressions used in this summary and the following
announcement.
Enquiries:
Concateno plc Tel: +44 (0)20 7004 2800
Keith Tozzi, Chairman
Fiona Begley, Chief Executive Officer
Collins Stewart (financial adviser and broker to Tel: +44 (0)20 7523 8350
Concateno)
Seema Paterson
Piers Coombs
Financial Dynamics (Concateno public relations) Tel: +44 (0)20 7831 3113
Billy Clegg
Edward Westropp
Cozart plc Tel: +44 (0)1235 861 483
Sir Brian Richards, Chairman
Dr. Christopher Hand, Chief Executive Officer
Chris Yates, Finance Director
Numis Securities Limited (financial adviser and Tel: +44 (0)20 7260 1200
broker to Cozart)
Michael Meade
James Black
Financial Dynamics (Cozart public relations) Tel: +44 (0)20 7269 7242
Ben Atwell
In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Cozart
confirms that it has 111,949,321 ordinary shares of 1 pence each in issue.
The International Securities Identification Number (ISIN) for Cozart's ordinary
shares is GB00B01G6P33.
Collins Stewart Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Concateno
and no one else in connection with the Offer and will not be responsible to
anyone other than Concateno for providing the protections afforded to clients of
Collins Stewart Europe Limited nor for providing advice in relation to the
Offer, the contents of this announcement, or the Form of Acceptance.
Numis Securities Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Cozart
and no one else in connection with the Offer and will not be responsible to
anyone other than Cozart for providing the protections afforded to customers of
Numis Securities Limited nor for providing advice in relation to the Offer, the
contents of this announcement, or the form of Acceptance.
This announcement is not intended to and does not constitute or form any part
of, an offer to sell or an invitation to purchase or the solicitation of an
offer to subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will
be made solely through the Offer Document and in the case of certificated
Cozart Shares, the Form of Acceptance, which will together contain the full
terms and conditions of the Offer, including details of how to accept the
Offer. Any acceptance or other response to the Offer should be made only on the
basis of the information contained in the Offer Document and, in the case of
certificated Cozart Shares, the Form of Acceptance.
The making of the Offer in, or to persons resident in, or to nationals or
citizens of, jurisdictions outside the United Kingdom or to nominees of, or
custodians or trustees for, citizens or nationals of other countries ("Overseas
Shareholders") may be prohibited or affected by the laws of the relevant
jurisdictions. It is the responsibility of such Overseas Shareholders to inform
themselves about and observe any applicable legal requirements. No person
receiving a copy of the Offer Document and/or a Form of Acceptance in any
jurisdiction other than the UK may treat the same as constituting an invitation
or offer to him, nor should he in any event use such Form of Acceptance, if, in
the relevant jurisdiction, such invitation or offer cannot lawfully be made to
him or such Form of Acceptance cannot lawfully be used without contravention of
any relevant or other legal requirements. In such circumstances, the Offer
Document and/or Form of Acceptance are sent for information only. It is the
responsibility of such Overseas Shareholder receiving a copy of the Offer
Document and/or Form of Acceptance and wishing to accept the Offer to satisfy
himself as to the full observance of the laws and regulatory requirements of
the relevant jurisdiction in connection with the Offer, including obtaining any
governmental, exchange control or other consents which may be required, and
compliance with other necessary formalities needing to be observed and payment
of any issue, transfer or other taxes or duties due in such jurisdiction. Any
such Overseas Shareholder will be responsible for any such issue, transfer or
other taxes or duties by whomsoever payable and Concateno (and any person
acting on behalf of Concateno) shall be fully indemnified and held harmless by
such Overseas Shareholder for any such issue, transfer or other taxes or duties
or other requisite payments as Concateno (and any person acting on behalf of
Concateno) may be required to pay.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about, and observe any
applicable requirements. In particular, the Offer is not being made, directly or
indirectly, in the United States, Canada, Australia, the Republic of South
Africa or Japan. This announcement has been prepared for the purpose of
complying with English law and the City 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 England.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, "interested" (directly or indirectly) in 1 per cent. or more of any
class of "relevant securities" of Cozart, all "dealings" in any "relevant
securities" of Cozart (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 p.m. (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the Offer becomes, or is declared unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in "relevant
securities" of Cozart, they will be deemed to be a single person for the purpose
of Rule 8.3.
Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in
"relevant securities" of Cozart by Concateno or Cozart, or by any of their
respective "associates", must be disclosed by no later than 12.00 noon (London
time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the Panel.
Forward-looking Statements
This announcement contains statements about Concateno, Cozart and the Enlarged
Group that are or may be forward looking statements. All statements other than
statements of historical facts included in this announcement may be forward
looking statements. Forward looking statements often use words such as "target",
"plan", "believe", "expect", "aim", "intend", "will", "should", "could",
"would", "may", "consider", "anticipate", "estimate", "synergy", "cost saving",
"project", "goal" or "strategy" or words or terms of similar substance or the
negative thereof. Forward looking statements include statements relating to the
following: (i) the expected timetable for implementing the Offer, future capital
expenditures, expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and future prospects
of Concateno, Cozart or the Enlarged Group; (ii) business and management
strategies and the expansion and growth of Concateno's, Cozart's or the Enlarged
Group's operations and potential synergies resulting from the acquisition of
Cozart by Concateno; and (iii) the effects of government regulation on
Concateno's, Cozart's or the Enlarged Group's business.
These forward looking statements are not guarantees of future performance. They
have not been reviewed by the auditors of Concateno or Cozart. These forward
looking statements involve known and unknown risks, uncertainties and other
factors which may cause them to differ from the actual results, performance or
achievements expressed or implied by such forward looking statements. These
forward looking statements are based on numerous assumptions regarding the
present and future business strategies of such persons and the environment in
which each will operate in the future. Investors are cautioned not to place
undue reliance on the forward looking statements, which speak only as of the
date they were made. All subsequent oral or written forward looking statements
attributable to Concateno, Cozart or the Enlarged Group or any of their
respective members, directors, officers or employees or any persons acting on
their behalf are expressly qualified in their entirety by the cautionary
statement above. All forward looking statements included in this announcement
are based on information available to Concateno and Cozart on the date hereof.
Undue reliance should not be placed on such forward looking statements. Subject
to compliance with the City Code, neither Cozart nor Concateno intends, or
undertakes any obligation, to update any information contained in this
announcement.
All subsequent written and oral forward-looking statements attributable to
Cozart or Concateno or persons acting on behalf of either of them are expressly
qualified in their entirety by the cautionary statements above. The
forward-looking statements included herein are made only as of the date of this
announcement. Subject to compliance with the City Code, neither Cozart nor
Concateno intends, or undertakes any obligation, to update any information
contained in this announcement.
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF
SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
RECOMMENDED CASH OFFER
BY
CONCATENO PLC
FOR
COZART PLC
1 Introduction
Further to the announcement released by Cozart on 4 September 2007 in accordance
with rule 2.4 of the Code, the Concateno Directors and the Independent Directors
announce that they have reached agreement on the terms of a recommended cash
offer for the entire issued and to be issued ordinary share capital of Cozart.
The Concateno Directors believe that as a result of becoming part of a larger
group, Cozart will be provided with the opportunity for its ongoing operations
to accelerate and to build upon the positive progress made to date and to take
advantage of any synergies available between the two businesses.
2 The Offer
The Offer, which will be made on the terms and subject to the conditions
summarised below and in Appendix A to this announcement and to the full terms
and conditions which will be set out in the Offer Document and, in the case of
Cozart Shareholders who hold their Cozart Shares held in certificated form, the
Form of Acceptance, will be made on the following terms:
for every Cozart Share 57.5 pence in cash
Entitlements to cash consideration will be rounded down to the nearest whole
number.
The Offer represents:
*a premium of approximately 41 per cent. to the Closing Price of 40.75
pence per Cozart Share on 3 September 2007, the last business day prior to the
commencement of the Offer Period;
*a premium of approximately 50 per cent. to the average Closing Price of
38.4 pence per Cozart Share for the six month period prior to the commencement
of the Offer Period; and
*a premium of approximately 77 per cent. to the 2007 lowest Closing Price
of 32.5 pence per Cozart Share.
The Offer values the existing issued ordinary share capital of Cozart at
approximately #64.4 million.
The Offer is conditional, inter alia, upon acceptance by Cozart Shareholders who
together own 75 per cent. of the issued share capital of Cozart. The conditions
to the Offer are set out in Appendix A to this announcement.
The Cozart Shares will be acquired by Concateno fully paid and free from all
liens, equitable interests, charges and encumbrances and other interests
whatsoever and together with all rights now or hereafter attaching thereto,
including the right to receive in full and retain all dividends and other
distributions (if any) declared, made or paid for the financial year 2007/2008
onwards but excluding, for the avoidance of doubt, any dividend declared, made
or paid in respect of the financial year 2006/2007.
3 Recommendation
The Independent Directors, who have been so advised by Numis, consider the terms
of the Offer to be fair and reasonable. In providing advice to the Independent
Directors, Numis has taken account of the commercial assessments of the Cozart
Independent Directors.
Numis, independent adviser to the Independent Directors, considers the terms of
the Incentive Arrangements between Concateno and Dr. Christopher Hand to be fair
and reasonable.
The Independent Directors comprise Sir Brian Richards, Edgar Wallner, Dene
Baldwin, Philip Hand, Stephen Noar, and Christopher Yates. Dr. Christopher Hand
cannot be treated as an independent director of Cozart by reason of the fact
that he will become a non-executive director of Concateno following the Offer
becoming or being declared unconditional in all respects and he will roll over
20 per cent. of his current holding of Cozart Shares, being 3,095,160 Cozart
Shares, into new Concateno Shares.
Accordingly, the Independent Directors of Cozart unanimously recommend Cozart
Shareholders to accept the Offer and unanimously recommend Independent
Shareholders to vote in favour of a resolution to be proposed at the
Extraordinary General Meeting for the purposes of approving the Incentive
Arrangements as they and their connected parties have irrevocably undertaken to
do in respect of their aggregate holdings of 35,102,509 Cozart Shares
(representing approximately 31 per cent. of the issued ordinary share capital of
Cozart).
