TIDMBAR TIDMIDP
RNS Number : 6812G
Brand Architekts Group PLC
31 March 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT IS DEEMED BY BRAND ARCHITEKTS AND INNOVADERMA
TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE
REGULATION NO 596/2014 (INCORPORATED INTO UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMED BY VIRTUE OF THE
MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS 2019). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
31 March 2022
Recommended Merger
of
InnovaDerma plc ("InnovaDerma") with Brand Architekts Group plc
("Brand Architekts")
to be effected by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- The Boards of Brand Architekts and InnovaDerma are pleased to
announce that they have reached agreement on the terms of a
recommended cash and shares Merger pursuant to which Brand
Architekts will acquire the entire issued and to be issued ordinary
share capital of InnovaDerma (the "Merger") (together, the "
Combined Group "). The Merger is to be effected by means of a
Court-sanctioned scheme of arrangement between InnovaDerma and
InnovaDerma Scheme Shareholders under Part 26 of the Companies Act
2006 (the "Scheme").
-- Under the terms of the Merger, InnovaDerma Shareholders will be entitled to receive:
for each InnovaDerma Share 7 pence in cash
held and
0. 3818 New Brand Architekts
Shares
(together, the "Merger Consideration")
-- Based on the Closing Price of 106.5 pence per Brand
Architekts Share on 30 March 2022 (being the Latest Practicable
Date), the Merger values each InnovaDerma Share at 47.7 pence and
InnovaDerma's issued and to be issued ordinary share capital at
approximately GBP13.6 million on a fully diluted basis. This
represents a premium of approximately:
o 70.4 per cent. to the Closing Price of 28 pence per
InnovaDerma Share on the Latest Practicable Date;
o 34.4 per cent. to the volume weighted average share price per
InnovaDerma Share of 35.5 pence in the 3 months to the Latest
Practicable Date; and
o 29.3 per cent. to the volume weighted average share price per
InnovaDerma Share of 36.9 pence in the 12 months to the Latest
Practicable Date.
-- The implied headline offer price represents an EV/sales
multiple for InnovaDerma of 1.3 times on a historic EV/sales
basis.
-- Following Completion, InnovaDerma Shareholders will own
approximately 38.7 per cent. and Brand Architekts Shareholders will
own approximately 61.3 per cent. of the enlarged issued ordinary
share capital of Brand Architekts.
-- The Brand Architekts Directors believe that bringing together
the two companies creates a stronger scaled business which has the
ability to accelerate delivery of its strategic objectives, with an
opportunity for both sets of shareholders to share in the benefits
accruing to the Combined Group via the expected realisation of cost
and revenue synergies.
Background to and reasons for the Merger
Brand Architekts has long admired InnovaDerma's reputation and
experience as a direct to consumer ("DTC") beauty and skincare
retailer. Brand Architekts and InnovaDerma have common cultures and
shared values with both companies focused on building sustainable
brands with a digital first mindset.
The Boards of Brand Architekts and InnovaDerma believe there is
compelling strategic and financial rationale for the Merger
including:
Strategic benefits
-- Enabling the Combined Group to offer a wider range of
products to its combined commercial customer base. The Combined
Group will have a broad portfolio of 18 challenger brands including
three core brands; Super Facialist, Skinny Tan and Dirty Works. The
ability to offer a broader product proposition to an enlarged
customer base, and the greater scale of the Combined Group, is
expected to strengthen the growth prospects of Combined Group;
-- Accelerating both companies' standalone growth strategies.
The Merger accelerates delivery of Brand Architekts's ambitious
growth plan whilst supporting InnovaDerma's strategy of increasing
organic growth. InnovaDerma has a strong focus on digital customer
acquisition and DTC sales through its online store, utilising a
variety of digital marketing strategies to market the Skinny Tan
brand across the UK and further afield. When implemented across the
Combined Group's brands these strategies are expected to help drive
customer engagement and accelerate DTC sales. Brand Architekts's
retailer sales channels are also expected to drive strong growth in
InnovaDerma's brands;
-- Accelerating growth via Brand Architekts's recently launched
marketplace. Brand Architekts's Unexpekted Store was launched in
September 2021 to drive multiple channel expansion. The opportunity
to market Skinny Tan through this platform and The Unexpekted Store
to the Skinny Tan digital customer database is expected to be a
significant contributor to the growth of the Combined Group;
-- Establishing a Combined Group of greater scale, whilst
retaining a strong balance sheet, to leverage growth opportunities
including further complementary M&A, investment in digital
marketing, brand and product development; and
-- Increasing international expansion. Brand Architekts's brands
and products are sold in 34 countries with listings in various key
international retailers. InnovaDerma's products and brands are
focused on UK sales and there is an opportunity to leverage Brand
Architekts's relationships to expand the InnovaDerma offering
internationally, particularly with Skinny Tan.
Financial benefits
-- Value creation for both sets of shareholders, underpinned by
cost and revenue synergies. The Merger is expected to result in
recurring run-rate pre-tax cost synergies of c. GBP1.5 million -
GBP1.75 million per annum, primarily driven by:
o the harmonisation of the Combined Group's supply chain and DTC
business relationships;
o a reduction in staff costs across the Combined Group; and
o a reduction in duplicated public quoted company costs and
certain operational costs and overheads.
In addition, the Merger is expected to deliver significant
revenue synergies, driven by:
o the Combined Group's ability to increase both the physical and
digital presence of its product portfolio. InnovaDerma's digital
client base will help Brand Architekts expand its presence online
while Brand Architekts's strong relationships with bricks and
mortar retailers will enable expanded distribution of InnovaDerma's
products in the UK and internationally;
o the complementary nature of the Combined Group's brand
portfolio enabling strong cross-selling opportunities to be
realised;
o collaboration between the Combined Group's brands in new
product development;
o international expansion of key brands into markets such as
Australia and the US; and
o utilising InnovaDerma's digital marketing expertise to bolster
awareness of and engagement with the Combined Group's brands;
It is anticipated that all cost synergies would be delivered
within 12 months of the Completion of the Merger.
-- Anticipated to be earnings accretive to shareholders of Brand
Architekts and InnovaDerma. The Merger is anticipated to be
double-digit earnings accretive for both InnovaDerma and Brand
Architekts shareholders(1) in the first full financial year post
completion (including expected recurring run-rate cost synergies).
The financial effects stated exclude potential further upside that
could be realised from revenue synergies or if there were to be a
re-rating of Brand Architekts shares following the Merger.
(1) Excluding any one-off transaction costs
The Combined Group
-- The Boards of Brand Architekts and InnovaDerma have agreed a
unified management team to lead the Combined Group.
-- It is anticipated that Quentin Higham will lead the Combined
Group as Group Chief Executive Officer with Tom Carter as Chief
Financial Officer. Roger McDowell will be non-executive Chair of
the Combined Group.
-- It is anticipated that the Non-executive Directors of the
Combined Group will be Chris How, Edward Beale, Amy Nelson-Bennett
and Simon Pyper.
-- It is intended that all of the executive directors of
InnovaDerma will step down from their roles upon the Merger
becoming Effective.
-- It is intended that Ross Andrews and Mark Ward, currently
Non-Executive Chairman and Non-Executive Director of InnovaDerma
respectively, will resign upon the Merger becoming effective.
-- Given the proposed size of the Board of the Combined Group,
relative to the size of the business, it is intended that Edward
Beale will resign as a non-executive director following the
announcement of the Combined Group's preliminary results in
September 2022.
-- Upon the Merger becoming Effective, the Combined Group will
continue to be called "Brand Architekts", with its head office in 8
Waldegrave Road, Teddington, London, and its shares admitted to
trading on AIM.
Further detail on the structure of the Board of the Combined
Group and its governance is provided in paragraph 9 of this
Announcement.
Recommendations
InnovaDerma
The InnovaDerma Directors, who have been so advised by finnCap
Ltd ("finnCap") as to the financial terms of the Merger,
unanimously consider the terms of the Merger to be fair and
reasonable. In providing advice to the InnovaDerma Directors,
finnCap has taken into account the commercial assessments of the
InnovaDerma Directors.
finnCap is providing independent financial advice to the
InnovaDerma Directors for the purposes of Rule 3 of the Takeover
Code. Accordingly, the InnovaDerma Directors intend to recommend
unanimously that InnovaDerma Shareholders vote in favour of the
Scheme at the InnovaDerma Court Meeting and in favour of the
InnovaDerma Resolution to be proposed at the InnovaDerma General
Meeting.
Brand Architekts
In order to implement the Merger, Brand Architekts will require
the approval of the Brand Architekts Shareholders to allot the New
Brand Architekts Shares at the Brand Architekts General Meeting.
The Merger is accordingly conditional on such approval being
obtained.
The Brand Architekts Directors have received financial advice
from Singer Capital Markets Advisory LLP ("Singer Capital Markets")
in relation to the Merger. In providing its advice to the Brand
Architekts Directors, Singer Capital Markets has taken into account
the Brand Architekts Directors' commercial assessment of the
Merger. Singer Capital Markets is also acting as Nominated Adviser
and Corporate Broker to Brand Architekts.
Roger McDowell has abstained himself from the Brand Architekts
Board recommendation given his respective shareholdings in both
Brand Architekts and InnovaDerma, as set out below. Accordingly,
the Brand Architekts Directors, with the exception of Roger
McDowell, consider the Merger to be in the best interests of Brand
Architekts Shareholders as a whole and intend to recommend
unanimously that Brand Architekts Shareholders vote in favour of
the Brand Architekts Resolution to be proposed at the Brand
Architekts General Meeting.
Roger McDowell, the Chairman of Brand Architekts, has an
interest in 899,105 Brand Architekts Shares (representing
approximately 5.2 per cent. of Brand Architekts's issued ordinary
share capital as at the close of business on the Latest Practicable
Date). In addition, Roger McDowell has an interest in 883,671
InnovaDerma Shares (representing approximately 3.1 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date). Roger McDowell intends to
vote in favour of the Brand Architekts Resolution to be proposed at
the Brand Architekts General Meeting in respect of his holding of
Brand Architekts Shares; and in favour of the Scheme at the
InnovaDerma Court Meeting and in favour of the InnovaDerma
Resolution to be proposed at the InnovaDerma General Meeting, in
each case in respect of his holding of InnovaDerma Shares.
Irrevocable undertakings and letters of support in respect of
the Merger
In respect of the InnovaDerma Shareholder Meetings
The InnovaDerma Directors who are interested in InnovaDerma
Shares have irrevocably undertaken to vote (or procure votes) in
favour of the Scheme at the InnovaDerma Court Meeting and in favour
of the InnovaDerma Resolution to be proposed at the InnovaDerma
General Meeting, in respect of their own beneficial holdings (or
the holdings of certain persons connected with them) of 5,596,302
InnovaDerma Shares representing, in aggregate, approximately 19.9
per cent. of InnovaDerma's issued ordinary share capital as at the
close of business on the Latest Practicable Date.
In addition, Brand Architekts has received irrevocable
undertakings from an InnovaDerma Shareholder to vote in favour of
the Scheme at the InnovaDerma Court Meeting and to vote in favour
of the InnovaDerma Resolution to be proposed at the InnovaDerma
General Meeting, in respect of a total of 883,671 InnovaDerma
Shares representing, in aggregate, approximately 3.1 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
Brand Architekts has therefore received irrevocable undertakings
in respect of a total number of 6,479,973 InnovaDerma Shares
representing, in aggregate, approximately 23.1 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
The Brand Architekts Directors have given irrevocable
undertakings to vote (or procure votes) in favour of the Brand
Architekts Resolution to be proposed at the Brand Architekts
General Meeting in respect of their own beneficial holdings (or the
holdings of certain persons connected with them) of 1,155,025 Brand
Architekts Shares representing, in aggregate, approximately 6.7 per
cent. of Brand Architekts's issued ordinary share capital as at the
close of business on the Latest Practicable Date.
Brand Architekts has also received a non-binding letter of
support from a Brand Architekts Shareholder to vote in favour of
the Brand Architekts Resolution to be proposed at the Brand
Architekts General Meeting, in respect of 1,979,400 Brand
Architekts Shares representing, in aggregate, approximately 11.5
per cent. Brand Architekts's issued ordinary share capital as at
the close of business on the Latest Practicable Date.
Brand Architekts has therefore received irrevocable undertakings
and letters of support to vote in favour of the Brand Architekts
Resolution in respect of a total of 3,134,425 Brand Architekts
Shares representing, in aggregate, approximately 18.2 per cent. of
Brand Architekts's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
Further details of these irrevocable undertakings and letters of
support (and the circumstances in which the irrevocable
undertakings will cease to be binding) are set out in Appendix
3.
General
The Merger is expected to be effected by means of a
Court-sanctioned scheme of arrangement between InnovaDerma and
InnovaDerma Scheme Shareholders under Part 26 of the Companies Act
2006, further details of which are contained in the full text of
this Announcement (and will be included in the Scheme Document).
Brand Architekts also reserves the right to implement the Merger by
way of a Takeover Offer, subject to the Panel's consent.
The Merger will also be subject to the conditions and further
terms set out in Appendix 1 to this Announcement and to be set out
in the Scheme Document. The Conditions include:
(i) the approval by the requisite majorities of, respectively,
the InnovaDerma Scheme Shareholders and InnovaDerma Shareholders of
(A) the Scheme at the Court Meeting and (B) the InnovaDerma
Resolution at the InnovaDerma General Meeting;
(ii) the sanction of the Scheme by the Court;
(iii) an ordinary resolution granting the Brand Architekts
Directors' authority to issue the new Brand Architekts shares to be
issued in connection with the Merger being proposed at the Brand
Architekts General Meeting and passed (without amendment); and
(iv) The L ondon Stock Exchange having acknowledged to Brand
Architekts or its agent (and such acknowledgement not having been
withdrawn) that the New Brand Architekts Shares will be admitted to
trading on AIM;
Further details relating to these conditions are set out in
paragraph 11 of this Announcement.
It is expected that the Scheme Document (including notices of
the InnovaDerma Shareholder Meetings) together with the relevant
InnovaDerma Forms of Proxy will be sent to InnovaDerma Shareholders
within 28 days of the date of this Announcement (or on such later
date as may be agreed by Brand Architekts and InnovaDerma with the
consent of the Panel).
It is expected that the Brand Architekts Circular, which will
contain a notice of the Brand Architekts General Meeting, will be
published and mailed to Brand Architekts Shareholders at or around
the same time as the Scheme Document is posted to InnovaDerma
Shareholders.
The Scheme Document and the Brand Architekts Circular will each
be made available by Brand Architekts on its website at
www.brandarchitektsplc.com and by InnovaDerma on its website at
www.innovaderma.com.
The Scheme Document and Brand Architekts Circular will contain
details of the dates, times and locations of the InnovaDerma
Shareholder Meetings and Brand Architekts General Meeting. The
Scheme is expected to be Effective in May / early June 2022,
subject to satisfaction or (where applicable) waiver of the
Conditions and certain further terms set out in Appendix 1 to this
Announcement.
Commenting on the Merger, Roger McDowell, Non-Executive Chairman
of Brand Architekts, said:
"The Merger makes strong strategic sense for both parties,
delivering an improved portfolio of core brands that we can scale,
as well as cost synergies. The structure of the deal means that the
enlarged group will retain a very strong balance sheet. We look
forward to welcoming our new shareholders to the register in due
course. ."
Commenting on the Merger, Quentin Higham, Chief Executive
Officer of Brand Architekts, said:
" InnovaDerma complements our existing range and the addition of
Skinny Tan will give us a third core brand of size and scale. It
shares many similar attributes to Super Facialist and with
appropriate levels of investment, we believe there is a significant
opportunity for profitable growth. InnovaDerma has a strong digital
first proposition which is a key focus for Brand Architekts going
forward. Brand Architekts has built a solid platform for growth,
including its investment in The Unexpekted Store, and I'm excited
to start working with the new team upon completion. "
Commenting on the Merger, Ross Andrews, Non-Executive Chairman
of InnovaDerma, said:
"The Board of InnovaDerma believes that the Merger will deliver
compelling strategic and financial benefits, as well as generating
significant synergies for the two businesses. The implied premium
of 70.4 per cent for InnovaDerma's Shareholders is a reflection of
the attractiveness of our digitally focused business and we
strongly believe that the Merger will accelerate growth and secure
the earlier delivery of our brand's long-term value potential.
InnovaDerma's Shareholders will continue to own approximately 38.7
per cent of the enlarged group and the Board is unanimously
recommending the Merger to InnovaDerma's Shareholders."
Commenting on the Merger, Blake Hughes, Chief Executive Officer
of InnovaDerma, said:
"The Merger has a compelling strategic rationale and I believe
the combined assets and strengths of both businesses will create
sustainable shareholder value. Skinny Tan will benefit from being
the Combined Group's largest revenue generator as it looks to
accelerate growth, and InnovaDerma's digital marketing and
e-commerce expertise will help drive faster online growth across
the whole group. I am confident the merged businesses have a bright
future ahead ."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including the Appendices).
The Merger will be subject to the Conditions and further terms set
out in Appendix 1 to this Announcement and to the full terms and
conditions which will be set out in the Scheme Document. Appendix 2
contains the bases and sources of certain information used in this
summary and this Announcement. Appendix 3 contains details of the
irrevocable undertakings and letters of support received in
relation to the Merger and the resolution to be proposed at the
Brand Architekts General Meeting respectively and which are
referred to in this Announcement. Appendix 4 contains details of
and bases of calculation of the quantified financial benefits of
the Merger. Appendix 5 contains definitions of certain terms used
in this summary and this Announcement.
For the purposes of Rule 28 of the Takeover Code, quantified
financial benefits statements contained in this Announcement are
the responsibility of Brand Architekts and the Brand Architekts
Directors. Appendix 4 sets out the quantified financial benefits
statements relating to cost savings and synergies arising out of
the Merger and provides underlying information and bases of belief.
Appendix 4 also includes reports from Brand Architekts's reporting
accountant, Francis Clark LLP ("PKF Francis Clark"), and Brand
Architekts's financial adviser, Singer Capital Markets, in
connection with quantified financial benefits statements, as
required pursuant to Rule 28.1(a) of the Takeover Code, and
provides underlying information and bases for the reporting
accountant's and financial adviser's respective reports. Each of
PKF Francis Clark and Singer Capital Markets has given and not
withdrawn its consent to the publication of its report in this
Announcement in the form and context in which it is included.
This Announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation. For such purposes, the
person responsible for this Announcement on behalf of Brand
Architekts is Tom Carter, Brand Architekts Chief Financial Officer.
The person responsible for this Announcement on behalf of
InnovaDerma is Andrew Dunderdale, InnovaDerma Group Finance
Director.
Enquiries :
Brand Architekts plc
Quentin Higham, Chief Executive Officer
Tom Carter, Chief Financial Officer +44 (0) 20 3166 2840
Singer Capital Markets Advisory LLP (Financial
Adviser, Nominated Adviser and Corporate
Broker to Brand Architekts)
Jen Boorer / Shaun Dobson / Dan Dearden-Williams +44 (0) 20 7496 3000
Alma PR (Financial PR Adviser to Brand
Architekts)
Josh Royston / Sam Modlin +44 (0) 203 405 0205
InnovaDerma plc c/o TB Cardew
Blake Hughes, Chief Executive Officer innovaderma@tbcardew.com
Andrew Dunderdale, Group Finance Director
finnCap Ltd (Financial Adviser, Rule 3
Adviser and Corporate Broker to InnovaDerma)
Geoff Nash / Henrik Persson / Kate Bannatyne +44 (0) 2072 200 500
TB Cardew (Financial PR Adviser to InnovaDerma)
Shan Willenbrock / Olivia Rosser + 44 (0) 7775 848547
Addleshaw Goddard LLP and Ashfords LLP are retained as legal
advisers for Brand Architekts. Fieldfisher LLP is retained as legal
adviser for InnovaDerma.
Important notices relating to financial advisers
Singer Capital Markets Advisory LLP, which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively for Brand Architekts and no one else in
connection with the matters set out in this Announcement and will
not be responsible to anyone other than Brand Architekts for
providing the protections offered to clients of Singer Capital
Markets or for providing advice in relation to the contents of this
Announcement or any matters referred to in this Announcement.
finnCap Ltd, which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively for
InnovaDerma and for no one else in connection with the subject
matter of this Announcement and will not be responsible to anyone
other than InnovaDerma for providing the protections afforded to
clients of finnCap or for providing advice in relation to the
contents of this Announcement or any matters referred to in this
Announcement.
