TIDMMER
RNS Number : 4963E
Mears Group PLC
06 November 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO, OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION.
This announcement contains inside information for the purpose of
Article 7 of the Market Abuse Regulation (EU) No 596/2014 (the
"Market Abuse Regulation").
6 November 2020
Mears Group PLC
("Mears", the "Group", or "the Company")
Proposed sale of TerraQuest Solutions Limited
for up to GBP72 million
Mears (LSE: MER), the UK Housing solutions provider, today
announces that it has entered into a conditional agreement to sell
the entire issued share capital of TerraQuest Solutions Limited
("TerraQuest") and its subsidiary undertakings to a newly
incorporated private limited company (the "Buyer") controlled by
funds advised by Apse Capital Limited (together, the
"Disposal").
Highlights
-- The Buyer will acquire the entire issued share capital of
TerraQuest for a maximum valuation of GBP72.0m(1) . The
consideration is as follows:
o minimum cash proceeds are expected to be GBP61.8 million(2)
;
o up to a further GBP5.0 million in cash, payable subject to the
performance of TerraQuest in the financial year to 31 December
2021; and
o GBP3.2 million in interest bearing loan notes(3) together with
ordinary shares equating to a 6.2 per cent. of the share capital of
the Buyer's holding company, providing the potential for further
value to Shareholders.
-- Following the Disposal Mears will:
o be solely focused on its core proposition as a trusted
provider of specialist housing solutions to central and local
government; and
o have a significantly strengthened balance sheet, where
unaudited pro forma net debt as at 30 June 2020 would have been
GBP10.8 million(4) (actual net debt 30 June 2020: GBP62.4
million).
-- Mears has built a significant asset through the TerraQuest
business since 2009, including the contract to re-develop and
operate the National Planning Portal - a web-based platform which
processes c.90% of all planning applications in England &
Wales. In the financial year ended 31 December 2019, the TerraQuest
Group generated revenues of GBP20.9 million and a profit before tax
of GBP4.9 million.
-- Trading across the Continuing Group in the period since 30
June 2020 has been in line with the Board's expectations. The Board
keeps under close review the changing COVID-19 backdrop. Mears
continues to benefit from the supportive financial arrangements
agreed with clients through the first half of this year. Given
this, and the relative proximity of the year end, the Board expects
that the recently implemented England-wide lockdown restrictions
and the restrictions in Scotland will not have a materially adverse
impact on performance in 2020. The Group intends to make a
scheduled Q4 trading update in due course.
-- The Group also announces that to support the Class 1 working
capital exercise it has undertaken in conjunction with the
Disposal, and in recognition of the impact of Covid-19, it has
entered into an amendment of its Revolving Credit Facility to
provide materially greater covenant headroom as at 31 December 2020
and 30 June 2021 .
-- The Disposal is conditional upon the approval of Mears
Shareholders and the consent of TerraQuest's joint venture partner
MHCLG; completion of the Disposal is expected to occur in early
December 2020.
-- The Board believes the Disposal is in the best interests of
Shareholders as a whole a nd will be unanimously recommending in
the circular to Shareholders that they vote in favour of the
Disposal.
Notes : 1. Maximum valuation before locked box adjustments and
on a cash and debt free basis. 2 . Minimum expected cash
consideration payable GBP56.8m on completion (before transaction
costs but after anticipated locked box adjustments) and GBP5m
deferred consideration payable in March 2022 3. Loan notes to be
issued by a new holding company of TerraQuest and accruing
rolled-up interest at a rate of 10% per annum. 4. Excluding the
benefit of any deferred consideration. Net debt is defined as long
term borrowings and overdrafts less cash and cash equivalents.
Terms used in this announcement are defined in the Definitions
section below.
David Miles, Chief Executive Officer of the Group,
commented:
"TerraQuest has been a great success story within the Mears
Group. Through the provision of both financial and intellectual
capital we have created a leading digital and technical services
provider to the planning, infrastructure and property sectors
across the UK. This transaction secures the next stage of
TerraQuest's development and allows Mears shareholders to realise
significant value from this investment.
