TIDMEVC
RNS Number : 8721N
Evolutec Group PLC
25 February 2009
EVOLUTEC GROUP PLC
To be renamed
NANOCO GROUP PLC
Proposed acquisition of Nanoco Tech Public Limited Company
Approval of a waiver of the obligations under Rule 9 of the Takeover Code
Re-admission of the Existing Ordinary Shares and admission of the Consideration
Shares to trading on AIM
Notice of General Meeting
Evolutec Group plc ("Evolutec" or the "Company"), is pleased to announce that it
has reached agreement of a recommended share acquisition of the entire issued
and to be issued share capital of Nanoco Tech Public Limited Company ("Nanoco"),
a leading nanotechnology company involved in the development and manufacture of
fluorescent semi-conducting materials called quantum dots, to be effected by
means of a Court approved scheme of arrangement.
The Acquisition is conditional, amongst other things, upon the approval of
Shareholders at the General Meeting and the Scheme of Arrangement becoming
effective.
ACQUISITION HIGHLIGHTS:
* Nanoco is a leading nanotechnology company involved in the development and
manufacture of fluorescent semi-conducting materials called quantum dots.
* Quantum dots are a platform technology with uses in a wide range of
applications.
* Quantum dot based applications have the ability to potentially offer significant
benefits in performance and energy savings compared to those materials currently
used.
* Nanoco has been successful in signing significant development contracts as well
as establishing distribution channels with multinational companies to supply
Nanoco materials.
* Following Admission the Directors of the Company will comprise Dr. Michael
Edelman as Chief Executive Officer, Dr. Peter Rowley as non-executive Chairman,
Dr. Nigel Pickett as Chief Technical Officer, Michael Bretherton as Chief
Financial Officer and Gordon Hall as non-executive director.
* The consideration for the Acquisition is to be satisfied by the issue of the
Consideration Shares to the Nanoco Shareholders, on the basis of 4.55
Consideration Shares for every Nanoco Share held.
* The Enlarged Group will have net funds of approximately GBP8.1 million following
Admission which will be applied to the execution of Nanoco's strategy.
* In view of the size of the Acquisition, in relation to the Company, the
Acquisition constitutes a reverse takeover under the AIM Rules.
* It is expected that dealings in the shares of the Enlarged Group will become
effective on 30 April 2009.
Michael Edelman, Nanoco CEO Commented:
"This acquisition represents the next milestone in Nanoco's rapid development.
Nanoco has grown by focusing its efforts on the development and mass production
of high performance quantum dots and working to get these exciting materials
into the market by partnering with strategic quantum dot application developers
around the world. Admission to the AIM Market of the London Stock Exchange
allows the company to continue to further strengthen its shareholder base and
balance sheet and gives Nanoco the resources needed to meet the growing demand
for its products."
David Bloxham, Evolutec Chairman, Commented:
"The opportunity with Nanoco will provide a significant new start for the
Company."
Enquiries:
Evolutec Group plc07771 525 875
David Bloxham
Zeus Capital Limited 0161 831 1512
Richard Hughes
INTRODUCTION
The Company announces that it has reached agreement on the terms of a
recommended share acquisition of the entire issued and to be issued share
capital of Nanoco to be effected by means of a Court approved scheme of
arrangement between Nanoco and its shareholders pursuant to Part 26 of the 2006
Act (involving a reduction of capital pursuant to section 135 of the Act).
Nanoco is a leading nanotechnology company involved in the development and
manufacture of fluorescent semi-conducting materials called quantum dots.
Quantum dots are a platform technology with uses in a wide range of applications
from life sciences through to optoelectronics dominated by solid state lighting,
photovoltaics, and next generation displays. Quantum dot based applications have
the ability to potentially offer significant benefits in performance and energy
savings compared to those materials currently used.
The consideration for the Acquisition is to be satisfied by the issue of the
Consideration Shares to the Nanoco Shareholders, on the basis of 4.55
Consideration Shares for every Nanoco Share held.
In view of the size of the Acquisition, in relation to the Company, the
Acquisition constitutes a reverse takeover under the AIM Rules and, as such, is
conditional upon the admission of the Enlarged Issued Share Capital to trading
on AIM and the publication of the Admission Document. In addition, the
Acquisition also requires the approval of Shareholders. Accordingly, a general
meeting is being convened on 24 March 2009 at which Shareholders will be asked
to approve the Acquisition and grant the appropriate authority to permit the
Company to issue the Consideration Shares. If the Resolutions are approved by
Shareholders and subject to the Scheme of Arrangement having become effective in
accordance with its terms, it is expected that Admission will take place, and
that dealings on AIM will commence, on 30 April 2009.
