TIDMTRX
RNS Number : 6900L
Tissue Regenix Group PLC
20 July 2017
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA.
The information contained herein is not for release, directly or
indirectly, in or into the United States of America, Australia,
Canada, Japan or the Republic of South Africa. This announcement
(and the information contained herein) does not contain or
constitute an offer of securities for sale, or solicitation of an
offer to purchase securities, in the United States, Australia,
Canada, Japan or the Republic of South Africa or any other
jurisdiction where such an offer or solicitation would be unlawful.
The securities referred to herein have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered or sold in the United
States unless the securities are 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. No
public offering of the securities will be made in the United
States.
Tissue Regenix Group plc
Acquisition of CellRight Technologies, proposed placing and
subscription of new Ordinary Shares at a price of 10 pence per
share to raise approximately GBP40 million and approval of waiver
of obligations under Rule 9 of the Takeover Code
Creates a leading regenerative medical devices company,
accelerating growth and penetration in US market
Adds complementary technology, 13 new products and pipeline in
the multi-billion dollar market
Increases US sales by 2.5x and accelerates trajectory towards
profitability, targeting 2020[1]
Leeds, 20 July 2017 - Tissue Regenix Group plc (AIM:TRX)
("Tissue Regenix" or the "Company"), the regenerative medical
devices company, is pleased to announce the conditional acquisition
of CellRight Technologies ("CellRight"), a US regenerative medicine
business focused on the development and commercialisation of a
range of human tissue products based on proprietary bone processing
techniques and soft tissue products for clinical applications in
spine, dental, sports medicine and general surgery, for a total
consideration of up to $30.0 million (GBP23.0 million)([2]) (the
"Acquisition"). Tissue Regenix also announces its intention to
raise gross proceeds of approximately GBP40 million pursuant to a
placing of up to 400 million new Ordinary Shares less the number of
any Subscription Shares (as defined below) (the "Placing Shares")
in the Company at a price of 10 pence per Placing Share, with both
new and existing institutional investors (the "Placing"). In
connection with the proposed fundraise, certain of the Directors
intend to subscribe for new Ordinary Shares (the "Subscription
Shares") in the Company at a price of 10 pence per Subscription
Share (the "Subscription", together with the Placing, the
"Offer").
The proceeds from the Offer will be used to finance the initial
consideration of $25.9 million (GBP19.9 million) for the
Acquisition, with an additional up to $4.1 million (GBP3.1 million)
earn-out consideration payable subject to the achievement of
revenue performance targets. The remaining funds will be used to
accelerate the growth of the Enlarged Group and will provide
working capital to support the on-going commercialisation of the
Group's existing programmes. The Acquisition will expand the market
opportunity of the Enlarged Group and accelerate it towards its
target of achieving profitability in 2020.([3])
Antony Odell, CEO of Tissue Regenix, said:
"The acquisition of CellRight Technologies provides a
transformational opportunity for Tissue Regenix and accelerates the
Group's trajectory to break even through the creation of an
innovative, regenerative medical devices company. CellRight bring a
synergistic regenerative technology focused on bone, which will
complement our own dCELL(R) soft tissue platform. Furthermore, a
broad development pipeline of innovative products, multiple
established distribution channels and a state of the art US-based
manufacturing facility will enable us to increase our growth and
market penetration, cementing our presence in the key US market, as
well as providing an opportunity to enter new geographies.
"Building on our material progress over the last two years, the
additional resources will enable Tissue Regenix to invest in
advancing our organic product pipeline and commercial strategy. We
would like to thank our existing and new shareholders for their
support as we realise our vision of becoming a market leader in the
multibillion dollar global regenerative medicine market."
Strategic Rationale for the Acquisition
-- CellRight adds an innovative regenerative platform technology
focused on bone, with application areas in orthopaedics, spine and
general surgery, which is complementary to Tissue Regenix's soft
tissue based platform technology;
-- The Acquisition broadens the Group's orthopaedic product
offering which the Board expects to significantly increase the
Group's growth and penetration in the US market as well as other
territories;
-- CellRight has well established distribution and sales
relationships and has demonstrated strong revenue and profit
generation as well as cash flow, with a three year sales CAGR in
excess of 61 per cent. across the financial years ended 31 December
2013 - 31 December 2016; and
-- The Acquisition provides the Enlarged Group with the ability
to leverage capacity to meet future growth requirements and drive
efficiencies in a state of the art tissue processing facility
accredited by the FDA and AATB and located in Universal City, San
Antonio, Texas.
The Offer
The Placing is being conducted through an accelerated
bookbuilding process to be carried out by Jefferies International
Limited ("Jefferies") which shall determine the exact number of the
Placing Shares in accordance with the terms and conditions set out
in the Appendix to this announcement. Participation in the Placing
will be limited to institutional investors. Members of the general
public are not eligible to take part in the Placing.
The book will open with immediate effect and is expected to
close no later than 9 a.m. on 21 July 2017. The timing of the
closing of the book and allocations is at Jefferies' discretion in
consultation with the Company. The number of Placing Shares to be
allocated and issued pursuant to the Placing is subject to
agreement between the Company and Jefferies at the close of the
bookbuilding process.
Certain of the Directors have indicated an intention to
subscribe for Subscription Shares at the Issue Price pursuant to
separate subscription agreements which are expected to be entered
into between the Company and such Directors. The maximum number of
Placing Shares that may be allocated pursuant to the bookbuilding
process will be reduced to the extent that Directors subscribe for
such Subscription Shares.
Details of the final terms of the Placing, including its
completion, and the Subscription (if any) will be announced as soon
as practicable after the close of the bookbuilding process.
Due to the size of the Offer, the Offer is conditional, inter
alia, on the passing of certain resolutions by shareholders of the
Company at a general meeting expected to be convened at the offices
of DLA Piper UK LLP, Princes Exchange, Leeds LS1 4BY on Tuesday 8
August 2017 at 9 a.m. (the "General Meeting").
The Takeover Panel has agreed to waive the obligation of the
Concert Party to make a general offer to all Shareholders of the
Company ("Rule 9 Waiver") that would otherwise arise as a result of
any resulting increase to the Concert Party's percentage holding of
shares carrying voting rights pursuant to the Offer, subject to the
approval, on a poll, of the Shareholders of the Company other than
(i) the Concert Party (and anyone acting in concert with it) and
the (ii) other Placees who hold Ordinary Shares and any Directors
participating in the Subscription (the "Independent Shareholders").
Accordingly, it is expected that such a whitewash resolution would
be proposed at the General Meeting, to be taken on a poll. The
Concert Party (and anyone acting in concert with its members), the
other Placees and any Directors participating in the Subscription
who hold Ordinary Shares would not be entitled to vote on the
resolution.
A circular containing details of the Offer, the Acquisition and
the Rule 9 Waiver will be posted to shareholders as soon as
practicable following the close of the bookbuild.
Jefferies is acting as broker and nominated adviser in
connection with the Placing and WG Partners LLP is acting as
placement agent. The Offer is not being underwritten.
Terms used but not defined in this announcement shall have the
meanings given to such terms in the Appendix. This announcement
contains inside information for the purposes of Article 7 of EU
Regulation 596/2014 ("MAR"). In addition, market soundings (as
defined in MAR) were taken in respect of the Placing with the
result that certain persons became aware of inside information (as
defined in MAR), as permitted by MAR. This inside information is
set out in this announcement. Therefore, those persons that
received inside information in a market sounding are no longer in
possession of such inside information relating to the Company and
its securities.
Tissue Regenix's management Antony Odell, CEO, and Paul Devlin,
CFO, will host a presentation for analysts Friday, 21 July, 2017 at
9.30 a.m. at the offices of FTI Consulting, 200 Aldersgate,
Aldersgate Street, London, EC1A 4HD.
Please contact tissueregenix@fticonsulting.com for further
details.
For more Information:
Tissue Regenix Group plc Tel: 07920 272
Caitlin Pearson, Corporate Communications 441
Director
Jefferies International Ltd (NOMAD Tel: 020 7029
and Broker) 8000
Simon Hardy
Lee Morton
Christopher Binks
FTI Consulting Tel: 020 3727
Ben Atwell / Brett Pollard / 1000
Mo Noonan / Rob Winder
WG Partners Tel: 020 3705
Claes Sprang / Nigel Barnes 9321
Expected Timetable of Key Events
Circular and the Form 21 July 2017
of Proxy posted to Shareholders
---------------------------------- ------------------------
Latest time and date 9 a.m. on 6 August 2017
for receipt of Forms
of Proxy and CREST Proxy
Instructions
---------------------------------- ------------------------
General Meeting 9 a.m. on 8 August 2017
---------------------------------- ------------------------
Admission and dealings 8 a.m. on 9 August 2017
in the New Ordinary Shares
expected to commence
on AIM
---------------------------------- ------------------------
Where applicable, expected 9 August 2017
date for New Ordinary
Shares in uncertificated
form to be credited to
CREST accounts (CREST
shareholders only)
---------------------------------- ------------------------
Expected date for completion 9 August 2017
of the Acquisition
---------------------------------- ------------------------
Where applicable, expected by 16 August 2017
date for definitive certificates
for New Ordinary Shares
in certificated form
to be dispatched (non-CREST
shareholders only)
---------------------------------- ------------------------
About Tissue Regenix
Tissue Regenix is a leading medical devices company in the field
of regenerative medicine. Tissue Regenix's patented
decellularisation ('dCELL(R)') technology removes DNA and other
cellular material from animal and human tissue leaving an acellular
tissue scaffold which is not rejected by the patient's body which
can then be used to repair diseased or worn out body parts. The
potential applications of this process are diverse and address many
critical clinical needs such as vascular disease, heart valve
replacement and knee repair.
Tissue Regenix was formed in 2006 when it was spun-out from the
University of Leeds. Tissue Regenix commercialises academic
research conducted by our partners around the world.
In November 2012 Tissue Regenix Group plc set up a subsidiary
company in the United States - 'Tissue Regenix Wound Care Inc.', as
part of its commercialisation strategy for its dCELL(R) technology
platform.
Important Notice
This announcement has been issued by, and is the sole
responsibility of, the Company.
No prospectus or admission document will be made available in
connection with the matters contained in this announcement.