"The Disposal materially strengthens the Mears Group balance
sheet and completes our strategic programme to focus on our core
activities of specialist Housing services to local and central
government clients. We are also delighted at the support we have
received from our relationship banks who, in conjunction with the
Disposal, have significantly increased our covenant headroom over
the next twelve months.
"Our portfolio of high-quality contracts focused on our core
Housing services and the Group's strengthened balance sheet mean we
look to the future with confidence."
This summary should be read in conjunction with the full text of
this announcement. This announcement is available at
http://www.mearsgroup.co.uk. A circular containing further details
of the Disposal (the "Circular") and a notice convening a general
meeting of the Company will be sent to Shareholders shortly.
A conference call will be held for analysts and shareholders at
9am GMT on 6 November 2020 hosted by David Miles, CEO and Andrew
Smith, CFO. Joining instructions are below:
Dial-in: +44 20 3655 9505
Pin code: 1171266#
A recording of this call will be available in the Investor
section of the Mears Group website later today.
For further information, contact:
Mears Group PLC
David Miles, Chief Executive Officer Tel: +44(0)7778 220 185
Andrew Smith, Finance Director Tel: +44(0)7712 866 461
Alan Long, Executive Director Tel: +44(0)7979 966 453
Joe Thompson, Investor Relations Tel: +44(0)7980 844 580
www.mearsgroup.co.uk
Investec Bank plc Tel: +44(0)20 7597 5970
(Sponsor and Financial Adviser to Mears
Group PLC)
Daniel Adams
Virginia Bull
Will Fenby
Peel Hunt Tel: +44(0)20 7418 8900
( C orporate Broker to Mears Group PLC)
Nicholas How
Ed Allsopp
The person responsible for arranging the release of this
announcement on behalf of Mears Group PLC is Ben Westran, Company
Secretary.
Market Abuse Regulation
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation. Upon the publication of this
announcement via a regulatory information service, this inside
information is now considered to be in the public domain.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND
ADDITIONAL INFORMATION FOR SHAREHOLDERS
This announcement contains forward-looking statements.
Statements containing the words "intends", "aims", "anticipates",
"assumes", "budgets", "could", "contemplates", "continues",
"plans", "predicts", "projects", "schedules", "seeks", "shall",
"should", "targets", "would", "believes", "anticipates", "may",
"will", "estimates" "expects" and "outlook" or, in each case, their
negative or other variations, or words of similar meaning are
forward looking. By their nature, all forward-looking statements
are subject to assumptions, risks and uncertainties. Although the
Company believes that the expectations reflected in these
forward-looking statements are reasonable, there can be no
assurance that these expectations will prove to have been correct
and because these statements involve risks and uncertainties,
actual results may differ materially from those expressed or
implied by those forward-looking statements. Each forward-looking
statement speaks only as of the date of the particular statement.
These forward-looking statements include all matters that are not
current or historical facts. They appear in a number of places
throughout this announcement and include, but are not limited to,
statements regarding the Directors', the Group's and/or the
Company's intentions, beliefs or current expectations concerning,
amongst other things, the Group's operational results, financial
condition, prospects, growth, dividend policy, strategies and the
industries in which the Group operates, and the financial effect of
the proposed Disposal of TerraQuest on the Group.
Shareholders should not place undue reliance on forward-looking
statements (which speak only as of the date of this announcement)
because they involve known and unknown risks, uncertainties and
other factors that are in many cases beyond the control of the
Group. By their nature, forward-looking statements involve risk and
uncertainty because such statements relate to events and depend on
circumstances that may or may not occur in the future.
Forward-looking statements are not indicative of future
performance; the actual results of operations and financial
condition of the Group, and the development of the industries in
which the Group operates, may differ materially from those
described in or suggested by the forward-looking statements
contained in this announcement. A number of factors could cause
actual results and developments to differ materially from those
expressed or implied by the forward-looking statements, including,
without limitation: conditions in the markets; the market position
of the Group; earnings, financial position, cash flows, return on
capital and operating margins of the Group; anticipated investments
and capital expenditures of the Group; industry
trends; changing business or other market conditions;
competition and changes in business strategy; and general economic
and business conditions. These and other factors could adversely
affect the outcome and financial effects of the plans and events
described herein.