Immediately following Admission the Consideration Shares will comprise
approximately 85.90 per cent. of the Enlarged Issued Share Capital.
Further details of the Scheme of Arrangement are set out in paragraph 14 of Part
IX of the Admission Document and copies of this document will be available for
inspection free of charge at the offices of Zeus Capital at 3 Ralli Courts, West
Riverside, Manchester M3 5FT.
Following Completion, the Concert Party will be interested in 70,630,848
Ordinary Shares, representing 38.37 per cent. of the Enlarged Issued Share
Capital. Since the Acquisition will result in the Concert Party being interested
in more than 30 per cent. of the issued share capital of the Company, the
Concert Party would, in the absence of a waiver from the provisions of Rule 9 of
the Takeover Code being granted by the Panel, be obliged to make a general offer
to all remaining shareholders of the Company. The Panel has agreed, however,
subject to Resolution number 2 being passed on a poll by the Independent
Shareholders at the General Meeting, to waive this obligation.
Further details on the Concert Party are set out in this Announcement and the
Admission Document.
The admission document in relation to the proposed Acquisition, approval of the
Waiver, Admission and General Meeting (the "Admission Document") has been posted
to shareholders today and is available on the Company's website
www.evolutec.com.
INFORMATION ON EVOLUTEC
Background
Evolutec was admitted to AIM in August 2004. Evolutec's principal activity was
the discovery and development of novel agents for the prevention and treatment
of human disease. Evolutec focused its therapeutic development on allergy,
inflammation and autoimmune disease.
Evolutec progressed its lead therapeutic development candidate from discovery to
completion of various phase II trials, however it did not show clinical efficacy
in any of the clinical trials. Following the results of these trials an
extensive strategic review was undertaken to assess the options available to
Evolutec.
On 6 June 2007 a circular was sent to Evolutec shareholders explaining a
proposal to distribute cash to shareholders by way of liquidation and the
proposed cancellation of admission of Evolutec's shares from AIM. Following
dispatch of the circular the board of Evolutec received written confirmation
from one significant shareholder that they would vote against the proposals. The
board was therefore of the view that the resolutions required to effect the
proposals would not be passed and took the decision to continue as a quoted
entity with a strategy of identifying potential acquisitions.
Evolutec is now classed as an investment company under the AIM Rules. The
investment policy of Evolutec has been to seek a single investment, most
probably of a UK or European business, in either the technology, healthcare or
service related sectors.
The Directors believe that Nanoco is a suitable acquisition for the Company.
INFORMATION ON NANOCO
Nanoco is a leading nanotechnology company involved in the development and
manufacture of fluorescent semi-conducting materials called quantum dots. Nanoco
Technologies was founded in 2001 by Professor Paul O'Brien and Dr Nigel Pickett
in order to progress the development of quantum dot technology that was
previously developed at the University of Manchester and Imperial College,
London. Since 2001, Nanoco has raised GBP4.1 million of private equity funds to
continue the development and manufacture of quantum dots.
Quantum dots are a platform technology with uses in a wide range of applications
from life sciences through to optoelectronics dominated by solid state lighting,
photovoltaics and next generation displays. Quantum dot based applications have
the ability to potentially offer significant benefits in performance and energy
savings compared to those materials currently used in these industry sectors.
Of the range of potential applications for quantum dots Nanoco has focused
initially on four application areas. These are solid state lighting, solar
energy, life sciences and next generation displays.
A key challenge in the quantum dot field has been the ability to manufacture
highly efficient quantum dots in significant commercial volumes. The Proposed
Directors believe that to date, the quantum dot industry's production has been
limited to the production of milligram to single gram batches.
Nanoco's technology directly addresses these key challenges. Firstly, Nanoco has
developed and patented core technology based on methods for producing highly
efficient quantum dots that are tuneable to a specific colour emission.
Secondly, Nanoco has developed scalable processes for producing quantum dots.
This technology enables the control of nanoparticle growth thereby allowing the
production of larger quantities of quantum dots. The production technology is
currently being scaled up from 50 gram batches towards kilogram batches and
greater to meet the forecast market demand.
Nanoco has also developed a number of other nanomaterials, methods to improve
the performance of quantum dots, additional production methods and the
incorporation of the resultant nanomaterials into commercial applications.
Nanoco's business strategy is to work in partnership with quantum dot
application developers. These application developers tend to be large global
technology companies working to incorporate quantum dots into a specific end use
application. Examples of these applications include quantum dot containing LEDs,
displays and solar cells. Nanoco has been successful in signing development
contracts as well as establishing distribution channels with multinational
companies to supply Nanoco materials. The Proposed Directors believe that Nanoco
is now well placed to become a successful quantum dot partner of choice for
application developers globally.