Further information
This Announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, any offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Merger or otherwise, nor shall there
be any sale, issuance or transfer of securities of InnovaDerma
pursuant to the Merger or otherwise in any jurisdiction in
contravention of applicable law. The Merger will be implemented
solely by means of the Scheme Document (or, in the event that the
Merger is to be implemented by means of a Takeover Offer, the offer
document) which will contain the full terms and conditions of the
Merger, including details of how to vote in respect of the Merger
(or, in the case of a Takeover Offer, to accept the offer).
InnovaDerma will prepare the Scheme Document to be distributed
to InnovaDerma Shareholders. InnovaDerma and Brand Architekts urge
InnovaDerma Shareholders to read the Scheme Document carefully as
it will contain important information relating to the Merger, the
New Brand Architekts Shares and the Combined Group. Any decision to
vote in respect of resolutions to be proposed at the InnovaDerma
Shareholder Meetings to approve the Merger, the Scheme or related
matters, should be made only on the basis of the information
contained in the Scheme Document.
It is expected that the Scheme Document (including notices of
the InnovaDerma Shareholder Meetings) together with the relevant
InnovaDerma Forms of Proxy will be sent to InnovaDerma Shareholders
within 28 days of the date of this Announcement (or on such later
date as may be agreed by Brand Architekts and InnovaDerma with the
consent of the Panel) .
Brand Architekts will prepare the Brand Architekts Circular to
be distributed to Brand Architekts Shareholders and which will be
available on Brand Architekts's website at
www.brandarchitektsplc.com and InnovaDerma's website at
www.innovaderma.com. Brand Architekts urges Brand Architekts
Shareholders to read the Brand Architekts Circular when it becomes
available. Any decision to vote in respect of the Brand Architekts
Resolution should be made only on the basis of the information in
the Brand Architekts Circular. It is expected that the Brand
Architekts Circular (including the notice of the Brand Architekts
General Meeting) together with the Brand Architekts Form of Proxy,
will be posted to Brand Architekts Shareholders as soon as is
reasonably practicable and in any event within 28 days of this
Announcement, unless otherwise agreed with the Panel.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them.
This Announcement does not constitute a prospectus or prospectus
equivalent document. The New Brand Architekts Shares to be issued
pursuant to the Merger are not being offered to the public by means
of this Announcement. The Merger will be subject to the applicable
requirements of the Takeover Code, the Panel, the London Stock
Exchange, the Listing Rules and the FCA.
Please be aware that addresses, electronic addresses and certain
other information provided by InnovaDerma Shareholders, persons
with information rights and other relevant persons for the receipt
of communication by InnovaDerma may be provided to Brand Architekts
during the Offer Period as required by section 4 of Appendix 4 to
the Takeover Code.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying
with English law, the Takeover Code, the Market Abuse Regulation,
the AIM Rules, the Listing Rules and the Disclosure Guidance and
Transparency Rules 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 of the United Kingdom.
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
law and/or regulation. Persons who are not resident in the United
Kingdom, or who are subject to the laws of other jurisdictions
should inform themselves of, and observe, any applicable legal or
regulatory requirements. In particular, the ability of persons who
are not resident in the United Kingdom or who are subject to the
laws of another jurisdiction to participate in the Merger or to
vote their InnovaDerma Shares in respect of the Scheme at the
InnovaDerma Court Meeting, or to execute and deliver InnovaDerma
Forms of Proxy appointing another to vote at the InnovaDerma Court
Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located or to which they
are subject. Any failure to comply with the applicable requirements
may constitute a violation of the laws and/or regulations of any
such jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Merger disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Unless otherwise determined by Brand Architekts or required by
the Takeover Code and permitted by applicable law and regulation,
participation in the Merger will not be made available, directly or
indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may
vote in favour of the Merger by any such use, means,
instrumentality or form within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the
laws of that jurisdiction. Accordingly, copies of this Announcement
and all documentation relating to the Merger are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and
persons receiving this Announcement and all documents relating to
the Merger (including custodians, nominees and trustees) must not
mail or otherwise distribute or send them in, into or from such
jurisdictions as doing so may invalidate any purported vote in
respect of the Merger.
If the Merger is implemented by way of a Takeover Offer (unless
otherwise permitted by applicable law and regulation), the Takeover
Offer may not be made, directly or indirectly, in or into or by use
of the mails or a ny other means or instrumentality (including,
without limitation, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national, state or other securities
exchange of any Restricted Jurisdiction and the Takeover Offer will
not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted
Jurisdiction.
The availability of the New Brand Architekts Shares under the
Merger to InnovaDerma Shareholders who are not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident or to which they are
subject. Persons who are not resident in the United Kingdom or who
are subject to the laws of other jurisdictions should inform
themselves of, and observe, any applicable legal or regulatory
requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Forward looking statements
This Announcement (including information incorporated by
reference into this Announcement), any oral statements made by
Brand Architekts or InnovaDerma in relation to the Merger and other
information published by Brand Architekts or InnovaDerma may
contain statements about Brand Architekts, InnovaDerma and the
Combined Group that are or may be forward looking statements. All
statements other than statements of historical fact included in
this Announcement may be forward looking statements. Without
limitation, any statements preceded or followed by or that include
the words "targets", "plans", "goals", "believes", "expects",
"aims", "intends", "will", "may", "anticipates", "estimates",
"projects", hopes", "continues", "would", "could", "should" or
words or terms of similar substance or the negative of them, are
forward looking statements. Forward looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; and (ii) business and management
strategies and the expansion and growth of Brand Architekts's,
InnovaDerma's or the Combined Group's operations and potential
synergies resulting from the Merger.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and/or the
operations of Brand Architekts, InnovaDerma or the Combined Group
and are based on certain assumptions and assessments made by Brand
Architekts and InnovaDerma in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. Except as
expressly provided in this Announcement, they have not been
reviewed by the auditors of Brand Architekts or InnovaDerma.
Although it is believed that the expectations reflected in such
forward looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct and
you are therefore cautioned not to place reliance on these forward
looking statements which speak only as at the date of this
Announcement. Neither InnovaDerma nor Brand Architekts, nor any of
their respective members, directors, officers, employees, advisers
and any person acting on behalf of one or more of them assumes any
obligation to update or correct the information contained in this
Announcement (whether as a result of new information, future events
or otherwise) except as required by applicable law (including as
required by the Takeover Code, the Listing Rules, the AIM Rules,
the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules).
There are several factors which could cause actual results to
differ materially from those expressed or implied in forward
looking statements. Among the factors that could cause actual
results to differ materially from those described in the forward
looking statements are changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business acquisitions or disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations.
No member of the Brand Architekts Group or the InnovaDerma
Group, nor any of their respective associates, directors, officers,
employees or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this Announcement will actually
occur.
Quantified Financial Benefits Statement
Statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. Neither the Quantified
Financial Benefits Statement nor any other statement in this
Announcement should be construed as a profit forecast or
interpreted to mean that the Combined Group's earnings in the
financial year ending 30 June 2023, being the envisaged first full
financial year following Completion, or in any subsequent period,
would necessarily match or be greater than or be less than those of
Brand Architekts or InnovaDerma for the relevant preceding
financial period or any other period. For the purposes of Rule 28
of the Takeover Code, the Quantified Financial Benefits Statement
contained in this Announcement is the responsibility of Brand
Architekts and the Brand Architekts Directors.
Profit forecasts and estimates
No statement in this Announcement is intended to constitute a
profit forecast or profit estimate and no statement in this
Announcement should be interpreted to mean that the earnings or
future earnings per share of or dividends or future dividends per
share of Brand Architekts or InnovaDerma for current or future
financial years will necessarily match or exceed the historical or
published earnings or dividends per share of Brand Architekts or
InnovaDerma, as appropriate.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the Offer Period and, if later, following the
Announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of: (i) the offeree
company; and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the Takeover
Code applies must be made by no later than 3.30 pm on the 10th
Business Day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 pm on the 10th Business Day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each
of: (i) the offeree company; and (ii) any securities exchange
offeror, save to the extent that these details have previously been
disclosed under Rule 8 of the Takeover Code. A Dealing Disclosure
by a person to whom Rule 8.3(b) of the Takeover Code applies must
be made by no later than 3.30 pm on the Business Day following the
date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Takeover Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with either of them (see Rules 8.1, 8.2 and 8.4
of the Takeover Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk , including
details of the number of relevant securities in issue, when the
Offer Period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Takeover Code, InnovaDerma
announces that, as at close of business on the Latest Practicable
Date, it has 28,057,825 InnovaDerma Shares in issue and admitted to
trading on the London Stock Exchange. InnovaDerma has no shares
held in treasury. The International Securities Identification
Number (ISIN) of the InnovaDerma Shares is GB00BT9PTW34.
In accordance with Rule 2.9 of the Takeover Code, Brand
Architekts announces that as at close of business on the Latest
Practicable Date, it has 17,230,702 Brand Architekts Shares in
issue and admitted to trading on AIM. Brand Architekts has no
shares held in treasury. The ISIN of the Brand Architekts Shares is
GB0008667304.
Requesting Hard Copy Documents
Pursuant to Rule 30.3 of the Takeover Code, a person so entitled
may request a copy of this Announcement and any information
incorporated into it by reference to another source in hard copy
form. A person may also request that all future documents,
announcements and information to be sent to that person in relation
to the Merger should be in hard copy form.
Brand Architekts Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by writing to Computershare Investor Services plc, of
The Pavilions, Bridgwater Road, Bristol, BS13 8AE or by calling
Computershare on +44 (0) 370 707 1332. Calls are charged at the
standard geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international
rate. The helpline is open between 9.00 am - 5.30 pm, Monday to
Friday excluding public holidays in England and Wales. Please note
that Computershare cannot provide any financial, legal or tax
advice and calls may be recorded and monitored for security and
training purposes. It is important that you note that unless you
make such a request, a hard copy of this Announcement and any such
information incorporated by reference in it will not be sent to
you. You may also request that all future documents, announcements
and information to be sent to you in relation to the Merger should
be in hard copy form.
InnovaDerma Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by writing to, SLC Registrars, P.O. Box 5222,
Lancing, BN99 9FG or by calling SLC Registrars on +44 (0) 203 890
2122. Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom will be charged
at the applicable international rate. The helpline is open between
9.00 am - 5.30 pm, Monday to Friday excluding public holidays in
England and Wales. Please note that Computershare cannot provide
any financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes. It is important that
you note that unless you make such a request, a hard copy of this
Announcement and any such information incorporated by reference in
it will not be sent to you. You may also request that all future
documents, announcements and information to be sent to you in
relation to the Merger should be in hard copy form.
Publication on website
A copy of this Announcement will be made available, free of
charge subject to certain restrictions relating to persons resident
in Restricted Jurisdictions, on Brand Architekts's website at
www.brandarchitektsplc.com and on InnovaDerma's website at
www.innovaderma.com by no later than 12 noon on the Business Day
following the date of this Announcement.
Neither the content of the websites referred to in this
Announcement nor the content of any website accessible from
hyperlinks on Brand Architekts's website or InnovaDerma's website
(or any other website) is incorporated into, or forms part of, this
Announcement.
The Merger is subject to the provisions of the Takeover
Code.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT IS DEEMED BY BRAND ARCHITEKTS AND INNOVADERMA
TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE
REGULATION NO 596/2014 (INCORPORATED INTO UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMED BY VIRTUE OF THE
MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS 2019). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
FOR IMMEDIATE RELEASE
31 March 2022
Recommended Merger
of
InnovaDerma plc with Brand Architekts Group plc
to be effected by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The Boards of Brand Architekts and InnovaDerma are pleased to
announce that they have reached agreement on the terms of a
recommended cash and share Merger pursuant to which Brand
Architekts will acquire the entire issued and to be issued ordinary
share capital of InnovaDerma (together, the " Combined Group ").
The Merger is to be effected by means of a Court-sanctioned scheme
of arrangement between InnovaDerma and InnovaDerma Scheme
Shareholders under Part 26 of the Companies Act 2006.
2. The Merger
Under the terms of the Merger, InnovaDerma Shareholders will be
entitled to receive:
for each InnovaDerma Share held 7 pence in cash (the "Cash Consideration")
and
0. 3818 New Brand Architekts
Shares
(together, the "Merger Consideration")
Based on the Closing Price of 106.5 pence per Brand Architekts
Share on 30 March 2022 (being the Latest Practicable Date), the
Merger values each InnovaDerma Share at 47.7 pence and
InnovaDerma's issued and to be issued ordinary share capital at
approximately GBP13.6 million on a fully diluted basis. This
represents a premium of approximately:
-- 70.4 per cent. to the Closing Price of 28 pence per
InnovaDerma Share on the Latest Practicable Date;
-- 34.4 per cent. to the volume weighted average share price per
InnovaDerma Share of 35.5 pence in the 3 months to the Latest
Practicable Date; and
-- 29.3 per cent. to the volume weighted average share price per
InnovaDerma Share of 36.9 pence in the 12 months to the Latest
Practicable Date.
The implied headline offer price represents an EV/sales multiple
of 1.3 times on a historic basis.
Following Completion, InnovaDerma Shareholders will own
approximately 38.7 per cent. and Brand Architekts Shareholders will
own approximately 61.3 per cent. of the enlarged issued ordinary
share capital of Brand Architekts.
The New Brand Architekts Shares will be issued credited as fully
paid and will rank pari passu in all respects with the Brand
Architekts Shares in issue at the time the New Brand Architekts
Shares are issued pursuant to the Merger, including the right to
receive and retain dividends and other distributions declared, made
or paid by reference to a record date falling after the Effective
Date. Application will be made to the London Stock Exchange for the
New Brand Architekts Shares to be admitted to trading on AIM.
In the event that the Merger is to be implemented instead by way
of a Takeover Offer, the InnovaDerma Shares will be acquired
pursuant to such Merger fully paid and free from all liens,
charges, equitable interests, encumbrances and rights of
pre-emption and any other interests of any nature whatsoever and
together with all rights attaching to them.
3. Background to and reasons for the Merger
Brand Architekts is a beauty brand specialist, with a portfolio
of skincare, haircare and bodycare brands and focused on innovating
new and exciting products. Brands range from female beauty to male
grooming, with both mass market appeal and everyday value
propositions. The brands are retailed to a variety of DTC and
business to business (B2B) channels; through its online platform,
The Unexpekted Store and through the Group's strong relationships
with retailers across the UK and internationally.
Brand Architekts has a stated strategy to seek
earnings-enhancing acquisition opportunities that are complementary
to its brand portfolio and longer term strategy.
Brand Architekts has long admired InnovaDerma's reputation and
experience as a DTC beauty and skincare retailer. Brand Architekts
and InnovaDerma have common cultures and shared values, with both
companies focused on building sustainable brands with a digital
first mindset.
The Brand Architekts Directors believe that through a Merger
with InnovaDerma there is an opportunity to leverage Brand
Architekts's omni-channel approach to drive sales through The
Unexpekted Store and through relationships with bricks and mortar
stores, whilst also acquiring a strong customer database, thereby
promoting cross-sell opportunities with brands and products within
the Group's existing portfolio.
The Boards of Brand Architekts and InnovaDerma believe there is
compelling strategic and financial logic to the Merger
including:
Strategic benefits
-- Enabling the Group to offer a wider range of products to its
combined commercial customer base. The Combined Group will have a
broad portfolio of 18 focused, challenger brands including three
core brands: Super Facialist, Skinny Tan and Dirty Works. The
ability to offer a broader product proposition to an enlarged
customer base, and the greater scale of the Combined Group, is
expected to strengthen the growth prospects of Combined Group;
-- Accelerating both companies' standalone growth strategies.
The Merger accelerates delivery of Brand Architekts's ambitious
growth plan whilst supporting InnovaDerma's strategy of increasing
organic growth. InnovaDerma has a strong focus on digital customer
acquisition and DTC sales through its online store, utilising a
variety of digital marketing strategies to market the Skinny Tan
brand across the UK and further afield. When implemented across the
Combined Group's brands, these strategies are expected to help
drive customer engagement and accelerate DTC sales. Brand
Architekts's retailer sales channels are also expected to drive
strong growth in InnovaDerma's brands;
-- Accelerating growth via Brand Architekts's recently launched
marketplace. Brand Architekts's The Unexpekted Store was launched
in September 2021 to drive multiple channel expansion. The
opportunity to market Skinny Tan through this platform and The
Unexpekted Store to the Skinny Tan digital customer database is
expected to be a significant contributor to the growth of the
Combined Group;
-- Establishing a Combined Group of greater scale, whilst
retaining a strong balance sheet, to leverage growth opportunities
including further complementary M&A, investment in digital
marketing, brand and product development; and
-- Increasing international expansion. Brand Architekts's brands
and products are sold in 34 countries with listings in various key
international retailers. InnovaDerma's products and brands are
focused on UK sales and there is an opportunity to leverage Brand
Architekts's relationships to expand the offering internationally,
particularly with Skinny Tan.
Financial benefits
-- Value creation for both sets of shareholders, underpinned by
cost and revenue synergies. The Merger is expected to result in
recurring run-rate pre-tax cost synergies of c. GBP1.5 million -
GBP1.75 million per annum, primarily driven by:
o the harmonisation of the Combined Group's supply chain and
direct to consumer business relationships;
o a reduction in staff costs across the Combined Group; and
o a reduction in duplicated public quoted company costs and
certain operational costs and overheads.
In addition, the Merger is expected to deliver significant
revenue synergies driven by:
o the Combined Group's ability to increase both the physical and
digital presence of its product portfolio. InnovaDerma's digital
client base will help Brand Architekts expand its presence online
while Brand Architekts's relationships with bricks and mortar
retailers will enable expanded distribution of InnovaDerma's
products in the UK and internationally;
o the complementary nature of the Combined Group's brand
portfolio enabling strong cross-selling opportunities to be
realised;
o collaboration between the Combined Group's brands in new
product development;
o international expansion of key brands into markets such as
Australia and the US; and
o utilising InnovaDerma's digital marketing expertise to bolster
awareness of and engagement with the Combined Group's brands.
It is anticipated that all cost synergies would be delivered
within 12 months of Completion of the Merger.
-- Anticipated to be earnings accretive to shareholders of Brand
Architekts and InnovaDerma. The Merger is anticipated to be
double-digit earnings accretive for both InnovaDerma and Brand
Architekts shareholders(1) in the first full financial year post
completion (including expected recurring run-rate cost synergies).
The financial effects stated exclude potential further upside that
could be realised from revenue synergies or if there were to be a
re-rating of Brand Architekts shares following the Merger.
4. Recommendations
InnovaDerma
The InnovaDerma Directors, who have been so advised by finnCap
Ltd as to the financial terms of the Merger, unanimously consider
the terms of the Merger to be fair and reasonable. In providing its
advice to the InnovaDerma Directors, finnCap has taken into account
the commercial assessments of the InnovaDerma Directors. finnCap is
providing independent financial advice to the InnovaDerma Directors
for the purposes of Rule 3 of the Takeover Code.
Accordingly, the InnovaDerma Directors intend unanimously to
recommend that InnovaDerma Shareholders vote in favour of the
Scheme at the InnovaDerma Court Meeting, and in favour of the
InnovaDerma Resolution to be proposed at the InnovaDerma General
Meeting as those InnovaDerma Directors who are interested in
InnovaDerma Shares have irrevocably undertaken to do in respect of
their own beneficial holdings (or have undertaken to procure the
vote in respect of the InnovaDerma Shares in which certain of their
connected persons are interested) of 5,596,302 InnovaDerma Shares
representing, in aggregate, approximately 19.9 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
Brand Architekts
In order to implement the Merger, Brand Architekts will require
the approval of the Brand Architekts Shareholders to allot the New
Brand Architekts Shares at the Brand Architekts General Meeting.
The Merger is accordingly conditional on such approval being
obtained.
The Brand Architekts Directors have received financial advice
from Singer Capital Markets in relation to the Merger. In providing
its advice to the Brand Architekts Directors, Singer Capital
Markets has taken into account the Brand Architekts Directors'
commercial assessment of the Merger.