The cautionary statements set out above should be considered in
connection with any subsequent written or oral forward-looking
statements that the Company, or persons acting on its behalf, may
issue.
The Company does not undertake any obligation publicly to update
or revise any forward-looking statement as a result of new
information, future events or other information, although such
forward-looking statements will be publicly updated if required by
the FCA, the Listing Rules, the Prospectus Regulation, Prospectus
Regulation Rules, the Disclosure Guidance and Transparency Rules,
the rules of the London Stock Exchange, the Market Abuse Regulation
or by applicable law.
Investec Bank plc ("Investec") is authorised by the Prudential
Regulatory Authority (the "PRA") and regulated in the United
Kingdom by the PRA and the Financial Conduct Authority ("FCA") and
is acting exclusively for the Company and no one else in connection
with the Disposal or any other matters referred to in this
announcement and will not regard any other person as a client
(whether or not a recipient of this announcement) in relation to
the Disposal or any other matters referred to in this announcement
and is not, and will not be, responsible to anyone other than the
Company for providing the protections afforded to its clients or
for providing advice in relation to the Disposal or any other
matters referred to in this announcement.
Mears's Shareholders will be able to obtain a copy of the
Circular (when available) from Mears' website at
www.mearsgroup.co.uk.
Proposed sale of TerraQuest Solutions Limited
1. Introduction
The Company today announces that it has reached conditional
agreement with Apse Capital Limited for the sale of the entire
issued share capital of TerraQuest Solutions Limited ("TerraQuest")
and its subsidiary undertakings, which includes PortalPlanQuest
Limited (the "TerraQuest Group"), subject to the fulfilment of
certain conditions (the "Disposal"). A newly-formed company
controlled by funds advised by Apse Capital Limited, Mason Bidco
Limited (the "Buyer"), will acquire the entire issued share capital
of TerraQuest for a maximum valuation of GBP72 million, before
locked box adjustments, on a cash and debt free basis.
The Disposal constitutes a Class 1 transaction under the Listing
Rules. As a consequence, completion of the Disposal is conditional
on, among other things, the Disposal receiving the approval of
Shareholders. A General Meeting is expected to be held at the
Company's registered office on 25 November 2020 at 10 a.m. for the
purpose of seeking such approval. Accordingly, a circular
containing further details of the Disposal, and a notice convening
the General Meeting will be sent to Shareholders shortly.
Completion of the Disposal is expected (subject to the approval
by Shareholders of the Disposal and receiving MHCLG Consent) to
occur in early December 2020.
2. Background to and Reasons for the Disposal
The long-term strategy of the Mears Group is to be the UK's most
respected and trusted provider of housing solutions.
The TerraQuest Group provides a range of land and planning
services to a wide range of customers, notably the National
Planning Portal which provides planning and building control
application services, processing some 90 per cent. of all digital
planning applications in England and Wales. The TerraQuest Group
has developed successfully and grown in profitability while under
the ownership of the Mears Group. However, the Board considers that
the business activities of the TerraQuest Group are different in
kind from those provided by the Continuing Group. After a thorough
review, the Board concluded that the prospects of the TerraQuest
Group would be optimised under new ownership.
Accordingly, the Group commenced a competitive sale process,
advised by KPMG. A number of counterparties submitted proposals
from which the Board selected Apse as providing the optimal outcome
for the TerraQuest Group and its MHCLG partner, as well as Mears
Shareholders.
The disposal of the TerraQuest Group will contribute to the
Board's stated objective of reducing the indebtedness of the Group
and hence strengthening its balance sheet. The continuing winding
down of the Group's property development activities and the
disposal of the domiciliary care activities have also contributed
to this objective. The proceeds from the disposal of the TerraQuest
Group will be used to reduce the Continuing Group's
indebtedness.
3. Information on the TerraQuest Group
The TerraQuest Group is a software and technical services
provider to the infrastructure, property, and planning sectors in
the UK. It processes c.90 per cent. of planning applications made
digitally in England and Wales through its running of the National
Planning Portal and is a leading provider of land referencing
services in national, long-term infrastructure projects. In
addition, the TerraQuest Group provides specialist data management
for clients such as the Land Registry and holds a large volume of
planning and property sector data.
