TIDMMERI
RNS Number : 7384L
Merian Chrysalis Investment Co. Ltd
10 September 2019
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
States of America, any member state of the European Economic Area
(other than the United Kingdom and the republic of ireland),
Canada, Australia, Japan or the Republic of South Africa.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. PLEASE SEE THE
IMPORTANT NOTICE AT THE
OF THIS ANNOUNCEMENT.
This announcement is an advertisement for the purposes of the
Prospectus Rules of the UK Financial Conduct Authority (the "FCA")
and not a prospectus and not an offer of securities for sale in any
jurisdiction. Neither this announcement nor anything contained
herein shall form the basis of, or be relied upon in connection
with, any offer or commitment whatsoever in any jurisdiction.
Investors should not purchase or subscribe for any shares referred
to in this announcement except on the basis of information in the
prospectus published on 11 October 2018 (the "Prospectus"). A copy
of the Prospectus is available from the Company's website
(www.merian.com/chrysalis), subject to applicable securities laws,
and at its registered office at 3rd Floor, 1 Le Truchot, St Peter
Port, Guernsey, GY1 1WD
10 September 2019
Merian Chrysalis Investment Company Limited (the "Company")
Placing under Placing Programme
The Company today announces its intention to raise new capital
under the Company's placing programme (the "Placing Programme") as
detailed in the Company's Prospectus. The Company is seeking to
raise GBP100+ million via a placing (the "Placing") of new ordinary
shares in the Company (the "New Shares").
Background
Following a successful placing in April 2019, in which the
Company raised gross proceeds of GBP100 million, the management
team has continued to source and execute top-tier deal flow,
alongside other leading global institutions.
Recent additions to the portfolio include:
-- Embark Group Limited, the UK's fastest growing digital retirement platform
-- Klarna Holding AB, Europe's most valuable fintech firm
-- Sorted Holdings Limited, one of the UK's most disruptive SaaS companies
As a result, the Company is now approximately 80% invested,
across nine investments.
The Company's shares continue to trade at a premium to its
prevailing net asset value ("NAV"), reflecting the sustained demand
for access to the underlying portfolio companies.
Current Portfolio
Merian Global Investors (UK) Limited ("MGI" or the "Investment
Adviser"), the Company's Investment Adviser, believes that the
portfolio provides investors with access to a number of
high-calibre, later-stage private companies, which are highly
innovative and disruptive in nature. These businesses have the
potential to generate significant value accretion and have
typically developed what the Company and MGI believe to be
best-in-class technologies, which enable them to compete on price,
service and convenience.
The Merian Chrysalis portfolio provides investors with an
attractive combination of growth, international exposure and
downside protection.
The weighted average revenue growth rate in the first half of
2019 of the nine current portfolio assets was in excess of 50% over
the first half of 2018. This rate of growth offers significant
value accretion potential.
The Company has also diversified geographically and from a
revenue generation perspective, the portfolio has approximately 75%
international exposure, meaning it is broadly comparable with the
FTSE 100. The Investment Adviser therefore believes that the
portfolio is well positioned, in light of the ongoing UK political
and macroeconomic uncertainties.
Where possible, the Investment Adviser has also negotiated
investment structures which can provide investors with strong
downside protection.
Investment opportunity
The Investment Adviser has a strong pipeline and is seeking
additional capital to exploit a number of exciting opportunities
and complete the next phase of portfolio acquisitions. With a
number of investments undergoing due diligence, the Investment
Adviser believes it will deploy the proceeds in a timely manner, so
as to minimise cash drag.
In addition to new capital for pipeline investments, the Company
currently intends to allocate approximately 50% of the Placing's
proceeds, dependent on the overall size of the Placing, to a number
of existing portfolio holdings some of which will be subject to
certain consents being obtained. This will allow the portfolio to
maintain its positions in core holdings and means that a
substantial proportion of the net proceeds of the Placing will be
deployed quickly.
Following completion of the Placing, it is expected the
additional shares will be acquired imminently from MGI's open-ended
UK small- and mid-cap equity funds. It is currently anticipated
that the interests will be purchased at a modest discount to the
latest valuation of those assets (subject to any necessary
adjustments in the event of any material change). As a result, this
transaction is expected to be accretive to the Company's NAV.