Jefferies, which is authorised and regulated in the United
Kingdom by the FCA is acting for the Company and no one else in
relation to the Placing, the Acquisition and Admission and will not
be responsible to anyone other than the Company for providing the
protections afforded to customers of Jefferies or for providing
advice in relation to any matter contained in this document or any
matter or arrangement referred to in it. No representation or
warranty, express or implied, is or will be made as to, or in
relation to, and no responsibility or liability is or will be
accepted by Jefferies, or by any of its affiliates or agents, as to
or in relation to, the accuracy or completeness of this
announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
This announcement (including the Appendix and the terms and
conditions set out therein) is directed at persons in member states
of the European Economic Area who are qualified investors within
the meaning of Article 2(1)(e) of the Prospectus Directive
(Directive 2003/71/EC, as amended) and, additionally in the United
Kingdom, to those qualified investors who (a) are persons who have
professional experience in matters relating to investments falling
within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (investment professionals) or (b)
fall within Article 49(2)(a) to (d) of that Order (high net worth
companies, unincorporated associations etc).
Forward Looking Statements
This announcement includes statements that are, or may be deemed
to be, "forward--looking statements". These forward--looking
statements can be identified by the use of forward--looking
terminology, including the terms "believes", "estimates",
"forecasts", "plans", "prepares", "anticipates", "projects",
"expects", "intends", "may", "will", "seeks", or "should" or, in
each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives,
goals, future events or intentions. These forward--looking
statements include all matters that are not historical facts. They
appear in a number of places throughout this announcement and
include statements regarding the Company's and the Directors'
intentions, beliefs or current expectations concerning, amongst
other things, the Company's prospects, growth and strategy. No
statement in this announcement is intended to be a profit forecast
and no statement in this announcement should be interpreted to mean
that earnings per share of the Company for the current or future
years would necessarily match or exceed the historical published
earnings per share of the Company.
By their nature, forward--looking statements involve risks and
uncertainties because they relate to future events and depend on
circumstances that may or may not occur in the future.
Forward--looking statements are not guarantees of future
performance. The Company's actual performance, achievements and
financial condition may differ materially from those expressed or
implied by the forward--looking statements in this announcement. In
addition, even if the Company's results of operations, performance,
achievements and financial condition are consistent with the
forward--looking statements in this announcement, those results or
developments may not be indicative of results or developments in
subsequent periods.
Any forward--looking statements that the Company makes in this
announcement speak only as of the date of such statement, and none
of the Company or the Directors undertake any obligation to update
such statements unless required to do so by applicable law.
Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future
performance, unless expressed as such, and should only be viewed as
historical data.
1. INTRODUCTION
The Company is pleased to announce that it has, through its
wholly owned subsidiary, Tissue Regenix Holdings Inc.
("Purchaser"), conditionally agreed to acquire all of the
membership interests in CellRight Technologies, LLC, ("CellRight"),
a US regenerative medicine business focused on the development and
commercialisation of a range of human tissue products based on
proprietary bone processing techniques and soft tissue products for
clinical applications in the spine, dental, sports medicine and
general surgical applications. The consideration for the
Acquisition will be up to $30.0 million (GBP23.0 million) on a
"cash-free" "debt-free" basis subject to a working capital
adjustment mechanism which is capped at a maximum upwards
adjustment of $100,000 (GBP76,693). Of the total consideration
payable under the terms of the Acquisition, $25.9 million (GBP19.9
million) (subject to the working capital adjustment) is payable in
cash upon Completion (the "Initial Consideration") and the
remaining up to $4.1 million (GBP3.1 million) is payable to
existing members of CellRight in cash subject to CellRight
achieving certain revenue performance targets over a two-year
period following Completion ("Earn Out Consideration") (the Initial
Consideration and the Earn Out Consideration together being the
"Consideration").
The Board believes there is strong strategic rationale for the
Acquisition which it believes will be transformational for the
Group and will drive Tissue Regenix's long term strategy of
building a leading regenerative medical devices company by
accelerating growth and penetration into the key US markets,
broadening the product offering and providing the Enlarged Group
with ownership of a state of the art tissue processing facility.
The Acquisition will expand the market opportunity of the Enlarged
Group and accelerate it towards its target of achieving
profitability in 2020([4]) .
Specifically, the Board believes there is strong strategic
rationale for the Acquisition for the following reasons:
-- CellRight adds an innovative regenerative platform technology
focused on bone, with application areas in orthopaedics, spine and
general surgery, which is complementary to Tissue Regenix's soft
tissue based platform technology;
-- The Acquisitaion broadens the Group's orthopaedic product
offering which the Board expects to significantly increase the
Group's growth and penetration in the US market as well as other
territories;
-- CellRight has well established distribution and sales
relationships and has demonstrated strong revenue and profit
generation as well as cash flow, with a three year sales CAGR in
excess of 61 per cent. across the financial years ended 31 December
2013 - 31 December 2016; and
-- The Acquisition provides the Enlarged Group with the ability
to leverage capacity to meet future growth requirements and drive
efficiencies in a state of the art tissue processing facility
accredited by the FDA and AATB and located in Universal City, San
Antonio, Texas.
Further details of the Acquisition and the Acquisition Agreement
are set out below.
Under Rule 9 of the Takeover Code, the issue of the New Ordinary
Shares to the Concert Party and any resultant increase in the
Concert Party's percentage holding of Ordinary Shares would
normally result in the Concert Party being obliged to make an offer
to all Shareholders (other than the Concert Party) to acquire their
shares. The Takeover Panel has agreed to waive this obligation
subject to the approval of the Independent Shareholders.
2. INFORMATION ON CELLRIGHT
CellRight is a profitable, high-growth regenerative medicine
company focused on bone, with application areas in orthopaedics,
spine and general surgery.
Technology
CellRight's core platform technology transforms human bone into
a mouldable matrix that preserves natural bone growth factors: Bone
Morphogenic Proteins ("BMP's") and Growth Factors ("GF's"). It has
the ability to deliver malleable bone collagen scaffolds in
different physical forms to meet various clinical requirements.
The bone matrices and putties that CellRight has developed have
distinctive active characteristics when compared to competitor
products in the market. In particular, they are guaranteed to be
osteo-inductive and are able to retain regenerative properties
post-implantation.
The products retain the key five BMP's and GF's needed to signal
oesteo-inductivity and assist active regeneration of bone as part
of the natural musculoskeletal system. Moreover, key CellRight
products contain 100 per cent. allograft bone which has been
clinically proven to produce a better clinical outcome when
compared to competitor products, which typically have lower
allograft percentages. CellRight protects its technology through
registered trade secrets and copyrights as well as retaining
'know-how' in respect of core processes within the company.
The business has developed and commercialised a portfolio of
products which fall under the HCT/P regulation pathway, allowing
for an accelerated market entry.
Product Portfolio and Pipeline
CellRight's technology enables the transformation of cortical
and cancellous bone into various physical forms that allow the
clinician to select the one most appropriate for the procedure
involved.
CellRight has launched 13 products since 2012, addressing a
multitude of clinical procedures in key treatment areas, as
demonstrated in the chart below which shows selected products and
their application areas. As CellRight's technology produces
different physical forms of bone, each product is chosen for
applicability to the surgery required. This versatility allows for
product line extensions, and the potential to apply the technology
to different musculoskeletal structures.
Product (Launch Product Description Orthopaedics Spine General
Date) Surgery
Matrix OI(R) Compressible X X X
(2013) Stem
Cell Containment(TM)
matrix derived
from 100 per
cent. allograft
bone
Matrix OI FlexIT Thin pliable X X
(2013) osteoinductive
verified cortical
sheet that has
the ability
to be sized
with scissors
or a scalpel
MatrixCellect(R) DBM putty derived X X X
from 100 per
cent. allograft
bone treatment
of surgically
created osseous
defects resulting
from traumatic
injury
100 DBM putty
(2014)
MatrixCellect(R) DBM Crunch is X X X
100 derived from
Crunch (2015) 100 per cent.
allograft bone
that contains
mineralised
cancellous chips
ConCelltrate(R) ConCelltrate(R) X X X
100 may be hydrated
with saline,
blood, Bone
Marrow Aspirate
(BMA), Platelet
Rich Plasma
(PRP), or other
cellular components
100 (2015)
Matrix IQ(R) Human derived X X
Dermis (2014) dermal grafts
As demonstrated by the significant progress in technology and
product development to date, CellRight retains extensive
development expertise with a strong product pipeline, including new
categories, with new products expected to be launched in the second
half of 2017.
Sourcing and Sales Infrastructure
CellRight has a well-established, diverse supply chain,
currently holding a number of donor recovery agreements with organ
provider organisations allowing for the collection of high quality
bone and tissue material. As at 31 December 2016, CellRight held
approximately $1,836k of raw materials and work in progress and
$248k of finished goods. CellRight does not currently employ a
direct sales force and has in place a number of significant
distribution agreements including ten long-term distribution
contracts. In addition, CellRight expects to commence sales with a
major new distribution partner during the third quarter of 2017.
During 2016, CellRight had 90 active customers and 14 private label
accounts.
Facilities
CellRight moved into its existing premises in Universal City,
San Antonio, Texas in 2012 and customised the facility to allow for
both its current requirements as well as future growth. The
facility is 13,650 sq ft and is purpose built, using the extensive
experience of the management team to design a flexible modular
manufacturing unit. The current design and layout of the existing
premises is sufficient to meet Tissue Regenix's requirements for
the Enlarged Group to 2020 and beyond, with considerable capacity
to accommodate future growth by building new facilities on the one
acre of adjacent land also owned by CellRight. The facility is FDA
approved and AATB accredited and has a track record of successful
FDA and client quality audits.
Financial Information
The business has a track record of increasing sales and
profitability and is currently cash generative. CellRight generated
sales of $5.4 million in 2016 which represented a three year CAGR
in excess of 61 per cent.
CellRight achieved sales of $5.4 million for the year ended 31
December 2016, an increase of 17 per cent. on the previous year
(2015: $4.6 million). CellRight's revenue growth in 2016 in
comparison to 2015 was due to an increase in the number of
customers in 2016 and the annualisation of new product launches and
contract gains in 2015. Cross-selling of products to existing
customers also contributed to the increase in revenue. Gross margin
has been steady over the past 2 years at over 60 per cent.
Overheads in 2016 reflected incremental charges related to the
proprietors taking market based salaries for the first time, and a
change to the accounting treatment for doubtful debts.
Year ended 31 December 2013* 2014* 2015 2016
Revenue $'000s 1,291 2,521 4,649 5,422
Gross Profit $'000s - - 2,832 3,361
Gross Margin percentage - - 60.9 per 62.0 per
cent. cent.