4 Irrevocable undertakings to accept the Offer
The Independent Directors have given irrevocable undertakings to accept, or
procure the acceptance, of the Offer and to vote, or procure the voting, in
favour of the Resolution in respect of their entire beneficial and connected
holdings totaling, in aggregate, 35,102,509 Cozart Shares, representing
approximately 31 per cent. of the existing issued share capital of Cozart.
The irrevocable undertakings given by the Independent Directors are binding
where a higher competing offer for the Cozart Shares is made, and cannot be
withdrawn other than in the event of the Offer lapsing or failing to become
unconditional.
Dr. Christopher Hand has given Concateno an irrevocable undertaking to accept,
or procure the acceptance of, the Offer in respect of his beneficial and
connected holding totaling 15,475,799 Cozart Shares, representing approximately
14 per cent. of the existing issued share capital of Cozart. This undertaking is
binding even where a higher competing offer for the Cozart Shares is made, and
cannot be withdrawn other than in the event of the Offer lapsing or failing to
become unconditional. Dr. Hand is prevented from voting on the Resolution.
In addition, Concateno has received irrevocable undertakings from Avlar
Bioventures Limited acting on behalf of Avlar Bioventures Fund I Limited
Partnership (the "Avlar Undertaking") and MDY Healthcare plc (the "MDY
Undertaking") to accept, or procure the acceptance of, the Offer and to vote in
favour, or procure the voting in favour, of the Resolution in respect of their
beneficial holding of Cozart Shares totaling, in aggregate, 7,388,364 Cozart
Shares, representing approximately 7 per cent. of the existing issued share
capital of Cozart. These irrevocable undertakings shall, at the relevant
Shareholder's option, cease to be binding in the event that, at any time prior
to the date and time for acceptance, a firm intention to make in respect of the
Avlar Undertaking a Higher Cash Offer and in respect of the MDY Undertaking a
Higher Cash and/or Share Offer is announced by another party in accordance with
Rule 2.5 of the City Code (the "Competing Announcement") and the relevant
Shareholder gives notice in writing to Concateno within seven business days of
that Competing Announcement that the relevant Shareholder intends to accept that
Higher Offer.
Accordingly, Concateno has received, in aggregate, irrevocable undertakings to
accept the Offer in respect of 57,966,672 Cozart Shares, representing
approximately 52 per cent. of the existing issued ordinary share capital of
Cozart and irrevocable undertakings to vote in favour of the Resolution in
respect of 42,490,873 Cozart Shares representing approximately 38 per cent. of
the existing issued ordinary share capital of Cozart.
Further details of the irrevocable undertakings will be set out in Appendix C.
5 Background to and reasons for the Offer
The Concateno Directors believe that the Acquisition represents a further stage
in the development of Concateno. Due to Cozart's focus on point of care testing,
the Acquisition will enable Concateno to develop a more even balance between
laboratory based and point of care testing. The Acquisition will also diversify
the current Concateno product offering with the addition of a laboratory
products division and the ability to manufacture drug testing devices in house,
thus reducing cost of sales. The Concateno Directors believe that the Enlarged
Group will benefit from a considerable increase in scale, particularly in the
UK, with the Cozart business increasing turnover by approximately 78 per cent.
Furthermore, the Concateno Directors believe that the Acquisition will provide
the Enlarged Group with considerable growth opportunities and will be earnings
enhancing in the first full year of operation(1).
The Acquisition accelerates Concateno's stated strategy of expanding its
operations into Europe. The Cozart Group has wholly owned subsidiaries in four
European countries, with 23 per cent. of 2006 revenue generated in Europe. In
addition it would offer Concateno a diversification of its product offering in
Europe. Concateno intends to develop these operating divisions to capitalise on
the expanding drugs of abuse market throughout Europe. The Concateno Directors
also intend to leverage current group testing products and services onto the
global distribution network developed by the Spinreact division of Cozart. The
Acquisition represents a move along the value chain with the capability to
manufacture drug testing devices and laboratory products.
The Concateno management have identified synergies with an estimated value of #3
million. It is intended that these will be fully implemented by December 2008.
The rationalisation of costs associated with a public listing and a reduction in
board costs will provide the first #1 million of these synergies. The Concateno
management have further identified potential synergies through closing
laboratories to focus the operations of the group on two key laboratory sites
that the Concateno Directors believe represent the most efficient sites within
the Enlarged Group and that they believe will be able to cope with the increased
sample flow. The remaining synergies are anticipated to arise from distribution
efficiencies provided by a combined global network and the reduced cost of sales
through the manufacture of drug testing devices in house. The Concateno
Directors believe that Cozart's manufacturing capabilities will reduce the
Enlarged Group's reliance on third party suppliers.
The Concateno Directors believe that the Enlarged Group will experience
considerable growth opportunities. Of the 600 police custody suites in the UK
Cozart's Rapiscan device is used in 173 suites. Accordingly Concateno management
believe there is significant potential for expansion and anticipate an increase
in the number of tests carried out on arrest. The Concateno Directors intend to
expand Concateno's existing product base onto Cozart's global distribution
network. The Concateno Directors believe that the commercialisation agreement
with Philips provides significant potential upside and anticipate revenues from
the agreement in 2009. It is estimated that 30 million breathalyser tests were
carried out in Europe in 2005. The Concateno Directors believe that the ability
to carry out effective drugs of abuse testing at the roadside in parallel to
breathalyser testing will add considerable revenue to the Enlarged Group.
6 Inducement Fee
Cozart has agreed, pursuant to an inducement fee agreement, to pay Concateno an
inducement fee of #669,609.95 (exclusive of any recoverable VAT), being one per
cent. of the value of the fully diluted share capital of Cozart calculated by
reference to the Offer Price. Such fee shall be payable in the event, inter
alia, that:
(i) the Independent Directors withdraw or adversely modify their recommendation of the Offer; or
(ii) the Independent Directors withdraw or adversely modify their recommendation of the Incentive
Arrangements; or
(iii) a competing offer for Cozart is announced prior to the Offer lapsing or being withdrawn and such
competing offer becomes or is declared unconditional in all respects or is otherwise completed; or
(iv) the Independent Directors fail, within 48 hours of being requested by Concateno, publicly to repeat
or reconfirm their unanimous recommendation of the Offer and the Offer subsequently is not declared or does not become
unconditional as to acceptances; or
(v) Cozart undertakes, without the consent of Concateno, (whether with or without the consent of its
shareholders) any action for which shareholders' consent is stated as required under Rule 21.1(a) to (b) (inclusive) of
the Code and as a direct result the Offer subsequently lapses or is withdrawn.
7 Information on Concateno
Concateno Shares were admitted to trading on AIM on 7 April 2005. On 6 November
2006, Concateno completed the acquisition of Medscreen, a global provider of
drug and alcohol testing services. With the acquisition of this platform
business, Concateno set out its strategy to consolidate the UK and European drug
and alcohol testing sector and become a leading European business in the sector.
The then directors of Concateno saw an opportunity for consolidation as they
believed the drug and alcohol testing market was fragmented, with the majority
of operations being small, privately owned businesses or non-core divisions of
larger general testing companies. Drug and alcohol testing is broken down into
laboratory based analysis of samples and point of care analysis. Sample
collection for these two methodologies can be carried out through a number of
different mediums, primarily being urine, oral fluids, hair and blood, each of
which has a different commercial application.
Concateno's strategy has been to develop a "one stop shop" that offers both
point of care and laboratory based testing through a complete range of different
testing mediums. Different testing methodologies are utilised by customers for
different needs. For example, point of care testing provides a positive or
negative result on the spot while laboratory based analysis will provide a more
detailed and accurate result. The Concateno Directors believe that the ability
to offer a complete solution for drug and alcohol testing will enable Concateno
to grow the overall testing market by providing the right solution for its
customer's needs.
Concateno's acquisitions to date, as detailed below, operate across the spectrum
of drug and alcohol testing methodologies, providing services to the workplace,
criminal justice and healthcare sectors.
The drugs of abuse testing market in the US developed in the 1980s and today the
market is highly developed with an estimated 40 to 50 per cent. of US companies
undertaking some form of drug testing. Europe represents the next most developed
marketplace, in particular the UK and Sweden. However, it is significantly less
developed than the US with only 4 per cent. of UK companies estimated to test
for drugs of abuse. The Concateno Directors believe that, with increasing
legislation and regulation, the European market will follow the trend shown in
the US and so represents a considerable growth opportunity.
The following provides an overview of the businesses acquired by Concateno to
date.
Medscreen
On 6 November 2006, Concateno completed the acquisition of Medscreen, a global
provider of drug and alcohol testing services, for a total consideration of #30
million. Medscreen is a global provider of legally defensible drug and alcohol
testing services, providing management solutions for the problems that drugs and
alcohol bring to the workplace. Medscreen's testing and analytical procedures
are based on urine testing and it has implemented UKAS ISO17025 accreditation
for its laboratory, based in Canary Wharf in London. Medscreen has over 800
customers worldwide with approximately 50 per cent. of turnover in the year
ended 31 December 2006 being derived from the international maritime sector and
its largest customer by sales is Her Majesty's Prison Service.
In the year ended 31 December 2006 Medscreen reported audited turnover of #8.5
million and EBITDA of #2.0 million.
Tricho-Tech
On 31 January 2007 Concateno completed the acquisition of Tricho-Tech for a
total consideration of #11.25 million. Tricho-Tech's Cardiff based laboratory is
focused on detecting drugs of abuse, principally through testing hair samples.
Tricho-Tech's specialist toxicology expertise and know-how significantly
differentiates them from their competitors, with the capability to test 14 drug
groups and over 40 analytes. They have a broad customer base of over 3,000
clients principally in the police force and family services sector with
international sales in Brazil, Australia and New Zealand.
Tricho-Tech has generated sales of #3.1m in the year ended 31 December 2006 and
EBITDA of #0.9 million.
Altrix
On 5 February 2007 Concateno acquired Altrix for a total consideration of
approximately #11 million plus #0.7 million of net cash on the Altrix balance
sheet and cash of approximately #1.9 million receivable by Altrix on exercise of
options. Altrix specialises in the provision of drug testing solutions to
criminal justice and drug treatment services to help them to manage problem drug
users from its laboratory in Warrington. Altrix has exclusive distribution
rights in the UK and the Republic of Ireland to Intercept and OraSure, being
oral fluid sample collection technologies.