Target Portfolio Composition
It is anticipated that the resulting transaction will lead to a
larger and well-balanced portfolio, as demonstrated below:
Portfolio company Current Weighting Target Weighting
Klarna 20% 11-14%
TransferWise 13% 14-16%
Starling Bank 11% 12-14%
Graphcore 9% 8-10%
Secret Escapes 7% 6-8%
Embark Group 7% 4-5%
Growth Street 6% 3-4%
Sorted 5% 3-4%
The Hut Group 5% 8-10%
Cash and Equivalents 18% Approx. 30%
Source: Merian Global Investors, as at 30/08/2019. Based on
GBP100m-GBP200m fundraise with 50% of proceeds allocated to
existing holdings. Due to rounding the figures may not add up to
100%. The acquisition of the portfolio holdings described above
remains subject to contract between the Company and the selling
funds and the transfer of some positions will be subject to certain
third party consents. As such, the portfolio composition following
completion of the acquisition may differ from the target weightings
set out above and further announcements on the acquisitions will be
made in due course.
Proposed Placing under the Placing Programme
The proposed Placing will take place through Liberum Capital
Limited ("Liberum") and Zeus Capital Limited ("Zeus") as
bookrunners.
The Placing is expected to close at 3.00 p.m. (London time) on
23 September 2019, but may be closed earlier or later at the
discretion of the Company and Liberum. In particular, the Company
reserves the right to close the Placing early should commitments
under the Placing exceed GBP200 million.
The placing price will be set at a premium to the prevailing Net
Asset Value per Share ("NAVps") and, in accordance with the Listing
Rules, the placing price shall be not more than a 10% discount to
the mid- market price at the time the placing price is confirmed.
Due to the premium to NAVps at which the shares are expected to be
issued, together with the costs cap of 1.25% of the gross proceeds
in relation to the Placing, the Placing is expected to be accretive
to the current NAV. It is therefore currently anticipated that the
price at which the new shares will be issued under the Placing will
reflect a modest premium to the resulting post placing NAV. In
addition, the acquisition of the investments from MGI's open-ended
funds at a modest discount to their latest valuation is also
expected to be NAV accretive. The placing price will be announced
prior to the closing of the Placing.
The final number of New Shares will be agreed between the
Company and Liberum following the close of the Placing, and
announced shortly thereafter. Notwithstanding the above, the
Placing size may be increased or decreased at the Company's
discretion.
Allocations under the Placing will be at the absolute discretion
of the Company determined in agreement with Liberum, and may scale
down any bids for this purpose on such basis as the Company and
Liberum may determine. Liberum may also, notwithstanding the above
and subject to the prior consent of the Company: (i) allocate New
Shares after the time of any initial allocation to any person
submitting a bid after that time, and (ii) allocate New Shares
after the book-build has closed to any person submitting a bid
after that time. The Company's Board, in consultation with Liberum,
may also decide not to proceed with the Placing for any reason. In
this case, an announcement will be made by the Company.
Applications will be made to the London Stock Exchange for the
New Shares to be admitted to the Official List of the FCA and to
trading on the Premium Segment of the Main Market of the London
Stock Exchange ("Admission"). It is expected that Admission will
become effective on or around 26 September 2018 and that dealings
in the New Shares will commence at that time.
The Placing is being made pursuant to the terms and conditions
set out in Part IX of the Prospectus. Investors are invited to
apply for New Shares pursuant to the Placing by contacting their
usual contact at Liberum or Zeus.
Expected Timetable for the New Placing
Each of the times and dates set out below and mentioned
elsewhere in this document may be adjusted by the Company, in which
event details of the new times and dates will be announced via a
Regulatory Information Service. References to a time of day are to
London time.
Event Date
Placing opens 10 September 2019
--------------------------
Latest time and date for 3.00 p.m. on 23 September
commitments under the 2019
Placing
--------------------------
Trade date 24 September 2019
--------------------------
Admission 8.00 a.m. on 26 September
2019
--------------------------
Crediting of CREST stock 26 September 2019
accounts in respect of
the New Shares
--------------------------
A copy of the Prospectus is available for inspection at:
www.morningstar.co.uk/uk/nsm as well as on the Company's website at
www.merian.com/chrysalis
Terms used but not defined in this announcement shall have the
meanings given to such terms in the Prospectus.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Past performance is not necessarily a reliable indicator of
future results. Returns are target returns only and there can be no
guarantee that such returns will be achieved. The market value of
shares and income from them can fall as well as rise due to stock
market and currency movements. When you sell your investment you
may get back less than you originally invested.