Overheads $'000s - - 1,371 1,778
EBITDA $'000s (624) 102 1,461 1,583
*unaudited accounts
In the year ended 31 December 2016, CellRight generated 40 per
cent. of its revenue in spine products, 26 per cent. in orthopaedic
products, 34 per cent. in general surgery products.
CellRight's top ten customers by revenue in the year ended 31
December 2016 accounted for $3.1 million of total revenue of $5.4
million, with $2.5 million of these top ten customers relating to
sales to private label distributors (top ten customers in the year
ended 31 December 2015 revenue accounted for $3.3 million of total
revenue of $4.6 million, with $3.0 million of these relating to
private label distributors).
Distribution agreements are in place predominately for the US
market with over 90 per cent. of CellRight's revenue derived from
North America in the year ended 31 December 2016. CellRight also
makes international sales to Canada and the United Kingdom and has
approvals to sell into South Korea and selected countries in the
Middle East and South America.
The current financial year has started well with unaudited
revenue for the five months ended 31 May 2017 of $2,602k,
reflecting a year on year increase of 20.7 per cent.
Key Personnel
Jesus Hernandez, Founder and CEO of CellRight has over 34 years'
experience in the biologics and medical industry, Jesus is a former
CEO, COO, VP, and director of several biologic companies in the US.
With a proven track record of establishing innovative transplant
products he holds extensive FDA regulatory knowledge and is an
advisor for the United Network of Organ Sharing (UNOS). Jesus
founded CellRight in 2012.
Jesus achieved a B.S. Degree from the University of California,
Irvine and holds an honorary doctorate Foundation of Ophthalmology,
Bogota, Columbia.
CellRight also employs experienced managers to oversee
operations and regulatory affairs, who together hold over 45 years'
combined experience in the biologics and medical industries.
3. BACKGROUND AND REASONS FOR THE ACQUISITION
Strategic rationale for the Acquisition
There is strong strategic rationale for the Acquisition which
the Board believes will be transformational for the Group and will
complement Tissue Regenix's long term strategy of building a
leading regenerative medical devices company by accelerating growth
and penetration into the key US markets, broadening the product
offering and leveraging a state of the art tissue processing
facility. The Acquisition will expand the market opportunity of the
Enlarged Group and accelerate it towards its target of achieving
profitability in 2020([5]) .
Innovative regenerative platform technology, focused on bone,
with application areas in orthopaedics, spine and general surgery
which is complementary to Tissue Regenix's soft tissue based
platform technology
Tissue Regenix launched its first product, DermaPure(R), a
decellularised allograft dermis for use in chronic and acute wounds
in the US in 2014. The success in commercialising DermaPure(R)
highlighted the opportunity for allograft-based products globally.
Consequently, the Group launched its joint venture GBM-V in Germany
in January 2016 as a platform to build on this opportunity within
Europe, via both standard and dCELL(R) Technology processed tissues
primarily DermaPure(R) and CardioPure(TM) HAV/HPV.
The Board believes a logical extension of this strategy is to
address not only decellularised soft tissue allografts, but also
bone-derived technologies. The North American bone graft and
substitutes market, which includes the United States, Canada and
Mexico, was valued at $1.7 billion in 2016. The largest single
market is the United States which accounts for 95 per cent. of the
regional revenue and is complementary to Tissue Regenix's pipeline
of soft tissue xenograft (porcine) and allograft (human) products
that the Group has been developing over the past 5 years. The North
America orthopaedic soft tissue market was valued at $2.0 billion
in 2015. CellRight's portfolio of cortical and cancellous bone
allograft-derived constructs have been well received by the
clinical community and have shown an aggregate 61 per cent. year on
year sales CAGR over the past three years.
CellRight's products are highly complementary to the Tissue
Regenix range, supplementing soft tissue orthopaedics with bone
replacement technologies allowing for an enhanced product
offering.
Broadening the Group's orthopaedic product offering which the
Board expects to significantly increase the Group's growth and
penetration in core markets in the US and other territories
CellRight's product portfolio and market penetration will
complement Tissue Regenix's dCELL(R) Technology offering as the
Group enters the US orthopaedics market. This augmented product
portfolio would allow for the leveraging of existing relationships
thus accelerating commercial traction within the marketplace. In
addition, Tissue Regenix can use its own commercial expertise to
leverage CellRight's product lines through existing agreements and
utilising the Group's experienced national accounts team.
CellRight has well established distribution and sales
relationships and has demonstrated strong revenue and profit
generation as well as cash flow
CellRight has demonstrated a track record of revenue and EBITDA
growth over the last three years and will provide additional
revenues for the Enlarged Group and positive cash flow,
accelerating the drive towards profitability of the Group as
further products are developed towards commercialisation.
CellRight has established strategic alliances with a broad
network of suppliers and distribution channels which allows for the
potential to explore other applications and products for the
Enlarged Group. CellRight currently sells its products via
different sales channels to Tissue Regenix, which offers
significant scope for cross-selling for the Enlarged Group.
Ability to leverage capacity to meet future growth and drive
efficiencies in state of the art tissue processing facility
accredited by the FDA and AATB in Universal City, San Antonio,
Texas
Tissue Regenix would be able to utilise CellRight's
state-of-the-art facility to manufacture the Group's decellularised
human tendons and menisci, as well as other dCELL(R) Technology
processed human tissues in the US which should ultimately reduce
technology transfer times and overhead expenditure.
Tissue Regenix Strategy
The acquisition of CellRight would allow for an extension of the
Tissue Regenix Group's existing strategy to become a leading
regenerative medical technology company through the exploitation of
dCELL(R) Technology, throughout key clinical areas and territories.
Since the last placing, Tissue Regenix has made significant
progress in achieving strategic milestones, including undertaking
European orthopaedic clinical trials, receiving 510k clearance for
SurgiPure(TM) XD, entry into its joint venture GBM-V, progressing
the cardiac market approvals and establishing its US business
infrastructure in line with its business plan.
Tissue Regenix's 'dual-tissue' strategy allows it to utilise
multiple tissue sources for an expanded product portfolio. In
certain territories the shorter timeframe for the approval of
allograft tissue based products is advantageous in order to
establish a commercial presence which can then be augmented, if
required, with the xenograft version once regulatory approval is
secured.
Tissue Regenix has the capacity to manufacture in-house
xenograft variants of its orthopaedic products and SurgiPure(TM)
XD. With the scope to upscale manufacturing there is little concern
around manufacturing capacity in the coming years, with a view to
multi-national distribution. However, the Group's human tissue
products are currently processed by third party partners, which
adds a potential risk to the process, both with intellectual
property protection and also tissue donation supply.
Following the Acquisition, Tissue Regenix intends to build on
CellRight's strengths, employing its substantial expertise in
developing, manufacturing and launching allograft based products,
with over 100 years of accumulated management experience in this
and related fields. It is intended that CellRight will operate as
the human tissue development and processing arm of the Group whilst
integrating its products and distribution network (direct and
private label) into Tissue Regenix's operating companies Tissue
Regenix Wound Care Ltd and Tissue Regenix Orthopaedics Ltd.
Internationally, the Group's EU joint venture GBM-V in Germany
intends, following regulatory approval, to produce CellRight's
products for launch in Germany and the rest of Europe. There is
opportunity to utilise CellRight's existing distribution network to
market selected Tissue Regenix dCELL(R) Technology products.
The Board believes the combination of the two companies will
provide strong momentum to both the orthopaedic and wound care
businesses particularly in the US, and will help progress both
these business units towards commercial success, targeting
profitability for the Enlarged Group in 2020([6]) .
Tissue Regenix does not intend to change the primary focus of
CellRight, and moreover given the complementary nature of the
product and customer portfolios, it has identified certain
potential synergies. These include gaining commercial advantage
through cross selling; operational efficiency; overhead leverage
and in-house capability to manufacture allograft tissue-derived
products. The Group will invest in systems and will provide
resources to expedite the delivery of the integration of CellRight
into the Enlarged Group.
CellRight's position within the US allograft tissue market will
accelerate an entry into the orthopaedic soft tissue market with
OrthoPureTM HT/HM.
Use of Proceeds
The Company intends to use the net proceeds of the Offer for the
following purposes:
To finance the $25.9 million (GBP19.9 million) Initial
Consideration (plus any working capital adjustment) and up to $4.1
million (GBP3.1 million) Earn-Out Consideration payable under the
Acquisition Agreement and payment of associated acquisition costs,
including advisor fees.
The remaining funds of approximately GBP12.5 million will be
used to accelerate the growth of the Enlarged Group and will
provide working capital to support the on-going commercialisation
of the Group's existing programmes.
Tissue Regenix intends to launch seven products over the next
two years.
Wound Care
- Drive continued growth of Tissue Regenix's US wound care business.
- Integrate CellRight's Matrix IQ product to the wound care
product portfolio in the US and eventually Europe.
- Launch SurgiPure(TM) XD in the US H1 2018, and continue to
expand and develop CellRight's product offering in the general
surgery market.
- Launch DermaPure(R) in the EU.
Orthopaedics
- Subject to regulatory approval, launch and roll out
OrthoPure(TM) XT for ACL repair in Europe with subsequent line
extensions planned.
- Launch of OrthoPure(TM) HT and OrthoPure(TM) HM in the US.
- Accelerate development of CellRight's distributor &
private label business in the US and internationally for both
CellRight and Tissue Regenix products.
- Continue to expand and develop CellRight's product offering in
the spine and orthopaedic spaces and its market share in each.
GBM-V/Cardiac
- Subject to regulatory approval for CardioPure(TM) HAV/HPV in
Germany, roll out in H2 2017/H1 2018.
- Subject to regulatory approval for DermaPure(R) in Germany, roll out in H2 2017.
- GBM-V drive to EBITDA positive during the 2019 financial year.
The Acquisition, along with the additional funding will expand
the market opportunity of the Enlarged Group and accelerate it
towards its target of achieving profitability in 2020([7]) .
Current trading and outlook
On 2 June 2017 the Group announced its results for the 11 months
to 31 December 2016. Tissue Regenix Group plc grew sales by 77 per
cent. to GBP1,443k in the 11 months to 31 December 2016 (January
2016: GBP816k) which includes GBP1,322k of sales in the US.
Operating loss in the same period was GBP11,060k (January 2016:
GBP10,242k). Finance income was GBP114k in the period (January
2016: GBP213k) with a research and development tax credit of
GBP1,034k (January 2016: GBP527k) generating a loss after tax of
GBP9,912k (January 2016: GBP9,502k) of which GBP9,786k was
attributable to equity holders.
