TIDMHYVE
RNS Number : 6982V
Providence Equity LLP
06 April 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
6 April 2023
Offer for Hyve Group Plc: update on financing
On 15 March 2023, the boards of Hyve Group plc ("Hyve") and
Heron UK Bidco Limited ("Bidco") announced, pursuant to Rule 2.7 of
the City Code on Takeovers and Mergers (the "Code"), that they had
agreed the terms of a recommended cash offer to be made by Bidco
for the entire issued and to be issued share capital of Hyve at a
price of 108 pence per Hyve share (the "Acquisition"). It is
intended that the Acquisition will be implemented by way of a
scheme of arrangement under Part 26 of the Companies Act 2006.
Terms defined in that announcement have the same meanings when used
in this Announcement.
On 6 April 2023, Bidco entered into a financing commitment
letter and related fee letter (the "Financing Commitment Documents"
in relation to the financing of the Acquisition, in each case with
certain funds managed and/or advised by Hayfin Capital Management
LLP . A summary of the terms of the commitment letter is attached
as the Appendix to this Announcement.
A copy of the Financing Commitment Documents will be available
free of charge, subject to certain restrictions relating to persons
resident in certain jurisdictions, on Bidco's website at
www.provequity.com/hyvegroupplc by no later than 12.00 p.m. on the
business day following the date of this Announcement.
FURTHER INFORMATION
This Announcement is for information purposes only and is not
intended to and does not constitute, or form part of, an offer to
sell or an invitation to purchase any securities or the
solicitation of an offer to buy, otherwise acquire, subscribe for,
sell or otherwise dispose of any securities, pursuant to the
Acquisition or otherwise, nor shall there be any purchase, sale,
issuance or exchange of securities or such solicitation in any
jurisdiction in which such offer, solicitation, sale, issuance or
exchange would be unlawful prior to the registration or
qualification under the laws of such jurisdiction. The Acquisition
will be made solely by means of the Scheme Document or any document
by which the Acquisition is made, which contains the full terms and
conditions of the Acquisition, including details of how to vote in
respect of the Acquisition. This Announcement has been prepared for
the purpose of complying with English law and the Code and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws of other jurisdictions.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks is incorporated into, or forms part of, this
Announcement. Hyve shareholders may request a hard copy of this
Announcement by contacting Equiniti on +44 371 384 2030. Calls
outside the United Kingdom will be charged at the applicable
international rate. The helpline is open between 8.30 a.m. to 5.30
p.m., Monday to Friday, excluding public holidays in England and
Wales. Please note that Equiniti cannot provide any financial,
legal or tax advice and calls may be recorded and monitored for
security and training purposes. Hyve shareholders may also request
that all future documents, announcements and information to be sent
to them in relation to the Acquisition should be in hard copy form.
If a Hyve shareholder has received this Announcement in electronic
form, hard copies of this Announcement and any document or
information incorporated by reference into this Announcement will
not be provided unless such a request is made.
APPIX
Summary of financing commitment letter
On 6 April 2023, Bidco entered into a commitment letter (the
"Bidco Commitment Letter") concerning the debt financing facilities
described below with certain funds managed and/or advised by Hayfin
Capital Management LLP (the "Commitment Parties").
Under the terms of the Bidco Commitment Letter, the Commitment
Parties agreed to arrange and underwrite certain term loans
described more particularly below. The Bidco Commitment Letter also
sets out the terms and conditions of certain uncommitted facilities
(being the Uncommitted DDTL2 and the Uncommitted Revolving
Facility, each as defined below); however, since these facilities
remain uncommitted as at the date hereof, they are not described in
detail. The Bidco Commitment Letter contemplates that additional
banks, financial institutions or other parties may also be
appointed to provide all or part of the Uncommitted DDTL2 and/or
the Uncommitted Revolving Facility.
The Bidco Commitment Letter prohibits assignment by both the
Commitment Parties and Bidco, save for an assignment, transfer or
delegation by the Commitment Parties to their affiliates or related
funds.