For further information, please
contact:
Merian Global Investors:
Amelie Shepherd +44 (0) 20 7332 7500
Liberum:
Gillian Martin / Owen Matthews +44 (0) 20 3100 2000
/ Louis Davies
Zeus
John Goold / Ben Robertson +44 (0) 20 3829 5000
Maitland Administration (Guernsey)
Limited:
Aimee Gontier / Elaine Smeja +44 (0) 1481 749364
LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's
website at https://www.merian.com/chrysalis/. Neither the content
of the Company's website, nor the content on any website accessible
from hyperlinks on its website for any other website, is
incorporated into, or forms part of, this announcement nor, unless
previously published by means of a recognised information service,
should any such content be relied upon in reaching a decision as to
whether or not to acquire, continue to hold, or dispose of,
securities in the Company.
This announcement may include "forward-looking statements". All
statements other than statements of historical facts included in
this announcement, including, without limitation, those regarding
the Company's financial position, business strategy, plans and
objectives of management for future operations (including
development plans and objectives relating to the Company's products
and services) are forward-looking statements.
Forward-looking statements are subject to risks and
uncertainties and accordingly the Company's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These factors include but are not limited to those
described in the formal Prospectus. These forward-looking
statements speak only as at the date of this announcement. The
Company expressly disclaims any obligation or undertaking to update
or revise any forward-looking statements contained herein to
reflect actual results or any change in the assumptions, conditions
or circumstances on which any such statements are based unless
required to do so by the Financial Services and Markets Act 2000
(the "FSMA"), the Listing Rules or Prospectus Rules of the
Financial Conduct Authority or other applicable laws, regulations
or rules.
This announcement which has been prepared by, and is the sole
responsibility of, the Directors of the Company has been approved
for the purposes of section 21 of the Financial Services and
Markets Act 2000 by the Adviser, which is authorised and regulated
by the Financial Conduct Authority.
Recipients of this announcement who are considering acquiring
New Shares are reminded that any such acquisition must be made only
on the basis of the information contained in the Prospectus which
may be different from the information contained in this
announcement. The subscription for New Shares is subject to
specific legal or regulatory restrictions in certain jurisdictions.
Persons distributing this announcement must satisfy themselves that
it is lawful to do so. The Company assumes no responsibility in the
event that there is a violation by any person of such
restrictions.
The information contained in this announcement is for background
purposes only and does not purport to be full or complete. It is
also subject to change. Before subscribing for any New Shares,
persons viewing this announcement should ensure that they fully
understand and accept the risks which are set out in the
Prospectus. The value of New Shares is not guaranteed and can fall
as well as rise due to stock market and currency movements. When
you sell your investment you may get back less than you originally
invested. The price and value of securities can go down as well as
up, and investors may get back less than they invested or nothing
at all. Potential investors should consult an independent financial
advisor as to the suitability of the securities referred to in this
advertisement for the person concerned.
Neither this announcement, the information contained herein nor
any copy of it may be taken or transmitted by any means or media or
is for publication, distribution or release, in whole or in part,
directly or indirectly, in or into or from the United States
(including its territories and possessions), any member state of
the European Economic Area (other than the United Kingdom and the
Republic of Ireland), Australia, Canada, South Africa, Japan or to
any person in any of those jurisdictions or any other jurisdiction
where to do so would constitute a violation of the relevant laws of
such jurisdiction. The offer of New Shares pursuant to the Placing
(the "Offer") and the distribution of this announcement may be
restricted by law in certain jurisdictions and persons into whose
possession this announcement or any document or other information
referred to herein comes should inform themselves about and observe
any such restriction. Any failure to comply with these restrictions
may constitute a violation of the securities laws of any such
jurisdiction.
This announcement does not contain or constitute an offer of, or
the solicitation of an offer to buy or subscribe for, securities in
any jurisdiction, including the United States, Australia, Canada,
South Africa or Japan or in any jurisdiction in which such offer or
solicitation is unlawful.
The securities to which this announcement relates have not been
and will not be registered under the U.S. Securities Act of 1933,
as amended (the "Securities Act") or with any regulating authority
or under any applicable securities laws of any state or other
jurisdiction of the United States, and will not be offered, sold,
exercised, resold, delivered, pledged or otherwise transferred,
directly or indirectly, within the United States or to, or for the
account of benefit of, any US person (as defined under the U.S.