Note: All comparatives are 11 months to December 2016 versus 12
months to January 2016
Following the award of two major GPO contracts with Premier and
Vizient in December 2016 and March 2017 respectively, the Group now
has 75% coverage for hospital based wounds in the US, complementing
the 93% Medicare reimbursement coverage for outpatient settings. To
identify the areas of highest opportunity and to maximise the sales
potential of these GPO contracts, the Group undertook a detailed
analysis of its addressable hospital market and has accordingly
restructured its direct sales force on a regional basis to
prioritise high potential hospitals, whilst continuing to use
distributors to access other areas. To support this new focus, the
Group has strengthened its US leadership team, acquiring specific
expertise pivotal to the success of driving performance and pulling
through clinical demand from the GPO agreements, which the Group
expects will maximise sales execution and ultimately enhance
revenue performance.
These operational changes were implemented in the first quarter
of this year with the impact of these changes taking effect
progressively throughout H1. Tissue Regenix achieved wound care
revenue of $0.6m in the 4 months to 30 April 2017, with 45% of
revenue in April secured via GPO agreements. With the benefits of
the restructured sales force already becoming evident and as
individual hospital approvals increase, the Group expects sales in
wound care to accelerate significantly in the second half of the
year.
With DermaPure(R) now positioned to meaningfully increase market
penetration, the Group expects a significant and sustained
acceleration in sales growth over the medium term based on
DermaPure(R)'s superior patient outcomes, strong clinical support
and increasingly broadly-based hospital approvals. As
hospital-based adoption increases the Group believes that this will
benefit its distributor channels as well as its ability to address
the out-patient setting.
The one year clinical data for OrthoPure(TM) XT has been
submitted to support CE mark and European market authorisation.
There is, however, added uncertainty brought by the new Medical
Device Regulation which introduced additional review steps and will
impact the regulatory approval process. Therefore, the timeline for
launch is now difficult to predict as these changes are
implemented. The Company is working closely with the notified body
with the aim of expediting this process and providing clarity
around timelines.
In addition, GBM-V, the Group's controlled joint venture in
Europe is expected to make an increased contribution over the
course of this year with momentum expected to continue as the year
progresses.
The Group believes that the refocused sales approach targeting
key markets, its broad development pipeline of innovative products
offering exciting organic growth opportunities and its forthcoming
entry into the US orthopaedics market in 2018, means that it is
well placed for future growth.
Tissue Regenix Wound Care Inc. and Community Tissue Services
(which manufactures products in the US on behalf of Tissue Regenix)
have received a complaint from LifeNet Health alleging potential
infringement of one of its patents. Tissue Regenix Wound Care Inc.
and Community Tissue Services respect third party intellectual
property and although they do not believe that there has been
infringement, they have taken LifeNet Health's notice under review
and have responded accordingly.
Principal terms of the Acquisition
Pursuant to the terms of the Acquisition Agreement, the
Purchaser has conditionally agreed to acquire all of the membership
interests of CellRight which will, following Completion, be owned
by the Purchaser. The Acquisition Agreement provides for a maximum
aggregate consideration of up to $30.0 million (GBP23.0 million) on
a "cash-free" "debt-free" basis subject to a working capital
adjustment mechanism which is capped at a maximum upwards
adjustment of $100,000 (GBP76,693). Of the total Consideration
payable under the terms of the Acquisition, the Initial
Consideration of $25.9 million (GBP19.9 million) (subject to the
working capital adjustment) is payable in cash upon Completion and
the remaining Earn Out Consideration of up to $4.1 million (GBP3.1
million) is payable to the members of CellRight ("Members"), in
cash subject to CellRight achieving certain revenue performance
targets over a two-year period following Completion as detailed
below.
A payment of $2.04 million is payable upon CellRight reaching
$7.0 million revenue by the end of the 12 months following
Completion. Should this not be met, there is a mechanism that
allows for a proportion of the payment to be made provided revenue
equals or exceeds $6.0 million in such period.
In addition, if revenue in the 12 months following Completion is
equal to or exceeds $10.0 million, then the Purchaser will make an
additional $1.0 million payment to the Members ("Performance
Advance").
A further $2.04 million, less an amount equal to the Performance
Advance, if any, is payable upon CellRight reaching $12.5 million
revenue by the end of the second 12 month period following
Completion. There is also a mechanism for a proportion of the
payment to be made provided revenue equals or exceeds $10.0
million.
Details Of The Placing
The Company intends to conditionally raise approximately GBP40
million (before expenses) by way of a proposed placing of up to 400
million new Ordinary Shares, less the number of any Subscription
Shares, at a price of 10 pence per Placing Share in order to
finance the Consideration payable in respect of the Acquisition, as
well as provide additional capital for the Enlarged Group. The
Issue Price represents a discount of approximately 18.4 per cent to
the closing middle market price of 12.25 pence per Ordinary Share
on 20 July 2017 (being the latest practicable date prior to the
date of this document). In connection with the proposed fundraise,
certain of the Directors intend to subscribe for Subscription
Shares in the Company at a price of 10 pence per Subscription
Share.
The New Ordinary Shares will rank pari passu in all respects
with each other and with the existing Ordinary Shares.
Financing of the Acquisition
The Acquisition will be funded by the Placing and the
Subscription (if any) of 400 million New Ordinary Shares at a price
of 10 pence per share, a discount of approximately 18.4 per cent to
the closing middle market price of 12.25 pence per Ordinary Share
on 20 July 2017, being the latest practicable date prior to the
announcement of the Offer. The total consideration payable is up to
$30.0 million (GBP23.0 million) on a "cash-free" "debt-free" basis
subject to a working capital adjustment mechanism which is capped
at a maximum upwards adjustment of $100,000 (GBP76,693). The
Initial Consideration of $25.9 million (GBP19.9 million) (subject
to the working capital adjustment) will be paid in cash at
Completion, with deferred Earn Out Consideration of a maximum $4.1
million (GBP3.1 million) being subject to CellRight achieving the
revenue performance targets detailed above.
Management
Following Completion, Jesus Hernandez, CEO of CellRight will
join Tissue Regenix as Chief Scientific Officer. It is intended
that a separate CellRight board will be established comprising of
Antony Odell, Chairman; Paul Devlin, Chief Financial Officer and
Jesus Hernandez, CEO of CellRight.
4. RELATED PARTY TRANSACTIONS
The proposed participations in the Placing by Invesco Asset
Management Limited acting as agent for its discretionary managed
clients including the Invesco Funds ("IAML"), IP Group (or its
affiliates) and Woodford Investment Management Limited acting as
agent for its discretionary managed clients ("Woodford") are
expected to constitute related party transactions for the purposes
of the AIM Rules by virtue of their status as substantial
shareholders of the Company pursuant to the AIM Rules. Further
details of any participation by IAML, IP Group and Woodford in the
Placing will be set out in the announcement to be made on the
closing of the bookbuild exercise, which is expected to be made
tomorrow.
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
1. Details of the Placing
1.1 Jefferies has entered into an agreement with the Company
(the "Placing Agreement") under which, subject to the conditions
set out in that agreement, Jefferies has agreed, as agent and on
behalf of the Company, to use reasonable endeavours to procure
placees (the "Placees") for the Placing Shares at a price of 10
pence per Placing Share (the "Issue Price"), where the exact number
of the Placing Shares to be allocated and issued to each Placee
shall be determined following completion of an accelerated
bookbuilding process (the "Bookbuild"), described in this
announcement and set out in the Placing Agreement (the "Placing").
The Placing is not underwritten.
1.2 The Placing is conditional on, amongst other things, the
approval by Shareholders of the Shareholder Resolutions which will:
(i) grant authority to the Directors to allot the Placing Shares
and disapply pre-emption rights in respect of the Placing Shares;
and (ii) approve a proposed waiver of Rule 9 of the Takeover Code.
The Circular containing details of the proposed Placing and the
notice of the General Meeting is expected to be sent to
Shareholders as soon as practicable following the close of the
Bookbuild.
1.3 The Placing Shares will, when issued, be credited as fully
paid and will rank pari passu in all respects with the existing
Ordinary Shares of the Company including the right to receive all
dividends and other distributions declared, made or paid on or in
respect of such Ordinary Shares after the date of issue of the
Placing Shares.
1.4 As a term of the Placing, the Company has agreed that it
will not issue or sell any Ordinary Shares (other than the Placing
Shares or the Subscription Shares) for a period ending on the date
falling 90 days after Admission, without Jefferies' prior consent.
This agreement does not however prevent the Company from granting
or satisfying exercises of options granted pursuant to existing
share schemes of the Company.
2. Application for admission to trading
2.1 Application will be made to the London Stock Exchange for
the Admission of the Placing Shares to trading on AIM. It is
expected that Admission will become effective on or around 9 August
2017 and that dealings in the Placing Shares will commence at that
time.
3. Bookbuild
3.1 Jefferies will today commence the Bookbuild to determine
demand for participation in the Placing by Placees. This Appendix
gives details of the terms and conditions of, and the mechanics of
participation in, the Placing. No commissions will be paid to
Placees or by Placees in respect of any Placing Shares.
3.2 Jefferies and the Company shall be entitled to effect the
Placing by such alternative method to the Bookbuild as they may, in
their absolute discretion determine.
4. Participation in, and principal terms of, the Placing
4.1 Jefferies is acting as bookrunner and agent of the Company
in respect of the Placing.
4.2 Participation in the Placing will only be available to
persons who may lawfully be, and are, invited to participate by
Jefferies. Jefferies and each of its affiliates are entitled to
enter bids in the Bookbuild as principal.
4.3 The Bookbuild will be carried out on the basis of the Issue
Price of 10 pence per Placing Share payable to Jefferies by all
Placees whose bids are successful. The number of the Placing Shares
to be allocated and issued to each Placee will be determined by
Jefferies in consultation with the Company following completion of
the Bookbuild. Further details of the Placing, including its
completion, will be announced on a regulatory information service
("RIS") following the completion of the Bookbuild.
4.4 Certain of the Directors have indicated an intention to
subscribe for new Ordinary Shares in the Company at the Issue Price
pursuant to separate subscription agreements which are expected to
be entered into between the Company and such Directors. The maximum
number of Placing Shares that may be allocated pursuant to the
Bookbuild will be reduced to the extent that Directors subscribe
for such Subscription Shares.