Revenue for the year ended 30 September 2006 was #5.3 million, generating
operating profit before exceptional items of #0.7 million.
Euromed
On 30 March 2007, Concateno acquired Euromed for a total consideration of #11.5
million. Euromed is a provider of point of care testing devices and services for
the detection of drugs of abuse primarily in the criminal justice and
rehabilitation sectors. Euromed has distribution rights for Innovacon rapid
diagnostic testing kits in the UK and Ireland. The acquisition of Euromed
extended Concateno's existing product range to point of care testing.
Euromed had sales of approximately #3.3 million in the year ended 31 March 2007,
generating EBITDA of #0.1 million.
Infill acquisitions
Since May Concateno has completed two smaller acquisitions. On 22 May 2007
Concateno completed the acquisition of Marconova AB, a Swedish drug and alcohol
testing business, which established a presence in the Scandinavian market. On 13
July 2007 Concateno completed the acquisition of CPL International Services
Limited, a business that provides initial screening of samples for alcohol and
drugs of abuse and a full range of immunisation and medical examinations.
8 Financing of the Offer
The cash consideration payable under the Offer will be funded by a combination
of the proceeds of the Placing, the Marwyn Bridging Loan and the extension of
existing Debt Facilities. There is a total fundraising requirement of #70.5
million, inclusive of approximately #5.0 million estimated deal costs. The
equity component of the fundraising will be completed within Concateno's
authorised share capital.
Concateno will raise, conditional inter alia upon the Offer becoming or being
declared unconditional in all respects and upon Admission, approximately #53.7
million (before expenses) by the issue of up to 41,323,296 Placing Shares to
institutional and other investors at the Placing Price, which represents a 9 per
cent. discount to Concateno's share price on 3 September 2007, the last business
day before the commencement of the Offer Period. At the date of this
announcement Collins Stewart has procured committed placees for 34,615,380 of
the available Placing Shares representing approximately #45.0 million and Marwyn
has agreed under the Marwyn Bridging Loan to provide further funding either by
way of loan or subscription for Placing Shares up to an aggregate amount of
approximately #8.7 million. Further details are set out in paragraph 9 below.
Further marketing of the Placing will continue after the date of this
announcement and any successful take up will reduce the above mentioned
commitments. The Placing is fully underwritten by Collins Stewart including any
Placing Shares taken up by placees (and by Marwyn under the terms of the Marwyn
Bridging Loan). The net proceeds of the Placing together with the Marwyn
Bridging Loan (if required) are estimated to be approximately #51.0 million and
will be used to fund a portion of the cash consideration payable for the Offer,
including the costs associated with the Offer. In addition, Dr Christopher Hand
will roll over 3,095,160 of his holding of Cozart Shares into Concateno Shares
at the Placing Price. This will result in the issue to him of 1,369,013
Concateno Shares under the Incentive Arrangements as set out in paragraph 12,
reducing the fundraising requirement for the Offer by #1.8 million. Application
will be made for the Placing Shares and shares to be allotted to Dr. Christopher
Hand to be admitted to trading on AIM. The expected date of Admission and the
anticipated date of commencement of dealings in the Placing Shares and the
shares to be allotted to Dr. Christopher Hand will be conditional, inter alia,
upon the date on which the Offer becomes unconditional in all respects.
Concateno will also use an extension of existing Debt Facilities by #15 million
to fund part of the cash consideration payable under the Offer and the costs
associated with the Offer.
Collins Stewart, the financial adviser to Concateno, is satisfied that the
actions detailed above will enable Concateno to satisfy acceptance of the cash
consideration payable under the Offer in full. The sources of finance for the
Offer will be described in more detail in the Offer Document.
9 Related Party Disclosure
Pursuant to AIM Rule 13, Marwyn, a 16 per cent shareholder in Concateno and a
related party by virtue of its relationship with James Corsellis, Managing
Partner of Marwyn Investment Management LLP, the investment manager of Marwyn,
and non-executive director of Concateno, has agreed to underwrite #20m of the
cash consideration payable under the Offer in return for a 1 per cent.
underwriting fee. The underwriting period will run from the day of this
announcement up to 24 December 2007 at the latest. Upon the Offer being
announced, it is envisaged that up to #10.0m of the underwriting commitment from
Marwyn will be marketed to other shareholders with a view to reducing the
overall underwriting commitment of Marwyn. In addition, Marwyn has entered into
the Marwyn Bridging Loan. Pursuant to that instrument, Marwyn has agreed to make
available to Concateno an amount up to #8.7 million to fund the Offer. This
amount will also be marketed to other existing and potential Concateno
shareholders, with a view to reducing the commitment of Marwyn under this
instrument. However in the event that the commitment is not taken up through the
marketing, Marwyn must provide these funds by way of a subscription for up to
6,707,916 Placing Shares in Concateno at the Placing Price unless it acts to
make these amounts available by way of a loan. Under the loan agreement,
interest will accrue on the loan on a daily basis at a rate of 15 per cent. per
annum payable at maturity on 1 January 2010. It is convertible in whole or in
part to equity in Concateno at the lower of the Placing Price and a 10 per cent.
discount to the 90 day volume weighted average price at the option of either
Concateno or the holder. Marwyn is entitled to transfer its rights under this
loan. Marwyn shall not be entitled to subscribe for shares in Concateno under
the Marwyn Bridging Loan to the extent that to do so would result in it
incurring an obligation under Rule 9 of the Code to make a mandatory offer for
Concateno. Marwyn will be entitled to receive an arrangement fee of #87,202.91,
which represents 1% of the amount. With the exception of Mr. Corsellis, the
Concateno Directors consider, having consulted with Collins Stewart, Concateno's
nominated adviser, that the terms of the transactions between Marwyn and
Concateno, are fair and reasonable in so far as its shareholders are concerned.
10 Information on Cozart
Cozart is a medical diagnostics company founded in 1993 and focused on building
a leading position in the global drugs of abuse market. Cozart supplies an
international customer base with its point of care testing products, laboratory
services and forensic testing kits in the criminal justice (e.g. police forces,
probation services and prisons), healthcare (e.g. hospitals and drug dependency
clinics), workplace (e.g. pre-employment, random and 'for cause' testing) and
roadside segments. Cozart manufactures and markets immunodiagnostic and other
testing equipment for detection of drugs of abuse. Cozart's major contract in
the criminal justice segment is with the Home Office.
Cozart provides leading-edge technology solutions to its customers through
continued innovation of its product and service portfolio. Cozart currently
supplies the Cozart(R) DDS and Rapiscan systems, portable devices used for the
on-site testing of drugs of abuse in saliva samples and is working with Philips
to develop the next generation of point of care drug testing analysers. The
current Cozart portable devices are used by the Home Office, primarily in its
Drug Interventions Programme, and within the police forces. Out of roughly 600
police custody sites Cozart's Rapiscan device is used in 173 sites. Of the 173
sites, 160 utilise the Rapiscan device to test for drugs of abuse on arrest. The
Cozart Directors anticipate an expansion in the use of Cozart's products within
the police forces.
In June 2007 Cozart announced that, after completing the 18 month joint
development agreement signed in January 2006 with Philips, they had signed a
commercialisation agreement for a new biosensor device. The aim of the
commercialisation agreement is to develop a hand-held drugs of abuse biosensor
testing device to be used at the roadside. The biosensor in development is
intended to test for eight major classes of drugs of abuse in under one minute,
compared to the current device which tests for five major classes of drugs of
abuse in five minutes. Development work has shown the biosensor technique to be
100 times more sensitive than current Cozart leading edge systems. Under the
terms of the commercialisation agreement Philips will be responsible for the
manufacture of the product and Cozart will be responsible for sales, marketing
and distribution within the drugs of abuse testing sector.
11 Current Trading and Prospects of Cozart
Cozart today announces its results for the year ending 31 May 2007. Further
details will be set out in the Offer Document and a summary of the results is
set out below.
2007 2006
#m #m
Turnover 16.9 11.1
Adjusted profit before tax 1.6 0.5
Scandinavian restructuring costs (0.2) -
Goodwill amortisation (0.3) (0.2)
Reported profit before tax 1.1 0.3
Retained profit for the year 0.9 0.2
Basic and diluted EPS (pence) 0.81 0.16
The Cozart Directors are pleased to announce a 52 per cent. increase in revenue
to #16.9m (2005/6: #11.1m), with gross profit of #8.7m (2005/6: #5.9m), reported
profit before tax of #1.1m (2005/6: #0.3m) and adjusted (before goodwill
amortisation and Scandinavian restructuring costs) profit before tax trebling to
#1.6m (2005/6: #0.5m). Net funds as at 31 May 2007 were #0.1m (2006: #0.8m) with
cash and current asset investments of #3.6m (2006: #4.4m).
The strong increase in revenues was driven both by continued organic growth
(2006/7: 23 per cent., 2005/6: 23 per cent.) and the impact of the acquisitions
of HL Scandinavia AB, Nemesis and a full year's contribution from Spinreact. The
net funds position of #0.1m (2006: #0.8 m) was augmented after the end of the
period by the #1.9m investment by Philips in the Company in June 2007 through
the exercise of its share option.
Cozart has made a solid start to the new financial year and is trading in line
with management's expectations. The recent contract wins that Cozart has
announced, including the Home Office Laboratory Confirmations contract, provides
the Cozart Group with a solid platform for the next financial year. In addition,
Cozart announced in June 2007 the signing of the commercialisation agreement
with Philips to manufacture and market the next generation drug testing system,
which represents a significant milestone for the Cozart Group. It is intended
that the new product will be launched by mid 2009.