The business operates two closely linked service lines -
Software Solutions and Technical Services.
Software Solutions
Software Solutions are platform-based solutions including
planning, mapping, digital workspaces and bespoke tools. This
business includes planning application software, bespoke portals
for clients such as Crossrail, and pre-employment checks for
private companies and government authorities.
The planning application business, the National Planning Portal,
is held within a 75 per cent. owned subsidiary, with the balancing
stake held by MHCLG. It is through this system that the business
engages with its core customers: Local Authorities in England and
Wales, architects to property agents, and other government
departments.
Technical Services
These services include the provision of technical services and
consulting on data analysis and process optimisation. This business
includes land referencing for major infrastructure projects, data
curation for governmental authorities, and planning services.
In the financial year ended 31 December 2019, the TerraQuest
Group generated revenues of GBP20.9 million and a profit before tax
of GBP4.9 million. As at 31 December 2019, the TerraQuest Group had
gross assets of GBP12.7 million. For the six months ended 30 June
2020, the TerraQuest Group generated revenues of GBP9.0 million and
a profit before tax of GBP2.4 million. As at 30 June 2020, the
TerraQuest Group had gross assets of GBP17.1 million.
A summary of the trading results of the TerraQuest Group for the
three years ended 31 December 2019 and the six months ended 30 June
2020 and the net asset statement as at 31 December 2019 and 30 June
2020 will be set out in the Circular.
4. Summary of the Principal Terms of the Disposal
The Buyer is a company indirectly owned by Topco. The Topco
Group has been formed by Apse for the purposes of the Disposal. The
Buyer and the Company entered into the Disposal Agreement, pursuant
to which the Buyer agreed to acquire, subject to the fulfilment of
certain conditions, the entire issued share capital of
TerraQuest.
The consideration payable to the Company pursuant to the terms
of the Disposal Agreement is structured as follows:
-- GBP56.7 million, plus an amount of further consideration
equal to GBP6,112 per day (the "Daily Factor") for the period from
the date of the Disposal Agreement to the date of Completion,
payable in cash at Completion. The Daily Factor is paid in
consideration for the profits accrued by the TerraQuest Group in
that period;
-- the issue to the Company of (i) 64,823 B Ordinary Shares in
Topco, representing 6.2 per cent. of the entire issued share
capital of Topco immediately following Completion and (ii)
Consideration Loan Notes with an aggregate nominal value of GBP3.2
million accruing an interest rate of 10 per cent. per annum payable
upon redemption of the Consideration Loan Notes; and
-- a maximum amount of GBP10 million of deferred consideration
payable in cash conditional upon the TerraQuest Group achieving an
aggregate EBITDA of GBP9.5 million in the financial year ending on
31 December 2021 (the "Earn Out Period"). If the TerraQuest Group
does not achieve the GBP9.5 million EBITDA target, GBP5 million in
deferred consideration will be payable in cash and, provided the
aggregate EBITDA in the financial year ending on 31 December 2021
is greater than that of the previous financial year, an additional
GBP333,333 is payable in cash for every GBP100,000 of EBTIDA
achieved in the Earn Out Period in excess of GBP8 million up to
EBITDA of GBP9.5 million.
In connection with the Disposal, the Buyer has agreed terms with
the management team of TerraQuest by which they will subscribe for
C Ordinary Shares in Topco representing 20 per cent. of the entire
issued share capital of Topco immediately following Completion (the
"Sweet Equity Arrangement"). Under the terms of the Sweet Equity
Arrangement, Geoffrey Keal, the Managing Director of TerraQuest
will acquire C Ordinary Shares.
The Continuing Group expects to incur certain operational
expenses and transaction costs in connection with the Disposal.
As part of the Disposal, the Continuing Group has agreed to
provide certain transitional services already being provided by it
to the TerraQuest Group for a limited period following Completion
pursuant to the terms of the Transitional Services Agreement.
TerraQuest has agreed to provide certain transitional services
already being provided by it to the Continuing Group for a limited
period following Completion pursuant to the terms of the Reverse
Transitional Services Agreement.