4.5 To bid in the Bookbuild, prospective Placees should
communicate their bid by telephone to their usual sales contact at
Jefferies. Each bid should state the number of Placing Shares which
the prospective Placee wishes to subscribe for at the Issue Price.
Bids may be scaled down by Jefferies on the basis referred to in
paragraph 4.9.
4.6 The Bookbuild is expected to close no later than 9 a.m.
(London time) on 21 July 2017, but may be closed earlier or later
at Jefferies' discretion. Jefferies may, in agreement with the
Company, accept bids that are received after the Bookbuild has
closed. The Company reserves the right (upon the agreement of
Jefferies) to reduce or seek to increase the amount to be raised
pursuant to the Placing, in its absolute discretion.
4.7 Each prospective Placee's allocation will be determined by
Jefferies in consultation with the Company and will be confirmed
orally by Jefferies as agent of the Company following the close of
the Bookbuild. That oral confirmation will constitute an
irrevocable legally binding commitment upon that person (who will
at that point become a Placee) in favour of Jefferies and the
Company to subscribe for the number of Placing Shares allocated to
it at the Issue Price on the terms and conditions set out in this
Appendix and in accordance with the Company's articles of
association.
4.8 Each Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to Jefferies as agent of
the Company, to pay Jefferies (or as it may direct) in cleared
funds, an amount equal to the product of the Issue Price and the
number of Placing Shares that such Placee has agreed to subscribe
for and the Company has agreed to allot and issue to that
Placee.
4.9 Jefferies may choose to accept bids, either in whole or in
part, on the basis of allocations determined in consultation with
the Company and may scale down any bids for this purpose on such
basis as it may determine. Jefferies may also, notwithstanding
paragraphs 4.6 and 4.7 above, subject to the prior consent of the
Company (i) allocate Placing Shares after the time of any initial
allocation to any person submitting a bid after that time and (ii)
allocate Placing Shares after the Bookbuild has closed to any
person submitting a bid after that time.
4.10 A bid in the Bookbuild will be made on the terms and
subject to the conditions in this announcement and will be legally
binding on the Placee on behalf of which it is made and except with
Jefferies' consent will not be capable of variation or revocation
after the time at which it is submitted.
4.11 Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares to be subscribed for pursuant to the Placing will be
required to be made at the same time on the basis explained below
under "Registration and Settlement".
4.12 All obligations under the Bookbuild and Placing will be
subject to fulfilment of the conditions referred to below under
"Conditions of the Placing" and to the Placing not being terminated
on the basis referred to below under "Termination of the Placing
Agreement".
4.13 By participating in the Bookbuild, each Placee will agree
that its rights and obligations in respect of the Placing will
terminate only in the circumstances described below and will not be
capable of rescission or termination by the Placee.
4.14 To the fullest extent permissible by law, neither Jefferies
nor any of its affiliates, agents, directors, officers or employees
shall have any liability to Placees (or to any other person whether
acting on behalf of a Placee or otherwise). In particular, neither
Jefferies nor any of its affiliates, agents, directors, officers or
employees shall have any liability (including to the fullest extent
permissible by law, any fiduciary duties) in respect of their
conduct of the Bookbuild or of such alternative method of effecting
the Placing as Jefferies and the Company may determine.
5. Conditions of the Placing
5.1 The Placing is conditional upon the Placing Agreement
becoming unconditional and not having been terminated in accordance
with its terms. The obligations of Jefferies under the Placing
Agreement in respect of the Placing are conditional on, amongst
other things:
5.1.1 agreement being reached between the Company and Jefferies
on the terms of the Placing, including the number of Placing Shares
to be allocated and issued to each Placee and publication of an
announcement by the Company giving details of the results of the
Placing, through a RIS, by no later than 9 a.m. on 21 July
2017;
5.1.2 the Shareholder Resolutions being approved by the
requisite majority of Shareholders attending and voting at the
General Meeting, and the proposed waiver of Rule 9 of the Takeover
Code having been granted and not revoked by the Takeover Panel
(conditional only on approval by the independent shareholders);
5.1.3 the warranties contained in the Placing Agreement being
true and accurate in every respect and not misleading on the date
of the Placing Agreement and at Admission, as though they had been
given and made on such date by reference to the facts and
circumstances then subsisting;
5.1.4 the Company performing all of its obligations under the
Placing Agreement to the extent the same fall to be performed or
satisfied prior to Admission;
5.1.5 the membership interest purchase agreement entered into in
connection with the acquisition of the Target (the "Acquisition
Agreement"): (i) having been duly executed by the parties thereto
by or on the date of the Placing Agreement; (ii) remaining in full
force and effect and not having been modified, rescinded, lapsed or
been terminated (in whole or in part) prior to Admission (save with
the consent of Jefferies); (iii) having become unconditional in all
respects save for any condition relating to the Placing Agreement
not having been terminated and having become unconditional in all
respects; and (iv) having been completed in escrow (the sole escrow
condition being the satisfaction of certain payment obligations of
the Purchaser under the Acquisition Agreement) prior to
Admission;
5.1.6 Jefferies having received confirmation in writing from (i)
the Target's solicitors that they have received an irrevocable
instruction from the vendors; and (ii) the Company's solicitors
that they have received an irrevocable instruction from the
Purchaser, in each case to release certain documents held by them
in escrow (pursuant to the Acquisition Agreement) upon the
satisfaction of certain payment obligations of the Purchaser under
the Acquisition Agreement;
5.1.7 Admission taking place by 8.00 a.m. (London time) on 9
August 2017 (or such later date as the Company and Jefferies may
otherwise agree, being no later than 31 August 2017) (the "
Admission Date"); and
5.1.8 in the sole opinion of Jefferies, there shall not have
been a material adverse change in, or affecting, the condition
(financial, operational, legal or otherwise) or the earnings,
management, business affairs, solvency or prospects of the Company,
the Group or the Target Group (in each case, taken as a whole),
whether or not arising in the ordinary course of the business and
whether or not foreseeable at the date of the Placing Agreement (a
"Material Adverse Change") since the date of the Placing
Agreement.
5.2 If: (i) any of the conditions contained in the Placing
Agreement in relation to the Placing (including those described
above) are not fulfilled or waived by Jefferies, by the time or
date where specified (or, in each case, such later time and/or date
as the Company and Jefferies may agree); or (ii) the Placing
Agreement is terminated in the circumstances specified below, the
Placing will not proceed and the Placees' rights and obligations
hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be
made by the Placee in respect thereof.
5.3 Jefferies may, at its absolute discretion and upon such
terms as it thinks fit, waive compliance by the Company with the
whole or any part of certain of the Company's obligations in
relation to the conditions in the Placing Agreement. The condition
in the Placing Agreement relating to Admission taking place may not
be waived. Any such extension or waiver will not affect Placees'
commitments as set out in this announcement.
5.4 None of Jefferies, the Company or any other person shall
have any liability to any Placee (or to any other person whether
acting on behalf of a Placee or otherwise) in respect of any
decision they may make as to whether or not to waive or to extend
the time and/or the date for the satisfaction of any condition to
the Placing nor for any decision they may make as to the
satisfaction of any condition or in respect of the Placing
generally, and by participating in the Placing each Placee agrees
that any such decision is within the absolute discretion of
Jefferies.
6. Termination of the Placing Agreement
6.1 Jefferies may at any time prior to Admission (acting in good
faith) terminate the Placing Agreement by giving notice in writing
to the Company, if, amongst other things:
6.1.9 the Company's application for Admission has been refused
by the London Stock Exchange or, in the judgement of Jefferies
acting in good faith in pursuance of its duties as the nominated
adviser of the Company, will not be granted; or
6.1.10 there has been a Material Adverse Change and, in the
opinion of Jefferies, the effect of such change is that it would
materially prejudice the success of the Placing or the distribution
of Placing Shares; or
6.1.11 there has occurred, happened or come into effect:
(a) any government regulation or other occurrence of any nature
whatsoever which, in the good faith opinion of Jefferies,
materially and adversely affects or will or is reasonably likely
materially and adversely to affect the business of the Group taken
as a whole; or
(b) a suspension or material limitation in trading in securities
generally on the London Stock Exchange's market for listed
securities, a general moratorium on commercial banking activities
in London or New York or a material disruption in commercial
banking or securities settlement or clearance services in the
United Kingdom or United States of America, an incident of
terrorism or the outbreak or escalation of hostilities involving
the UK, any other EU Member State or the USA or the declaration by
the UK, any other EU Member State or the USA of a national
emergency or war or the occurrence of any other calamity or crisis
resulting in a change in financial, political, market or economic
conditions or currency exchange rates in the UK or US, which, in
Jefferies' good faith opinion, makes it impractical or inadvisable
to continue with the Placing.
6.2 Upon such termination, the parties to the Placing Agreement
shall be released and discharged (except for any liability arising
before or in relation to such termination) from their respective
obligations under or pursuant to the Placing Agreement subject to
certain exceptions.
6.3 By participating in the Placing, Placees agree that the
exercise by Jefferies of any right of termination or other
discretion under the Placing Agreement shall be within Jefferies
absolute discretion and that Jefferies need not make any reference
to Placees and that neither Jefferies nor any other person shall
have any liability to Placees whatsoever in connection with any
such exercise or failure so to exercise.
7. No prospectus
7.1 The Placing Shares are being offered to a limited number of
specifically invited persons only and will not be offered in such a
way as to require a prospectus in the UK. No offering document,
prospectus or admission document has been or will be submitted to
be approved by the FCA or submitted to the London Stock Exchange in
relation to the Placing and Placees' commitments will be made
solely on the basis of their own assessment of their own assessment
of the Company, the Placing Shares and the Placing based on the
Company's publicly available information taken together with the
information contained in this announcement (including this
Appendix), and subject to the further terms set forth in the
contract note to be provided to individual prospective Placees.
7.2 Each Placee, by accepting a participation in the Placing,
agrees that the content of this announcement (including this
Appendix) is exclusively the responsibility of the Company and
confirms that it has neither received nor relied on any other
information, representation, warranty, or statement made by or on
behalf of the Company or Jefferies or any other person and none of
Jefferies or the Company nor any other person will be liable for
any Placee's decision to participate in the Placing based on any
other information, representation, warranty or statement which the
Placees may have obtained or received. Each Placee acknowledges and
agrees that it has relied on its own investigation of the business,
financial or other position of the Company in accepting a
participation in the Placing. Nothing in this paragraph shall
exclude or limit the liability of any person for fraudulent
misrepresentation by that person.