12 Directors and Employees
Concateno recognises the skills, technical ability and experience of the
existing management and employees of Cozart Group. The Concateno Board has given
assurances to the Independent Directors that, if the Offer becomes or is
declared unconditional in all respects, the existing employment rights,
including pension rights, of all management and employees of Cozart will be
fully safeguarded. Concateno has confirmed that its plans for Cozart do not
involve any immediate change in the conditions of employment of Cozart
employees. However, in the future, Concateno may look to harmonise the terms and
conditions of employment of the Cozart employees with those of the existing
Concateno Employees. If that occurs, Concateno intends for all employees to
continue to enjoy terms and conditions that overall are no less favourable than
those that currently apply.
The Chairman and Non-Executive Directors of Cozart intend to resign from the
Board of Cozart when the Offer becomes or is declared unconditional in all
respects and agree to waive entitlements against Cozart.
Dr. Christopher Hand, Philip Hand and Christopher Yates will all resign as
executive directors of Cozart on the Offer becoming unconditional in all
respects and have entered into severance agreements with Cozart in respect of
their roles as executive directors of Cozart.
Philip Hand has entered into a consultancy agreement with Concateno, whereby,
conditional upon the Offer becoming unconditional in all respects, he will
provide consulting services as required, in particular in relation to the joint
venture with Philips.
Dr. Christopher Hand, current Chief Executive of Cozart and proposed
Non-Executive Director of Concateno, currently owns 15,475,779 issued ordinary
shares in the capital of Cozart. It has been proposed that, upon completion of
the Acquisition, he will: (i) roll over 20 per cent. of his current holding of
Cozart Shares, being 3,095,160 Cozart Shares, into new Concateno Shares and (ii)
enter into an agreement to become a non-executive director of Concateno (the "
Incentive Arrangements").
The proposed appointment of Dr. Hand (which is subject to formal ratification
by the nomination committee and the Board of Concateno) is initially for a
period of 1 year, and is terminable by either party on 3 months' written
notice.
Dr. Hand will be required to commit a minimum of 10 days per annum to this role
in return for which he will receive a fee of #40,000 gross (this will include
attendance at board meetings, the annual general meeting of Concateno, any
extraordinary general meeting convened by Concateno and at least one site visit
per year). For any time that he dedicates to this role in excess of 10 days per
annum, he will receive a further fee at a rate of #1,000 gross per 8 hour day.
Dr Hand's primary duty will be to oversee and ensure the effective development
and operation of the collaboration agreement entered into between Cozart and
Philips on 27 July 2007 concerning the manufacture and marketing of a new
biosensor system for drug testing. In addition he will be the representative of
the steering committee on the Concateno Board.
Dr. Hand will be subject to certain restrictions in relation to the use of
confidential information, competing with Concateno during the term of his
appointment and share dealing. It also includes post termination restrictions
preventing him from seeking to do business with customers of Concateno or
enticing away employees of Concateno (in both cases the restrictions apply only
in respect of customers/employees with whom he has material dealings) which
remain in place for 12 months following the termination of his non-executive
directorship.
In addition, Dr Hand will enter into an agreement with Concateno pursuant to
which he will agree that he will not sell the 1,369,013 Concateno Shares that he
will receive as a result of rolling over 20 per cent. of his Cozart Shares, for
a period of 6 months following their admission to trading on AIM.
The Panel requires these Incentive Arrangements to be approved by Independent
Cozart Shareholders at a general meeting of Cozart and the Offer is conditional
on such approval being obtained. Accordingly, an extraordinary general meeting
of Cozart will be convened at which an ordinary resolution will be proposed to
approve the Incentive Arrangements. Notice of the Extraordinary General Meeting
will be set out in the Offer Document. Voting on the Resolution will be on a
poll and Dr. Christopher Hand will not be entitled to vote.
Numis as Rule 3 adviser to the Independent Cozart Directors for the purpose of
the Code considers the Incentive Arrangements to be fair and reasonable.
Dene Baldwin will remain with the Enlarged Group as Technical Director of the
Cozart business. The terms of his employment will remain unchanged.
Further details of the arrangements involving the Cozart Directors will be set
out in the Offer Document.
13 Cozart Share Option Scheme
The Offer extends to any Cozart Shares which are issued or unconditionally
allotted and fully paid (or credited as fully paid) whilst the Offer remains
open (or, subject to the Code, by such earlier date as Concateno may decide),
including any such Cozart Shares allotted or issued pursuant to the exercise of
Cozart Share Options. By the date on which the Offer becomes or is declared
wholly unconditional, the Cozart Share Options will be exercisable regardless of
performance conditions, which will have been waived by the Concateno Directors.
To the extent that Cozart Share Options have not been exercised in full before
the date on which the Offer becomes or is declared wholly unconditional,
Concateno will make appropriate proposals to Cozart Share Option Holders in due
course. The Offer Document will contain further details of the actions that
Cozart Share Option Holders may take with regard to existing Cozart Share
Options.
14 Disclosure of interests in relevant securities of Cozart
As at 4 September 2007, being the latest practicable date prior to publication
of this announcement, save in respect of the Cozart Shares which are the
subject of the irrevocable undertakings described in paragraph 4 above, neither
Concateno, nor any of the Concateno Directors, nor (so far as the Concateno
Directors are aware having made due and careful enquiry) any person acting, or
deemed to be acting, in concert with Concateno, nor any person who is a party to
an arrangement of a kind referred to in Note 6 on Rule 8 of the City Code
relating to relevant securities with Concateno or any person acting, or
presumed to be acting, in concert with Concateno:
(i) had an interest in, or a right to subscribe for, relevant securities of Cozart;
(ii) engaged in any dealing in relevant securities of Cozart during the disclosure period;
(iii) had any short position in, was party to any agreement to sell, or was subject to any delivery obligation in
respect of, or had the right to require another person to purchase or take delivery of, relevant
securities of Cozart;
(iv) had procured an irrevocable commitment or letter of intent to accept the Offer in respect of relevant
securities of Cozart; or
(v) had borrowed or lent any relevant securities of Cozart (except for any borrowed shares which have been
either on-lent or sold).
15 Cancellation of admission to trading on AIM and compulsory
acquisition
The Offer is for the entire issued and to be issued share capital of Cozart. It
is conditional, inter alia, upon acceptance by Cozart Shareholders who together
own 75 per cent. of the issued share capital of Cozart. Irrevocable undertakings
to accept the Offer representing 52 per cent. of the Cozart Shares have been
received.
Non-accepting Cozart Shareholders should note that, if the Offer is declared
wholly unconditional, Concateno wishes to cancel the admission of the Cozart
Shares to trading on AIM. There will no longer be a market for Cozart Shares
once such cancellation has taken place. It is further proposed that, following
the Offer becoming wholly unconditional, and after the admission to trading of
Cozart Shares on AIM is cancelled, Concateno will seek to re-register Cozart as
a private limited company.
Should Concateno acquire or have contracted to acquire not less than 90 per
cent. in value of all the Cozart Shares to which the Offer relates and not less
than 90 per cent. of the voting rights attaching to the Cozart Shares to which
the Offer relates then Concateno will give notice to Cozart Shareholders who
have not accepted the Offer that it desires to acquire their Cozart Shares on
the terms of the Offer. On the giving of such a notice, subject to the
provisions of the Companies Act 2006, Concateno is bound to acquire and the
relevant Shareholders are bound to sell such Cozart Shares on those terms.
16 Other Information
Pursuant to the Placing Agreement, Concateno shall:
(a) not declare the Offer unconditional as to acceptances at a level of
acceptances of less than seventy five per cent. of Cozart Shares to which the
Offer relates without the prior written consent of Collins Stewart;
(b) save to the extent required by the Panel, not without the prior written
consent of Collins Stewart, (i) make any alteration to the material terms and/or
conditions of the Offer or take or permit to be taken any step as a result of
which such terms and/or conditions are, or may be required to be, altered or,
(ii) waive any material condition of the Offer in whole or in part, unless
required to do so by the Panel or where such condition is a "negative" condition
not capable of satisfaction by any action on the part of Concateno or any member
of the Concateno Group or the Cozart Group and such condition has not been
breached or where the Panel does not permit Concateno to rely on such "negative"
condition to terminate or withdraw the Offer; and
(c) notify Collins Stewart in writing as soon as reasonably practicable upon it
becoming aware of any circumstance or event which is covered by a condition of
the Offer which, if not waived, would entitle it, with the consent of the Panel
if needed, to lapse the Offer and it shall, if so required by Collins Stewart
and subject to Concateno's obligations under the Facilities Agreement, promptly
make such representations to the Panel as Collins Stewart may reasonably deem
necessary to obtain such consent.
Pursuant to the Facilities Agreement being made available by Barclays Bank PLC
(the "Bank"), Concateno:
(a) shall procure that, save to the extent required by the Panel, no material
condition of, or amendment to any material term or condition of, the Offer is
waived or made by it, unless Barclays Bank PLC (in its capacity as agent) has
given its prior written consent; and
(b) shall not, without the prior written consent of the Bank (in its capacity as
agent), declare the Offer unconditional as to acceptances at a level of
acceptances of less than 75 per cent. in value of the Cozart Shares to which the
Offer relates.
Save as disclosed in this announcement, there are no agreements or arrangements
to which Concateno is a party which relate to the circumstances in which it may
or may not invoke or seek to invoke a condition to the Offer.
17 General
Your attention is drawn to the further information contained in the Appendices
which form part of this announcement.
The summaries of further terms in relation to the Offer set out in Appendix A to
this announcement form part of, and should be read in conjunction with, this
announcement.
Appendix B to this announcement provides details of the bases of calculations
and sources of certain information included in this announcement.
Appendix C to this announcement contains details of the irrevocable undertakings
received in relation to the Offer.
Appendix D to this announcement contains definitions of certain terms used in
this announcement.
The Offer will be subject to the applicable requirements of the City Code. The
formal Offer Document, setting out details of the Offer, and, in the case of
Cozart Shareholders holding Cozart Shares in certificated form, the Form of
Acceptance, is expected to be dispatched to Cozart Shareholders shortly and, in
any event, within 28 days of the date of this announcement unless the Panel
otherwise consents. This announcement does not constitute an offer or an
invitation to purchase any securities.