Completion of the Disposal is conditional upon (i) the approval
of the Disposal by Shareholders by the passing of the Resolution
and (ii) MHCLG Consent.
Completion shall take place on the tenth Business Day following
satisfaction or waiver of the conditions precedent. In the event
that the conditions are not satisfied by the Long Stop Date (or
such later time as the parties may agree), the Disposal Agreement
will automatically terminate and the Disposal will not proceed.
5. Smaller Related Party Transaction
As set out above, as part of the Consideration, the Company will
receive GBP3.16 million Consideration Loan Notes and B Ordinary
Shares in Topco, representing 6.16 per cent. of the entire issued
share capital of Topco. In addition, under the terms of the Sweet
Equity Arrangement, Geoffrey Keal, the Managing Director of
TerraQuest will acquire approximately 40% of the C Ordinary Shares
in Topco (which represents 8 per cent. of the entire issued share
capital of Topco) for a subscription value of GBP84,185.
Geoffrey Keal is a related party of Mears under the Listing
Rules. His investment in Topco alongside that of Mears constitutes
a related party transaction pursuant to Listing Rule 11.5.1(2).
A smaller related party transaction does not require the
approval of independent Shareholders of the Company. The
transaction falls within Listing Rule 11.1.10R (smaller related
party transactions) and this announcement is made in accordance
with Listing Rule 11.1.10R(2)(c).
6. Use of Proceeds and Financial Effects of the Disposal
The initial gross cash proceeds before transaction costs arising
from the Disposal are expected to be approximately GBP56.8 million.
The Continuing Group will retain the net cash proceeds to
strengthen the Continuing Group's balance sheet by reducing the
amount drawn down under the Group's Revolving Credit Facility.
Unaudited pro forma net debt as at 30 June 2020 would have been
GBP10.8 million (actual net debt 30 June 2020: GBP62.4
million).
The Disposal will have the net effect, after taking into account
any interest cost saving from reducing indebtedness, of reducing
the Continuing Group's profit before tax and is expected to be
dilutive to the earnings per share of the Group for the current
financial year and beyond.
7. Amendments to Revolving Credit Facility
In connection with the Disposal, the Group has entered into an
amendment to the terms of the existing Revolving Credit Facility
Agreement (as defined below) with its lenders (the
"Amendment").
The principal amendments to the Revolving Credit Facility
Agreement effected by the Amendment are summarised as follows:
-- the existing financial covenants will not be tested on the
December 2020 and June 2021 testing dates provided for under the
Revolving Credit Facility Agreement;
-- new financial covenants requiring a minimum level of EBITDA
and a maximum level of net borrowings will be introduced and tested
at the December 2020 and June 2021 testing dates only. In setting
these amended covenants, the Company was required to prepare
projections on the basis of the reasonable worst scenario for the
working capital statement contained in the Circular. This has also
involved making certain assumptions regarding the potential
evolution of the COVID-19 pandemic and its potential impact on the
Group in that reasonable worst case scenario;
If Shareholders do not vote in favour of the Resolution and the
Disposal does not complete, the new financial covenants to be
tested at the December 2020 and June 2021 testing dates will be
varied to reflect the fact that the TerraQuest Group remains part
of the Group. In addition, the Core Commitments will remain at
GBP170 million.
The amended covenants based on the outcome of the Resolution are
detailed below. EBITDA is calculated on a pre-IFRS 16 basis.
If Shareholders vote If Shareholders do
in favour of the Resolution not vote in favour
of the Resolution
Covenant Test Minimum Maximum Consolidated Minimum Consolidated Maximum
Date Consolidated Net Borrowings Adjusted Consolidated
Adjusted EBITDA Net Borrowings
EBITDA
Relevant Period (GBP9,000,000) GBP63,000,000 (GBP5,000,000) GBP108,000,000
Ending 31 December
2020
Relevant Period GBP3,800,000 GBP95,000,000 GBP7,800,000 GBP140,000,000
Ending 30 June
2021
-- a new minimum liquidity financial covenant will be introduced
and tested monthly which requires the Company to maintain a minimum
liquidity headroom at each month end of GBP40 million reducing by
any subsequent reduction in the Commitments;
-- changes to what is permitted regarding future acquisitions and disposals; and
-- following the occurrence of the Disposal, the commitments
provided under the Revolving Credit Facility Agreement (other than
the Non-Core Commitments) (the "Core Commitments") will be reduced
from GBP170 million to GBP145 million.