8. Registration and Settlement
8.1 Settlement of transactions in the Placing Shares following
Admission will take place within the system administered by
Euroclear UK & Ireland Limited ("CREST"), subject to certain
exceptions. Jefferies and the Company reserves the right to require
settlement for and delivery of the Placing Shares (or a portion
thereof) to Placees in certificated form if, in their opinion,
delivery or settlement is not possible or practicable within the
CREST system or would not be consistent with the regulatory
requirements in the Placee's jurisdiction.
8.2 Following the close of the Bookbuild for the Placing, each
Placee to be allocated Placing Shares in the Placing will be sent a
contract note stating the number of Placing Shares allocated to it
at the Issue Price and settlement instructions. The number of
Placing Shares allocated to each Placee will be allocated in a
manner determined by Jefferies in its absolute discretion in
consultation with the Company and Placees will be notified of the
relevant allocation in the contract note.
8.3 Each Placee agrees that it will do all things necessary to
ensure that delivery and payment is completed in accordance with
the standing CREST or certificated settlement instructions that it
has in place with Jefferies.
8.4 The Company will deliver the Placing Shares to a CREST
account operated by Jefferies as agent for the Company and
Jefferies will enter its delivery instruction into the CREST
system. The input to CREST by a Placee of a matching or acceptance
instruction will then allow delivery of the relevant Placing Shares
to that Placee against payment.
8.5 It is expected that settlement in respect of the Placing
Shares will take place on 9 August 2017 on a delivery versus
payment basis.
8.6 Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by Jefferies.
8.7 Each Placee is deemed to agree that, if it does not comply
with these obligations, Jefferies may sell any or all of the
Placing Shares allocated to that Placee on such Placee's behalf and
retain from the proceeds, for Jefferies' account and benefit, an
amount equal to the aggregate amount owed by the Placee plus any
interest due. The relevant Placee will, however, remain liable for
any shortfall below the aggregate amount owed by it and may be
required to bear any stamp duty or stamp duty reserve tax (together
with any interest or penalties thereon) or other similar taxes
imposed in any jurisdiction which may arise upon the sale of such
Placing Shares on such Placee's behalf.
8.8 If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
is copied and delivered immediately to the relevant person within
that organisation. Insofar as Placing Shares are registered in a
Placee's name or that of its nominee or in the name of any person
for whom a Placee is contracting as agent or that of a nominee for
such person, such Placing Shares should, subject as provided below,
be so registered free from any liability to UK stamp duty or stamp
duty reserve tax. Placees will not be entitled to receive any fee
or commission in connection with the Placing.
9. Representations and warranties
9.1 By participating in the Placing each Placee (and any person
acting on such Placee's behalf) irrevocably acknowledges, confirms,
undertakes, represents, warrants and agrees (as the case may be)
with Jefferies (in its capacity as bookrunner and agent of the
Company, in each case as a fundamental term of their application
for Placing Shares), the following:
9.1.1 it has read and understood this announcement in its
entirety and that its subscription of Placing Shares is subject to
and based upon all the terms, conditions, representations,
warranties, acknowledgements, agreements and undertakings and other
information contained herein;
9.1.2 that no offering document, listing particulars, prospectus
or admission document has been or will be prepared in connection
with the Placing and it has not received and will not receive a
prospectus, admission document or other offering document in
connection with the Bookbuild, the Placing or the Placing
Shares;
9.1.3 the Placing does not constitute a recommendation or
financial product advice and Jefferies has not had regard to its
particular objectives, financial situation or needs;
9.1.4 unless paragraph 9.1.5 below applies, it has neither
received nor relied on any 'inside information' (for the purposes
of MAR and section 56 of the Criminal Justice Act 1993) concerning
the Company in accepting this invitation to participate in the
Placing;
9.1.5 if it has received any 'inside information' (for the
purposes of MAR and section 56 of the Criminal Justice Act 1993) in
relation to the Company and its securities, it confirms that it has
received such information within the market soundings regime
provided for in article 11 of MAR and associated delegated
regulations and it has not: (i) dealt (or attempted to deal) in the
securities of the Company; (ii) encouraged, recommended or induced
another person to deal in the securities of the Company; or (iii)
unlawfully disclosed inside information to any person, prior to the
information being made publicly available;
9.1.6 it has the power and authority to carry on the activities
in which it is engaged, to subscribe for and/or acquire the Placing
Shares and to execute and deliver all documents necessary for such
acquisition and/or subscription;
9.1.7 that the existing Ordinary Shares in the capital of the
Company are admitted to trading on AIM, and that the Company is
therefore required to publish certain business and financial
information in accordance with the rules and practices of AIM,
which includes a description of the nature of the Company's
business and its most recent balance sheet and profit and loss
account, and that it is able to obtain or access such information
and such information or comparable information concerning any other
publicly traded company, in each case without undue difficulty;
9.1.8 that neither Jefferies nor the Company nor any of their
respective affiliates nor any person acting on behalf of any of
them has provided, and none of them will provide it, with any
material regarding the Placing Shares or the Company or any other
person other than this announcement; nor has it requested
Jefferies, the Company, any of their respective affiliates or any
person acting on behalf of any of them to provide it with any such
information;
9.1.9 unless otherwise specifically agreed with Jefferies, that
neither it nor the beneficial owner of the Placing Shares is, or at
the time the Placing Shares are acquired, neither it nor the
beneficial owner of the Placing Shares will be, a resident of, or
otherwise located in, Australia, Canada, Japan or the Republic of
South Africa and it further acknowledges that the Placing Shares
have not been and will not be registered under the securities
legislation of Australia, Canada, Japan or the Republic of South
Africa and, subject to certain exceptions, may not be offered,
sold, transferred, delivered or distributed, directly or
indirectly, in or into those jurisdictions;
9.1.10 that it and each account it represents is either:
(a) (i) not within the United States and will not be within the
United States at the time that any buy order for Placing Shares is
originated by it; (ii) acquiring the Placing Shares in an "offshore
transaction" as defined in Regulation S under the US Securities Act
of 1933, as amended (the "Securities Act"); and (iii) not acquiring
any of the Placing Shares as a result of any form of "directed
selling efforts" (within the meaning of Regulation S under the
Securities Act); or
(b) (i) a "qualified institutional buyer" ("QIB") as defined in
Rule 144A under the Securities Act; and (ii) not acquiring any of
the Placing Shares as a result of any form of "general
solicitation" or "general advertising" within the meaning of Rule
502(c) of Regulation D under the Securities Act;
9.1.11 that it understands, and each account it represents has
been advised that, (i) the Placing Shares have not been and will
not be registered under the Securities Act or with any regulatory
authority of any other state or other jurisdiction of the United
States; (ii) the Placing Shares are being offered and sold only (a)
to persons reasonably believed to be QIBs pursuant to an exemption
from or in transactions not subject to, the registration
requirements of the Securities Act or (b) in an "offshore
transaction" within the meaning of and pursuant to Regulation S
under the Securities Act; and (iii) no representation has been made
as to the availability of any exemption under the Securities Act or
any relevant state or other jurisdiction's securities laws for the
reoffer, resale, pledge or transfer of the Placing Shares;
9.1.12 it and each account it represents is not acquiring the
Placing Shares with a view to any offer, sale, resale or delivery,
directly or indirectly, of any Placing Shares in or into the United
States other than pursuant to an effective registration under the
US Securities Act or pursuant to an exemption from, or in
transactions not subject to, the registration requirements
thereunder and in compliance with any applicable securities laws of
any state or other jurisdiction of the United States;
9.1.13 that it will not distribute, forward, transfer or
otherwise transmit this announcement or any other materials
concerning the Placing (including any electronic copies thereof),
in or into the United States;
9.1.14 that the content of this announcement is exclusively the
responsibility of the Company and that neither Jefferies nor any
person acting on its behalf have or shall have any liability for
any information, representation or statement contained in this
announcement or any information previously or subsequently
published by or on behalf of the Company, including, without
limitation, any information required to be published by the Company
pursuant to applicable laws (the "Exchange Information") and will
not be liable for its decision to participate in the Placing based
on any information, representation or statement contained in this
announcement or otherwise. It further represents, warrants and
agrees that the only information on which it is entitled to rely
and on which it has relied in committing itself to subscribe for
the Placing Shares is contained in this announcement and any
information previously published by the Company by notification to
a RIS, such information being all that it deems necessary to make
an investment decision in respect of the Placing Shares and that it
has neither received nor relied on any other information given or
representations, warranties or statements made by Jefferies or the
Company and neither Jefferies nor the Company will be liable for
Its decision to accept an invitation to participate in the Placing
based on any other information, representation, warranty or
statement. It further acknowledges and agrees that it has relied on
its own investigation of the business, financial or other position
of the Company in deciding to participate in the Placing. None of
Jefferies, the Company or any of their respective affiliates has
made any representations to it, express or implied, with respect to
the Company, the Placing and the Placing Shares or the accuracy,
completeness or adequacy of the Exchange Information, and each of
them expressly disclaims any liability in respect thereof. Nothing
in this paragraph or otherwise in this announcement excludes the
liability of any person for fraudulent misrepresentation made by
that person;
9.1.15 neither it, nor the person specified by it for
registration as holder of Placing Shares is, or is acting as
nominee or agent for, and the Placing Shares will not be allotted
to, a person who is or may be liable to stamp duty or stamp duty
reserve tax under any of sections 67, 70, 93 and 96 of the Finance
Act of 1986 (depositary receipts and clearance services);
9.1.16 that it has complied with its obligations under the
Criminal Justice Act 1993, MAR and in connection with money
laundering and terrorist financing under the Proceeds of Crime Act
2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006,
the Money Laundering Regulations 2007 and the Money Laundering