This announcement is not intended to and does not constitute or form any part
of, an offer to sell or an invitation to purchase or the solicitation of an
offer to subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will
be made solely through the Offer Document and in the case of certificated
Cozart Shares, the Form of Acceptance, which will together contain the full
terms and conditions of the Offer, including details of how to accept the
Offer. Any acceptance or other response to the Offer should be made only on the
basis of the information contained in the Offer Document and, in the case of
certificated Cozart Shares, the Form of Acceptance. The making of the Offer
in, or to persons resident in, or to nationals or citizens of, jurisdictions
outside the United Kingdom or to nominees of, or custodians or trustees for,
citizens or nationals of other countries ("Overseas Shareholders") may be
prohibited or affected by the laws of the relevant jurisdictions. It is the
responsibility of such Overseas Shareholders to inform themselves about and
observe any applicable legal requirements. No person receiving a copy of the
Offer Document and/or a Form of Acceptance in any jurisdiction other than the UK
may treat the same as constituting an invitation or offer to him, nor should he
in any event use such Form of Acceptance, if, in the relevant jurisdiction,
such invitation or offer cannot lawfully be made to him or such Form of
Acceptance cannot lawfully be used without contravention of any relevant or
other legal requirements. In such circumstances, the Offer Document and/or Form
of Acceptance are sent for information only. It is the responsibility of such
Overseas Shareholder receiving a copy of the Offer Document and/or Form of
Acceptance and wishing to accept the Offer to satisfy himself as to the full
observance of the laws and regulatory requirements of the relevant jurisdiction
in connection with the Offer, including obtaining any governmental, exchange
control or other consents which may be required, and compliance with other
necessary formalities needing to be observed and payment of any issue, transfer
or other taxes or duties due in such jurisdiction. Any such Overseas
Shareholder will be responsible for any such issue, transfer or other taxes or
duties by whomsoever payable and Concateno (and any person acting on behalf of
Concateno) shall be fully indemnified and held harmless by such Overseas
Shareholder for any such issue, transfer or other taxes or duties or other
requisite payments as Concateno (and any person acting on behalf of Concateno)
may be required to pay.
The distribution of this announcement in jurisdictions other than the UK may be
restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about, and observe any
applicable requirements. In particular, the Offer is not being made, directly or
indirectly, in the United States, Canada, Australia, the Republic of South
Africa or Japan. This announcement has been prepared for the purpose of
complying with English law and the City 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 England.
Collins Stewart Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Concateno
and for no-one else in connection with the Offer and will not be responsible to
anyone other than Concateno for providing the protections afforded to clients of
Collins Stewart Europe Limited nor for providing advice in relation to the
Offer, the contents of this announcement or the Form of Acceptance.
Numis Securities Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Cozart
and for no-one else in connection with the Offer and will not be responsible to
any person other than Cozart for providing the protections afforded to customers
of Numis Securities Limited, nor for providing advice in relation to the Offer,
the contents of this announcement or the Form of Acceptance.
Concateno reserves the right to elect to implement the acquisition of Cozart by
way of a scheme of arrangement under section 425 of the Companies Act. Further
details are set out in Appendix A.
Enquiries:
Concateno plc Tel: +44 (0)20 7004 2800
Keith Tozzi, Chairman
Fiona Begley, Chief Executive Officer
Collins Stewart (financial adviser and broker to Tel: +44 (0)20 7523 8350
Concateno)
Seema Paterson
Piers Coombs
Financial Dynamics (Concateno public relations) Tel: +44 (0)20 7831 3113
Billy Clegg
Edward Westropp
Cozart Tel: +44 (0)1235 861 483
Sir Brian Richards, Chairman
Dr. Christopher Hand, Chief Executive Officer
Chris Yates, Finance Director
Numis Securities Limited (financial adviser and Tel: +44 (0)20 7260 1200
broker to Cozart)
Michael Meade
James Black
Financial Dynamics (Cozart public relations) Tel: +44 (0)20 7269 7242
Ben Atwell
Appendix A: Conditions of the Offer
The Offer is subject to the following conditions:
Acceptances
1. valid acceptances being received (and not, where permitted,
withdrawn) by 1.00 p.m. (London time) on the First Closing Date (or such later
time(s) and/or date(s) as Concateno may, subject to the rules of the Code,
decide), in respect of not less than 75 per cent. in nominal value (or such
lesser percentage as Concateno may decide) of the Cozart Shares to which the
Offer relates and that represent not less then 75 per cent. (or such lower
percentage as Concateno may decide) of the voting rights carried by the Cozart
Shares to which the Offer relates, provided that this condition shall not be
satisfied unless Concateno and/or its wholly owned subsidiaries shall have
acquired or agreed to acquire, whether pursuant to the Offer or otherwise,
Cozart Shares carrying, in aggregate, more than 50 per cent. of the voting
rights normally exercisable at general meetings of Cozart, including for this
purpose (to the extent, if any, required by the Panel) any such voting rights
attaching to any Cozart Shares that are unconditionally allotted or issued
before the Offer becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any subscription rights, conversion rights or
otherwise. For the purposes of this condition:
1.1 the expression "Cozart Shares to which the Offer relates"
shall be construed in accordance with sections 974-991 of the Companies Act
2006;
1.2 Cozart shares which have been unconditionally allotted but not
issued before the Offer becomes or is declared unconditional as to acceptances,
whether pursuant to the exercise of any outstanding subscription or conversion
rights or otherwise, shall be deemed to carry the voting rights they will carry
upon issue; and
1.3 valid acceptances shall be deemed to have been received in
respect of Cozart Shares which are treated for the purposes of section 977 and
sections 979 (8) to (10) of the 2006 Act as having been acquired or contracted
to be acquired by Concateno by virtue of acceptances of the Offer;
2. the passing on a poll of an ordinary resolution by the
Independent Shareholders at an extraordinary general meeting (or any adjournment
thereof) of Cozart to approve the Incentive Arrangements between Concateno and
Dr Christopher Hand required to be approved pursuant to Rule 16 of the Code;
3. the London Stock Exchange agreeing to admit to trading on
AIM the Placing Shares and (unless or to the extent the Panel agrees otherwise)
such admission becoming effective in accordance with paragraph 6 of the AIM
Rules or (if determined by Concateno and subject to the consent of the Panel)
agreeing to admit such shares to trading on AIM subject only to (i) the
allotment of such shares and/or (ii) the Offer becoming or being declared
unconditional in all respects save with respect to this condition;
4. the Office of Fair Trading not having referred, or
indicated to Concateno, prior to the date when the Offer would otherwise have
become or been declared unconditional, that the Office of Fair Trading intends
or is reasonably likely to refer the Acquisition, or any matters arising
therefrom, to the Competition Commission pursuant to section 33 of the
Enterprise Act 2002;
5. no government or governmental, quasi governmental,
supranational, statutory or regulatory or investigative body or trade agency,
professional body, association, institution or environmental body or any court
or other body or person whatsoever in any jurisdiction having taken, instituted
or threatened or indicated that it intends to take, institute or threaten and
there not continuing to be outstanding, any action, proceedings, suit,
investigation, enquiry or reference or having enacted, made or proposed any
statute, regulation or order or taken any other steps that would or might
reasonably be expected to:
5.1 make the Offer or the acquisition of any Cozart Shares, or the
acquisition by Concateno or member of Concateno Group of any shares in or
control of Cozart, void, unenforceable or illegal or directly or indirectly
restrict, prohibit, delay or otherwise adversely interfere with the
implementation of, or impose additional conditions or obligations with respect
to, or otherwise challenge the Offer or the acquisition of any Cozart Shares or
the acquisition of control of Cozart;
5.2 require or prevent or delay a divestiture by any member of the
Concateno Group of any Cozart Shares;
5.3 require or prevent or delay the divestiture or alter the terms
of any proposed divestiture by any member of the Wider Concateno Group or by the
Wider Cozart Group of all or any material part of their respective businesses,
assets or property or impose any material limitation on the ability of any of
them to conduct all or any material portion of their respective businesses or to
own all or any material portion of their respective assets or property;
5.4 impose any material limitation on the ability of the Wider
Concateno Group or of the Wider Cozart Group to acquire or hold or to exercise
effectively, directly or indirectly, all or any rights of ownership in respect
of shares or loans or securities convertible into shares or the equivalent in
any member of the Wider Cozart Group or the Wider Concateno Group respectively
or to exercise management control over any such member;
5.5 save as pursuant to the Offer or section 979 of the 2006 Act
require any member of the Wider Concateno Group or any member of the Wider
Cozart Group to offer to acquire directly or indirectly any shares in any member
of the Wider Cozart Group owned by any third party; or
5.6 affect adversely the business profits or prospects of any
member of the Wider Concateno Group or any member of the Wider Cozart Group to
an extent which is material in the context of respectively the Wider Concateno
Group taken as a whole or the Wider Cozart Group taken as a whole;
5.7 and all applicable waiting and other time periods during which
any such government, governmental, quasi-governmental, supranational, statutory
or regulatory or investigative body or trade agency, professional body,
association, institution or environmental body or court or body or person could
decide to take, implement, threaten or institute any such action, proceedings,
suit, investigation, enquiry or reference under the laws of any jurisdiction
having expired, lapsed or been terminated;
6. all necessary filings having been made in respect of the
Offer and all required authorisations, orders, grants, recognitions,
confirmations, consents, clearances, licences, permissions, exemptions and
approvals necessary or appropriate or required for or in respect of the Offer or
the proposed acquisition of any shares in, or control of, Cozart by the
Concateno Group being obtained on terms and in a form satisfactory to Concateno
(acting reasonably) from all appropriate governments, governmental, quasi
governmental, supranational, statutory or regulatory, or investigative bodies,
trade agencies, professional bodies, associations, institutions, environmental
bodies and courts, and from persons or bodies with whom any member of the
Concateno or Cozart Group has entered into contractual arrangements that are
material in the context of the Wider Cozart Group or the Wider Concateno Group,
in each case taken as a whole, where the absence of such would have a material
adverse effect on the Concateno Group or the Cozart Group as the case may be and
all such authorisations, orders, grants, recognitions, confirmations, consents,
clearances, licences, permissions, exemptions and approvals remaining in full
force and effect at the time at which the Offer becomes otherwise unconditional
in all respects and no intimation or notice of any intention to revoke, suspend,
restrict, modify or not renew any of the same having been received and all
necessary filings having been made and all appropriate waiting periods
(including any extension thereof) under any applicable legislation and
regulations in any jurisdiction having expired, lapsed or been terminated, in
each case as may be necessary in connection with the Offer under the laws or
regulations of any jurisdiction and all necessary statutory or regulatory
obligations in any jurisdiction having been complied with;
Consequences of the Offer
7. save as Disclosed there being no provision of any,
agreement, arrangement, licence, permit or other instrument to which any member
of the Wider Cozart Group is a party or by or to which any such member or any of
their assets may be (or may become) bound, entitled or be subject which might
reasonably be expected to result in, in each case, as a consequence of the Offer
or of the acquisition or proposed acquisition of all or any part of the issued
share capital of or change of control or management of Cozart or any member of
the Cozart Group, or otherwise, (in each case to an extent which is material and
adverse in the context of the Wider Cozart Group taken as a whole):
7.1 any monies borrowed by, or any other indebtedness (actual or
contingent) of, or any grant available to, any member of the Wider Cozart Group
being or becoming repayable or capable of being declared repayable immediately
or earlier than the repayment date stated in such agreement, arrangement,
licence, permit or other instrument, or the ability of any member of the Wider
Cozart Group to borrow monies or incur any indebtedness being withdrawn or
inhibited;
7.2 any such agreement, arrangement, licence, permit or other
instrument or the rights, liabilities, obligation or business or interests of
any such member under it being or becoming capable of being terminated or
adversely modified or affected or any onerous obligation arising or any adverse
action being taken or arising thereunder;
7.3 the interests or business of such of the Wider Cozart Group