The facilities, amounts and documentation process
The debt financing facilities comprise (in each case in their
respective base currency of US dollars) (i) a senior secured term
loan facility in the principal amount of up to $214,000,000 (the
"Unitranche Facility"), (ii) a senior secured term acquisition
facility in the principal amount of up to $49,000,000 (the
"Acquisition Facility"), (iii) a senior secured delayed draw term
facility in the principal amount of up to $43,000,000 (the
"DDTL1"), (iv) an uncommitted senior secured delayed draw term
facility in the principal amount of up to $125,000,000 (in respect
of which the Commitment Parties have not agreed to provide at this
time) (the "Uncommitted DDTL2") and (v) an uncommitted super senior
secured revolving credit facility in the principal amount of up to
$30,000,000 (in respect of which the Commitment Parties have not
agreed to provide at this time) (the "Uncommitted Revolving
Facility" and, together with the Uncommitted DDTL2, the
"Uncommitted Facilities"). As mentioned above, the Commitment
Parties have not committed to provide the Uncommitted Facilities at
this time, but the Uncommitted Facilities may be committed by them
or other banks, financial institutions or other parties in the
future. The Unitranche Facility, the Acquisition Facility and the
DDTL1 are referred to as the "Committed Term Facilities". All of
the foregoing together are referred to as the "Facilities".
The Committed Term Facilities will be available to be drawn down
by certain members of the Bidco Group, subject to satisfaction of
the conditions precedent to be set out in the long-form senior
facilities agreement (the "Senior Facilities Agreement") and as
summarised below, to be entered into as contemplated by the Bidco
Commitment Letter. The parties to the original Bidco Commitment
Letter agree to negotiate in good faith and use all reasonable
endeavours to execute the Senior Facilities Agreement (and any
other related financing documents) as soon as possible after the
date of the Bidco Commitment Letter and in any event by no later
than 24 April 2023 (or such later time as may be required by
Bidco). Failing timely execution by this deadline, in certain
circumstances, Bidco may require the Commitment Parties to execute
the Senior Facilities Agreement and related definitive
documentation reflecting the documentation principles agreed in the
Bidco Commitment Letter.
The proceeds of the Facilities are to be applied as follows:
(A) in respect of the Unitranche Facility, to finance/refinance
the consideration payable for the Acquisition, the payment of fees,
costs and expenses relating to the Acquisition or any transaction
document, to refinance/discharge/acquire existing Hyve Group
indebtedness and broken funding costs, prepayment/redemption fees
or premia, hedge termination amounts and fees, costs and expenses
related to that refinancing/discharge/acquisition to the extent
detailed in the funds flow statement prepared in connection with
the date of closing and to finance/refinance any squeeze-out;
(B) in respect of the Acquisition Facility, to finance/refinance
any permitted acquisition or permitted joint venture, the payment
of fees/costs/expenses incurred in connection therewith, the
refinancing/discharge/acquisition of existing indebtedness of any
related entity acquired (and related broken funding costs,
prepayment/redemption fees or premia, hedge termination amounts and
fees, costs and expenses);
(C) in respect of the DDTL1, to finance certain earn-outs and
related fees, costs and expenses;
(D) in respect of the Uncommitted DDTL2, to directly or
indirectly finance/refinance a particular acquisition, the
refinancing/repayment/acquisition/discharge of certain existing
indebtedness in connection with that acquisition and the
payment/refinancing of fees, costs and expenses incurred in
connection with the foregoing; and
(E) in respect of the Uncommitted Revolving Facility, to
finance/refinance the general corporate purposes and/or working
capital requirements of the Bidco Group.
Repayment terms - maturity
Once drawn, the Committed Term Facilities and the Uncommitted
DDTL2 (if and when committed and provided) must be repaid as a
bullet payment in full on the date falling 7 years after the date
on which the first drawing is made under a Facility (the "Closing
Date").
The Uncommitted Revolving Facility (if and when committed and
provided) must be repaid in full on the date falling six years and
six months from the Closing Date (the "Revolving Facility Maturity
Date").
Prepayment and repayment terms - voluntary/mandatory
Bidco may voluntarily cancel and prepay the Facilities in whole
or in part at any time subject to the giving of three Business
Days' prior notice. Prepayment and cancellation rights shall apply
(and/or may be exercised by the applicable lenders) in respect of
illegality, change of control or a sale of all or substantially all
of the assets of the Bidco Group. Additionally, mandatory
prepayment rights shall apply (subject to various exceptions and
exclusions) in respect of the prepayment of net cash proceeds
received from certain disposals, acquisition related claims,
insurance claims and in the event of an IPO which does not
constitute a change of control.