Sourcebook of the FCA (the "Money Laundering Regulations") and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations;
9.1.17 that it is acting as principal only in respect of the
Placing or, if it is acting for any other person; (i) it is duly
authorised to do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such
person; and (ii) it is and will remain liable to the Company and/or
Jefferies for the performance of all its obligations as a Placee in
respect of the Placing (regardless of the fact that it is acting
for another person);
9.1.18 if it is a financial intermediary, as that term is used
in Article 3(2) of the EU Prospectus Directive (which shall mean
Directive 2003/71/EC and amendments thereto, including the 2010 PD
Amending Directive, to the extent implemented in the Relevant
Member State), that the Placing Shares subscribed by it in the
Placing will not be acquired on a non-discretionary basis on behalf
of, nor will they be acquired with a view to their offer or resale
to, persons in a member state of the EEA other than qualified
investors, or in circumstances in which the prior consent of
Jefferies has been given to the proposed offer or resale;
9.1.19 that it has not offered or sold and will not offer or
sell any Placing Shares to the public in any member state of the
EEA except in circumstances falling within Article 3(2) of the
Prospectus Directive which do not result in any requirement for the
publication of a prospectus pursuant to Article 3 of that
Directive;
9.1.20 that it has only communicated or caused to be
communicated and will only communicate or cause to be communicated
any invitation or inducement to engage in investment activity
(within the meaning of section 21 of FSMA) relating to the Placing
Shares in circumstances in which section 21(1) of FSMA does not
require approval of the communication by an authorised person;
9.1.21 that it has complied with and will comply with all
applicable provisions of FSMA with respect to anything done by it
in relation to the Placing Shares in, from or otherwise involving,
the United Kingdom;
9.1.22 if in a member state of the EEA, unless otherwise
specifically agreed with Jefferies in writing, that it is a
"qualified investor" within the meaning of Article 2(1)(e) of the
Prospectus Directive;
9.1.23 if in the United Kingdom, that it is a person (i) having
professional experience in matters relating to investments who
falls within the definition of "investment professionals" in
Article 19(5) of the Order or (ii) who falls within Article 49(2)
(a) to (d) ("High Net Worth Companies, Unincorporated Associations,
etc") of the Order, or (iii) to whom this announcement may
otherwise lawfully be communicated;
9.1.24 that no action has been or will be taken by either the
Company or Jefferies or any person acting on behalf of the Company
or Jefferies that would, or is intended to, permit a public offer
of the Placing Shares in any country or jurisdiction where any such
action for that purpose is required;
9.1.25 that it and any person acting on its behalf is entitled
to acquire the Placing Shares under the laws of all relevant
jurisdictions which apply to it and that it has fully observed such
laws and obtained all such governmental and other guarantees,
permits, authorisations, approvals and consents which may be
required thereunder and complied with all necessary formalities and
that it has not taken any action or omitted to take any action
which will or may result in Jefferies, the Company or any of their
respective directors, officers, agents, employees or advisers
acting in breach of the legal or regulatory requirements of any
jurisdiction in connection with the Placing;
9.1.26 that it has all necessary capacity and has obtained all
necessary consents and authorities to enable it to commit to its
participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any
person on whose behalf it is acting, all necessary consents and
authorities to agree to the terms set out or referred to in this
announcement) and will honour such obligations;
9.1.27 that it and any person acting on its behalf will make
payment for the Placing Shares allocated to it in accordance with
this announcement on the due time and date set out herein, failing
which the relevant Placing Shares may be placed with other
subscribers or sold as Jefferies may in its absolute discretion
determine and without liability to it;
9.1.28 that its allocation (if any) of Placing Shares will
represent a maximum number of Placing Shares to which it will be
entitled, and required, to subscribe for, and that Jefferies or the
Company may call upon it to subscribe for a lower number of Placing
Shares (if any), but in no event in aggregate more than the
aforementioned maximum;
9.1.29 that the person whom it specifies for registration as
holder of the Placing Shares will be (i) itself or (ii) its
nominee, as the case may be. Neither Jefferies nor the Company will
be responsible for any liability to stamp duty or stamp duty
reserve tax or other similar taxes resulting from a failure to
observe this requirement. It and any person acting on its behalf
agrees to indemnify the Company and Jefferies in respect of the
same on the basis that the Placing Shares will be allotted to the
CREST stock account of Jefferies who will hold them as nominee on
its behalf until settlement in accordance with standing settlement
instructions;
9.1.30 that neither Jefferies, nor any of its affiliates,
agents, directors, officers or employees, nor any person acting on
its behalf, is making any recommendations to it or, advising it
regarding the suitability of any transactions it may enter into in
connection with the Placing and that participation in the Placing
is on the basis that it is not and will not be a client of either
of Jefferies and that Jefferies do not have any duties or
responsibilities to it for providing the protections afforded to
its clients or customers or for providing advice in relation to the
Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement nor
for the exercise or performance of any of its rights and
obligations thereunder including any rights to waive or vary any
conditions or exercise any termination right;
9.1.31 that in making any decision to subscribe for the Placing
Shares, it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of subscribing for or purchasing the Placing
Shares. It further confirms that it is experienced in investing in
securities of this nature in this sector and is aware that it may
be required to bear, and is able to bear, the economic risk of
participating in, and are able to sustain a complete loss in
connection with, the Placing. It further confirms that it relied on
its own examination and due diligence of the Company and its
associates taken as a whole, and the terms of the Placing,
including the merits and risks involved, and not upon any view
expressed or information provided by or on behalf of Jefferies;
9.1.32 that in connection with the Placing, Jefferies and any of
its affiliates acting as an investor for its own account may take
up Placing Shares in the Company and in that capacity may retain,
purchase or sell for its own account such Placing Shares in the
Company and any securities of the Company or related investments
and may offer or sell such securities or other investments
otherwise than in connection with the Placing. Jefferies do not
intend to disclose the extent of any such investment or
transactions otherwise than in accordance with any legal or
regulatory obligation to do so;
9.1.33 that these terms and conditions and any agreements
entered into by it pursuant to these terms and conditions and any
non-contractual obligations arising out of or in connection with
such agreements shall be governed by and construed in accordance
with the laws of England and Wales and it submits, on its own
behalf and on behalf of any person on whose behalf it is acting, to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter arising out of any such contract, except
that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or Jefferies in any
jurisdiction in which it is incorporated or in which any of its
securities have a quotation on a recognised stock exchange;
9.1.34 that the Company, Jefferies and their respective
affiliates and others will rely upon the truth and accuracy of the
representations, warranties and acknowledgements set forth herein
and which are given to Jefferies on its own behalf and on behalf of
the Company and are irrevocable and it irrevocably authorises the
Company and Jefferies to produce this announcement, pursuant to, in
connection with, or as may be required by any applicable law or
regulation, administrative or legal proceeding or official inquiry
with respect to the matters set forth herein;
9.1.35 none of the Company or Jefferies owes any fiduciary or
other duties to any Placee in respect of any acknowledgements,
confirmations, undertakings, representations, warranties or
indemnities in the Placing Agreement;
9.1.36 its commitment to take up Placing Shares on the terms set
out in this Announcement (including this Appendix) will continue
notwithstanding any amendment that may or in the future be made to
the terms and conditions of the Placing and that Placees will have
no right to be consulted or require that their consent be obtained
with respect to the Company or Jefferies' conduct of the Placing;
and
9.1.37 that it will indemnify and hold the Company and Jefferies
and their respective affiliates harmless from any and all costs,
claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings in this announcement and further agrees that the
provisions of this announcement shall survive after completion of
the Placing.
9.2 Please also note that the agreement to allot and issue
Placing Shares to Placees (or the persons for whom Placees are
contracting as agent) free of stamp duty and stamp duty reserve tax
in the UK relates only to their allotment and issue to Placees, or
such persons as they nominate as their agents, direct from the
Company for the Placing Shares in question. The Company and
Jefferies are not liable to bear any transfer taxes that arise on a
sale of Placing Shares subsequent to their acquisition by Placees
or for transfer taxes arising otherwise than under the laws of the
United Kingdom. Each Placee should, therefore, take its own advice
as to whether any such transfer tax liability arises. Furthermore,
each Placee agrees to indemnify on an after-tax basis and hold
Jefferies and/or the Company and their respective affiliates
harmless from any and all interest, fines or penalties in relation
to stamp duty, stamp duty reserve tax and all other similar duties
or taxes to the extent that such interest, fines or penalties arise
from the unreasonable default or delay of that Placee or its
agent.
9.3 Each Placee and any person acting on behalf of each Placee
acknowledges and agrees that Jefferies or any of its respective
affiliates may, at their absolute discretion, agree to become a
Placee in respect of some or all of the Placing Shares.
9.4 When a Placee or person acting on behalf of the Placee is
dealing with Jefferies, any money held in an account with Jefferies
on behalf of the Placee and/or any person acting on behalf of the
Placee will not be treated as client money within the meaning of
the rules and regulations of the FCA made under FSMA. The Placee
acknowledges that the money will not be subject to the protections
conferred by the client money rules; as a consequence, this money
will not be segregated from Jefferies' money in accordance with the
client money rules and will be used by Jefferies in the course of
its own business; and the Placee will rank only as a general
creditor of Jefferies.
9.5 All times and dates in this announcement may be subject to
amendment. Jefferies shall notify the Placees and any person acting
on behalf of the Placees of any changes.
9.6 The rights and remedies of Jefferies and the Company under
these Terms and Conditions are in addition to any rights and
remedies which would otherwise be available to each of them and the
exercise or partial exercise of one will not prevent the exercise
of others.