Roger McDowell has abstained himself from the Brand Architekts
Board recommendation given his respective shareholdings in both
Brand Architekts and InnovaDerma. Accordingly, the Brand Architekts
Directors, with the exception of Roger McDowell, consider the
Merger to be in the best interests of Brand Architekts Shareholders
as a whole and intend unanimously to recommend that Brand
Architekts Shareholders vote in favour of the Brand Architekts
Resolution to be proposed at the Brand Architekts General Meeting,
as those Brand Architekts Directors who are interested in Brand
Architekts Shares have irrevocably undertaken to do in respect of
their own beneficial holdings (or have undertaken to procure the
vote in respect of the Brand Architekts Shares in which certain of
their connected persons are interested) of 983,580 Brand Architekts
Shares representing, in aggregate, approximately 5.7 per cent. of
Brand Architekts's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
Roger McDowell, the Chairman of Brand Architekts, has an
interest in 899,105 Brand Architekts Shares (representing
approximately 5.2 per cent. of Brand Architekts's issued ordinary
share capital as at the close of business on the Latest Practicable
Date). In addition Roger McDowell has an interest in 883,671
InnovaDerma Shares (representing approximately 3.1 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date). Roger McDowell intends to
vote in favour of the Brand Architekts Resolution to be proposed at
the Brand Architekts General Meeting in respect of his holding of
Brand Architekts Shares; and in favour of the Scheme at the
InnovaDerma Court Meeting and in favour of the InnovaDerma
Resolution to be proposed at the InnovaDerma General Meeting, in
each case in respect of his holding of InnovaDerma Shares.
5. Background to and reasons for the recommendation of the InnovaDerma Board
Following a largely wholescale board change in 2021, InnovaDerma
raised GBP4.5m at a price of 35 pence per share in April 2021, to
provide funding to allow then newly appointed CEO Blake Hughes and
the wider management team to execute on a revised business
transformation strategy (as described in paragraph 7).
The transformation has reached across InnovaDerma's operations
and performance and as reported in the Company's interim financial
statements, is delivering pleasing improvements in the Company's
financial performance. The speed of the transformation has been
impacted by the much reduced consumer consumption and retail
momentum in the tanning industry, InnovaDerma's key market, as a
result of COVID-19. This included the effects of the Omicron
variant and the associated reduction in social contact in December
2021 and early 2022.
The InnovaDerma Directors are confident in the Company's
prospects but cautious that an unusually high level of global
uncertainty remains that can have an impact on underlying consumer
confidence and spending. Furthermore, in order to accelerate
profitable growth, as an independent company, further investment
and resources are required.
It is against this background that the InnovaDerma Directors
share the commercial and strategic attractions of the Merger
presented by the Brand Architekts Board in paragraph 3.
In particular, it is apparent that InnovaDerma growth can be
further accelerated by incremental resources and investment,
particularly in key brands Skinny Tan and Charles + Lee. The
InnovaDerma Directors believe that the Merger offers both the
opportunity and resources for to accelerate a return to
profitability, balanced with financial resilience in the case of
any future downturn.
The InnovaDerma Directors also believe that there is an
opportunity for the two companies to benefit from each other's
sales channels. In particular, InnovaDerma has a strong presence in
pharmacies such as Boots and Superdrug whereas Brand Architekts has
strengths in the grocery channel and there is an opportunity to
leverage these relationships to drive sales growth in the
respective products. In addition to this, Brand Architekts has
broader sales presence globally with an international sales team.
The InnovaDerma Board believe that these channels could be used to
further drive sales growth, especially in Skinny Tan.
The InnovaDerma Directors believe that the financial terms of
the Merger, insofar as the premium to the prevailing share price of
an InnovaDerma Share and the resultant relative participation of
InnovaDerma Shareholders in the performance of the Combined Group,
are attractive to InnovaDerma Shareholders and that the Cash
Consideration represents a meaningful partial return to reward
InnovaDerma Shareholders for their support. The InnovaDerma
Directors believe that greater scale will not only bring
operational benefits, but potentially also enhance trading
liquidity of the Combined Group's shares and greater appeal to a
wider range of investors.
Therefore, after careful consideration, the InnovaDerma
Directors have concluded that the terms of the Merger are in the
best interests of InnovaDerma Shareholders and InnovaDerma as a
whole. As such, the InnovaDerma Directors unanimously intend to
recommend that InnovaDerma Shareholders vote in favour of the
Merger.
6. Information on Brand Architekts
Brand Architekts is a public limited company incorporated in
England and Wales whose shares are admitted to the AIM market of
the London Stock Exchange.
Brand Architekts is a beauty brand specialist, with a portfolio
of skincare, haircare and bodycare brands and focused on innovating
new and exciting products. Brands range from female beauty to male
grooming, with both mass market appeal and everyday value
propositions. Among its 13 core growth brands are Super Facialist,
Dirty Works, Kind Natured and Dr Salts. The brands are retailed to
a variety of DTC and B2B channels; through its online platform, The
Unexpekted Store and through the Group's relationships with
retailers across the UK and internationally.
The recent creation of a new marketplace called
theunexpektedstore.com is expected to strengthen consumer reach and
engagement and drive multi-channel expansion. Brand Architekts's
strategic focus is to maximise the potential of its brands and
significant opportunities exist in the targeting of new
international markets and building relationships with appropriate
distribution and retail partners.
Brand Architekts has a stated strategy to seek
earnings-enhancing acquisition opportunities that are complementary
to its brand portfolio and longer term strategy.
Brand Architekts had, as at the last Practicable Date, a market
capitalisation of approximately GBP18.4 million . In the year ended
30 June 2021, Brand Architekts generated revenue of GBP15.9 million
(2020: GBP16.3 million), giving an underlying operating loss of
GBP0.3 million (2020: GBP0.1 million) and loss before tax of GBP1.9
million (2020: GBP(4.3) million), and had net assets on its balance
sheet as at 30 June 2021 of GBP23.7 million (2020: GBP23.1
million). As at 28 February 2022 Brand Architekts had a headcount
of 37 employees.
Further information regarding the interim results for Brand
Architekts for the six months to December 2021 can be found in
paragraph 8 below.
The table below shows illustrative historical pro forma
financial information for the Combined Group:
Latest financial year Brand Architekts InnovaDerma Pro forma
(ended 30 June 2021) (GBP'm) (GBP'm) (GBP'm)
Revenue 15.9 10.2 26.1
Adjusted EBITDA (0.2) (1.5) (1.7)
Underlying operating
profit margin (1.4)% (14.2)% (6.4)%
Depreciation and amortisation (0.3) (0.2) (0.5)
Net finance revenue
/ (costs) (0.2) (0.0) (0.2)
Other exceptional items (1.1) (0.3) (1.4)
Loss before tax 1.9 1.9 3.8
1. The pro forma financials have been based on audited
information obtained from (i) Brand Architekts's annual report for
the financial year ended 30 June 2021 and (ii) InnovaDerma's annual
report for the financial year ended 30 June 2021.
7. Information on InnovaDerma
InnovaDerma is a public limited company incorporated in England
and Wales whose shares are admitted to the standard listing segment
of the Official List and to trading on Euronext Paris.
InnovaDerma focuses on the research, manufacture and marketing
of beauty and personal care products and has a presence in the UK,
Europe, US, Australasia, Asia and Africa. InnovaDerma's products
extend over a range of applications and include the brands Skinny
Tan, Roots, Charles + Lee and Nuthing and InnovaDerma also has a
minority stake in the Prolong brand. InnovaDerma's products are
retailed to a variety of DTC channels; through its website, Amazon
and through its relationships with retailers across the UK and
internationally.
Skinny Tan, InnovaDerma's self-tanning range, is its largest and
highest priority product and accounts for approximately 84 per
cent. of its revenue. In addition to being sold through a variety
of channels as described above, Skinny Tan is also retailed through
its own website and the InnovaDerma Board has focused on the
marketing of Skinny Tan, in particular through social media. Most
notably, in October 2021, InnovaDerma appointed Love Island's
Liberty Poole as a Skinny Tan ambassador to market the brand to her
c. 1.5 million Instagram followers.
InnovaDerma has changed substantially over the last 18 months
focusing on its digital, commercial and beauty sector expertise to
drive profitable and sustainable growth. In this period,
InnovaDerma has strategically repositioned its business to move
away from certain loss leading sales, increased its sales through
Amazon (which is now its third largest retailer) and implemented
gross margin improvements and operational cost reductions.
The company has implemented a programme of significant change
across the organisation, ensuring that it is focused on the areas
that will drive both immediate and substantive performance
improvements whilst building the foundations for future growth.
InnovaDerma had, as at the last Practicable Date, a market
capitalisation of approximately GBP7.9 million. In the year ended
30 June 2021, InnovaDerma generated revenue of GBP10.2 million
(2020: GBP13.2 million), giving an underlying operating loss of
GBP2.3 million (2020: GBP(4.6) million) and loss before tax of
GBP1.9 million (2020: GBP(5.0) million), and had net assets on its
balance sheet as at 30 June 2021 of GBP3.4 million (2020: GBP1.7
million). As at 28 February 2022 InnovaDerma had a headcount of 35
employees.
8. Current trading
Current trading of Brand Architekts
Earlier today , Brand Architekts announced its unaudited interim
results for the 6 month period ended 31 December 2021 (the "Brand
Architekts Interim Results Announcement ").
In particular, in the Brand Architekts Interim Results
Announcement, the Company reported the following:
"The trading environment throughout the last six months has
continued to be challenging, with the impact of COVID and the well
publicised supply chain issues effecting retailers' buying
patterns, freight costs and therefore margin. We have focused on
implementing our four strategic pillars, so that we can position
ourselves to take advantage of future opportunities. Despite these
headwinds, I am pleased with the operational progress that has been
made in the first half of the year. We will be focusing on securing
omnichannel distribution gains and implementing a digital mindset,
so that we can ultimately deliver our Project 50 goal.
Key achievements include:
-- Relaunched seven brands in September & October 2021 (Dr
Salts; Root Perfect; Argan +; SenSpa; Kind Natured; Happy Naturals;
Beautopia). The benefits of the relaunch (new designs, formulations
and environmentally friendly packaging) will be seen in H2 and
beyond.
-- The successful relaunch of Root Perfect resulted in strong
distribution gains in 300+ Normal stores across Europe and
Morrisons.
-- Continued distribution gains for Super Facialist (Morrisons; Look Fantastic) and Dirty Works Internationally. After a successful trial period Super Facialist will be launching 14 products into 200+ Tesco stores in June 2022.
-- Launched our own marketplace www.theunexpektedstore.com at the end of September 2021.
Performance review
Net sales for the period were GBP7.4m, a decrease of 19% on the
prior year (H1FY 2021: GBP9.0m). This decline was as a result of
two factors; firstly key retailers delaying the implementation of
our brand relaunches, caused by the COVID pandemic and secondly
planned rationalisation of our product ranges by 25% to optimise
our productivity. With many of our brands needing to be relaunched
and product ranges rationalised to reflect consumer demand and
improve productivity, this delay meant that sales for the first
three months were affected, as stocks of the previous ranges were
run down. The impact of these delays was felt across both the high
street and grocer retailers, which remain our dominant revenue
generators.
International sales increased, with Root Perfect rolling out to
300+ Normal stores in Europe and Dirty Works launching in Peru. We
also increased both our e-commerce (Amazon and Look Fantastic) and
international sales but not significantly enough to counter the
high street impact.
Gross margin in the period was significantly impacted and
declined to 32.5% versus 36.3% in the prior year period (on an
adjusted basis). This reflects a wide range of cost pressures felt
throughout our supply chain, that we could not pass onto retailers
due to previously agreed pricing commitments. The main impact was
the significant increase in shipping container costs for goods from
overseas (principally Christmas Gift Sets and bath salts), which at
the time of shipping were 500% higher than historical prices.
Alongside this we have had to contend with other significant cost
increases throughout the supply chain, notably in raw materials,
componentry and energy. As we enter the second half and as we
approach Christmas 2022 planning, we plan to offset the majority of
these costs.
The Company experienced a first half loss before tax of GBP1.1m
(H1FY 2021: profit of GBP0.4m).
Net cash decreased by GBP1.7m, as a result of a GBP1.0m
contribution to the defined benefit pension scheme and the factors
detailed above. The Company still enjoys a very strong net cash
position of GBP17.3m (H1 2021: GBP19.0m) which positions it well
for future growth."
Current trading of InnovaDerma
Earlier today , InnovaDerma announced its unaudited interim
results for the 6 month period ended 31 December 2021 (the
"InnovaDerma Interim Results Announcement ") in which it outlines
trading for the period and its outlook on the 12 months ended 30
June 2022.
9. Employees, management and locations
Strategic plans for the Combined Group
Brand Architekts intends to implement a strategy which
recognises the importance of InnovaDerma's brands and the
established network of suppliers and customers, to facilitate
future growth and profitability for the business. The Combined
Group will have a broader product offering, a larger combined
customer base and an omni-channel sales approach and opportunities
exist to cross-sell opportunities amongst this portfolio.
The Combined Group, upon Completion will initiate a more
detailed review of the operations of both businesses to harmonise,
and define the most efficient, operating structure for the Combined
Group. This is expected to involve the harmonisation of the
Combined Group's supply chain and direct to consumer business
relationships, a reduction in headcount across the Combined Group
and a reduction in duplicated public quoted company costs and
certain operational costs and overheads.
The integration plan is then expected to take approximately 12
months following Completion, and will be designed to minimise
disruption to customers and employees whilst aiming to deliver the
anticipated opportunities and benefits of the Merger for the
Combined Group's stakeholders.
The Merger is expected to result in recurring run-rate pre-tax
cost synergies of c. GBP1.5 million - GBP1.75 million per
annum.
Governance
It is anticipated that the Board of the Combined Group will be
made up of seven directors with appropriate skills and relevant
experience. The members of the Board of the Combined Group are
expected to be as follows:
Executive directors: Quentin Higham, Group Chief Executive
Officer and Tom Carter Group Chief Financial Officer;
Non-executive directors: Roger McDowell, Chair of the Combined
Group; Chris How, Non-executive Director; Edward Beale,
Non-executive Director; Amy Nelson-Bennett, Non-executive Director
and Simon Pyper, Non-executive Director.
It is intended that Ross Andrews, Blake Hughes and Andrew
Dunderdale, currently non-executive chair, chief executive officer
and group finance director of InnovaDerma, will resign as directors
of the Board of InnovaDerma upon the Merger becoming Effective, on
terms to be agreed. It is also intended that Mark Ward, currently a
non-executive director of InnovaDerma, will step down as a director
with effect from Completion.
Given the proposed size of the Board of the Combined Group,
relative to the size of the business, it is intended that Edward
Beale will resign as a non-executive director following the
announcement of the Combined Group's preliminary results in
September 2022.
Management and employees
The Combined Group will aim to retain the best talent of Brand
Architekts and InnovaDerma to deliver the strategic and financial
benefits of the Merger.
Following the Merger becoming Effective, the Board of Brand
Architekts does not propose to make any changes to the terms and
conditions of employment of InnovaDerma employees for at least the
first 12 months post Completion. Brand Architekts confirms that it
intends to safeguard fully the existing statutory and contractual
employment and pension rights of Brand Architekts and InnovaDerma
employees and management.
The Boards of Brand Architekts and InnovaDerma recognise that to
achieve the expected benefits of the Merger, restructuring of the
internal functions of the Combined Group will be required following
Completion of the Merger. The initial synergy work carried out to
date, as part of preparation of the Quantified Financial Benefits
Statement, has assumed cost savings from the removal of duplication
and rationalisation of roles as part of the integration process,
across corporate, sales and support functions and Board level
positions.
Subject to the outcome of the detailed review of the integration
options, it is likely there will be a reduction of approximately 35
per cent. in the Combined Group's projected headcount. The current
assumption is that the cost savings will predominantly be delivered
12 months post-Completion. Any proposals relating to a reduction in
headcount would be subject to consultation with Brand Architekts
and InnovaDerma employees as appropriate. Any affected employees
will be treated in a fair and transparent manner and in accordance
with their employment rights and applicable law.
At the time of this Announcement, Brand Architekts has not
entered into, nor had any discussions about proposals to enter
into, management incentivisation arrangements with members of the
management of InnovaDerma, nor does it expect to have any such
discussions until after Completion . As noted above, it is the
intention that Simon Pyper, a non-executive director of
InnovaDerma, joins the Board of the Combined Group as a
non-executive director. Brand Architekts proposes to enter into a
letter of appointment with this individual with effect from the
Merger becoming Effective on terms of appointment consistent with
Brand Architekts's existing non-executive directors.
Locations and Research and Development
The Board of Brand Architekts considers that it is in the best
interests of the Combined Group for the head offices and corporate
functions of Brand Architekts and InnovaDerma to be combined.
Following the Merger becoming Effective, it is intended that the
Combined Group and its corporate functions will be headquartered at
Brand Architekts's existing headquarters in 8 Waldegrave Road,
Teddington, London, TW11 8GT and the lease in respect of
InnovaDerma's current registered office, 27 Old Gloucester Street,
London WC1N 3AX will be immediately terminated. Brand Architekts
and InnovaDerma have supported flexible working remotely and
following Completion it is intended to continue to support such
working practices. Following Completion, it is intended that the
Combined Group will review InnovaDerma's flexible overseas offices
in Australia and the Philippines, as part of the detailed review
referred to above, which may result in the rationalisation of its
corporate footprint. As part of this review, the Board of Brand
Architekts is considering all options in respect of the DTC trading
operations of the Combined Group which includes outsourcing all
existing overseas infrastructure. However, these plans have not yet
been fully determined ahead of the detailed review and taking
account of the commercial and legal considerations.
Beyond the potential changes identified above, there are no
further plans to redeploy the fixed assets of the Combined
Group.
InnovaDerma does not currently have a research and development
function and therefore no changes are intended in this regard.
Pensions
Following Completion, the Combined Group does not intend to make
any changes with regard to the agreed employer contributions into
InnovaDerma's existing pension scheme(s) or the accrual of benefits
to existing members or the admission of new members to such pension
schemes.
Trading Facilities
InnovaDerma is currently listed on the Official List and
Euronext Paris. As further described below, prior to the Scheme
becoming Effective, it is intended that an application will be made
to the London Stock Exchange for the cancellation of trading in the
InnovaDerma Shares on the Main Market of the London Stock Exchange,
and to the FCA for the cancellation of the listing of the
InnovaDerma Shares on the Official List, in each case with effect
from or shortly after the Effective Date. In addition, prior to the
Scheme becoming Effective, it is intended that an application will
be made to Euronext Paris for the delisting of InnovaDerma Shares
from Euronext Paris with effect from or shortly after the Effective
Date. Any delisting of InnovaDerma Shares from Euronext Paris is
subject to the approval of Euronext Paris.
It is also intended that, following the Effective Date,
InnovaDerma will be re-registered as a private company under the
relevant provisions of the Companies Act.
Prior to the Effective Date, an application will be made by
Brand Architekts to the London Stock Exchange for the New Brand
Architekts Shares to be admitted to AIM.
Views of the InnovaDerma Board
The InnovaDerma Directors believe that there are compelling
strategic and financial rationale to the Merger and welcome Brand
Architekts's recognition of the importance of InnovaDerma's brands
and suppliers and customers, in facilitating the future growth and
profitability of the Combined Group. The InnovaDerma Directors also
welcome that Brand Architekts recognise the importance of
InnovaDerma's employees and the intention to retain the best talent
across the Combined Group. The InnovaDerma Directors acknowledge
that combining head offices is a pragmatic step in integrating the
businesses.
It is with regret that the InnovaDerma Directors note the
potential for headcount reductions across the Combined Group as a
result of the Merger but understand their potential necessity to
achieve the expected benefits of the Merger in this competitive
landscape. The InnovaDerma Directors welcome the assurance that any
headcount reductions will follow careful review as to the manner of
such cost saving proposals being pursued, as set out above.
In this light, it is reassuring that Brand Architekts has also
confirmed that all existing employment rights and pensions of
InnovaDerma's employees, including as to pension rights, will be
fully safeguarded and that no material changes are expected in the
terms and conditions of employment or in the redeployment of
InnovaDerma's fixed assets.