From the occurrence of the December 2021 testing date, the
financial covenants shall revert to the requirements (including the
covenant levels) set out in the Revolving Credit Facility Agreement
in force immediately prior to the occurrence of the Amendment, save
that the leverage covenant for the December 2021 testing date only
shall be 3.5:1.
8. Strategy of the Continuing Group Subsequent to the Disposal
The Mears Group is a specialist provider of Housing Maintenance
and Management services to central and local government clients
across the UK. Following the Disposal, it will employ around 5,700
people.
In partnership with its local council and housing association
clients, the Mears Group is responsible for the repair, maintenance
and upgrade of social housing in communities from remote rural
villages to large inner-city estates. The Mears Group also provides
broader Housing Management solutions to its local and central
government clients, which include the Home Office and Ministry of
Defence. These programmes help solve the challenge posed by the
lack of affordable housing through the provision of accommodation
and support to a range of user groups, including many of society's
most vulnerable.
Following the Disposal, the strategy of the Continuing Group is
to focus on these core Housing Maintenance and Management
activities and secure further long-term contract wins, retentions
and extensions. The Mears Group considers its competitive strengths
to include its leading market position and brand, national scale
and coverage, sophisticated contract management systems and
long-standing, trusted client relationships. In addition, the
Continuing Group will continue to wind down its housing development
portfolio to enhance further its operating cash conversion.
9. Current Trading, Financial Position and Outlook of the Continuing Group
On 18 August 2020, the Company announced the interim results for
the Group for the six months to 30 June 2020 (the "2020 Interim
Financial Statements"). The following update on the current trading
and prospects of the Company has been extracted without material
amendment from that announcement:
"Maintenance:
Recovery in activity levels expected during the second half, as
working arrangements progressively return towards more normal
levels.
Management :
Levels of demand to remain strong, with some easing in the
operational challenges.
The Board continues to evaluate Mears' portfolio of businesses,
and where assets are seen as peripheral to the Group's core
strategy of providing services to the Housing sector in the UK,
actions are being taken in order to deliver the best financial
return for shareholders, and accelerate the Board's stated desire
to see a reduction in debt levels.
The Group is progressing well with its planned disposal of the
Scotland Domiciliary Care business and expects to complete the
disposal during 2020.
While the Covid crisis has impacted short-term financial
performance, the business remains resilient, volumes are returning
and win rates are healthy."
Subsequent to the announcement of its 2020 Interim Financial
Statements, the Company announced on 28 September 2020 that it had
sold its Scottish domiciliary care business and thereby exited from
domiciliary care services.
Trading across the Continuing Group in the period since 30 June
2020 has been in line with the Board's expectations. The Board
keeps under close review the changing COVID-19 backdrop. Mears
continues to benefit from the supportive financial arrangements
agreed with clients through the first half of this year. Given
this, and the relative proximity of the year end, the Board expects
that the recently implemented England-wide lockdown restrictions
and the restrictions in Scotland will not have a materially adverse
impact on performance in 2020. The Group intends to make a
scheduled Q4 trading update in due course.
10. Information on the Buyer
Apse Capital is a London-based private equity firm that
specialises in backing tech-enabled B2B information and services
businesses in high-growth sectors across Europe. Apse Capital was
co-founded by Tim Green, Ashley Long and Vikram Krishna, who have
worked together for over fifteen years, have 80 years of combined
private equity experience and over the last five years have
completed a total of 24 transactions in tech-enabled businesses,
with an aggregate Enterprise Value of EUR1.5 billion. Apse Capital
typically backs fast-growing European SMEs with an enterprise value
of EUR50-EUR200 million.
11. Costs and Risks Relating to the Disposal
Whilst the Board considers the Disposal to be in the best
interests of the Company and its Shareholders as a whole there are
a number of potential risks and uncertainties that Shareholders
should consider before voting on the Resolution. A discussion of
these risks and uncertainties will be set out in the Circular to be
sent to Shareholders.