member in or with any other person, firm, company or body (or any arrangements
relating to such interests or business) being terminated, modified or adversely
affected;
7.4 any assets or interests, or any asset the use of which is
enjoyed by any member of the Cozart Group being or falling to be disposed of or
charged in any way or ceasing to be available to any member of the Wider Cozart
Group or any rights arising under which any such asset or interest could be
required to be disposed of or charged in any way or could cease to be available
to any member of the Wider Cozart Group;
7.5 the creation of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
member of the Wider Cozart Group, or any such security (whenever arising or
having arisen) becoming enforceable or being enforced;
7.6 the value or financial or trading position or prospects of any
member of the Wider Cozart Group being prejudiced or adversely affected;
7.7 any member of the Wider Cozart Group ceasing to be able to
carry on business under any name under which, or on the terms on which, it
currently does so or any person presently not able to carry on business under
any name under which any member of the Wider Cozart Group currently does
becoming able to do so;
7.8 the creation of actual or contingent liabilities by any member
of the Wider Cozart Group other than trade creditors in the ordinary course of
business;
7.9 any liability of any member of the Wider Cozart Group to make
any severance, termination, bonus or other payments to any of its directors or
other officers;
7.10 the Offer, their implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control of, Cozart by any
member of the Wider Concateno Group being or becoming void, illegal and/or
unenforceable under the laws of any jurisdiction, or would otherwise directly or
indirectly prohibit, or restrain, restrict, materially delay or otherwise
interfere with the implementation of, or impose additional material conditions
or obligations with respect to, or otherwise challenge or require amendment of
the Offer or the acquisition of any such shares or securities by any member of
the Wider Concateno Group; or
7.11 the imposition of any limitation on, or material delay in, the
ability of any member of the Wider Concateno Group directly or indirectly to
acquire or hold or to exercise effectively all or any rights of ownership in
respect of shares or other securities in Cozart or on the ability of any member
of the Wider Cozart Group or any member of the Wider Cozart Group directly or
indirectly to hold or exercise effectively any rights of ownership in respect of
shares or other securities (or the equivalent) in, or to exercise management
control over, any member of the Wider Cozart Group;
7.12 a divestiture by any member of the Wider Concateno Group of any
shares or other securities (or the equivalent) in Cozart being required,
prevented or materially delayed;
7.13 the imposition of any material limitation on the ability of any
member of the Wider Concateno Group or any member of the Wider Cozart Group to
integrate or co ordinate all or any part of its business with all or any part of
the business of any other member of the Wider Concateno Group and/or the Wider
Cozart Group,
the ability of any member of the Wider Cozart Group to carry on its business
being materially adversely affected;and no event having occurred which, under
any provision of any agreement, arrangement, license, permit, lease or other
instrument to which any member of the Wider Cozart Group is a party, or by or to
which any such member, or any of its assets, may be bound, entitled or subject,
could result, to an extent which is material in the context of the Offer or, as
the case may be, in the context of the Wider Cozart Group taken as a whole, in
any of the events or circumstances as are referred to in subparagraphs 7.1 to
7.14 inclusive.
Corporate Action
8. since 31 May 2006, save as Disclosed, no member of the
Wider Cozart Group having:
8.1 issued or authorised or proposed the issue of additional
shares of any class, or securities convertible into or exchangeable for, or
rights, warrants or options to subscribe for or acquire, any such shares or
securities or redeemed, purchased or reduced any part of its share capital save
as between Cozart and wholly??owned subsidiaries of Cozart prior to and save for
options granted and for any Cozart Shares allotted upon exercise of options
granted under the Cozart Share Option Scheme; or
8.2 approved, recommended, declared, paid or made or proposed to
declare, pay or make any bonus, dividend or other distribution whether payable
in cash or otherwise other than to Cozart or any wholly owned subsidiary of
Cozart;
8.3 save as between a wholly??owned subsidiary of Cozart and
Cozart or another wholly??owned subsidiary of Cozart entered into, implemented,
effected or authorised or announced its intention to enter into any merger,
demerger, reconstruction, amalgamation, scheme, or other similar commitment,
transaction or arrangement otherwise than in the ordinary course of business;
8.4 redeemed, purchased, repaid, reduced or agreed to the
redemption, purchase, repayment or reduction of any part of its share capital or
made or approved the making of any other change to its share or loan capital;
8.5 issued, authorised or proposed the issue of any debentures or
(save in the ordinary course of business) incurred or increased any borrowings,
indebtedness or liability (actual or contingent);
8.6 entered into, varied or authorised or approved the entry into
or variation of, or announced its intention to enter into or vary, any
transaction, arrangement, contract or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, onerous or unusual nature or
magnitude or which involves or could involve an obligation of such nature or
magnitude or which is or could reasonably be expected to be a material adverse
restriction on the business of any member of the Wider Cozart Group or which is
other than in the ordinary course of business;
8.7 entered into any contract, transactions or arrangement which
would be restrictive on the business of any member of the Wider Cozart Group and
would have a material effect on the business of the Wider Cozart Group taken as
a whole; or
8.8 entered into or varied or made any offer (which remains open
for acceptance) to enter into or vary the terms of any service agreement with
any of the directors or senior executives or any member of the Wider Cozart
Group; or
8.9 acquired, disposed of or transferred, mortgaged or charged or
encumbered or created any security interest over any asset or any right, title
or interest in any asset (including, without limitation, shares and trade
investments) or entered into any contract, reconstruction, amalgamation,
commitment or other transaction or arrangement otherwise than in the ordinary
course of business; or
8.10 waived or compromised any claim which is or could be material
and is otherwise than in the ordinary course of business;
8.11 taken or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it or petition presented for its
winding-up (voluntary or otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrator, administrative receiver, manager,
trustee or similar officer of all or any of its assets or revenues or for any
analogous proceedings or steps in any jurisdiction or for the appointment of any
analogous person or had any such person appointed in any jurisdiction; or
8.12 been unable, or admitted in writing that it is unable, to pay
its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness or has stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business; or
8.13 made any alteration to its memorandum or articles of
association; or
8.14 proposed, agreed to provide or modified the terms of any share
option scheme or incentive scheme, or other benefit relating to the employment
or termination of employment of any employee or directors of the Wider Cozart
Group; or
8.15 entered into any contract, commitment, arrangement or agreement
to, or passed any resolution or made any offer (which remains open for
acceptance) or proposed announced any intention with respect to effect any of
the transactions or events referred to in this paragraph
Other Events
9. since 31 May 2006, and save as Disclosed:
9.1 no adverse event, deterioration or change having occurred in
the business, financial or trading position or profits or assets or prospects of
any member of the Wider Cozart Group which would be material in the context of
the Wider Cozart Group taken as a whole; and
9.2 no contingent or other liability or other liability having
arisen or becoming apparent or increased to an event which is material in the
context of the Wider Cozart Group taken as a whole;
9.3 no litigation or arbitration proceedings, prosecution,
investigation, enquiry, complaint, or other legal proceedings or reference to
any relevant person having been announced, instituted, threatened or remaining
outstanding by, against or in respect of, any member of the Wider Cozart Group
or to which any member of the Wider Cozart Group is or may become a party
(whether as claimant, defendant or otherwise) which is material in the context
of the Wider Cozart Group taken as a whole; or
9.4 no steps having been taken and no omissions having been made
which are reasonably likely to result in the withdrawal, cancellation,
termination of any intellectual property or other licence held by any member of
the Wider Cozart Group which is necessary for the proper carrying on of its
business and the withdrawal, cancellation, termination or modification of which
is material and adverse in the context of the Wider Cozart Group as a whole;
Other Issues
Environmental
10. save as Disclosed, Concateno not having discovered that, to an
extent which is material in the context of the Wider Cozart Group taken as a
whole that any member of the Wider Cozart Group has not complied with all
applicable legislation or regulations or authorisations of any jurisdiction with
regard to the environment or human health or there is, or is reasonably likely
to be any liability (whether actual or contingent) or requirement or cost on the
part of any member of the Wider Cozart Group to make good, repair, reinstate or
clean up any asset or any other property or any controlled waters under any
environmental legislation, regulation, or other lawful requirement to an extent
which is material and adverse in the context of the Wider Cozart Group;
Information
11. Concateno not having discovered:
11.1 that any, financial or business or other information concerning
the Cozart Group which has been Disclosed at any time is materially misleading,
contains a material misrepresentation of fact or omits to state a fact necessary
to make the information contained therein not materially misleading or that any
contingent liability disclosed in such information would or might materially and
adversely affect directly or indirectly the business, profits or prospects of
the Wider Cozart Group and which was not subsequently corrected before the date
of this document by public announcement to a Regulatory Information Service or
privately to Concateno or its advisers; or
11.2 that any partnership, company or other entity in which, any
member of the Wider Cozart Group has an interest and which is not a subsidiary
undertaking of Cozart is subject to any liability, contingent or otherwise,
which is or might reasonably be expected to be material in the context or the
Wider Cozart Group taken as a whole, and has not been Disclosed;
11.3 any information which affects the import of any information
Disclosed (and which information was not subsequently corrected before the date
of this document by disclosure publicly by an announcement to a Regulatory
Information Service or privately to Concateno or its advisers); in each case to
an extent which is material and adverse in the context of the Wider Cozart Group
taken as a whole,
Criminal property
12. any asset of any member of the Wider Cozart Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002
(but disregarding paragraph (b) of that definition) to an extent which is
material and adverse in the context of the Wider Cozart Group taken as a whole,
Intellectual Property
13. save as Disclosed, Concateno not having discovered that:
13.1 a member of the Cozart Group is not the sole (save for
co-ownership with any other members of the Cozart Group) unencumbered legal and
beneficial owner of or does not have licensed to it (on terms that (a) are not
unusual or onerous; (b) will not be adversely affected by the acquisition by
Concateno of the Wider Cozart Group; (c) do not require the making of any
payment which is likely to have a material adverse effect on the business of the
Wider Cozart Group taken as a whole; and (d) are either perpetual and
irrevocable, or termination will not be likely to have a material adverse effect
on the business of any member of the Wider Cozart Group taken as a whole) all
intellectual property that is required or reasonably necessary for the conduct
of the business of the Wider Cozart Group in a manner in all respects similar to
the manner in which it is currently conducted; or
13.2 any member of the Wider Cozart Group has (in the 6 years prior
to 5 September 2007) infringed in any material respect any intellectual property
of any third party, or is or has been alleged to have done so; or
13.3 there has been (in the 6 years prior to 5 September 2007)
material unauthorised use, infringement or misappropriation of any intellectual
property of any member of the Wider Cozart Group by any third party which is
material and adverse in the context of the Wider Cozart Group taken as a whole;
or
13.4 any third party has a licence (whether express or implied,
written or unwritten) to use any intellectual property of any member of the
Wider Cozart Group, and that any third party is entitled as a result of
acquiescence on the part of any member of the Wider Cozart Group to use any
intellectual property (in each case where this would be likely to have a
material adverse effect on the business of the Wider Cozart Group) or any member
of the Wider Cozart Group; or
13.5 in the 6 years prior to 5 September 2007 any third party has
alleged or suggested that any registered intellectual property, or any material
unregistered intellectual property, of the Wider Cozart Group is or might be
invalid subject to revocation, or is not or might not be owned by Wider Cozart
Group.