10. Irrevocable undertakings and Letters of Support in respect of the Merger
In respect of the InnovaDerma Shareholder Meetings
The InnovaDerma Directors who are interested in InnovaDerma
Shares have irrevocably undertaken to vote (or procure votes) in
favour of the Scheme at the InnovaDerma Court Meeting and in favour
of the InnovaDerma Resolution to be proposed at the InnovaDerma
General Meeting, in respect of their own beneficial holdings (or
the holdings of certain persons connected with them) of 5,596,302
InnovaDerma Shares representing, in aggregate, approximately 19.9
per cent. of InnovaDerma's issued ordinary share capital as at the
close of business on the Latest Practicable Date.
In addition, Brand Architekts has received irrevocable
undertakings from an InnovaDerma Shareholder to vote in favour of
the Scheme at the InnovaDerma Court Meeting and to vote in favour
of the InnovaDerma Resolution to be proposed at the InnovaDerma
General Meeting, in respect of a total of 883,671 InnovaDerma
Shares representing, in aggregate, approximately 3.1 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
Brand Architekts has therefore received irrevocable undertakings
in respect of a total number of 6,479,973 InnovaDerma Shares
representing, in aggregate, approximately 23 .1 per cent. of
InnovaDerma's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
In addition, the Brand Architekts Directors have given
irrevocable undertakings to vote (or procure votes) in favour of
the Brand Architekts Resolution to be proposed at the Brand
Architekts General Meeting in respect of their own beneficial
holdings (or have undertaken to procure the vote in respect of the
Brand Architekts Shares in which certain of their connected persons
are interested) of 1,155,025 Brand Architekts Shares representing,
in aggregate, approximately 6.7 per cent. of Brand Architekts's
issued ordinary share capital as at the close of business on the
Latest Practicable Date.
Brand Architekts has also received a non-binding letter of
support from a Brand Architekts Shareholders to vote in favour of
the Brand Architekts Resolution to be proposed at the Brand
Architekts General Meeting, in respect of 1,979,400 Brand
Architekts Shares representing, in aggregate, approximately 11.5
per cent. Brand Architekts's issued ordinary share capital as at
the close of business on the Latest Practicable Date.
Brand Architekts has therefore received irrevocable undertakings
and letters of intent to vote in favour of the Brand Architekts
Resolution in respect of a total of 3,134,425 Brand Architekts
Shares representing, in aggregate, approximately 18.2 per cent. of
Brand Architekts's issued ordinary share capital as at the close of
business on the Latest Practicable Date.
Further details of these irrevocable undertakings (and the
circumstances in which the irrevocable undertakings will cease to
be binding) are set out in Appendix 3.
11. Scheme of Arrangement and Conditions
Scheme of Arrangement
It is intended that the Merger will be effected by means of a
Court-sanctioned scheme of arrangement between InnovaDerma and
InnovaDerma Scheme Shareholders under Part 26 of the Companies Act.
The procedure involves, among other things, an application by
InnovaDerma to the Court to sanction the Scheme, in consideration
for which InnovaDerma Scheme Shareholders, who are on the register
of members at the Scheme Record Time, will receive the Merger
Consideration on the basis set out in paragraph 2 of this
Announcement. The purpose of the Scheme is to provide for Brand
Architekts to become the owner of the entire issued and to be
issued ordinary share capital of InnovaDerma.
The New Brand Architekts Shares will be issued in registered
form and will be capable of being held in both certificated and
uncertificated form. The New Brand Architekts Shares will be issued
by Brand Architekts to InnovaDerma Shareholders no later than 14
days after the Effective Date. Fractions of New Brand Architekts
Shares will not be allotted or issued pursuant to the Merger, but
entitlements of InnovaDerma Shareholders will be rounded down to
the nearest whole number of New Brand Architekts Shares and all
fractions of New Brand Architekts Shares will be aggregated and
sold in the market as soon as practicable after the Effective Date.
The net proceeds of such sale (after deduction of all expenses and
commissions incurred in connection with the sale) will be
distributed in due proportions to InnovaDerma Shareholders who
would otherwise have been entitled to such fractions (rounded down
to the nearest penny), save that individual entitlements to amounts
of less than GBP5.00 will be retained for the benefit of the
Combined Group.
Conditions
Implementation of the Scheme
The implementation of the Scheme will be subject to the
Conditions and further terms which are set out in Appendix 1 of
this Announcement and the further terms and conditions to be set
out in the Scheme Document (and the related InnovaDerma Forms of
Proxy when issued) including, among other things:
1. the Scheme becoming Effective by 11:59 p.m. on the Long Stop
Date, failing which the Scheme will lapse and the Merger will not
take place (unless the Panel otherwise consents);
2. the approval of the Scheme by a majority in number of the
InnovaDerma Scheme Shareholders, representing not less than 75 per
cent. in value of the InnovaDerma Scheme Shares held by those
InnovaDerma Scheme Shareholders, present and voting, either in
person or by proxy, at the InnovaDerma Court Meeting or at any
adjournment of it, such meeting to be held on or before the 22nd
day after the expected date of the InnovaDerma Court Meeting (or
such later date as may be agreed between Brand Architekts and
InnovaDerma and the Court may allow);
3. the passing of the InnovaDerma Resolution by the requisite
majority at the InnovaDerma General Meeting or at any adjournment
of it, such meeting to be held on or before the 22nd day after the
expected date of the InnovaDerma General Meeting (or such later
date as may be agreed between Brand Architekts and InnovaDerma and
the Court may allow);
4. the passing of the Brand Architekts Resolution by the
requisite majority at the Brand Architekts General Meeting;
5. the sanction by the Court of the Scheme at the Court Hearing,
such hearing to be held on or before the 22nd day after the
expected date of the Court Hearing (or such later date as may be
agreed between Brand Architekts and InnovaDerma and the Court may
allow);
6. delivery to the Registrar of Companies in England and Wales
of the Court Order sanctioning the Scheme for registration; and
7. the L ondon Stock Exchange having acknowledged to Brand
Architekts or its agent (and such acknowledgement not having been
withdrawn) that the New Brand Architekts Shares will be admitted to
trading on AIM.
Scheme becoming Effective
Once the necessary approvals from InnovaDerma Shareholders have
been obtained and the other Conditions have been satisfied, or
(where applicable) waived, to become Effective the Scheme must be
sanctioned by the Court. The Scheme will become Effective in
accordance with its terms upon a copy of the Court Order being
delivered to the Registrar of Companies for registration. Upon the
Scheme becoming Effective, it will be binding on all InnovaDerma
Shareholders, irrespective of whether or not they attended or voted
at the InnovaDerma Court Meeting or the InnovaDerma General Meeting
(and if they attended and voted, whether or not they voted in
favour).
The Merger is subject to the terms and Conditions in Appendix 1
to this Announcement and on the further terms and conditions that
will be set out in the Scheme Document.
12. Indicative Timing
Further details of the Scheme, including an indicative timetable
for its implementation, will be set out in the Scheme Document,
which is expected to be despatched to InnovaDerma Shareholders as
soon as reasonably practicable and, in any event, within 28 days of
the date of this Announcement (unless otherwise agreed with the
Panel). The timing of events which relate to the implementation of
the Merger is, however, subject to the approval of the Court and is
therefore subject to change.
It is currently expected that the Merger will have an Effective
Date in May / early June 2022.
13. Election to switch
Subject to obtaining the consent of the Panel, Brand Architekts
reserves the right to elect to implement the Merger by way of a
Takeover Offer as an alternative to the Scheme. In any such event,
a Takeover Offer would be implemented on the same terms, so far as
applicable, as those which apply to the Scheme. Further details
relating to this right are set out in the terms and Conditions in
Appendix 1 to this Announcement. If Brand Architekts does elect to
implement the Merger by way of a Takeover Offer, and if sufficient
acceptances of such Takeover Offer are received and/or sufficient
InnovaDerma Shares are otherwise acquired, it is the intention of
Brand Architekts to apply the provisions of sections 979 to 982
(inclusive) of the Companies Act to acquire compulsorily any
remaining InnovaDerma Shares to which such Takeover Offer
relates.
14. Financing
The Cash Consideration payable in consideration for the Merger,
being in the aggregate amount of approximately GBP1.99 million,
will be financed from the on-balance sheet existing cash resources
of Brand Architekts.
Singer Capital Markets, as financial adviser to Brand
Architekts, is satisfied that sufficient resources are available to
Brand Architekts to enable it to satisfy in full the Cash
Consideration payable to InnovaDerma Shareholders under the terms
of the Merger.
15. Offer-related arrangements
Confidentiality Agreement
Brand Architekts and InnovaDerma have entered into a mutual
confidentiality agreement dated 25 January 2022 pursuant to which
each of Brand Architekts and InnovaDerma has undertaken, among
other things, to keep certain information relating to the Merger
and the other party confidential and not to disclose it to third
parties (other than to permitted parties) unless required by law or
regulation.
The confidentiality obligations of each party under the
Confidentiality Agreement in respect of the relevant information
disclosed from one party to another will continue until such time
as the information disclosed ceases to be confidential in
nature.
Cost Coverage Agreement
Brand Architekts and InnovaDerma have entered into an agreement
dated 28 March 2022 pursuant to which Brand Architekts has
undertaken to pay InnovaDerma for reasonably and properly incurred
legal costs incurred in respect of the Merger up to a maximum
amount of GBP200,000 (inclusive of VAT and disbursements) in the
event that the Merger does not proceed to Completion before the
Long Stop Date ("Cost Compensation Payment").
The Cost Compensation Payment will not be payable in the event
that, among other things, the InnovaDerma Directors withdraw,
remove or adversely qualify their unconditional and unanimous
recommendation of the Merger and/or InnovaDerma Shareholders
holding the requisite number of InnovaDerma Shares fail to approve
the resolutions to be approved at the InnovaDerma Shareholder
Meetings and/or if a competing offer is made for InnovaDerma which
becomes effective or becomes or is declared unconditional in all
respects.
16. Brand Architekts Shareholder approval to issue New Brand Architekts Shares
The Merger involves the issue of New Brand Architekts Shares to
InnovaDerma Shareholders. Accordingly, Brand Architekts will be
required to seek the approval of Brand Architekts Shareholders for
the allotment and issue of New Brand Architekts Shares at the Brand
Architekts General Meeting. The Merger will be conditional on,
among other things, the Brand Architekts Resolution being passed by
the requisite majority of Brand Architekts Shareholders at the
Brand Architekts General Meeting.
Brand Architekts will prepare the Brand Architekts Circular
which will contain a notice convening the Brand Architekts General
Meeting. It is expected that the Brand Architekts Circular will be
published and posted to Brand Architekts Shareholders at the same
time as the Scheme Document is posted to InnovaDerma Shareholders.
The Brand Architekts Circular will be made available by Brand
Architekts on its website at www.brandarchitektsplc.com and by
InnovaDerma on its website at www.innovaderma.com.
17. Admission of New Brand Architekts Shares
Prior to the Effective Date, an application will be made to the
London Stock Exchange for the New Brand Architekts Shares to be
admitted to AIM. It is expected that Admission will become
effective and that unconditional dealings in the New Brand
Architekts Shares will commence at 8.00 a.m. on the first Business
Day following the Effective Date. The New Brand Architekts Shares
will not be listed on any stock exchange other than AIM, and have
not been, and will not be, registered under the US Securities Act
or under any laws of any state or other jurisdiction of the United
States.
18. Cancellation of admission to trading on the London Stock
Exchange of InnovaDerma Shares, proposed cancellation of trading on
Euronext Paris and re registration
Prior to the Scheme becoming Effective, it is intended that an
application will be made to the London Stock Exchange for the
cancellation of the trading of the InnovaDerma Shares on the Main
Market of the London Stock Exchange, and to the FCA for the
cancellation of the listing of the InnovaDerma Shares on the
Official List, in each case with effect from or shortly after the
Effective Date. The last day of dealings in InnovaDerma Shares on
the London Stock Exchange is expected to be the date of the Court
Hearing and no transfers will be registered after 6.00 p.m. on that
date.
In addition, prior to the Scheme becoming Effective, it is
intended that an application will be made to Euronext Paris for the
delisting of InnovaDerma Shares from Euronext Paris with effect
from or shortly after the Effective Date. Any delisting of
InnovaDerma Shares from Euronext Paris is subject to the approval
of Euronext Paris.
On the Effective Date, InnovaDerma will become a subsidiary of
Brand Architekts and share certificates in respect of InnovaDerma
Shares will cease to be valid and should be destroyed. In addition,
entitlements to InnovaDerma Shares held within the CREST system
will be cancelled on the Effective Date.
Upon the Scheme becoming Effective, Brand Architekts will
acquire the InnovaDerma Shares fully paid and free from all liens,
equitable interests, charges, encumbrances and other third party
rights of any nature whatsoever and together with all rights
attaching to them including the right to receive and retain all
dividends and distributions (if any) declared, made or paid by
reference to a record date on or after the date of this
Announcement.
It is also intended that, following the Effective Date,
InnovaDerma will be re-registered as a private company under the
relevant provisions of the Companies Act.
19. Overseas Shareholders
The distribution of this Announcement to, and the availability
of the New Brand Architekts Shares to be issued pursuant to the
Merger to, persons who are not resident in the United Kingdom may
be affected by the laws of their relevant jurisdiction. Such
persons should inform themselves of and observe any applicable
legal or regulatory requirements of their jurisdiction. Further
details in relation to Overseas Shareholders of InnovaDerma will be
found in the Scheme Document.
This Announcement is provided for information purposes only.
This Announcement is not intended to, and does not constitute, or
form part of, an offer, invitation or the solicitation of an offer
to purchase, otherwise acquire, subscribe for, exchange, sell or
otherwise dispose of any securities, nor is it a solicitation of
any vote or approval in any jurisdiction, nor will there be any
purchase or transfer of the securities referred to in this
Announcement in any jurisdiction in contravention of applicable law
or regulation.
The New Brand Architekts Shares to be issued under the terms of
the Merger have not been and will not be registered under the US
Securities Act or under any laws or with any securities regulatory
authority of any state or other jurisdiction of the United States.
Accordingly, unless an exemption under relevant securities laws is
available, including the exemption from the registration
requirements of the US Securities Act provided by section 3(a)(10)
of that Act, the New Brand Architekts Shares are not being, and may
not be, offered, sold, resold, delivered or distributed, directly
or indirectly, in, into or from the United States. Neither the US
Securities and Exchange Commission nor any US state securities
commission has approved or disapproved of the New Brand Architekts
Shares, or determined if this Announcement is accurate or complete.
Any representation to the contrary is a criminal offence.
20. InnovaDerma Share Plan and InnovaDerma Warrants
InnovaDerma Share Plan
The Merger will affect participants in the InnovaDerma Share
Plan. In summary, Brand Architekts and InnovaDerma have agreed that
Brand Architekts will make appropriate proposals to the holders of
options and awards under the InnovaDerma Share Plan in accordance
with, and as required by, Rule 15 of the Takeover Code. Further
details of these arrangements will be communicated to participants
in the InnovaDerma Share Plan in due course, in the Scheme Document
and in separate proposal documentation.
Awards and options which vest and are exercised prior to the
Scheme Record Time will be satisfied by the allotment, issue or
transfer of InnovaDerma Shares prior to the Scheme Record Time and
those InnovaDerma Shares will be subject to the Scheme.
InnovaDerma Warrants
The Merger will affect the holder of the InnovaDerma Warrants.
In summary, Brand Architekts and InnovaDerma have agreed that Brand
Architekts will make appropriate proposals to the holder of the
InnovaDerma Warrants in accordance with, and as required by, Rule
15 of the Takeover Code. Further details of these arrangements will
be communicated to holders of the InnovaDerma Warrants in due
course, in the Scheme Document and in separate proposal
documentation.
InnovaDerma Warrants which are exercised prior to the Scheme
Record Time will be satisfied by the allotment, issue or transfer
of InnovaDerma Shares prior to the Scheme Record Time and those
InnovaDerma Shares will be subject to the Scheme.
21. Disclosure of interests
Save in respect of (a) the holding of Roger McDowell, the
Chairman of Brand Architekts, in 883,671 InnovaDerma Shares
(representing approximately 3.1 per cent. of InnovaDerma's issued
ordinary share capital as at the close of business on the Latest
Practicable Date) and (b) the irrevocable undertakings referred to
in paragraph 10 above, as at the close of business on the Latest
Practicable Date neither Brand Architekts, nor any of its
directors, nor, so far as Brand Architekts is aware, any person
acting in concert (within the meaning of the Takeover Code) with
it:
-- had any interest in or right to subscribe for any relevant securities of InnovaDerma;
-- had any short positions in respect of relevant securities of
InnovaDerma (whether conditional or absolute and whether in the
money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or
right to require another person to purchase or take delivery;
-- had borrowed or lent any relevant securities of InnovaDerma
(including, for these purposes, any financial collateral
arrangements of the kind referred to in Note 4 on Rule 4.6 of the
Takeover Code) save for any borrowed shares which have been either
on-lent or resold; or
-- was a party to any dealing arrangement of the kind referred
to in Note 11 on the definition of acting in concert in the
Takeover Code.
22. Opening position disclosures
Each of InnovaDerma and Brand Architekts confirm that it will
make an Opening Position Disclosure, setting out the details
required to be disclosed by it under Rule 8 of the Takeover Code,
by no later than 12 noon on 14
April 2022.
23. Documents available on website
Copies of the following documents will be made available on
Brand Architekts's and InnovaDerma's websites at
www.brandarchitektsplc.com and www.innovaderma.com respectively, by
no later than 12 noon on the Business Day following the date of
this Announcement until the end of the Offer Period:
-- this Announcement;
-- the Confidentiality Agreement;
-- the Cost Coverage Agreement;
-- the irrevocable undertakings and the letter of support
referred to in paragraph 10 above and summarised in Appendix 3 to
this Announcement;
-- the consent letters referred to in paragraph 25 and Appendix 4 below; and
-- the investor presentation prepared by Brand Architekts in
connection with the Brand Architekt's Interim Results Announcement
and Merger.
None of the contents of InnovaDerma's website, the contents of
Brand Architekts's website, or the content of any other website
accessible from hyperlinks on either such website, is incorporated
into or forms part of, this Announcement.
25. General
The Scheme will be governed by English law and will be subject
to the jurisdiction of the courts of England and Wales. The Scheme
will be subject to the applicable requirements of the Takeover
Code, the Panel, the London Stock Exchange and the FCA.
The bases and sources for certain financial information
contained in this Announcement are set out in Appendix 2. Details
of the irrevocable undertakings received in relation to the Merger
which are referred to in this Announcement are set out in Appendix
3. Information relating to the quantified financial benefits of the
Merger is set out in Appendix 4. Certain definitions and terms used
in this Announcement are set out in Appendix 5.
For the purposes of Rule 28 of the Takeover Code, the Quantified
Financial Benefits Statement is the responsibility of Brand
Architekts and the Brand Architekts Directors. Appendix 4 sets out
the Quantified Financial Benefits Statement relating to cost
synergies expected to arise as a direct result of the Merger and
provides underlying information and bases of belief. Appendix 4
also includes reports from Brand Architekts's reporting accountant,
PKF Francis Clark, and its financial adviser, Singer Capital
Markets, in connection with the Quantified Financial Benefits
Statement, as required pursuant to Rule 28.1(a) of the Takeover
Code, and provides underlying information and bases for the
accountant's and financial adviser's respective reports.
Each of Singer Capital Markets, PKF Francis Clark and finnCap
has given and not withdrawn its consent to the publication of this
Announcement with the inclusion in it of the references to their
opinions and names (as applicable) in the form and context in which
they are included.
This Announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation. For such purposes, the
person responsible for this Announcement on behalf of Brand
Architekts is Tom Carter, Brand Architekts Chief Financial Officer.
The person responsible for this Announcement on behalf of
InnovaDerma is Andrew Dunderdale, InnovaDerma Group Finance
Director.