Investment Company Act of 1940, as amended, unless registered under
the Securities Act or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and in compliance with applicable state law. There
will be no public offer of the securities in the United States. The
securities referred to herein have not been registered under the
applicable securities laws of Australia, Canada, South Africa or
Japan and, subject to certain exceptions, may not be offered or
sold within Australia, Canada, South Africa or Japan or to any
national, resident or citizen of Australia, Canada, South Africa or
Japan.
The timetable, including the date of Admission, may be
influenced by a range of circumstances such as market conditions.
There is no guarantee that the Offer will proceed and you should
not base your financial decisions on the Company's intentions in
relation to the Offer. This announcement does not constitute a
recommendation concerning the Offer. The Company is not regulated
by the FCA and FCA protection does not apply to the Offer.
Liberum and Zeus, each of which are authorised and regulated by
the FCA in the United Kingdom, are acting exclusively for the
Company and no one else in connection with the matters described in
this announcement. Neither Liberum nor Zeus will regard any other
person (whether or not a recipient of this document) as a client in
relation thereto and will not be responsible to anyone other than
the Company for providing the protections afforded to its or their
clients nor for giving advice in relation to the Offer, the
contents of this announcement or any transaction or arrangement or
other matter referred to herein. Neither Liberum, Zeus nor any of
its or their respective directors, officers, employees, advisers or
agents accepts any responsibility or liability whatsoever for this
announcement, its contents or otherwise in connection with it or
any other information relating to the Company, whether written,
oral or in a visual or electronic format.
Apart from the responsibilities and liabilities, if any, which
may be imposed on Liberum, Zeus or the Adviser by the FSMA or the
regulatory regime established thereunder, or under the regulatory
regime of any jurisdiction where exclusion of liability under the
relevant regulatory regime would be illegal, void or unenforceable,
neither Liberum, Zeus nor the Adviser, nor any of its or their
respective affiliates, directors, officers, employees, advisors or
agents accepts any responsibility or liability whatsoever for, or
makes any representation or warranty, express or implied, as to the
truth, accuracy, completeness or fairness of the information
contained in this announcement (or whether any information has been
omitted from the announcement) or any other information relating to
the Company, its subsidiaries or associated companies, whether
written, oral or in a visual or electronic form, and howsoever
transmitted or made available or for any loss howsoever arising
from any use of this announcement or its contents or otherwise
arising in connection therewith.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Productive Governance Requirements"), and disclaiming all and
any liability, whether arising in tort, contract or otherwise,
which any manufacturer (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the New
Shares the subject of the Placing have been subject to a product
approval process, which has determined that such New Shares are:
(i) compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii)
eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, Distributors should
note that: (i) the price of the New Shares may decline and
investors could lose all or part of their investment; (ii) the New
Shares offer no guaranteed income and no capital protection; and
(iii) an investment in the New Shares is compatible only with
investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the New Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the New Shares and determining
appropriate distribution channels.
PRIIPS (as defined below)
ln accordance with the Regulation (EU) No 1286/2014 of the
European Parliament and of the Council of 26 November 2014 on key
information documents for packaged retail and insurance-based
investment products ("PRIIPs") and its implementing and delegated
acts (the "PRIIPs Regulation"), the Company has prepared a key
information document (the "KID") in respect of the New Shares. The
KID is made available by the Company to "retail investors" prior to
them making an investment decision in respect of the New Shares at
ww.Merian.com/Chrysalis.
If you are distributing New Shares, it is your responsibility to
ensure that the KID is provided to any clients that are "retail
clients".
The Company is the only manufacturer of the New Shares for the
purposes of the PRIIPs Regulation and none of Liberum, Zeus nor the
Adviser are manufacturers for these purposes. None of Liberum, Zeus
nor the Adviser makes any representations, express or implied, or
accepts any responsibility whatsoever for the contents of the KID
prepared by the Company nor accepts any responsibility to update
the contents of the KID in accordance with the PRIIPs Regulation,
to undertake any review processes in relation thereto or to provide
the KID to future distributors of New Shares. Each of Liberum,
Zeus, the Adviser and their respective affiliates accordingly
disclaim all and any liability whether arising in tort or contract
or otherwise which it or they might have in respect of the key
information documents prepared by the Company. Investors should
note that the procedure for calculating the risks, costs and
potential returns in the KID are prescribed by laws. The figures in
the KID may not reflect actual returns for the Company and
anticipated performance returns cannot be guaranteed.
The Company's home member state is the United Kingdom.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IOECKCDDBBKBFCK
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