Interest rates
The rate of interest payable on each loan drawn under the
Facilities is the aggregate of the applicable margin, plus the
applicable reference rate (being term SOFR for USD loans, Euribor
for Euro loans and compounded SONIA for Sterling loans).
Subject to the below, the margin in respect of the Committed
Term Facilities is (in each case) 6.75% per annum.
Notwithstanding the foregoing, a margin rate of 7.25% shall
apply for each Committed Term Facility from the Closing Date until
12 months thereafter (the "Opening Margin Period"). After the end
of the Opening Margin Period, the highest margin rate will be 6.75%
for each Committed Term Facility where total net leverage is
greater than 4.50:1, with a step-down to 6.50% where total net
leverage is equal to or less than 4.50:1 but greater than 4.00:1
and an additional step-down to 6.25% where total net leverage is
equal to or less than 4.00:1.
Guarantees and security
The Commitment Parties will receive the benefit of guarantees
and security in respect of each of the Committed Facilities and
guarantees and security will initially be provided by both Heron UK
Finco Limited and Bidco. They will each guarantee the Committed
Facilities, and provide security over shares in certain
subsidiaries, their bank accounts and intra-group receivables, in
addition to a floating charge pursuant to certain security
documents (the "Initial Security Documents"). In due course after
the Closing Date, other members of the Bidco Group will also
provide guarantees and security as is customary for a transaction
of this nature.
Representations, warranties, undertakings and events of
default
The Senior Facilities Agreement will contain representations and
warranties, a financial covenant, undertakings (both operational
and as regards certain information) and events of default that are
customary for a financing of this nature.
Representations and warranties will be made (subject to various
exceptions and materiality and other thresholds) regarding status,
binding obligations, non-conflict with other obligations, power and
authority, validity and admissibility in evidence, governing law
and enforcement, insolvency, no default, no misleading information,
financial statements, no proceedings pending or threatened, no
breach of laws, environmental laws, taxation, ranking, good title
to assets, legal and beneficial ownership, intellectual property,
centre of main interests, pensions, holding company status of Heron
UK Finco Limited and Bidco and sanctions.
The Senior Facilities Agreement will contain a financial
covenant based on total net leverage, commencing with the first
financial quarter date falling at least three full quarter periods
after the Closing Date (initially set at 8:00:1, and decreasing
over time). The Senior Facilities Agreement will also contain
operational general undertakings (subject to various exceptions and
materiality and other thresholds) regarding, among other things,
due authorisations, compliance with laws, environmental compliance
and claims, tax, restrictions on mergers/change of
business/acquisitions/joint ventures, maintenance of holding
company status of Heron UK Finco Limited and Bidco, preservation of
assets, pari passu ranking, negative pledge, disposals, arm's
length dealings, restrictions on granting loans, incurring debt,
providing guarantees, making restricted payments and issuing share
capital. In addition, certain information undertakings will be
given with respect to the provision of financial statements and
budgets, compliance certificates, annual lender presentations and
various other miscellaneous items.
Events of default (subject to various exceptions, materiality
and other thresholds and grace periods) will consist of
non-payment, breach of financial covenant/reporting obligations,
breach of other obligations and misrepresentations, cross-default,
certain insolvency events, unlawfulness and
invalidity/repudiation/rescission of certain finance documents,
breaches of intercreditor documentation and litigation events.
Conditions precedent
The Bidco Commitment Letter sets out a number of conditions
precedent to first utilisation (both documentary and otherwise)
which will be included in the Senior Facilities Agreement and
includes, among other things, the delivery of the Initial Security
Documents and customary officer's certificates setting out various
confirmations in respect of applicable conditions being
satisfied.
The foregoing description is a high-level overview of key
indicative terms of the Bidco Commitment Letter and ancillary
documents.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
OFFUNUNROUUSRAR
(END) Dow Jones Newswires
April 06, 2023 12:26 ET (16:26 GMT)
Hyve (LSE:HYVE)
Historical Stock Chart
From May 2024 to Jun 2024
Hyve (LSE:HYVE)
Historical Stock Chart
From Jun 2023 to Jun 2024