Enquiries :
Brand Architekts plc
Quentin Higham, Chief Executive Officer
Tom Carter, Chief Financial Officer +44 (0) 20 3166 2840
Singer Capital Markets Advisory LLP (Financial
Adviser, Nominated Adviser and Corporate
Broker to Brand Architekts)
Jen Boorer / Shaun Dobson / Dan Dearden-Williams +44 (0) 20 7496 3000
Alma PR (Financial PR Adviser to Brand
Architekts)
Josh Royston / Sam Modlin +44 (0) 203 405 0205
InnovaDerma plc c/o TB Cardew
Blake Hughes, Chief Executive Officer innovaderma@tbcardew.com
Andrew Dunderdale, Group Finance Director
finnCap Ltd (Financial Adviser, Rule 3
Adviser and Corporate Broker to InnovaDerma)
Geoff Nash / Henrik Persson / Kate Bannatyne +44 (0) 2072 200 500
TB Cardew (Financial PR Adviser to InnovaDerma)
Shan Willenbrock / Olivia Rosser + 44 (0)7775 848537
Addleshaw Goddard LLP and Ashfords LLP are retained as legal
advisers for Brand Architekts. Fieldfisher LLP is retained as legal
adviser for InnovaDerma.
Important notices relating to financial advisers
Singer Capital Markets Advisory LLP, which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively for Brand Architekts and no one else in
connection with the matters set out in this Announcement and will
not be responsible to anyone other than Brand Architekts for
providing the protections offered to clients of Singer Capital
Markets or for providing advice in relation to the contents of this
Announcement or any matters referred to in this Announcement.
finnCap Ltd, which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting exclusively for
InnovaDerma and for no one else in connection with the subject
matter of this Announcement and will not be responsible to anyone
other than InnovaDerma for providing the protections afforded to
clients of finnCap or for providing advice in relation to the
contents of this Announcement or any matters referred to in this
Announcement.
Further information
This Announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, any offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Merger or otherwise, nor shall there
be any sale, issuance or transfer of securities of InnovaDerma
pursuant to the Merger or otherwise in any jurisdiction in
contravention of applicable law. The Merger will be implemented
solely by means of the Scheme Document (or, in the event that the
Merger is to be implemented by means of a Takeover Offer, the offer
document) which will contain the full terms and conditions of the
Merger, including details of how to vote in respect of the Merger
(or, in the case of a Takeover Offer, to accept the offer).
InnovaDerma will prepare the Scheme Document to be distributed
to InnovaDerma Shareholders. InnovaDerma and Brand Architekts urge
InnovaDerma Shareholders to read the Scheme Document carefully as
it will contain important information relating to the Merger, the
New Brand Architekts Shares and the Combined Group. Any vote in
respect of resolutions to be proposed at the InnovaDerma
Shareholder Meetings to approve the Merger, the Scheme or related
matters, should be made only on the basis of the information
contained in the Scheme Document.
It is expected that the Scheme Document (including notices of
the InnovaDerma Shareholder Meetings) together with the relevant
InnovaDerma Forms of Proxy will be sent to InnovaDerma Shareholders
within 28 days of the date of this Announcement (or on such later
date as may be agreed by Brand Architekts and InnovaDerma with the
consent of the Panel).
Brand Architekts will prepare the Brand Architekts Circular to
be distributed to Brand Architekts Shareholders and which will be
available on Brand Architekts's website at
www.brandarchitektsplc.com and InnovaDerma's website at
www.innovaderma.com. Brand Architekts urges Brand Architekts
Shareholders to read the Brand Architekts Circular when it becomes
available. Any decision to vote in respect of the Brand Architekts
Resolution should be made only on the basis of the information in
the Brand Architekts Circular. It is expected that the Brand
Architekts Circular (including the notice of the Brand Architekts
General Meeting) together with the Brand Architekts Form of Proxy,
will be posted to Brand Architekts Shareholders as soon as is
reasonably practicable and in any event within 28 days of this
Announcement, unless otherwise agreed with the Panel.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them.
This Announcement does not constitute a prospectus or prospectus
equivalent document. The New Brand Architekts Shares to be issued
pursuant to the Merger are not being offered to the public by means
of this Announcement. The Merger will be subject to the applicable
requirements of the Takeover Code, the Panel, the London Stock
Exchange and the FCA.
Please be aware that addresses, electronic addresses and certain
other information provided by InnovaDerma Shareholders, persons
with information rights and other relevant persons for the receipt
of communication by InnovaDerma may be provided to Brand Architekts
during the Offer Period as required by section 4 of Appendix 4 to
the Takeover Code.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying
with English law, the Takeover Code, the Market Abuse Regulation,
the Listing Rules, the AIM Rules and the Disclosure Guidance and
Transparency Rules 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 of the United Kingdom.
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
law and/or regulation. Persons who are not resident in the United
Kingdom, or who are subject to the laws of other jurisdictions
should inform themselves of, and observe, any applicable legal or
regulatory requirements. In particular, the ability of persons who
are not resident in the United Kingdom or who are subject to the
laws of another jurisdiction to participate in the Merger or to
vote their InnovaDerma Shares in respect of the Scheme at the
InnovaDerma Court Meeting, or to execute and deliver InnovaDerma
Forms of Proxy appointing another to vote at the InnovaDerma Court
Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located or to which they
are subject. Any failure to comply with the applicable requirements
may constitute a violation of the laws and/or regulations of any
such jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Merger disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Unless otherwise determined by Brand Architekts or required by
the Takeover Code and permitted by applicable law and regulation,
participation in the Merger will not be made available, directly or
indirectly, in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may
vote in favour of the Merger by any such use, means,
instrumentality or form within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the
laws of that jurisdiction. Accordingly, copies of this Announcement
and all documentation relating to the Merger are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and
persons receiving this Announcement and all documents relating to
the Merger (including custodians, nominees and trustees) must not
mail or otherwise distribute or send them in, into or from such
jurisdictions as doing so may invalidate any purported vote in
respect of the Merger.
If the Merger is implemented by way of a Takeover Offer (unless
otherwise permitted by applicable law and regulation), the Takeover
Offer may not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including,
without limitation, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national, state or other securities
exchange of any Restricted Jurisdiction and the Takeover Offer will
not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted
Jurisdiction.
The availability of the New Brand Architekts Shares under the
Merger to InnovaDerma Shareholders who are not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident or to which they are
subject. Persons who are not resident in the United Kingdom or who
are subject to the laws of other jurisdictions should inform
themselves of, and observe, any applicable legal or regulatory
requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Forward looking statements
This Announcement (including information incorporated by
reference into this Announcement), any oral statements made by
Brand Architekts or InnovaDerma in relation to the Merger and other
information published by Brand Architekts or InnovaDerma may
contain statements about Brand Architekts, InnovaDerma and the
Combined Group that are or may be forward looking statements. All
statements other than statements of historical fact included in
this Announcement may be forward looking statements. Without
limitation, any statements preceded or followed by or that include
the words "targets", "plans", "goals", "believes", "expects",
"aims", "intends", "will", "may", "anticipates", "estimates",
"projects", hopes", "continues", "would", "could", "should" or
words or terms of similar substance or the negative of them, are
forward looking statements. Forward looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; and (ii) business and management
strategies and the expansion and growth of Brand Architekts's or
InnovaDerma's or the Combined Group's operations and potential
synergies resulting from the Merger.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and/or the
operations of Brand Architekts, InnovaDerma or the Combined Group
and are based on certain assumptions and assessments made by Brand
Architekts and InnovaDerma in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. Except as
expressly provided in this Announcement, they have not been
reviewed by the auditors of Brand Architekts or InnovaDerma.
Although it is believed that the expectations reflected in such
forward looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct and
you are therefore cautioned not to place reliance on these forward
looking statements which speak only as at the date of this
Announcement. Neither InnovaDerma nor Brand Architekts, nor any of
their respective members, directors, officers, employees, advisers
and any person acting on behalf of one or more of them assumes any
obligation to update or correct the information contained in this
Announcement (whether as a result of new information, future events
or otherwise) except as required by applicable law (including as
required by the Takeover Code, the Listing Rules, the AIM Rules,
the Market Abuse Regulation
and the Disclosure Guidance and Transparency Rules).
There are several factors which could cause actual results to
differ materially from those expressed or implied in forward
looking statements. Among the factors that could cause actual
results to differ materially from those described in the forward
looking statements are changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business acquisitions or disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations.
No member of the Brand Architekts Group or the InnovaDerma
Group, nor any of their respective associates, directors, officers,
employees or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this Announcement will actually
occur.
Quantified Financial Benefits Statement
Statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. Neither the Quantified
Financial Benefits Statement nor any other statement in this
Announcement should be construed as a profit forecast or
interpreted to mean that the Combined Group's earnings in the
financial year ending 30 June 2023, being the envisaged first full
year following Completion, or in any subsequent period, would
necessarily match or be greater than or be less than those of Brand
Architekts or InnovaDerma for the relevant preceding financial
period or any other period. For the purposes of Rule 28 of the
Takeover Code, the Quantified Financial Benefits Statement
contained in this Announcement is the responsibility of Brand
Architekts and the Brand Architekts Directors.
Profit forecasts and estimates
No statement in this Announcement is intended to constitute a
profit forecast or profit estimate and no statement in this
Announcement should be interpreted to mean that the earnings or
future earnings per share of or dividends or future dividends per
share of Brand Architekts and/or InnovaDerma for current or future
financial years will necessarily match or exceed the historical or
published earnings or dividends per share of Brand Architekts or
InnovaDerma, as appropriate.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the Offer Period and, if later, following the
Announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of: (i) the offeree
company; and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the Takeover
Code applies must be made by no later than 3.30 p.m. on the 10th
Business Day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 p.m. on the 10th Business Day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each
of: (i) the offeree company; and (ii) any securities exchange
offeror, save to the extent that these details have previously been
disclosed under Rule 8 of the Takeover Code. A Dealing Disclosure
by a person to whom Rule 8.3(b) of the Takeover Code applies must
be made by no later than 3.30 p.m. on the Business Day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Takeover Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with either of them (see Rules 8.1, 8.2 and 8.4
of the Takeover Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk , including
details of the number of relevant securities in issue, when the
Offer Period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Takeover Code, InnovaDerma
announces that, as at close of business on the Latest Practicable
Date, it has 28,057,825 InnovaDerma Shares in issue and admitted to
trading on the London Stock Exchange. InnovaDerma has no
InnovaDerma Shares held in treasury. The International Securities
Identification Number (ISIN) of the InnovaDerma Shares is
GB00BT9PTW34.
In accordance with Rule 2.9 of the Takeover Code, Brand
Architekts announces that as at close of business on the Latest
Practicable Date, it has 17,230,702 Brand Architekts Shares in
issue and admitted to trading on AIM. Brand Architekts has no Brand
Architekts Shares held in treasury. The ISIN of the Brand
Architekts Shares is GB0008667304.
Requesting Hard Copy Documents
Pursuant to Rule 30.3 of the Takeover Code, a person so entitled
may request a copy of this Announcement and any information
incorporated into it by reference to another source in hard copy
form. A person may also request that all future documents,
announcements and information to be sent to that person in relation
to the Merger should be in hard copy form.
Brand Architekts Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by writing to Computershare Investor Services plc, of
The Pavilions, Bridgwater Road, Bristol, BS13 8AE or by calling
Computershare on +44 (0) 370 707 1332. Calls are charged at the
standard geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international
rate. The helpline is open between 9.00 am - 5.30 pm, Monday to
Friday excluding public holidays in England and Wales. Please note
that Computershare cannot provide any financial, legal or tax
advice and calls may be recorded and monitored for security and
training purposes. It is important that you note that unless you
make such a request, a hard copy of this Announcement and any such
information incorporated by reference in it will not be sent to
you. You may also request that all future documents, announcements
and information to be sent to you in relation to the Merger should
be in hard copy form.
InnovaDerma Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by writing to SLC Registrars, P.O. Box 5222, Lancing,
BN99 9FG or by calling SLC Registrars on +44 (0) 203 890 2122.
Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. The helpline is open between 9.00 am
- 5.30 pm, Monday to Friday excluding public holidays in England
and Wales. Please note that Computershare cannot provide any
financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes. It is important that
you note that unless you make such a request, a hard copy of this
Announcement and any such information incorporated by reference in
it will not be sent to you. You may also request that all future
documents, announcements and information to be sent to you in
relation to the Merger should be in hard copy form.
Publication on website
A copy of this Announcement will be made available, free of
charge subject to certain restrictions relating to persons resident
in Restricted Jurisdictions, on Brand Architekts's website at
www.brandarchitektsplc.com and on InnovaDerma's website at
www.innovaderma.com by no later than 12 noon on the Business Day
following the date of this Announcement.
Neither the content of the websites referred to in this
Announcement nor the content of any website accessible from
hyperlinks on Brand Architekts's or InnovaDerma's website (or any
other website) is incorporated into, or forms part of, this
Announcement.
The Merger is subject to the provisions of the Takeover
Code.
APPIX 1
Conditions to and Further Terms of the Merger
Part A: The Conditions
1. The Merger will be conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the Takeover Code,
by not later than 11.59 p.m. on the Long Stop Date.
Scheme conditions
2. In addition, subject to Part B of this Appendix 1 and to the
requirements of the Panel, the Scheme will be conditional upon:
(a)
(i) the approval of the Scheme by a majority in number of
InnovaDerma Scheme Shareholders representing not less than 75 per
cent. of the voting rights attaching to the InnovaDerma Scheme
Shares held by such InnovaDerma Scheme Shareholders (or the
relevant class or classes thereof) who are on the register of
members of InnovaDerma at the Voting Record Time, present and
voting, either in person or by proxy, at the InnovaDerma Court
Meeting and at any separate class meeting which may be required by
the Court or at any adjournment of any such meetings;
(ii) the InnovaDerma Court Meeting and any separate class
meeting which may be required by the Court or any adjournment of
any such meeting being held on or before the 22nd day after the
expected date of the InnovaDerma Court Meeting, to be set out in
the Scheme Document in due course (or such later date, if any, as
may be agreed by Brand Architekts and InnovaDerma in writing and,
if required, the Court may allow);
(b)
(i) all resolutions necessary to approve and implement the
Scheme being duly passed by the requisite majority or majorities at
the InnovaDerma General Meeting, or at any adjournment of that
meeting;
(ii) the InnovaDerma General Meeting or any adjournment of that
meeting being held on or before the 22nd day after the expected
date of the InnovaDerma General Meeting, to be set out in the
Scheme Document in due course (or such later date, if any, as may
be agreed by Brand Architekts and InnovaDerma in writing and, if
required, the Court may allow);
(c)
(i) the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable
to Brand Architekts and InnovaDerma) and the delivery of the Court
Order to the Registrar of Companies; and
(ii) the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing to be set out in the
Scheme Document in due course (or such later date, if any, as Brand
Architekts and InnovaDerma may agree and, if required, the Court
may allow);
Other conditions
3. In addition, subject to Part B of this Appendix 1 and to the
requirements of the Panel, the Merger will be conditional upon the
following conditions and, accordingly, the necessary actions to
make the Scheme Effective will only be taken on the satisfaction
or, where relevant, waiver of the following conditions:
Brand Architekts General Meeting
(a) the passing at the Brand Architekts General Meeting of any
resolution required to approve and implement the Merger and to
authorise the allotment and issue of the New Brand Architekts
Shares to InnovaDerma Scheme Shareholders pursuant to the
Merger;
Admission to trading on AIM
(b) the London Stock Exchange having acknowledged to Brand
Architekts or its agent (and such acknowledgement not having been
withdrawn) that the New Brand Architekts Shares will be admitted to
trading on AIM;
General Third Party official authorisations and regulatory
clearances
(c) no Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and, in each case, not having
withdrawn the same), or having enacted, made or proposed any
statute, regulation, decision or order, or change to published
practice or having taken any other steps, and there not continuing
to be outstanding any statute, regulation, decision or order, which
in each case would or might reasonably be expected to:
(i) require, prevent or delay the divestiture, or materially
alter the terms envisaged for any proposed divestiture by any
member of the Wider Brand Architekts Group or any member of the
Wider InnovaDerma Group of all or any portion of their respective
businesses, assets or property or impose any limitation on the
ability of any of them to conduct their respective businesses (or
any of them) or to own any of their respective assets or properties
or any part thereof which, in any such case, is material in the
context of the Wider Brand Architekts Group or the Wider
InnovaDerma Group in either case taken as a whole;
(ii) require, prevent or delay the divestiture by any member of
the Wider Brand Architekts Group of any shares or other securities
in InnovaDerma;
(iii) impose any material limitation on, or result in a delay
in, the ability of any member of the Wider Brand Architekts Group
directly or indirectly to acquire or to hold or to exercise
effectively any rights of ownership in respect of shares or loans
or securities convertible into shares or any other securities (or
the equivalent) in any member of the Wider InnovaDerma Group or the
Wider Brand Architekts Group or to exercise voting or management
control over any such member;
(iv) otherwise adversely affect the business, assets, profits or
prospects of any member of the Wider Brand Architekts Group or of
any member of the Wider InnovaDerma Group to an extent which is
material in the context of the Wider Brand Architekts Group or the
Wider InnovaDerma Group in either case taken as a whole;
(v) make the Merger or its implementation or the offer or
proposed offer by Brand Architekts or any member of the Wider Brand
Architekts Group of any shares or other securities in, or control
of InnovaDerma void, illegal, and/or unenforceable under the laws
of any jurisdiction, or otherwise, directly or indirectly,
restrain, restrict, prohibit, delay or otherwise interfere with the
same, or impose additional conditions or obligations with respect
thereto;
(vi) except pursuant to the implementation of the Merger or, if
applicable, sections 974 to 991 of the Companies Act, require any
member of the Wider Brand Architekts Group or the Wider InnovaDerma
Group to offer to acquire any shares or other securities (or the
equivalent) or interest in any member of the Wider InnovaDerma
Group or the Wider Brand Architekts Group owned by any third
party;
(vii) impose any limitation on the ability of any member of the
Wider InnovaDerma Group to co-ordinate its business, or any part of
it, with the businesses of any other members which is adverse to
and material in the context of the Wider InnovaDerma Group taken as
a whole or in the context of the Merger; or
(viii) result in any member of the Wider InnovaDerma Group
ceasing to be able to carry on business under any name under which
it presently does so, and all applicable waiting and other time
periods (including any extensions thereof) during which any such
Third Party could institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference or any other
step under the laws of any jurisdiction in respect of the Merger or
proposed offer for any InnovaDerma Shares having expired, lapsed or
been terminated;
(d) the waiver (or non-exercise within any applicable time
limits) by any Third Party of any termination right, right of
pre-emption, first refusal or similar right (which is material in
the context of the Wider InnovaDerma Group taken as a whole)
arising as a result of or in connection with the Merger including,
without limitation, its implementation and financing or the
proposed direct or indirect offer for any shares or other
securities in, or control or management of, InnovaDerma by Brand
Architekts or any member of the Wider Brand Architekts Group;
(e) all necessary filings or applications having been made in
connection with the Merger and all statutory or regulatory
obligations in any jurisdiction having been complied with in
connection with the Merger or the offer by any member of the Wider
Brand Architekts Group for any shares or other securities in, or
control of, InnovaDerma and all authorisations, orders, grants,
recognitions, determinations, confirmations, consents, licences,
clearances, permissions, exemptions and approvals reasonably deemed
necessary or appropriate by Brand Architekts or any member of the
Wider Brand Architekts Group for or in respect of the Merger
including without limitation, its implementation and financing or
the proposed direct or indirect offer for any shares or other
securities in, or control of, InnovaDerma or any member of the
Wider InnovaDerma Group by any member of the Wider Brand Architekts
Group having been obtained in terms and in a form satisfactory to
Brand Architekts from all appropriate Third Parties or persons with
whom any member of the Wider InnovaDerma Group has entered into
contractual arrangements and all such material authorisations,
orders, grants, recognitions, determinations, confirmations,
consents, licences, clearances, permissions, exemptions and
approvals necessary or appropriate to carry on the business of any
member of the Wider InnovaDerma Group which is material in the
context of the Brand Architekts Group or the InnovaDerma Group as a
whole or of the financing of the Merger remaining in full force and
effect and all filings necessary for such purpose having been made
and there being no notice or intimation of any intention to revoke
or not to renew any of the same at the time at which the Merger
becomes otherwise unconditional and all necessary statutory or
regulatory obligations in any jurisdiction having been complied
with;
Certain matters arising as a result of any arrangement,
agreement etc.