References in this Appendix A to:
(i) "Disclosed" means fairly disclosed to Concateno or its advisers prior to the
Announcement Date either by inclusion in the draft annual report and accounts of
Cozart for the financial year ended 31 May 2007, or otherwise in writing or by
the delivery of an announcement by or on behalf of Cozart of an announcement to
a Regulatory Information Service; and
(ii) "intellectual property" means copyright and rights in the nature of
copyright, database rights, design rights, inventions, patents, trade marks,
domain names, software, applications for any of the above, confidential
information or any other intellectual or industrial property rights, whether or
not registered or capable of registration and whether subsisting in the United
Kingdom or any other part of the world; and "registered intellectual property"
means intellectual property which has been registered or in respect of which
registration has been applied for.
Concateno reserves the right to waive, in whole or in part, all or any of the
above conditions apart from conditions (1), (2) and (3) of this Appendix A. If
Concateno is required by the Panel to make an offer for Cozart Shares under the
provisions of Rule 9 of the Code, Concateno may make such alterations to the
above conditions, including the condition contained in paragraph (1) of this
Appendix A, as are necessary to comply with the provisions of that Rule.
Under Rule 13.4 of the Code, Concateno may only invoke a condition to the Offer
so as to cause the Offer not to proceed, to lapse or to be withdrawn where the
circumstances which give rise to the right to invoke the condition are of
material significance to Concateno in the context of the Offer. The acceptance
condition contained in paragraph 1 of this Appendix A is not subject to this
provision of the Code.
The Offer will lapse unless all the conditions set out above of this Appendix A
are fulfilled or (if capable of waiver) waived by Concateno no later than 21
days after whichever is the later of the first closing date of the Offer and the
date on which the Offer becomes or is declared unconditional as to acceptances,
or such later date as the Panel may agree. Concateno shall be under no
obligation to waive or treat as satisfied any of the conditions contained in
paragraphs (4) to (13) of this document by a date earlier than the latest date
specified above for the satisfaction thereof notwithstanding that the other
conditions of the Offer may at such earlier date have been waived or fulfilled
and that on such earlier date there are no circumstances indicating that any of
such conditions may not be capable of fulfilment.
The Offer complies with the applicable provisions of the AIM Rules and the Code,
is governed by English law and is subject to the jurisdiction of the courts of
England. In addition, it is subject to the terms and conditions as set out in
this Appendix I and to be set out in the Offer Document and, in respect of
Shareholders holding Cozart Shares in certificated form, the Form of Acceptance.
The Offer will lapse if the acquisition of Cozart is referred to the Competition
Commission before 1.00 p.m. on or before whichever is the later of the first
closing date of the Offer and the date on which the Offer becomes or is declared
unconditional as to acceptances, or such later date as the Panel may agree. In
such circumstances, the Offer will cease to be capable of further acceptance and
persons accepting the Offer and Concateno shall thereupon cease to be bound by
Forms of Acceptances and/or Electronic Acceptances delivered or submitted on or
before the date on which the Offer lapses.
Concateno has reserved the right to implement the Offer, with the written
consent of Cozart, by way of a Scheme of Arrangement, in which case additional
documents will be dispatched to Cozart Shareholders. In such event, such a
Scheme of Arrangement will (unless otherwise agreed) be implemented on the same
terms (subject to appropriate amendments, including, amongst other things,
amendments to paragraph (1) (Acceptance Condition) of Appendix A) as those which
would apply to the Offer.
Appendix B
Sources and Bases of Information
In this announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have
been used:
(a) historic share prices are sourced from the AIM appendix to the Daily Official List of the London Stock
Exchange and represent closing middle market prices for Cozart Shares on the relevant date;
(b) the value of the whole of the existing issued share capital of Cozart is based upon the entire issued share
capital at the date of this announcement, namely 111,949,321 Ordinary Shares;
(c) unless otherwise stated, the financial information concerning Cozart has been extracted from the annual
reports and audited accounts of Cozart for the relevant period;
(d) references to a percentage of Cozart Shares are based on the number of Cozart Shares in issue as set out at
paragraph (b);
(e) the premium calculations to the price per Cozart Share have been calculated by reference to the Closing
Price of 40.75 pence per Cozart Share the latest practicable date prior to the commencement of the Offer Period; and
(f) the fully diluted share capital of Cozart is calculated on the basis of:
* the number of issued Cozart Shares, as set out in paragraph (b) above;
and
* the 4,504,583 "in the money" options outstanding under the Cozart Share Option Plans, the latest practicable
date prior to publication of this document and which are expected to become exercisable as a consequence of the Offer.