9.7 Past performance is no guide to future performance and
persons needing advice should consult an independent financial
adviser.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
"Acquisition" the acquisition of CellRight
by the Purchaser pursuant
to the Acquisition Agreement;
---------------------------- ----------------------------------
"Acquisition Agreement" the Members Interest
Purchase Agreement dated
on or around the date
of this announcement
in relation to the Acquisition
and made between the
Purchaser, CellRight,
the Members, Jesus Hernandez
(as seller representative)
and Tissue Regenix Limited
(as guarantor);
---------------------------- ----------------------------------
"Admission" the admission of the
Placing Shares and the
Subscription Shares (if
any) to trading on AIM
and such admission becoming
effective in accordance
with the AIM Rules;
---------------------------- ----------------------------------
"AIM" the AIM market of the
London Stock Exchange
plc;
---------------------------- ----------------------------------
"AIM Rules" the AIM rules for companies
published by the London
Stock Exchange;
---------------------------- ----------------------------------
"Bookbuild" an accelerated bookbuilding
process undertaken in
connection with the Placing;
---------------------------- ----------------------------------
"Business Day" any day on which banks
are generally open in
England and Wales for
the transaction of business,
other than a Saturday,
Sunday or public holiday;
---------------------------- ----------------------------------
"CAGR" compound annual growth
rate;
---------------------------- ----------------------------------
"Circular" the circular to be published
by the Company as soon
as practicable following
the close of the Bookbuild
in relation to the Offer
which includes notice
of convening the General
Meeting at which the
Shareholder Resolution
will be proposed;
---------------------------- ----------------------------------
"Company" or "Tissue Tissue Regenix Group
Regenix" plc, a company incorporated
in England and Wales
with registered number
5969271, with its registered
office at Unit 1 and
2 Astley Way, Astley
Lane Industrial Estate,
Swillington, Leeds, England,
LS26 8XT;
---------------------------- ----------------------------------
"Completion" means completion of the
Acquisition;
---------------------------- ----------------------------------
"Concert Party" the Invesco Concert Party
and the IP Group Concert
Party;
---------------------------- ----------------------------------
"CREST" a relevant system (as
defined in the CREST
Regulations) in respect
of which Euroclear is
the Operator (as defined
in the CREST Regulations);
---------------------------- ----------------------------------
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI
2001/3755) as amended
from time to time;
---------------------------- ----------------------------------
"Directors" or "Board" the existing directors
of the Company;
---------------------------- ----------------------------------
"EBITDA" earnings before interest,
tax, depreciation and
amortisation;
---------------------------- ----------------------------------
"Enlarged Group" the enlarged group following
completion of the Acquisition,
comprising the Group
incorporating CellRight
as a wholly owned subsidiary;
---------------------------- ----------------------------------
"FCA" Financial Conduct Authority;
---------------------------- ----------------------------------
"FSMA" Financial Services and
Markets Act 2000;
---------------------------- ----------------------------------
"GBM-V" GBM V Gewebebank Mecklenburg
Vorpommern gemeinnützige
GmbH;
---------------------------- ----------------------------------
"General Meeting" the general meeting of
the Company expected
to be convened for Tuesday
8 August 2017 at 9 am,
or any adjournment thereof;
---------------------------- ----------------------------------
"Group" the Company and its subsidiaries;
---------------------------- ----------------------------------
"IAML" Invesco Asset Management
Limited acting as agent
for its discretionary
managed clients including
the Invesco Funds;
---------------------------- ----------------------------------
"Independent Shareholders" all Shareholders other
than (i) the Concert
Party (and anyone acting
in concert with it);
and (ii) the other Placees
and any Directors participating
in the Subscription who
hold Ordinary Shares;
---------------------------- ----------------------------------
"Invesco" Invesco Limited;
---------------------------- ----------------------------------
"Invesco Concert Party" IAML and the Invesco
Funds;
---------------------------- ----------------------------------
"Invesco Funds" IPHIF and IPIF;
---------------------------- ----------------------------------
"IP Group" IP Group plc;
---------------------------- ----------------------------------
"IP Group Concert Party" IP Group, IP Assist Services
Limited, IP Venture Fund,
IP2IPO Limited and Alan
Aubrey, Mike Townend
and Greg Smith (as directors
of IP Group and IP2IPO
Limited);
---------------------------- ----------------------------------
"IPHIF" the Invesco Perpetual
High Income Fund;
---------------------------- ----------------------------------
"IPIF" the Invesco Perpetual
Income Fund;
---------------------------- ----------------------------------
"Issue Price" 10 pence;
---------------------------- ----------------------------------
"Jefferies" Jefferies International
Limited, acting as broker
and bookrunner to the
Company in respect of
the Placing;
---------------------------- ----------------------------------
"London Stock Exchange" London Stock Exchange
plc;
---------------------------- ----------------------------------
"MAR" EU Market Abuse Regulation
(2014/596/EU);
---------------------------- ----------------------------------
"Members" the members of CellRight,
being Jesus Hernandez,
Cellright Holdings LLC,
Vise Lion, Ltd, Hugocellr,
Ltd, Jack Kelly, Irene
Graham, Robin Sullivan
and Dean Mueller;
---------------------------- ----------------------------------
"New Ordinary Shares" up to 400,000,000 new
Ordinary Shares being
issued in relation to
the Offer;
---------------------------- ----------------------------------
"Offer" the Placing and the Subscription;
---------------------------- ----------------------------------
"Order" Financial Services and
Markets Act 2000 (Financial
Promotion) Order 2005;
---------------------------- ----------------------------------
"Ordinary Shares" the ordinary shares of
0.5 pence each in the
share capital of the
Company;
---------------------------- ----------------------------------
"Placees" subscribers for the Placing
Shares;
---------------------------- ----------------------------------
"Placing" the proposed conditional
placing by Jefferies,
as agent to the Company,
of the Placing Shares
at the Issue Price pursuant
to the terms and conditions
set out in the Placing
Agreement;
---------------------------- ----------------------------------
"Placing Agreement" the agreement between
the Company and Jefferies
dated the date of this
announcement in connection
with the Placing;
---------------------------- ----------------------------------
"Placing Shares" the new Ordinary Shares
in the capital of the
Company to be issued
and allotted pursuant
to the Placing;
---------------------------- ----------------------------------
"Purchaser" Tissue Regenix Holdings
Inc.;
---------------------------- ----------------------------------
"RIS" the regulatory information
services approved by
the London Stock Exchange
for the distribution
of AIM announcements;
---------------------------- ----------------------------------
"Shareholder Resolutions" the: (i) ordinary resolution
granting authority to
allot and the special
resolution seeking to
disapply pre-emption
rights, in each case
in respect of the New
Ordinary Shares; and
(ii) the resolution approving
the proposed waiver of
Rule 9 of the Takeover
Code, as set out in the
notice of the General
Meeting to be contained
in the Circular to be
proposed at the General
Meeting;
---------------------------- ----------------------------------
"Subscription" the expected conditional
direct subscription of
the Subscription Shares
by certain of the Directors
at the Issue Price;
---------------------------- ----------------------------------
"Subscription Shares" the New Ordinary Shares
(if any) to be allotted
and issued by the Company
at the Issue Price pursuant
to the Subscription;
---------------------------- ----------------------------------
"Shareholders" the holders of Ordinary
Shares in the capital
of the Company from time
to time;
---------------------------- ----------------------------------
"Takeover Code" the City Code on Takeovers
and Mergers;
---------------------------- ----------------------------------
"Takeover Panel" the Panel on Takeovers
and Mergers;
---------------------------- ----------------------------------
"Target" or "CellRight" CellRight Technologies,
LLC, a Delaware limited
liability company;
---------------------------- ----------------------------------
"Target Group" the Target and its subsidiaries;
---------------------------- ----------------------------------
"United States" or "US" the United States of
America, its territories
and possessions, any
state of the United States
and the District of Columbia;
---------------------------- ----------------------------------
"Waiver" or "Rule 9 Waiver" the consent of the Takeover
Panel to waive any obligations
on members of the Concert
Party to make a mandatory
offer to Shareholders
for the Ordinary Shares
not owned by members
of the Concert Party
upon completion of the
Offer which would otherwise
arise under Rule 9 of
the Takeover Code as
a result of the expected
issue of the New Ordinary
Shares to members of
the Concert Party in
connection with the Acquisition;
---------------------------- ----------------------------------
"WG Partners" WG Partners LLP, placing
agent in respect of the
Placing; and
---------------------------- ----------------------------------
"Woodford" Woodford Investment Management
Limited acting as agent
for its discretionary
managed clients.
---------------------------- ----------------------------------
All references in this announcement to "GBP", "pence" or "p" are
to the lawful currency of the United Kingdom, all references to
"US$" or "$" are to the lawful currency of the United States
GLOSSARY
The following terms used in this announcement have the following
meanings:
"AATB" The American Association
of Tissue Banks
"ACL" Anterior Cruciate Ligament,
found in the knee
"Allograft" Human bone or tissue
"BMP's" Bone Morphogenic Proteins
"Cancellous bone" Found at the end of long
bones, it has a higher surface
area to mass ratio when compared
to Cortical bone. Also known
as trabecular or spongy bone
"CardioPure(TM) HAV" The decelluralised allograft
aortic heart valve
"CardioPure(TM) HPV" The decellularised allograft
pulmonary heart valve
"Cortical bone" The dense outer layer, also
known as compact bone
"dCELL(R) Technology" the proprietary dCELL(R)
technology comprised within
the Company's owned and licensed
patents and its unpublished
information and know how
relating to the dCELL(R)
technology contained within
the standard operating procedures
of the Company
"DermaPure(R)" a decellularised allograft
dermis for use in chronic
and acute wounds
"FDA" Food and Drug Administration
"GF's" Growth Factors
"GPO" Group Purchasing Organisation,
is created to leverage the
purchasing power of a group
of healthcare providers e.g.
hospitals
"HCT/P regulatory the FDA's regulatory pathway
pathway" in respect of human cells,
tissues and cellular or tissue-based
products
"Medicare" Medicare is the US federal
health insurance program
for people who are 65 or
older and certain younger
people with disabilities
"OrthoPure(TM) HM" the decellularised allograft
meniscal implant for use
in partial meniscal replacement
surgery
"OrthoPure(TM) HT" the decelluralised allograft
tendon for use in anterior
cruciate ligament repair
"OrthoPure(TM) XT" the decelluralised porcine
tendon for use in anterior
cruciate ligament repair
"Osteoinductive" the ability of graft material
to recruit stem cells and
develop into bone-forming
cells
"Regenerative medicine" the potential of tissue engineering
and molecular biology to
offer a natural recovery
by triggering a response
through the body's own cells
"SurgiPure(TM) XD" A decellularised porcine
dermis tissue matrix targeted
for the repair of hernias
and body wall defects
"Xenograft" Tissue sourced from a different
species to the recipient
"510k clearance" a 510(k) is a premarket submission
made to the FDA to demonstrate
that the device to be marketed
is at least as safe and effective
as, that is, substantially
equivalent to, a legally
marketed device that is not
subject to pre-market approval.
Submitters must compare their
device to one or more similar
legally marketed devices
and make and support their
substantial equivalency claims
[1] This is not a profit forecast and has not been reported on
under Rule 28 of the Takeover Code.
[2] The rate of exchange used for information in this
announcement is US$ 1.3039 to GBP1.00, as published in the Daily
Official List of the London Stock Exchange on 19 July 2017.
[3] This is not a profit forecast and has not been reported on
under Rule 28 of the Takeover Code.
[4] This is not a profit forecast and has not been reported on
under Rule 28 of the Takeover Code.
[5] This is not a profit forecast and has not been reported on
under Rule 28 of the Takeover Code.
[6] This is not a profit forecast and has not been reported on
under Rule 28 of the Takeover Code.
[7] This is not a profit forecast and has not been reported on
under Rule 28 of the Takeover Code.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQOKKDQABKDFOB
(END) Dow Jones Newswires
July 20, 2017 13:03 ET (17:03 GMT)
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