(f) save as Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider InnovaDerma Group is a party or by or
to which any such member or any of its assets may be bound,
entitled or subject, or any circumstance which in consequence of
the Merger or the proposed offer for any shares or other securities
(or equivalent) in InnovaDerma or because of a change in the
control or management of InnovaDerma or otherwise, could or might
result in any of the following to an extent which is material and
adverse in the context of the Wider InnovaDerma Group, or the Wider
Brand Architekts Group, in either case taken as a whole, or in the
context of the Merger:
(i) any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any
such member, being or becoming repayable or capable of being
declared repayable immediately or earlier than their or its stated
maturity date or repayment date or the ability of any such member
to borrow moneys or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of
any such member thereunder being terminated or adversely modified
or affected or any obligation or liability arising or any action
being taken or arising thereunder;
(iii) any asset or interest of any such member being or failing
to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest
could be required to be disposed of or charged or could cease to be
available to any such member otherwise than in the ordinary course
of business;
(iv) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property, assets or interest of any such member;
(v) the rights, liabilities, obligations or interests of any
such member, or the business of any such member with, any person,
firm, company or body (or any arrangement or arrangements relating
to any such interest or business) being terminated, adversely
modified or affected;
(vi) the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business
under any name under which it presently does so; or
(viii) the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax
liability or any obligation to obtain or acquire any material
Authorisation, notice, waiver, concession, agreement or exemption
from any Third Party or any person) other than trade creditors or
other liabilities incurred in the ordinary course of business or in
connection with the Merger,
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider InnovaDerma Group is a party or by or
to which any such member or any of its assets may be bound,
entitled or subject, would or might reasonably be expected to
result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (viii) of this Condition;
Certain events occurring since Last Accounts Date
(g) save as Disclosed, no member of the Wider InnovaDerma Group
having, since the Last Accounts Date:
(i) save as between InnovaDerma and wholly-owned subsidiaries of
InnovaDerma or for InnovaDerma Shares issued under or pursuant to
the exercise of options and vesting of awards granted under the
InnovaDerma Share Schemes, issued or agreed to issue, authorised or
proposed the issue of additional shares of any class;
(ii) save as between InnovaDerma and wholly-owned subsidiaries
of InnovaDerma or for the grant of options and awards and other
rights under the InnovaDerma Share Schemes, issued or agreed to
issue, authorised or proposed the issue of securities convertible
into shares of any class or rights, warrants or options to
subscribe for, or acquire, any such shares or convertible
securities;
(iii) other than to another member of the InnovaDerma Group,
prior to completion of the Merger, recommended, declared, paid or
made any dividend or other distribution payable in cash or
otherwise or made any bonus issue;
(iv) save for intra-InnovaDerma Group transactions, merged or
demerged with any body corporate or acquired or disposed of or
transferred, mortgaged or charged or created any security interest
over any assets or any right, title or interest in any asset
(including shares and trade investments) or authorised or proposed
or announced any intention to propose any merger, demerger,
disposal, transfer, mortgage, charge or security interest, in each
case, other than in the ordinary course of business and, in each
case, to the extent which is material in the context of the Wider
InnovaDerma Group taken as a whole;
(v) save for intra-InnovaDerma Group transactions, made or
authorised or proposed or announced an intention to propose any
change in its loan capital in each case, to the extent which is
material in the context of the Wider InnovaDerma Group taken as a
whole;
(vi) issued, authorised or proposed the issue of, or made any
change in or to, any debentures or (save for intra-InnovaDerma
Group transactions), save in the ordinary course of business,
incurred or increased any indebtedness or become subject to any
contingent liability;
(vii) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, save in respect to the matters mentioned in
sub-paragraphs (i) or (ii) above, made any other change to any part
of its share capital in each case, to the extent which is material
in the context of the Wider InnovaDerma Group taken as a whole;
(viii) save for intra-InnovaDerma Group transactions,
implemented, or authorised, proposed or announced its intention to
implement, any reconstruction, merger, demerger, amalgamation,
scheme, commitment or other transaction or arrangement otherwise
than in the ordinary course of business;
(ix) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction 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 a nature or
magnitude other than in the ordinary course of business, in each
case, to the extent which is material in the context of the Wider
InnovaDerma Group taken as a whole;
(x) (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or steps
or had any legal proceedings started or threatened against it in
relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up, dissolution or reorganisation or for
the appointment of a receiver, administrative receiver,
administrator, manager, trustee or similar officer of all or any
part of its assets or revenues or any analogous proceedings in any
jurisdiction or appointed any analogous person in any jurisdiction
or had any such person appointed, in each case, to the extent which
is material in the context of the Wider InnovaDerma Group taken as
a whole;
(xi) entered into any contract, transaction or arrangement which
would be restrictive on the business of any member of the Wider
InnovaDerma Group or the Wider Brand Architekts Group other than of
a nature and extent which is normal in the context of the business
concerned;
(xii) waived or compromised any claim otherwise than in the
ordinary course of business which is material in the context of the
Wider InnovaDerma Group taken as a whole;
(xiii) made any material alteration to its memorandum or
articles of association or other incorporation documents;
(xiv) 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 having 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;
(xv) entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or
proposed to, effect any of the transactions, matters or events
referred to in this Condition 3(g);
(xvi) made or agreed or consented to any change to:
(A) the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider InnovaDerma Group
for its directors, employees or their dependents;
(B) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
(C) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(D) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made, in each case, to
the extent which is material in the context of the Wider
InnovaDerma Group taken as a whole;
(xvii) proposed, agreed to provide or modified the terms of any
of the InnovaDerma Share Schemes or other benefit constituting a
material change relating to the employment or termination of
employment of a material category of persons employed by the Wider
InnovaDerma Group or which constitutes a material change to the
terms or conditions of employment of any senior employee of the
Wider InnovaDerma Group, save as agreed by the Panel (if required)
and by Brand Architekts, or entered into or changed the terms of
any contract with any director or senior executive;
(xviii) taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the
approval of InnovaDerma Shareholders in general meeting in
accordance with, or as contemplated by, Rule 21.1 of the Code;
(xix) entered into or varied in a material way the terms of, any
contracts, agreement or arrangement with any of the directors or
senior executives of any members of the Wider InnovaDerma Group;
or
(xx) waived or compromised any claim which is material in the
context of the Wider InnovaDerma Group taken as a whole, otherwise
than in the ordinary course;
No adverse change, litigation, regulatory enquiry or similar
(h) except as Disclosed, since the date of the Last Accounts Date:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects or operational performance of any member of the Wider
InnovaDerma Group which, in any such case, is material in the
context of the Wider InnovaDerma Group taken as a whole and no
circumstances have arisen which would or might reasonably be
expected to result in such adverse change or deterioration;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider
InnovaDerma Group is or may become a party (whether as a plaintiff,
defendant or otherwise) and no enquiry, review or investigation by,
or complaint or reference to, any Third Party or other
investigative body against or in respect of any member of the Wider
InnovaDerma Group having been instituted, announced, implemented or
threatened by or against or remaining outstanding in respect of any
member of the Wider InnovaDerma Group which in any such case has
had or might reasonably be expected to have a material adverse
effect on the Wider InnovaDerma Group taken as a whole or in the
context of the Merger;
(iii) no contingent or other liability of any member of the
Wider InnovaDerma Group having arisen or become apparent to Brand
Architekts or increased which has had or might reasonably be
expected to have a material adverse effect on the Wider InnovaDerma
Group taken as a whole or in the context of the Merger;
(iv) no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented,
instituted by or remaining outstanding against or in respect of any
member by or the Wider InnovaDerma Group which in any case is
material in the context of the Wider InnovaDerma Group taken as a
whole;
(v) no member of the Wider InnovaDerma Group having conducted
its business in breach of any applicable laws and regulations and
which is material in the context of the Wider InnovaDerma Group as
a whole or material in the context of the Merger; and
(vi) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any
licence or permit held by any member of the Wider InnovaDerma Group
which is necessary for the proper carrying on of its business and
the withdrawal, cancellation, termination or modification of which
has had, or would reasonably be expected to have, a material
adverse effect on the Wider InnovaDerma Group taken as a whole;
No discovery of certain matters
(i) save as Disclosed, Brand Architekts not having discovered:
(i) that any financial or business or other information
concerning the Wider InnovaDerma Group disclosed at any time by or
on behalf of any member of the Wider InnovaDerma Group, whether
publicly, to any member of the Wider Brand Architekts Group or
otherwise, is materially misleading or contains any material
misrepresentation of fact or omits to state a fact necessary to
many any information contained therein not misleading, in each case
to an extent which is material in the context of the Wider
InnovaDerma Group taken as a whole; or
(ii) that any member of the Wider InnovaDerma Group is subject
to any liability (actual or contingent) which is material in the
context of the Wider InnovaDerma Group taken as a whole; or
(iii) any information which affects the import of any
information disclosed at any time by or on behalf of any member of
the Wider InnovaDerma Group and which is material in the context of
the Wider InnovaDerma Group taken as a whole;
Environmental
(j) save as Disclosed, Brand Architekts not having discovered:
(i) any past or present member of the Wider InnovaDerma Group
has not complied in all material respects with all applicable
legislation or regulations of any jurisdiction relating to the use,
treatment, storage, carriage, disposal, discharge, spillage,
release, leak or emission of any waste or hazardous substance or
any substance likely to impair the environment (including property)
or harm human health or otherwise relating to environmental matters
or the health and safety of any person, or that there has otherwise
been any such use, treatment, handling, storage, transport,
release, disposal, discharge, spillage, leak or emission (whether
or not this constituted a non-compliance by any person with any
legislation or regulations and wherever the same may have taken
place), which non-compliance would be likely to give rise to any
material liability including any penalty for non-compliance
(whether actual or contingent) or cost on the part of any member of
the Wider InnovaDerma Group, which in any case is material in the
context of the Wider InnovaDerma Group as a whole; or
(ii) there is, or is likely to be, for any reason whatsoever,
any liability (actual or contingent) of any past or present member
of the Wider InnovaDerma Group to make good, remediate, repair,
reinstate or clean up any property or any controlled waters now or
previously owned, occupied, operated or made use of or controlled
by any such past or present member of the Wider InnovaDerma Group
(or on its behalf) or by any person for which a member of the Wider
InnovaDerma Group is or has been responsible, or in which any such
member may have or previously have had or be deemed to have had an
interest, under any environmental legislation, regulation, notice,
circular or order of any Third Party and which is material in the
context of the Wider InnovaDerma Group taken as a whole or the
Merger; or
(iii) circumstances exist (whether as a result of the making of
the Merger or otherwise) which would be reasonably likely to lead
to any Third Party instituting, or whereby any member of the Wider
Brand Architekts Group or any present or past member of the Wider
InnovaDerma Group would be likely to be required to institute, an
environmental audit or take any other steps which would in any such
case be reasonably likely to result in any liability (whether
actual or contingent) to improve, modify existing or install new
plant, machinery or equipment or carry out changes in the processes
currently carried out or make good, remediate, repair, re-instate
or clean up any land or other asset currently or previously owned,
occupied or made use of by any past or present member of the Wider
InnovaDerma Group (or on its behalf) or by any person for which a
member of the Wider InnovaDerma Group is or has been responsible,
or in which any such member may have or previously have had or be
deemed to have had an interest which is material in the context of
the Wider InnovaDerma Group taken as a whole or the Merger; or
(iv) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any
product or process of manufacture or materials used therein
currently or previously manufactured, sold or carried out by any
past or present member of the Wider InnovaDerma Group which claim
or claims would be likely, materially and adversely, to affect any
member of the Wider InnovaDerma Group and which is material in the
context of the Wider InnovaDerma Group taken as a whole or the
Merger;
Anti-corruption, economic sanctions, criminal property and money
laundering
(k) save as Disclosed, Brand Architekts not having discovered:
(i) (A) any past or present member, director, officer or
employee of the Wider InnovaDerma Group is or has at any time
engaged in any activity, practice or conduct which would constitute
an offence under the Bribery Act 2010, the US Foreign Corrupt
Practices Act of 1977 or any other applicable anti-corruption or
anti-bribery law, rule or regulation or any other applicable law,
rule, or regulation concerning improper payments or kickbacks or
(B) any person that performs or has performed services for or on
behalf of the Wider InnovaDerma Group is or has at any time engaged
in any activity, practice or conduct in connection with the
performance of such services which would constitute an offence
under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977 or any other applicable anti-corruption or anti-bribery law,
rule or regulation or any other applicable law, rule, or regulation
concerning improper payments or kickbacks; or
(ii) any asset of any member of the Wider InnovaDerma Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition) or proceeds of crime under any other applicable law,
rule, or regulation concerning money laundering or proceeds of
crime or any member of the Wider InnovaDerma Group is found to have
engaged in activities constituting money laundering under any
applicable law, rule, or regulation concerning money laundering;
or
(iii) any past or present member, director, officer or employee
of the Wider InnovaDerma Group, or any other person for whom any
such person may be liable or responsible, is or has engaged in any
business with, made any investments in, made any funds or assets
available to or received any funds or assets from:
(A) any government, entity or individual in respect of which US,
UK or European Union persons, or persons operating in those
territories, are prohibited from engaging in activities or doing
business, or from receiving or making available funds or economic
resources, by US, UK or European Union laws or regulations,
including the economic sanctions administered by the United States
Office of Foreign Assets Control, or HMRC; or
(B) any government, entity or individual targeted by any of the
economic sanctions of the United Nations, the United States, the
United Kingdom, the European Union or any of its member states,
save that this shall not apply if and to the extent that it is or
would be unenforceable by reason of breach of any applicable
Blocking Law; or
(iv) any past or present member, director, officer or employee
of the Wider InnovaDerma Group, or any other person for whom any
such person may be liable or responsible:
(A) has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not
limited to the U.S. Anti-Terrorism Act; or
(B) has engaged in conduct which would violate any relevant
anti-boycott law, rule, or regulation or any applicable export
controls, including but not limited to the Export Administration
Regulations administered and enforced by the U.S. Department of
Commerce or the International Traffic in Arms Regulations
administered and enforced by the U.S. Department of State; or
(C) has engaged in conduct which would violate any relevant
laws, rules, or regulations concerning human rights, including but
not limited to any law, rule, or regulation concerning false
imprisonment, torture or other cruel and unusual punishment, or
child labour; or
(D) is debarred or otherwise rendered ineligible to bid for or
to perform contracts for or with any government, governmental
instrumentality, or international organization or found to have
violated any applicable law, rule, or regulation concerning
government contracting or public procurement; or
(E) any member of the Wider InnovaDerma Group is or has been
engaged in any transaction which would cause Brand Architekts to be
in breach of any law or regulation in connection with the Merger,
including but not limited to the economic sanctions of the United
States Office of Foreign Assets Control, or HMRC, or any other
relevant government authority; and
Intellectual Property
(l) save as Disclosed, no circumstance having arisen or event
having occurred in relation to any intellectual property owned or
used by any member of the Wider InnovaDerma Group which would have
a material adverse effect on the Wider InnovaDerma Group taken as a
whole or is otherwise material in the context of the Merger,
including:
(i) any member of the Wider InnovaDerma Group losing its title
to any intellectual property, or any intellectual property owned by
the Wider InnovaDerma Group being revoked, cancelled or declared
invalid; or
(ii) any claim being asserted in writing or threatened in
writing by any person challenging the ownership of any member of
the Wider InnovaDerma Group to, or the validity or effectiveness
of, any of its intellectual property; or
(iii) any agreement regarding the use of any intellectual
property licensed to or by any member of the Wider InnovaDerma
Group being terminated or varied.
For the purpose of these Conditions:
1. "Third Party" means any central bank, government, government
department or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body,
authority, court, trade agency, association, institution or
professional or environmental body in any relevant jurisdiction,
including, for the avoidance of doubt, the Panel; and
2. a Third Party shall be regarded as having "intervened" if it
has given notice to take, institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference or
made, proposed or enacted any statute, regulation, decision or
order or taken any measures or other steps or required any action
to be taken or information to be provided or otherwise having done
anything and "intervene" shall be construed accordingly.
Part B: Further terms of the Merger and the Scheme
Waiver and Invocation of Conditions
1. Subject to the requirements of the Panel, Brand Architekts
reserves the right in its sole discretion to waive in whole or in
part, all or any of the Conditions set out in Part A above, except
Conditions 2(a)(i), 2(b)(i), 2(c)(i), 3(a) and 3(b) which cannot be
waived. If any of the Conditions 2(a)(ii), 2(b)(ii) or 2(c)(ii) is
not satisfied by the relevant deadline specified in the relevant
Condition, Brand Architekts shall make an announcement by 8.00 a.m.
on the Business Day following such deadline confirming whether it
has invoked the relevant Condition, waived the relevant deadlines
or agreed with InnovaDerma to extend the relevant deadline.
2. Conditions 2(a)(i), 2(b)(i) and 3(a) to 3(l) (inclusive) in
Part A above must each be fulfilled by, or (if capable of waiver)
be waived by, Brand Architekts or InnovaDerma (as the case may be)
by no later than 11.59 p.m. on the date immediately preceding the
date of the Court Hearing (or such later date as Brand Architekts,
InnovaDerma, the Panel and, if required, the Court may allow)
failing which the Scheme will lapse.
3. Under Rule 13.5(a) of the Code, Brand Architekts may not
invoke a Condition that is subject to Rule 13.5(a) of the Code so
as to cause the Scheme not to proceed, to lapse or to be withdrawn
unless the circumstances which give rise to the right to invoke the
condition are of material significance to Brand Architekts in the
context of the Merger. Brand Architekts may only invoke a Condition
that is subject to Rule 13.5(a) of the Code with the consent of the
Panel and any Condition that is subject to Rule 13.5(a) of the Code
may be waived by Brand Architekts. Conditions 1, 2(a)(i), 2(b)(i)
and 2(c)(i), 3(a) and 3(b) in Part A above and, if applicable, any
acceptance condition (if the Merger is implemented by means of a
Takeover Offer), are not subject to Rule 13.5(a) of the Code.
4. Brand Architekts shall not be under any obligation to waive
(if capable of waiver), to determine to be or remain satisfied or
to treat as fulfilled any of the Conditions by a date earlier than
the latest date of the fulfilment of that Condition notwithstanding
that the other Conditions to the Merger may at such earlier date
have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any such conditions may not
be capable of fulfilment.
Implementation by way of Takeover Offer
5. Subject to obtaining the consent of the Panel, Brand
Architekts reserves the right to elect to implement the Merger by
way of a Takeover Offer as an alternative to the Scheme.
6. In such event, such Takeover Offer will be implemented on the
same terms and conditions and conditions so far as applicable, as
those which would apply to the Scheme (subject to appropriate
amendments, including an acceptance condition set at up to 90 per
cent. of the InnovaDerma Shares to which the Takeover Offer relates
(or such lower percentage as the Panel may agree provided that if
the Takeover Offer became or was declared unconditional in all
respects, it would result in Brand Architekts holding InnovaDerma
Shares carrying greater than 50 per cent. of the voting rights in
InnovaDerma)).
Rights attaching to InnovaDerma Shares and Dividends
7. InnovaDerma Shares will be acquired by Brand Architekts fully
paid and free from all liens, charges, encumbrances and other third
party rights of any nature whatsoever and together with all rights
attaching to them, including the right to receive and retain all
dividends and distributions (if any) declared, made or paid on or
after the date of this Announcement.
8. The New Brand Architekts Shares will be issued credited as
fully paid and will rank pari passu in all respects with the
existing Brand Architekts Shares. Application will be made to the
London Stock Exchange for the New Brand Architekts Shares to be
admitted to trading on the AIM Market of the London Stock
Exchange.
9. Fractions of the New Brand Architekts Shares will not be
allotted or issued pursuant to the Merger, but entitlements of
InnovaDerma Shareholders will be rounded down to the nearest whole
number of New Brand Architekts Shares and all fractions of New
Brand Architekts Shares will be aggregated and sold in the market
as soon as practicable after the Merger becomes Effective. The net
proceeds of such sale (after deduction of all expenses and
commissions incurred in connection with the sale) will be
distributed in due proportions to InnovaDerma Shareholders who
would otherwise have been entitled to such fractions (rounded down
to the nearest penny), save that individual entitlements to amounts
of less than GBP5.00 will be retained for the benefit of the
Combined Group.