The Company will also incur a number of other customary costs in
relation to the Disposal more generally (including legal,
accounting, financial adviser, sponsor and other transaction fees),
some of which will be payable regardless of whether the Disposal
reaches Completion.
12. Expected Timetable to Completion
The Circular which contains further details of the Disposal and
the resolution to approve the Disposal (the " Resolution "), the
Board's unanimous recommendation to vote in favour of the
Resolution, and the Notice of General Meeting, will be sent to
Shareholders shortly. Completion of the Disposal is expected to
occur in early December 2020.
Definitions
"Apse" Apse Capital Bridge Fund LP
"B Ordinary Shares" B ordinary shares in the capital of Topco
"Board" or "Directors" the board of directors of the Company
"Buyer" Mason Bidco Limited, the acquisition vehicle
incorporated on behalf of Apse
"C Ordinary Shares" C ordinary shares in the capital of Topco
"Completion" the completion of the Disposal in accordance
with the terms of the Disposal Agreement
"Consideration Loan the consideration loan notes with an aggregate
Notes" nominal value equal to GBP3,160,100 to be
issued by Holdco to the Company
"Continuing Group" the Company and its subsidiary undertakings
following Completion being the continuing
business of the Group following Completion
(and excluding the TerraQuest Group)
"Disposal" the proposed disposal of the entire issued
share capital of TerraQuest by the Company
pursuant to the Disposal Agreement
"Disposal Agreement" the share purchase agreement dated 5 November
2020 entered into by the Buyer and the Company
pursuant to which the Buyer has conditionally
agreed to acquire the entire issued and to
be issued share capital of TerraQuest
"General Meeting" the general meeting of the Company expected
to be convened for 10 a.m. on 25 November
2020, notice of which is to be set out in
the Circular, and including any adjournment
thereof
"Group" or "Mears the Company and its subsidiary undertakings
Group"
"Holdco" Mason Holdco Limited, the direct subsidiary
of Topco
"Long Stop Date" 5 January 2021
"Market Abuse Regulation" Regulation (EU) No. 2014/596
"MHCLG" the Ministry of Housing, Communities and
Local Government, which hold a 25% interest
in PortalPlanQuest Limited
"MHCLG Consent" written consent to the Disposal from MHCLG
pursuant to the terms of the joint venture
agreement in relation to PortalPlanQuest
Limited
"Notice of General the notice of General Meeting set out in
Meeting" the circular to Shareholders
"Resolution" the resolution to be proposed at the General
Meeting (and set out in the Notice of General
Meeting) being an ordinary resolution to
approve the Disposal
"Revolving Credit the revolving credit facility agreement dated
Facility Agreement" 9 September 2011 and amended on 23 August
2012, 12 November 2013, 1 February 2016,
amended and restated on 29 November 2017
and as further amended on 9 June 2020, to
which the Company is a party together with,
amongst others, certain of its subsidiaries
as borrowers and guarantors and Barclays
Bank PLC, HSBC UK Bank plc and The Governor
and Company of the Bank of Ireland as lenders
and Barclays Bank PLC as agent
"Share" an ordinary share of 1 penny in the capital
of the Company and "Shares" shall be construed
accordingly
"Shareholders" and holders of Shares
each a "Shareholder"
"TerraQuest" TerraQuest Solutions Limited
"TerraQuest Group" TerraQuest and its subsidiary undertakings,
including PortalPlanQuest Limited
"Topco" Mason Topco Limited, the indirect holding
company of the Buyer
"Topco Group" Topco and its subsidiary undertakings including
the Buyer, Holdco and the TerraQuest Group
The release, publication or distribution of this announcement in
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This announcement is not intended to, and does not constitute,
or form part of, any offer to sell or an invitation to purchase or
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approval in any jurisdiction. Shareholders are advised to read
carefully the formal documentation in relation to the Disposal once
it has been despatched. Any response to the proposals should be
made only on the basis of the information in the formal
documentation to follow.
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END
DISUPGPCGUPUUQQ
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November 06, 2020 13:40 ET (18:40 GMT)
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