Appendix C - Details of Irrevocable Undertakings
1 Directors
The following persons have entered into irrevocable undertakings with Concateno
to accept the Offer and vote in favour of the Resolution in respect of their
issued Cozart Shares:
Percentage of
fully diluted
Total No. of ordinary
Name Cozart Shares share capital
Sir Brian Richards 1,400,476 1.2%
Edgar Wallner 13,915,933 11.9%
Philip Hand 15,475,799 13.3%
Christopher Yates 20,000 0.0%
Dene Baldwin 3,833,611 3.3%
Steven Noar 456,690 0.4%
The following person has entered into an irrevocable undertaking with Concateno
to accept the Offer in respect of his issued Cozart Shares:
Percentage of
fully diluted
Total No. of ordinary
Name Cozart Shares share capital
Dr. Christopher Hand 15,475,799 13.3%
The following persons have entered into irrevocable undertakings with Concateno
to exercise their rights to subscribe for or procure the exercise of the right
to subscribe for Cozart Shares in which they are interested under the Cozart
Share Option Schemes and to accept the Offer in respect of the resulting Cozart
Shares within ten days of becoming the registered holder of those shares:
Percentage of
fully diluted
Total No. of ordinary
Name Cozart Shares share capital
Dr. Christopher Hand 235,294 0.2%
Katherine Hand (by virtue of Dr. 168,312 0.1%
Christopher Hand's irrevocable
undertaking)
Philip Hand 235,294 0.2%
Christopher Yates 600,000 0.5%
Dene Baldwin 547,059 0.5%
2 Other Cozart Shareholders
The following persons have entered into irrevocable undertakings with Concateno
to accept, or procure the acceptance of, the Offer and vote, or procure the
voting, in favour of the Resolution in respect of their beneficial holding of
Cozart Shares:
Percentage of
fully diluted
Total No. of ordinary
Name Cozart Shares share capital
Avlar Bioventures Limited acting on behalf 5,155,789 4.4%
of Avlar Bioventures Fund I LP
MDY Healthcare plc 2,232,575 1.9%
Appendix D - Definitions
The following definitions apply throughout this announcement, the Offer Document
and in the Form of Acceptance unless the context otherwise requires:
"Admission" the admission of the Placing Shares to trading on
AIM becoming effective in accordance with the AIM
Rules
"AIM" the market of that name operated by London Stock
Exchange
"AIM Rules" Together the AIM rules for Companies and AIM Rules
for Nominated Advisers governing admission to and
the operation of AIM for AIM companies and their
nominated advisers as published by London Stock
Exchange from time to time
"Altrix" Altrix Healthcare Limited, a wholly owned
subsidiary of Concateno
"Acquisition" the acquisition or proposed acquisition by
Concateno of Cozart Shares pursuant to the Offer,
details of which are set out in this announcement
and in the Offer Document
"Australia" the Commonwealth of Australia, its states,
territories and possessions
"Bank" or "Barclays Bank Barclays Bank plc, 1 Churchill Place, London E14
plc" 5HP
"Board of Cozart" or the directors of Cozart, being Sir Brian Richards,
"Cozart Directors" Edgar Wallner, Dr Christopher Hand, Philip Hand,
Dene Baldwin, Stephen Noar, Christopher Yates
"Board of Concateno" or the directors of Concateno, being Keith Tozzi,
"Concateno Directors" Fiona Begley and James Corsellis
"business day" a day (other than a Saturday) on which banks are
generally open for business in London
"Canada" Canada, its provinces and territories and all
areas subject to its jurisdiction and any
political sub-division thereof
"certificated" or "in the description of a share or other security which
certificated form" is not in uncertificated form
"Closing Price" the closing middle market price of a Cozart Share
as derived from the AIM appendix to the Daily
Official List of the London Stock Exchange
"Code" the City Code on Takeovers and Mergers
"Collins Stewart" Collins Stewart Europe Limited, which is
authorised and regulated by the FSA
"Companies Act" or "Act" the Companies Act 1985, as amended, or where
relevant the Companies Act 2006 and where any
specific provision of the Companies Act 1985 is
referred to, this will include, where relevant,
any equivalent provision of the Companies Act 2006
"Computershare" or Computershare Investor Services
"Receiving Agent"
"Cozart" Cozart plc
"Cozart Articles" the articles of association of Cozart
"Cozart Group" Cozart and its subsidiaries
"Cozart Shareholder" or a holder of Cozart Shares and "Cozart
"Shareholder" Shareholders" and "Shareholders" shall be
construed accordingly
"Cozart Share Options" options issued pursuant to the Cozart Share Option
Scheme
"Cozart Share Option a holder of share options under the Cozart Share
Holder Option Scheme(s)
"Cozart Share Option the Cozart 2004 Enterprise Management Incentives
Schemes" Scheme and the Cozart 2007 Unapproved Share Option
Plan
"Cozart Shares" the existing issued or unconditionally allotted
and fully paid (or credited as fully paid)
ordinary shares of 1p each in the capital of
Cozart and any further such shares which are
unconditionally allotted or issued and fully paid
(or credited as fully paid) before the date on
which the Offer closes or, subject to the
provisions of the City Code, such earlier date as
Concateno may determine, including any such shares
unconditionally allotted or issued upon the
exercise of options granted under the Cozart Share
Option Schemes
"Cozart US Shareholder" a Cozart Shareholder who is a "US Person" as
defined under US securities laws
"CREST" the relevant system (as defined in the
Regulations) in respect of which Euroclear UK is
the operator (as defined in the Regulations)
"DDS" Cozart(R) Drug Detection System
"Debt Facilities" the debt facilities to be provided by the Bank to
Concateno pursuant to the terms of the Facilities
Agreement
"Concateno" Concateno plc
"Concateno Group" Concateno and its subsidiaries and associated
undertakings
"Concateno Shares" ordinary shares of 10p each in Concateno
"Enlarged Group" the Concateno Group as enlarged by the acquisition
of Cozart
"Electronic Acceptance" in relation to the Offer, the inputting and
settling of a TTE instruction which constitutes or
is deemed to constitute an acceptance of the Offer
on the terms set out in this document
"Euroclear UK" Euroclear UK & Ireland Limited
"Euromed" Euromed Limited, a wholly owned subsidiary of
Concateno
"Extraordinary General the extraordinary general meeting of Cozart
Meeting" (including any adjournment of that meeting),
notice of which will be contained in the Offer
Document
"Facilities Agreement" the syndicated facilities agreement dated 26
October 2006 entered into by (1) Concateno (as
parent, original borrower and original guarantor)
and (2) the Bank as mandated lead arranger,
original lender, agent of the other Finance
Parties (as defined therein) and security trustee
(the "Agent") (as amended by an amendment
agreement dated 19 December 2006, a supplemental
letter dated 10 January 2007, a second amendment
agreement dated 31 January 2007, a third amendment
agreement dated 30 March 2007 and to be further
amended by a fourth amendment agreement to be
entered into by (1) Concateno (as parent, original
borrower and guarantor), (2) Medscreen Holdings
Limited, Medscreen Limited, Altrix Healthcare
Limited, Euromed Limited and Tricho-Tech Limited
(as guarantors) and (3) the Bank (as arranger,
original lender, agent and security trustee))
further details of which will be set out in the
Offer Document
"First Closing Date" the date which is 21 days after the posting of the
Offer Document
"Form of Acceptance" the form of acceptance and authority relating to
the Offer which will accompany the Offer Document
"FSA" The Financial Services Authority
"FSMA" the Financial Services and Markets Act 2000, as
amended
"Higher Cash Offer" an offer in cash in full or accompanied by a full
cash alternative for the entire issued share
capital of Cozart (other than any shares held by
the competing offeror), the making of which is
not, or has ceased to be, subject to any
pre-condition and which is determined, by the
financial adviser to Cozart for the purposes of
Rule 3 of the Code, as being of an overall value
per Cozart Share in excess of 110 per cent. of the
value attributed to each Cozart Share by the Offer
and in determining the value of the offer or
proposed offer, the financial adviser to Cozart
shall have due and proper regard to the Notes on
Rule 6 of the Code
"Higher Cash and/or Share an offer offering either cash or shares or part
Offer" cash and part shares as consideration for the
entire issued share capital of Cozart (other than
any shares held by the competing offeror), the
making of which is not, or has ceased to be,
subject to any pre-condition and which is
determined, by the financial adviser to Cozart for
the purposes of Rule 3 of the Code, as being of an
overall value per Cozart Share in excess of 110
per cent. of the value attributed to each Cozart
Share by the Offer and in determining the value of
the offer or proposed offer, the financial adviser
to Cozart shall have due and proper regard to the
Notes on Rule 6 of the Code
"Home Office" the UK government department responsible for
leading the national effort to protect the public
from terrorism, crime and anti-social behaviour
"Incentive Arrangements" shall have the meaning given to such term in
paragraph 12 of this announcement
"Independent Directors" Sir Brian Mansel Richards, Edgar Wallner, Dene
Baldwin, Philip Joseph Hand, Stephen John Noar and
Christopher Henry Francis Yates, being independent
directors of Cozart
"Independent Shareholders" Cozart Shareholders, other than Dr. Christopher
Hand
"London Stock Exchange" London Stock Exchange plc
"Marwyn" Marwyn Neptune Fund LP
"Marwyn Bridging Loan" pursuant to an agreement dated on the date hereof
entered into between Marwyn and Concateno, the
commitment by Marwyn to subscribe for Placing
Shares at the Placing Price up to an aggregate
value of circa #8.7million or at Marwyn's
election, to provide a loan on agreed terms in
respect of that amount
"Medscreen" Medscreen Holdings Limited, a wholly owned
subsidiary of Concateno
"Nemesis" Nemesis Scientific Limited, a wholly owned
subsidiary of Cozart
"Numis" Numis Securities Limited
"Offer" the recommended cash offer to be made by Concateno
to acquire all of the issued and to be issued
share capital of Cozart on the terms and subject
to the conditions to be set out in the Offer
Document and, in the case of Shareholders holding
Cozart Shares in certificated form, in the Form of
Acceptance, including where the context permits or
requires, any subsequent revision, variation
extension or renewal thereof
"Offer Document" the document to be sent to Cozart Shareholders
(other than certain Overseas Shareholders) giving
details of the terms and conditions of the Offer
and containing the notice to Cozart Shareholders
convening the Extraordinary General Meeting
"Offer Period" means the period commencing on 4 September 2007
and ending on the First Closing Date or, if later,
on the date on which the Offer becomes or is
declared unconditional as to acceptances or lapses
"Offer Price" 57.5 pence in cash per Cozart Share
"Overseas Shareholders" Cozart Shareholders (or nominees of, or custodians
or trustees for Cozart Shareholders) not resident
in or citizens of the United Kingdom
"Panel" The Panel on Takeovers and Mergers
"Philips" Philips Electronics Nederlands B.V.
"Placing" the placing by Collins Stewart of up to 41,323,296
New Concateno Shares as further described in the
Offer Document
"Placing Agreement" the conditional agreement dated 5 September 2007
between Concateno and Collins Stewart under which
Collins Stewart has agreed to procure placees for
the Placing Shares
"Placing Price" 130 pence per Placing Share
"Placing Shares" up to 41,323,296 new Concateno Shares to be
issued, credited as fully paid, pursuant to the
Placing including any shares issued under the
conversion of the Marwyn Bridging Loan
"Regulations" the Uncertificated Securities Regulations 2001
"Resolution" the resolution to be proposed at the Extraordinary
General Meeting for the purposes of approving the
Incentive Arrangements
"Restricted Jurisdiction" the United States, Canada, Australia, the Republic
of South Africa and Japan or any jurisdiction in
relation to which the extension or acceptance of
the Offer to such jurisdiction would be unlawful,
or which Concateno decides in its sole discretion
would be likely to involve disproportionate
complexity or risk
"Scheme of Arrangement" a scheme of arrangement under section 425
Companies Act
"Significant Interest" a direct or indirect interest of 20 per cent. or
more of the total voting rights conferred by the
equity capital of an undertaking
"Spinreact" Spinreact, S.A., a wholly owned subsidiary of
Cozart
"Tricho-Tech" Tricho-Tech Limited, a wholly owned subsidiary of
Concateno
"uncertificated" or "in recorded on the relevant register of the share or
uncertificated form" security concerned as being held in uncertificated
form in CREST and title to which, by virtue of the
Regulations, may be transferred by means of CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern
Ireland
"United States" or "US" United States of America and all of its
possessions and territories
"Wider Cozart Group" any member of the Cozart Group or any company,
partnership, joint venture, firm or body corporate
in which any member of the Cozart Group has a
Significant Interest
"Wider Concateno Group" any member of the Concateno Group or any company,
partnership, joint venture, firm or body corporate
in which any member of the Concateno Group has a
Significant Interest.
--------------------------
(1) This statement should not be interpreted to mean that earnings per share
will necessarily be greater than the earnings per share for the preceding
financial period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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