10. If, on or after the date of this Announcement, and prior to
the Merger becoming Effective, any dividend, distribution or return
of capital or value is declared, made or paid or becomes payable in
respect of InnovaDerma Shares with a record date on or before the
Effective Date (an "InnovaDerma Dividend"), Brand Architekts
reserves the right (without prejudice to any right of Brand
Architekts, with the consent of the Panel, to invoke the Condition
set out in paragraph 3(g)(iii) of Part A of this Appendix 1) to
reduce Merger Consideration accordingly so as to reflect the
aggregate value attributable to any such InnovaDerma Dividend. Any
exercise by Brand Architekts of its rights to reduce the Merger
Consideration in the circumstances described above shall be the
subject of an announcement but, for the avoidance of doubt, shall
not be regarded as constituting any revision or variation of the
terms of the Merger. For the avoidance of doubt, to the extent that
a dividend, distribution or other return of value in respect of
InnovaDerma Shares has been declared, paid, made or is payable, and
is or shall be: (i) transferred pursuant to the Merger on a basis
which entitles Brand Architekts to receive the dividend,
distribution or other return of value and to retain it; or (ii)
cancelled before the Effective Date, the Merger Consideration
payable and the terms of the Merger shall not be subject to change
and shall not be reduced in accordance with the above.
Other terms of the Merger
11. If Brand Architekts is required by the Panel to make an
offer for InnovaDerma Shares under the provisions of Rule 9 of the
Code, Brand Architekts may make such alterations to the Conditions
and certain further terms of the Merger as are necessary to comply
with the provisions of that Rule.
12. The availability of the Merger to persons not resident in
the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
or who are subject to the laws of any jurisdiction other than the
United Kingdom should inform themselves about and observe any
applicable requirements. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.
13. The Merger will not be made, directly or indirectly, in or
into, or by use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telephone,
internet or e-mail) of interstate or foreign commerce of, or of any
facility of a national securities exchange of, any Restricted
Jurisdiction and it will not be capable of acceptance by any such
use, means, instrumentality or facility or from within any
Restricted Jurisdiction.
14. The New Brand Architekts Shares to be issued pursuant to the
Merger have not been and will not be registered under the US
Securities Act or under any laws or with any securities regulatory
authority of any state or other jurisdiction of the United States
nor under any of the relevant securities laws of any Restricted
Jurisdiction. Accordingly, the New Brand Architekts Shares may not
be offered, sold or delivered, directly or indirectly, into the
United States, or any other Restricted Jurisdiction, except
pursuant to exemptions from applicable requirements of any such
jurisdiction.
15. The Merger will be subject, inter alia, to the Conditions
and certain further terms which are set out in this Appendix 1 and
to the full terms and conditions which will be set out in the
Scheme Document and such further terms as may be required to comply
with the Listing Rules and the provisions of the Code.
16. This announcement and any rights or liabilities arising
hereunder are, and the Merger, the Scheme, and any proxies will be,
governed by English law and will be subject to the jurisdiction of
the courts of England and Wales. The Scheme will be subject to the
applicable requirements of the Code, the Panel, the London Stock
Exchange, the FCA and the Listing Rules.
17. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
APPIX 2
Sources of Information and Bases of Calculation
In this Announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used.
1. All Closing Prices for InnovaDerma Shares and Brand
Architekts Shares have been derived from the Daily Official List
and the AIM Appendix to the Daily Official List, respectively, and
represent the Closing Price of the relevant shares on the relevant
date.
2. The fully diluted share capital of InnovaDerma (being
28,492,610 InnovaDerma Shares) is based upon:
i. the 28,057,825 InnovaDerma Shares in issue as at the close of
business on the Latest Practicable Date;
ii. 220,500 InnovaDerma Shares which may be issued on or after
the date of this Announcement on the exercise of options or vesting
of awards granted or agreed to be granted under the InnovaDerma
Share Plan; and
iii. 214,285 InnovaDerma Shares which may be issued on or after
the date of this Announcement on the exercise of the InnovaDerma
Warrants.
The Merger value of GBP13.6 million attributed to the issued and
to be issued ordinary share capital of InnovaDerma is based upon
the fully diluted share capital of InnovaDerma referred to in
paragraph 2 above and by multiplying that fully diluted share
capital by the implied headline offer price calculated in
accordance with paragraph 3 below.
3. The implied headline offer price of 47.7 pence per
InnovaDerma Share is calculated with reference to:
i. the exchange ratio of 0.3818 New Brand Architekts Shares per InnovaDerma Share; and
ii. the Closing Price of a Brand Architekts Share of 106.5 pence
on the Latest Practicable Date, and
iii. then adding 7 pence, being the Cash Consideration per InnovaDerma Share.
4. The EV/sales multiple is calculated with reference to:
i. the Merger value of GBP13.6 million;
ii. InnovaDerma's cash balances as at 31 December 2021 of GBP1.3 million;
iii. InnovaDerma's borrowings as at 31 December 2021 of GBP1.2 million; and
iv. InnovaDerma's revenue for the financial year ended 31 June 2021 of GBP10.2 million.
5. The existing share capital of Brand Architekts (being
17,230,702 Brand Architekts Shares) is based upon the 17,230,702
Brand Architekts Shares in issue as at the close of business on the
Latest Practicable Date.
6. The fully diluted share capital of the Combined Group and the
percentage of the share capital that Brand Architekts Shareholders
and InnovaDerma Shareholders will own on a fully diluted basis upon
Completion is based upon:
i. the fully diluted share capital of Brand Architekts referred to in paragraph 6 above; and
ii. the 10,618,156 New Brand Architekts Shares that InnovaDerma
Shareholders will receive as part of the Merger Consideration under
the terms of the Merger, based on the fully diluted share capital
of InnovaDerma referred to in paragraph 2 above.
8. Unless otherwise stated, the financial information relating
to InnovaDerma is extracted (without adjustment) from the audited
financial statements of the InnovaDerma Group for the 12 months
ended 30 June 2021 and the unaudited interim results of the
InnovaDerma Group for the 6 months ended 31 December 2021.
9. Unless otherwise stated, the financial information relating
to Brand Architekts is extracted (without adjustment) from the
audited financial statements of the Brand Architekts Group for the
12 months ended 30 June 2021 and the unaudited interim results of
the Brand Architekts Group for the 6 months ended 31 December
2021.
10. Certain figures in this Announcement have been subject to rounding adjustments.
11. The synergy numbers are unaudited. Further information
underlying the Quantified Financial Benefits Statement contained in
this Announcement is provided in Appendix 4.
12. The volume-weighted average price of an InnovaDerma Share
and of a Brand Architekts Share is derived from data provided by
Bloomberg.
13. Statements about the pro forma financials of the Merger have
been based on audited information obtained from (i) Brand
Architekts's annual report for the financial year ended 30 June
2021 and (ii) InnovaDerma's annual report for the financial year
ended 30 June 2021.
14. The reference to the Combined Group's expected strong
balance sheet is based on unaudited information obtained from (i)
Brand Architekts's interim results for the period ended 31 December
2021 and (ii) InnovaDerma's interim results for the period ended 31
December 2021, less the one-off costs to realise the synergies set
out in Appendix 4 and expected transaction costs.
APPIX 3
Details of Irrevocable Undertakings and Letter of Support
Irrevocable Undertakings in connection with the InnovaDerma
Shareholder Meetings
PART A - Irrevocable undertakings in respect of InnovaDerma
Shares from InnovaDerma Directors
The following InnovaDerma Directors have given irrevocable
undertakings in respect of their entire beneficial holdings of
InnovaDerma Shares (and in respect of the InnovaDerma Shares in
which certain of their connected persons are interested) to vote,
or procure votes, in favour of the Scheme at the InnovaDerma Court
Meeting and in favour of the InnovaDerma Resolution to be proposed
at the InnovaDerma General Meeting (or in the event that the Merger
is implemented by way of a Takeover Offer, accept or procure the
acceptance of the Takeover Offer), in relation to 5,596,302
InnovaDerma Shares, representing, in aggregate, approximately 19.9
per cent. of InnovaDerma's existing issued ordinary share capital
as at the Latest Practicable Date:
Name of InnovaDerma Director Number of InnovaDerma Shares Percentage of issued ordinary share capital of
InnovaDerma as at the Latest Practicable Date
Mark Ward 5,049,076 18.0%
Ross Andrews 322,290 1.1%
Blake Hughes 128,571 0.5%
Simon Pyper 71,428 0.3%
Andrew Dunderdale 24,937 0.1%
These irrevocable undertakings will continue to be binding in
the event that a higher competing offer is made for
InnovaDerma.
Each of these irrevocable undertakings will lapse, among other
things:
-- if Brand Architekts announces, with the consent of the Panel,
that it does not intend to proceed with the Merger;
-- if any competing offer for InnovaDerma becomes or is declared
unconditional in all respects or otherwise becoming effective;
or
-- on and from the earlier of (a) the Long Stop Date or (b) the
time and date on which the Merger is withdrawn, lapses or otherwise
terminates in accordance with its terms (provided that the reason
is not because Brand Architekts has elected to proceed by way of a
Takeover Offer rather than by way of a Scheme or vice versa).
PART B - Irrevocable undertakings in respect of InnovaDerma
Shares from other InnovaDerma Shareholders
The following InnovaDerma Shareholder (other than InnovaDerma
Directors) has given irrevocable undertakings in respect of the
InnovaDerma Shares in which they are interested to vote, or procure
votes, in favour of the Scheme at the InnovaDerma Court Meeting and
in favour of the InnovaDerma Resolution to be proposed at the
InnovaDerma General Meeting (or in the event that the Merger is
implemented by way of a Takeover Offer, accept or procure the
acceptance of the Takeover Offer), in relation to 883,671
InnovaDerma Shares, representing, in aggregate, approximately 3.1
per cent. of InnovaDerma's existing issued ordinary share capital
as at the Latest Practicable Date:
Name of InnovaDerma Shareholder Number of InnovaDerma Shares Percentage of issued ordinary share capital of
InnovaDerma as at the Latest Practicable Date
Roger McDowell 883,671 3.1%
These irrevocable undertakings will continue to be binding in
the event that a higher competing offer is made for
InnovaDerma.
Each of these irrevocable undertakings will lapse, among other
things:
-- if Brand Architekts announces, with the consent of the Panel,
that it does not intend to proceed with the Merger;
-- if any competing offer for InnovaDerma becomes or is declared
unconditional in all respects or otherwise becoming effective;
or
-- on and from the earlier of (a) the Long Stop Date or (b) the
time and date on which the Merger is withdrawn, lapses or otherwise
terminates in accordance with its terms (provided that the reason
is not because Brand Architekts has elected to proceed by way of a
Takeover Offer rather than by way of a Scheme or vice versa).
Irrevocable Undertakings and Letter of Support in connection
with the Brand Architekts Shareholder Meeting
PART C - Irrevocable undertakings in respect of Brand Architekts
Shares from Brand Architekts Directors
The following Brand Architekts Directors have given irrevocable
undertakings in respect of their entire beneficial holdings of
Brand Architekts Shares (and in respect of the Brand Architekts
Shares in which certain of their connected persons are interested)
to vote, or procure votes, in favour of the Brand Architekts
Resolution to be proposed at the Brand Architekts General Meeting,
amounting to 1,155,025 Brand Architekts Shares, representing, in
aggregate, approximately 6.7 per cent. of Brand Architekts's
existing issued ordinary share capital as at close of business on
the Latest Practicable Date:
Name of Brand Architekts Number of Brand Architekts Percentage of issued ordinary
Director Shares share capital of Brand
Architekts as at the Latest
Practicable Date
Roger McDowell 899,105 5.2%
Quentin Higham 37,037 0.2%
Tom Carter 32,197 0.2%
Chris How 196,686 1.1%
Each of these irrevocable undertakings will lapse if Admission
does not occur before the Long Stop Date, or such later date as
Brand Architekts and Singer Capital Markets may agree.
PART D - Letter of support in respect of Brand Architekts Shares
from other Brand Architekts Shareholders
The following Brand Architekts Shareholder (other than Brand
Architekts Directors) has given a non-binding letter of support
indicating their intention to vote, or procure votes, in favour of
the Brand Architekts Resolution to be proposed at the Brand
Architekts General Meeting, in relation to 1,979,400 Brand
Architekts' Shares, representing, in aggregate, approximately 11.5
per cent. of Brand Architekts' existing issued ordinary share
capital as at close of business on the Latest Practicable Date:
Name of Brand Architekts Number of Brand Architekts Percentage of issued share
Shareholder Shares capital of Brand Architekts
as at the Latest Practicable
Date
Octopus Investments 1,979,400 11.5%
APPIX 4
Quantified Financial Benefits Statement
PART A - QUANTIFIED FINANCIAL BENEFITS STATEMENT:
Paragraph 3 of this Announcement contains statements of
estimated cost savings and synergies expected to arise from the
Merger (together, the "Quantified Financial Benefits
Statement").
A copy of the Quantified Financial Benefits Statement is set out
below:
The Brand Architekts directors, having reviewed and analysed the
potential synergies of the Merger, and having commenced discussions
with InnovaDerma management to refine this analysis, are confident
that as a direct result of the Merger, the Combined Group can
realise significant pre-tax cost synergies delivering attractive
value for both sets of shareholders. Brand Architekts has, to date,
identified pre-tax cost synergies of between GBP1.75 million and
GBP2 million which net of certain dis-benefits expected to arise,
are expected to reach a run-rate of between GBP1.5 million and
GBP1.75 million, within the first 12 months following completion of
the Merger.
These anticipated cost synergies will accrue as a direct result
of the Merger and would not be achieved on a standalone basis.
The potential sources of quantified cost synergies include:
-- approximately 70 per cent. from a consolidation of all group
functions and associated headcount reduction which is expected to
lead to a reduction of approximately 35 per cent of the Combined
Group's projected headcount. This includes the consolidation and
rationalisation of the Combined Group's Board and executive
leadership teams, and the combination of all other group
functions;
-- approximately 30 per cent. from the removal of duplicate public company and compliance costs, rationalisation of the combined office footprint, harmonisation of the Combined Group's supply chain and DTC business relationships and a reduction in IT and other duplicate operational costs; and
-- a cost of c. GBP0.25 million in respect of outsourcing all
existing overseas infrastructure in respect of the Combined Group's
DTC trading operations.
It is expected that the realisation of these identified
synergies will require one-off costs of up to approximately GBP1.4
million, within the first year following completion of the
Merger.
The synergies and dis-synergies referred to above are expected
to be recurring and are expected to arise as a direct result of the
Merger and could not be achieved independently of the Merger.
Further information on the bases of belief supporting the
Quantified Financial Benefits Statement, including the principal
assumptions and sources of information, is set out below.
Further information on the bases of belief supporting the
Quantified Financial Benefits Statement, including the principal
assumptions and sources of information, is set out below:
Bases of belief
The Brand Architekts synergy assessment was led by senior Brand
Architekts personnel. The Brand Architekts team worked with key
members of InnovaDerma senior management on the development of the
cost synergy plan and identifying areas of potential savings. This
included identification of integration initiatives and estimation
of the timing and quantum of cost savings available.
In preparing the Quantified Financial Benefits Statement, both
Brand Architekts and InnovaDerma have shared certain operating and
financial information to facilitate a detailed analysis in support
of evaluating the potential synergies available from the Merger. In
circumstances where data has been limited for commercial or other
reasons, the Brand Architekts team has made estimates and
assumptions to aid its development of individual synergy
initiatives.
In arriving at the Quantified Financial Benefits Statement, the
Brand Architekts Directors have assumed:
-- there will be no material change in macroeconomic, political,
legal or regulatory conditions in the markets and regions in which
Brand Architekts and InnovaDerma operate;
-- there will be no material change in accounting standards;
-- there will be no material change in foreign exchange rates;
-- there will be no significant impact on the underlying
operations of either business from the Merger; and
-- there will be no material divestments from either the Brand
Architekts or InnovaDerma existing businesses.
The baselines used for the quantified cost synergies were:
-- For Brand Architekts:
o full year expected operating expenses for the 12 months ended
30 June 2021.
-- For InnovaDerma:
o full year expected operating expenses for the 12 months ended
30 June 2021 and with consideration given to the current run rate
of operational costs.
The majority of cost saving synergies are substantially within
the influence of the Brand Architekts Directors.
In general, the synergy assumptions have in turn been risk
adjusted, with the Brand Architekts Directors exercising a degree
of prudence in the calculation of the estimated synergy benefits
described in this announcement above.
Reports
As required by Rule 28.1(a) of the Takeover Code, PKF Francis
Clark, as reporting accountants to Brand Architekts, have provided
a report stating that, in their opinion, the Quantified Financial
Benefits Statement has been properly compiled on the basis stated.
In addition, Singer Capital Markets, as sole financial adviser to
Brand Architekts, has provided a report stating that, in its view,
the Quantified Financial Benefits Statement has been prepared with
due care and consideration.
Each of PKF Francis Clark and Singer Capital Markets have given
and not withdrawn their consent to the publication of their reports
in this Announcement in the form and context in which they are
included.
Notes
These statements are not intended as a profit forecast and
should not be interpreted as such. These statements of estimated
cost savings and synergies relate to future actions and
circumstances which, by their nature, involve risks, uncertainties
and contingencies and which may in some circumstances be subject to
consultation with employees or their representatives. As a result,
the cost savings and synergies referred to may not be achieved, or
may be achieved later or sooner than estimated, or those achieved
could be materially different from those estimated. Neither these
statements nor any other statement in this Announcement should be
construed as a profit forecast or interpreted to mean that the
Combined Group's earnings in the first full year following
implementation of the Merger, or in any subsequent period, would
necessarily match or be greater than or be less than those of Brand
Architekts or InnovaDerma for the relevant preceding financial
period or any other period. Due to the scale of the Combined Group,
there may be additional changes to the Combined Group's operations.
As a result, and given the fact that the changes relate to the
future, the resulting cost savings may be materially greater or
less than those estimated.
PART B - REPORT FROM PKF FRANCIS CLARK
Published report on quantified financial benefits Statement
The Directors
Brand Architekts plc
8 Waldegrave Road
Teddington
London
TW11 8GT
Singer Capital Markets
One Bartholomew Lane
London
EC2N 2AX
31 March 2022
Dear Ladies and Gentleman
We report on the quantified financial benefits statement (the
"Statement") made by the directors of Brand Architekts plc (the
"Directors") in the Announcement dated 31 March 2022 (the
"Announcement") to the effect that:
The Brand Architekts directors, having reviewed and analysed the
potential synergies of the Merger, and having commenced discussions
with InnovaDerma management to refine this analysis, are confident
that as a direct result of the Merger, the Combined Group can
realise significant pre-tax cost synergies delivering attractive
value for both sets of shareholders. Brand Architekts has, to date,
identified pre-tax cost synergies of between GBP1.75 million and
GBP2 million which net of certain dis-benefits expected to arise,
are expected to reach a run-rate of between GBP1.5 million and
GBP1.75 million, within the first 12 months following completion of
the Merger.
The potential sources of quantified cost synergies include:
-- approximately 70 per cent. from a consolidation of all group
functions and associated headcount reduction which is expected to
lead to a reduction of approximately 35 per cent of the Combined
Group's projected headcount. This includes the consolidation and
rationalisation of the Combined Group's Board and executive
leadership teams, and the combination of all other group
functions;
-- approximately 30 per cent. from the removal of duplicate public company and compliance costs, rationalisation of the combined office footprint, harmonisation of the Combined Group's supply chain and DTC
business relationships and a reduction in IT and other duplicate operational costs; and
-- a cost of c. GBP0.25 million in respect of outsourcing all
existing overseas infrastructure in respect of the Combined Group's
DTC trading operations.
It is expected that the realisation of these identified
synergies will require one-off costs of up to approximately GBP1.4
million, within the first year following completion of the
Merger.
The synergies and dis-synergies referred to above are expected
to be recurring and are expected to arise as a direct result of the
Merger and could not be achieved independently of the Merger.
Opinion
In our opinion, the Statement has been properly compiled on the
basis stated.
The Statement has been made in the context of the disclosures in
the Announcement setting out, inter alia, the basis of the
Directors' belief (including the principal assumptions and sources
of information) supporting the Statement and their analysis and
explanation of the underlying constituent elements.
This report is required by Rule 28.1(a) of the City Code on
Takeovers and Mergers (the "City Code") and is given for the
purpose of complying with that requirement and for no other
purpose.
Responsibilities
It is the responsibility of the Directors to prepare the
Statement in accordance with the requirements of Rule 28 of the
City Code.
