Schroder UK Public Private Tst plc Agreement for sale of assets (9819M)
January 27 2021 - 2:00AM
UK Regulatory
TIDMSUPP
RNS Number : 9819M
Schroder UK Public Private Tst plc
27 January 2021
Schroder UK Public Private Trust plc (the "Company")
Agreement for sale of assets
The Company (LSE: SUPP) is pleased to announce that it has
signed a sale and purchase agreement for the sale of a basket of
seven assets (the "Sale Portfolio") to Rosetta Capital VI, LP (the
"Buyer"), an investment fund managed by the UK-based life science
venture capital firm Rosetta Capital Limited, for a total
acquisition price of GBP49.0 million (the "Transaction"). The Sale
Portfolio consists of the Company's entire holdings in Carrick
Therapeutics, Mission Therapeutics, PsiOxus Therapeutics and Mereo
BioPharma and partial holdings in Inivata, Immunocore and ReNeuron.
The agreed acquisition price represents a discount of 22 per cent
to the aggregate valuation for those holdings reflected in the Q3
2020 Net Asset Value ("NAV") as at 30 September 2020 (as published
on 3 December 2020) or a discount of 19% per cent adjusted for
relevant foreign exchange rate changes as of 25 January 2021.
The Buyer has also agreed to pay approximately GBP2.9 million to
the Company representing the value of certain follow-on investments
made by the Company with respect to holdings contained in the Sale
Portfolio during January 2021. In total, the Company expects to
receive initial proceeds from the Transaction of approximately
GBP51.9 million.
Furthermore, given the recent news of Immunocore filing for an
initial public offering ("IPO"), the Company has agreed with the
Buyer an earn-out under which the Company might receive an
additional contingent payment of up to GBP5.0 million subject to
the Immunocore stake acquired by the Buyer exceeding certain value
thresholds at the Buyer's future exit of the investment. The
Company had previously agreed to a lock-up period under which it
would not sell its entire holding for a period of 6 months from the
date of the IPO. The Buyer has agreed to be bound by the
restrictions of a lock-up agreement on the same terms as the
Company. The Company will remain subject to the lock-up for the
proportion of the holding it is retaining.
In addition, the Company and the Buyer have agreed to a
potential adjustment to the acquisition price in the event of
significant changes in value of the listed portfolio companies
Mereo BioPharma and ReNeuron on an aggregated basis by the date of
completion of the Transaction. The Company does not currently
expect the potential acquisition price adjustment, if any, to be
significant in the context of the overall transaction.
The closing of the Transaction is subject to customary closing
conditions. The Company expects the completion to occur in late
February or March 2021.
The valuation impact of the Transaction is expected to be
reflected in the NAV of the Company as at 31 December 2020, which
is expected to be announced in April 2021.
A significant proportion of the expected proceeds will be used
to pay down a meaningful portion of the Company's outstanding debt
under its credit facility whereby the current term loan will
convert to a revolving credit facility. In addition, the Company
intends to use the additional liquidity to support some of its
portfolio companies with follow-on capital and further optimise the
portfolio composition by selectively investing into new
opportunities
Tim Creed and Ben Wicks, Portfolio Managers of the Company,
jointly commented: "After the announcement of the acquisition of
Kymab by Sanofi and the extension of the Company's credit facility
by two years, this is the third very positive announcement for the
Company so far in 2021. When we assumed the management of the
Company's investment portfolio in December 2019, we communicated
that our initial focus in the process of repositioning the
portfolio would be to reduce the outstanding debt to a sustainable
level and put the Company back into a position to support its
portfolio companies with follow-on capital and selectively make new
investments. The basket transaction being announced today is a
further important milestone for the Company and delivers against
that communicated goal. Together with the divestiture of Kymab, the
Company expects to receive total proceeds of more than GBP115
million by the end of the first half of 2021. Also, we are
delighted to welcome Rosetta Capital as co-shareholders in
ReNeuron, Immunocore and Inivata and we welcome their expertise and
experience. We are looking forward to continuing to work with the
management teams of the Company's holdings in delivering
sustainable value and positive long-term shareholder returns."
Susan Searle, Chair of the Board of the Company, commented: "I
am extremely pleased with the progress that Schroders have made
since taking over the management of the portfolio. The three
announcements made in 2021; the extension of our debt facility, a
significant portfolio company cash exit and a portfolio sale put
the Company in a solid position from which to grow in 2021. These
events reflect the hard work of the team throughout 2020 and I look
forward to seeing the team build on this encouraging positive
progress in repositioning the Company's portfolio."
Enquiries:
Schroder Investment Management Limited
Estelle Bibby (Press) 0207 658 3431
Gareth Faith (Company Secretary) 0207 658 5264
LEI: 2138008X94M7OVE73I77
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