It is our responsibility to form an opinion, as required by Rule
28.1(a) of the City Code as to whether the Statement has been
properly compiled on the basis stated and to report that opinion to
you.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed, to the fullest extent
permitted by law we do not assume any responsibility and will not
accept any liability to any other person for any loss suffered by
any such other person as a result of, arising out of, or in
connection with this report or our statement, required by and given
solely for the purposes of complying with Rule 23.2 of the City
Code, consenting to its inclusion in the Announcement.
Basis of preparation of the Statement
The Statement has been prepared on the basis stated in Part A of
Appendix 1 to the Announcement.
Basis of opinion
We conducted our work in accordance with Standards for
Investment Reporting issued by the Financial Reporting Council in
the United Kingdom (the "FRC"). We are independent, and have
fulfilled our other ethical responsibilities, in accordance with
the relevant ethical requirements of the FRC's Ethical Standard as
applied to Investment Circular Reporting Engagements.
We have discussed the Statement, together with the underlying
plans, with the Directors and Singer Capital Markets Advisory LLP.
Our work did not involve any independent examination of any of the
financial or other information underlying the Statement.
We planned and performed our work so as to obtain the
information and explanations we considered necessary in order to
provide us with reasonable assurance that the Statement has been
properly compiled on the basis stated.
Our work has not been carried out in accordance with auditing or
other standards and practices generally accepted in the United
States of America and accordingly should not be relied upon as if
it had been carried out in accordance with those standards and
practices.
We do not express any opinion as to the achievability of the
benefits identified by the Directors in the Statement. Since the
Statement and the assumptions on which it is based relates to the
future and may therefore be affected by unforeseen events, we
express no opinion as to whether the actual benefits achieved will
correspond to those anticipated in the Statement and the
differences may be material.
Yours faithfully
Francis Clark LLP
Chartered Accountants
T: +44 (0)117 4039800
Francis Clark LLP is a limited liability partnership registered
in England and Wales with registered number OC349116. The
registered office is: Sigma House, Oak View Close, Edginswell Park,
Torquay TQ2 7FF .
PART C - REPORT FROM SINGER CAPITAL MARKETS
The Directors
Brand Architekts PLC
8 Waldegrave Road
Teddington
London
TW11 8GT
31 March 2022
Dear Directors
Quantified Financial Benefits Statement by Brand Architekts PLC
("Brand Architekts") in relation to the recommended all-share
merger of Brand Architekts and InnovaDerma PLC (the "Proposed
Merger ")
We refer to the Quantified Financial Benefits Statement, the
bases of belief thereof and the notes thereto (together, the
"Statement") as set out in Part A of Appendix 4 of the announcement
to be released on 31 March 2022 pursuant to Rule 2.7 of the City
Code on Takeovers and Mergers (the "Code") (the "Announcement"),
for which the board of directors of Brand Architekts (the
"Directors") are solely responsible under Rule 28.1(a)(ii) of the
Code.
We have discussed the Statement (including the assumptions and
sources of information referred to therein), with the Directors and
those officers and employees of Brand Architekts who developed the
underlying plans as well as with PKF Francis Clark. The Statement
is subject to uncertainty as described in the Announcement and our
work did not involve an independent examination of any of the
financial or other information underlying the Statement.
We have relied upon the accuracy and completeness of all the
financial and other information provided to us by or on behalf of
Brand Architekts, or otherwise discussed with or reviewed by us,
and we have assumed such accuracy and completeness for the purposes
of providing this letter.
We do not express any view as to the achievability of the
quantified financial benefits and disbenefits identified by the
Directors.
We have also reviewed the work carried out by PKF Francis Clark
and have discussed with them the opinion set out in the
Announcement addressed to you and us on this matter.
This letter is provided to you solely in connection with Rule
28.1(a)(ii) of the Code and for no other purpose. We accept no
responsibility to Brand Architekts or its shareholders or any
person other than the Directors in respect of the contents of this
letter; no person other than the Directors can rely on the contents
of this letter. We are acting exclusively as financial advisers to
Brand Architekts and no one else in connection with the Proposed
Merger and it was for the purpose of complying with Rule
28.1(a)(ii) of the Code that Brand Architekts requested Singer
Capital Markets to prepare this report on the Statement. No person
other than the Directors can rely on the contents of this letter,
and to the fullest extent permitted by law, we exclude all
liability (whether in contract, tort or otherwise) to any other
person, in respect of this letter, its contents or the work
undertaken in connection with this letter or any of the results
that can be derived from this letter or any written or oral
information provided in connection with this letter, and any such
liability is expressly disclaimed except to the extent that such
liability cannot be excluded by law.
On the basis of the foregoing we consider that the Statement,
for which you as the Directors are solely responsible, has been
prepared with due care and consideration.
Yours faithfully,
Singer Capital Markets Advisory LLP
APPIX 5
Definitions
The following definitions apply throughout this Announcement
unless the context requires otherwise:
Admission means admission of the New Brand Architekts Shares to
trading on AIM;
AIM means the market of that name, operated by the London Stock
Exchange;
AIM Rules means the rules of AIM as set out in the publication
entitled 'AIM Rules for Companies' published by the London Stock
Exchange from time to time;
Announcement means this announcement made pursuant to Rule 2.7
of the Takeover Code, including its Appendices;
Appendices means the appendices to this Announcement and
Appendix has a corresponding meaning;
Authorisations means authorisations, orders, grants,
recognitions, determinations, certificates, confirmations,
consents, licences, clearances, provisions, permissions and
approvals;
B2B means business to business;
Blocking Law means Council Regulation EC No 2271/1996 of 22
November 1996 ("Blocking Regulation") or any law or regulation
implementing the Blocking Regulation in any member state of the
European Union or the United Kingdom;
Board means board of directors;
Board of the Combined Group means the proposed board of
directors of the Combined Group;
Brand Architekts means Brand Architekts Group plc, a public
limited company incorporated under the laws of England and Wales
with registration number 01975376;
Brand Architekts Board or the Board of Brand Architekts means
the board of directors of Brand Architekts as at the date of this
Announcement;
Brand Architekts Circular means the circular to be published by
Brand Architekts and to be sent to Brand Architekts Shareholders
including the notice convening the Brand Architekts General Meeting
to approve the issue of New Brand Architekts Shares in connection
with the Merger;
Brand Architekts Directors means the directors of Brand
Architekts as at the date of this Announcement;
Brand Architekts Form of Proxy means the form of proxy which
will accompany the Brand Architekts Circular;
Brand Architekts General Meeting means the general meeting of
Brand Architekts (including any adjournment thereof) to be convened
to consider and, if thought fit, approve the Brand Architekts
Resolution (and amendments thereto), and expected to be held on the
same day as the InnovaDerma Shareholder Meetings;
Brand Architekts Group means Brand Architekts and its subsidiary
undertakings and, where the context permits, each of them;
Brand Architekts Resolution means the resolution to be proposed
to Brand Architekts Shareholders at the Brand Architekts General
Meeting to approve the allotment of the New Brand Architekts Shares
to be issued in connection with the Merger;
Brand Architekts Shareholders means the holders of Brand
Architekts Shares;
Brand Architekts Shares means the ordinary shares of 5 pence
each in the capital of Brand Architekts;
Business Day means a day, (other than a Saturday, Sunday, public
or bank holiday) on which commercial banks are generally open for
business in London;
Cash Consideration means the cash consideration referred to in
paragraph 2 of this Announcement, being part of the Merger
Consideration;
Closing Price means the closing middle market quotation of a
share derived from (in the case of InnovaDerma Shares) the Daily
Official List of the London Stock Exchange or (in the case of Brand
Architekts Shares) the AIM Appendix to the Daily Official List of
the London Stock Exchange, as relevant;
Combined Group means Brand Architekts and its subsidiaries,
including InnovaDerma and its subsidiaries, following
Completion;
Companies Act means the Companies Act 2006, as amended;
Completion means completion of the Merger by virtue of the
Merger becoming Effective;
Computershare means Computershare Investor Services plc, of The
Pavilions, Bridgwater Road, Bristol, BS13 8AE, the registrars to
Brand Architekts;
Conditions means the conditions to the Merger set out in Part A
of Appendix 1;
Confidentiality Agreement means the confidentiality agreement
dated 31 January 2022 between (1) Brand Architekts and (2)
InnovaDerma;
Cost Coverage Agreement means the cost coverage agreement dated
28 March 2022 between (1) Brand Architekts and (2) InnovaDerma
Cost Compensation Payment means a maximum amount of GBP200,000
payable by Brand Architekts to InnovaDerma in accordance with the
terms of the Cost Coverage Agreement
Court means the High Court of Justice in England and Wales;
Court Hearing means the hearing by the Court of the application
to sanction the Scheme;
Court Order means the order of the Court sanctioning the Scheme
under section 899 of the Companies Act;
CREST means the computerised settlement system (as defined in
the CREST Regulations) operated by Euroclear UK & International
Limited which facilitates the transfer of title to shares in
uncertificated form;
CREST Regulations means the Uncertificated Securities
Regulations 2001 (SI 2001/3755), as amended;
Daily Official List means the daily official list of the London
Stock Exchange;
Dealing Disclosure means an announcement pursuant to Rule 8 of
the Takeover Code containing details of dealings in the relevant
securities of a party to an offer;
Disclosed means the information fairly disclosed by or on behalf
of InnovaDerma: (i) in the annual report and accounts of
InnovaDerma for the financial year ended 30 June 2021 and the
interim results for the period ended 31 December 2021; (ii) in any
other public announcement made by InnovaDerma on a Regulatory
Information Service before the date of the Announcement; (iii) in
this Announcement; (iv) in the information made available to Brand
Architekts in the data room established by InnovaDerma (or
InnovaDerma's advisers) for the purposes of the Merger on or before
6.30 p.m. on 30 March 2022; or (v) as otherwise fairly disclosed by
or on behalf of InnovaDerma to Brand Architekts (or its officers,
employees, agents or advisers) before the date of this
Announcement;
Disclosure Guidance and Transparency Rules means the disclosure
rules and transparency rules made by the FCA pursuant to section
73A of FSMA;
DTC means direct to consumer;
Effective means:
(a) if the Merger is implemented by way of the Scheme, the
Scheme having become effective pursuant to its terms; or
(b) if the Merger is implemented by way of a Takeover Offer, the
Takeover Offer having been declared or become unconditional in all
respects in accordance with the requirements of the Takeover
Code;
Effective Date means the date on which the Merger becomes
Effective;
Euronext Paris means the Euronext Paris market operated by
Euronext Paris S.A.;
EV means enterprise value;
FCA means the UK Financial Conduct Authority, or its successor
from time to time;
finnCap means finnCap Ltd, financial adviser to InnovaDerma;
FSMA means the Financial Services and Markets Act 2000 (as
amended from time to time);
InnovaDerma means InnovaDerma plc, a public limited company
incorporated under the laws of England and Wales with registration
number 09226823 ;
InnovaDerma Board or Board of InnovaDerma means the board of
directors of InnovaDerma as at the date of this Announcement;
InnovaDerma Court Meeting means the meeting of the InnovaDerma
Scheme Shareholders to be convened by order of the Court pursuant
to section 896 of the Companies Act, for the purpose of approving
the Scheme, including any adjournment of it, notice of which shall
be contained in the Scheme Document;
InnovaDerma Directors means the directors of InnovaDerma as at
the date of this Announcement;
InnovaDerma Forms of Proxy means the forms of proxy for voting
at the InnovaDerma Shareholder Meetings which will accompany the
Scheme Document;
InnovaDerma General Meeting means the general meeting of the
InnovaDerma to be convened in connection with the Scheme, including
any adjournment of it, and expected to be held immediately
following the InnovaDerma Court Meeting and notice of which shall
be contained in the Scheme Document;
InnovaDerma Group means InnovaDerma and its subsidiary
undertakings and, where the context permits, each of them;
InnovaDerma Resolution means the special resolution to be
proposed at the InnovaDerma General Meeting authorising the
InnovaDerma Directors to take all required action in relation to
the Scheme and amending InnovaDerma's articles of association and
such other matters as may be necessary to implement the Scheme;
InnovaDerma Scheme Shareholders means the holders of InnovaDerma
Scheme Shares from time to time;
InnovaDerma Scheme Shares means the InnovaDerma Shares:
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document and
before the Voting Record Time; and
(c) (if any) issued at or after the Voting Record Time but at or
before the Scheme Record Time, either on terms that the original or
any subsequent holders of such shares are to be bound by the Scheme
or in respect of which their holders are, or shall by such time
have agreed in writing to be, bound by the Scheme,
and, in each case, remaining in issue at the Scheme Record Time
but excluding any InnovaDerma Scheme Shares held as treasury shares
at any relevant date or time and any InnovaDerma Scheme Shares
registered in the name of, or beneficially owned by, Brand
Architekts or its nominees or any other member of the Brand
Architekts Group at any relevant date or time;
InnovaDerma Share Plan means the InnovaDerma December 2021 EMI
Scheme;
InnovaDerma Shareholder Meetings means, together, the
InnovaDerma Court Meeting and the InnovaDerma General Meeting;
InnovaDerma Shareholders means the holders of InnovaDerma Shares
from time to time;
InnovaDerma Shares means the ordinary shares of 0.1 euros each
in the capital of InnovaDerma;
InnovaDerma Warrants means the warrants constituted by
InnovaDerma pursuant to a warrant agreement dated 9 April 2021
between (1) InnovaDerma and (2) finnCap;
Last Accounts Date means 30 June 2021, being the date to which
the last audited financial statements of InnovaDerma were
published;
Latest Practicable Date means 30 March 2022, being the latest
practicable date before the date of this Announcement;
Listing Rules means the rules and regulations made by the FCA
under Part VI of FSMA and contained in the FCA's publication of the
same name (as amended from time to time);
London Stock Exchange means London Stock Exchange plc;
Long Stop Date means 4 July 2022 or such later date as may be
agreed in writing by Brand Architekts and InnovaDerma (with the
Panel's consent and as the Court may approve (if such approval(s)
are required));
Market Abuse Regulation means the Market Abuse Regulation (EU)
(No 596/2014) in incorporated into UK law by virtue of the European
Union (Withdrawal) Act 2018 as amended by virtue of the Market
Abuse (Amendment)(EU Exit) Regulations 2019);
Merger means the proposed acquisition by Brand Architekts of the
entire issued and to be issued ordinary share capital of
InnovaDerma (other than any InnovaDerma Shares already held by the
Brand Architekts Group) to be implemented by way of the Scheme as
described in this Announcement or (should Brand Architekts so
elect, subject to the consent of the Panel (where necessary)) by
way of a Takeover Offer;
Merger Consideration means the consideration payable by Brand
Architekts to InnovaDerma Scheme Shareholders in consideration for
the Merger, as further referred to in paragraph 2 of this
Announcement;
New Brand Architekts Shares means the Brand Architekts Shares to
be issued credited as fully paid to the InnovaDerma Scheme
Shareholders pursuant to the Scheme (and any other InnovaDerma
Shareholders whose InnovaDerma Shares are issued after the Scheme
becomes Effective);
Offer Period means the period commencing on the date of this
Announcement and ending on (i) the earlier of the date on which the
Scheme becomes Effective and/or the date on which the Scheme lapses
or is withdrawn (or such other date as the Panel may decide) or
(ii) the earlier of the date on which the Takeover Offer has become
or has been declared unconditional as to acceptances and/or the
date on which the Takeover Offer lapses or is withdrawn (or such
other date as the Panel may decide), in each case other than where
such lapsing or withdrawal is a result of Brand Architekts
exercising its right to implement the Merger by way of a Takeover
Offer;
Official List means the Official List of the London Stock
Exchange plc;
Opening Position Disclosure means an announcement containing
details of interests or short positions in, or rights to subscribe
for, any relevant securities of a party to the Merger if the person
concerned has such a position, as defined in Rule 8 of the Takeover
Code;
Overseas Shareholders means InnovaDerma Shareholders who have a
registered address in, or are citizens, residents or nationals of,
a jurisdiction outside the UK;
Panel means the UK Panel on Takeovers and Mergers;
PKF Francis Clark means Francis Clark LLP, reporting accountant
to Brand Architekts
Quantified Financial Benefits Statement means the statement
described as such and set out in Appendix 4;
Registrar of Companies means the Registrar of Companies in
England and Wales;
Regulatory Information Service means a regulatory information
service as defined in the FCA's Handbook of rules and guidance as
amended from time to time;
Restricted Jurisdiction means any jurisdiction where the
relevant action would constitute a violation of the relevant laws
and regulations of such jurisdiction or would result in a
requirement to comply with any governmental or other consent or any
registration, filing or other formality which Brand Architekts
regards as unduly onerous;
Scheme means the proposed scheme of arrangement under Part 26 of
the Companies Act between InnovaDerma and the InnovaDerma Scheme
Shareholders the terms of which are to be set out in the Scheme
Document;
Scheme Document means the document to be dispatched to (among
others) InnovaDerma Shareholders including, among other things, the
Scheme and the notices convening the InnovaDerma Court Meeting and
the InnovaDerma General Meeting;
Scheme Record Time means the time and date to be specified in
the Scheme Document by reference to which the entitlements of
InnovaDerma Shareholders under the Scheme will be determined,
expected to be 6.00 p.m. on the Business Day before the Scheme
becomes Effective;
Significant Interest means, in relation to an undertaking, a
direct or indirect interest of 20 per cent. or more of: (i) the
total voting rights conferred by the equity share capital (as
defined in section 548 of the Companies Act) of such undertaking or
(ii) the relevant partnership interest;
Singer Capital Markets means Singer Capital Markets Advisory
LLP, financial adviser to Brand Architekts;
SLC Registrars means SLC Registrars Limited, 42-50 Hersham Road,
Walton-on-Thames, Surrey, KT12 1RZ, the registrars to
InnovaDerma;
Takeover Code means the City Code on Takeovers and Mergers;
Takeover Offer means, should the Merger be implemented by way of
a takeover offer as defined in section 974 of the Companies Act,
the takeover offer to be made by or on behalf of Brand Architekts
to acquire the entire issued and to be issued ordinary share
capital of InnovaDerma and, where the context requires, any
subsequent revision, variation, extension or renewal of such
takeover offer;
Third Party means any government, government department or
governmental, quasi-governmental, supranational, statutory,
regulatory, environmental or investigative body or association,
institution or agency (including, without limitation, any trade
agency) or authority (including, without limitation, any anti-trust
or merger control authority), any court or professional or
environmental body or any other person or body whatsoever in any
relevant jurisdiction;
UK or United Kingdom means the United Kingdom of Great Britain
and Northern Ireland;
US or the United States means the United States of America, its
territories and possessions, any state of the United States of
America and the District of Columbia and all areas subject to its
jurisdiction;
US Securities Act means the United States Securities Act of
1993;
Voting Record Time means the time and date specified in the
Scheme Document by reference to which entitlement to vote at the
InnovaDerma Court Meeting will be determined, expected to be 6.00
p.m. on the day two days prior to the InnovaDerma Court Meeting or
any adjournment of it (as the case may be);
Wider Brand Architekts Group means Brand Architekts and its
subsidiary undertakings and associated undertakings and any other
body corporate partnership, joint venture or person in which Brand
Architekts and all such undertakings (aggregating their interests)
have a Significant Interest (other than any member of the Wider
InnovaDerma Group); and
Wider InnovaDerma Group means InnovaDerma and its subsidiaries,
subsidiary undertakings, associated undertakings and any other body
corporate, partnership, joint venture or person in which
InnovaDerma and all such undertakings (aggregating their interests)
have a Significant Interest.
For the purposes of this Announcement, "subsidiary", "subsidiary
undertaking", "undertaking" and "associated undertaking" have the
respective meanings given by the Companies Act.
All references to "GBP", "pence", "Sterling", "Pounds sterling",
"p" or "GBP" are to the lawful currency of the United Kingdom.
All references to statutory provision or law or to any order or
regulation shall be construed as a reference to that provision,
law, order or regulation as extended, amended, replaced or
re-enacted from time to time and all statutory instruments,
regulations and orders from time to time made under them or
deriving validity from them.
All the times referred to in this Announcement are London times
unless otherwise stated.
References to the singular include the plural and vice versa
.
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END
SOAJMMBTMTTJTLT
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