QUANTUM DOTS
Quantum dots are tiny particles of a semiconductor material which range from 2
to 10 nanometers in diameter (about the width of 50 atoms). Because of their
small size, quantum dots display useful optical and electrical properties that
are different in character to those of the corresponding material in bulk. The
most immediately apparent of these properties is the emission of photons under
excitation, which are visible to the human eye as light. The wavelength of these
photon emissions depends on the size of the quantum dot.
The ability to precisely control the size of a quantum dot enables the
manufacturer to determine the wavelength of the emission, which in turn
determines the colour of light the human eye perceives. Quantum dots can
therefore be tuned during production to emit any colour of light desired. The
smaller the dot, the closer it is to the blue end of the spectrum, and the
larger the dot, the closer to the red end of the spectrum. Quantum dots can also
be tuned beyond visible light, into the infra-red or into the ultra-violet parts
of the spectrum.
Quantum dot technology has applications in a number of industries where there is
a requirement for colour, imaging or the manipulation of light.
NANOCO'S TECHNOLOGY
Conventional, small-scale quantum dot manufacturing relies on a process called
"high temperature dual injection", wherein raw materials are injected into a hot
reaction solution followed by particle growth. While in general producing high
quality quantum dots, this process involves harsh reaction conditions and
hazardous, often toxic starting materials. Attempts to scale up this process
cause increasing inconsistency in the resulting quality of quantum dots that are
produced. A reproducible route to larger quantities of consistent, high quality
quantum dots has been developed by Nanoco which avoids the high temperature,
difficult to control, process.
Nanoco's technology addresses five key issues associated with quantum dots.
These are:
1. Production of bright, highly efficient fluorescent semiconductors;
2. Materials which are highly tunable to a specific colour emission narrow band
width;
3. Stable materials which can stand up to the rigours of commercial
applications;
4. Heavy metal free quantum dots which are RoHS compliant. It is critical for
electronics producers around the world to comply with RoHS legislation;
5. Cost effective manufacturing scale-up of quantum dots which may provide a
route towards lower pricing and commercial viability.
The plan to ramp production batch size up to 1kg and later to 25kg comprises
several elements, including some design, technology, and broader management
challenges. Meeting the specifications for the more demanding applications in
display and lighting technology will require further manufacturing process
optimization and careful control of a number of parameters during the scale up.
Nanoco has good technical and intellectual property strength but will need to
remain focused on its key customer specifications. In particular, the Proposed
Directors believe that one of the most challenging technical targets for Nanoco
will be the achievement of sufficient life expectancy of its quantum dots in
order to satisfy the requirements of its customers.
An independent report on Nanoco's technology has been prepared by Pira
International and can be found in Part III of the Admission Document.
NANOCO'S BUSINESS MODEL
Nanoco forms and will continue to form strategic partnerships with quantum dot
application developers across the world. The application developer and Nanoco
work together in strategic partnership to develop a quantum dot based
application. In these development partnerships Nanoco will focus on the quantum
dot material and embedding the quantum dots in an application specific matrix
while the application developer focuses on the application itself.
In order to be successfully embedded into an application or device, the quantum
dots need to be designed and produced in a bespoke manner specific to each
application. The matrix could be made from a number of materials and could exist
in a liquid, powder or solid state.
Nanoco has developed its ability to fabricate quantum dots into end use devices
to assist the company's application partners and facilitate adoption of its
technology by the market. These devices include quantum dot printing inks,
quantum dot electroluminescent displays, quantum dots LEDs and quantum dot
based photovoltaic devices. The quantum dot containing devices give Nanoco rapid
feedback on its quantum dot material performance and enable the company to
quickly improve and modify the quantum dots to better suit the end use
applications of the company's partners.
Nanoco generates revenue from three sources: funded research, material sales and
royalties gained from sales of its application products into the market.
Funded research
Funded research is where a customer pays for all or a portion of Nanoco's
development costs in order to tailor
Nanoco's quantum dots to fit the customer's specific application.
Material sales
Nanoco currently sells materials to a number of universities, commercial and
government research laboratories and application developers both directly and
through its small lot distributor, Sigma Aldrich Corporation (headquartered in
the USA) and its Asian distributor, Kisco Limited. After the successful
development of a quantum dot containing application, Nanoco will sell quantum
dots which are tailored for a specific application.
Royalty income
Where Nanoco has worked with an application developer to incorporate quantum
dots into a specific application, Nanoco will negotiate a royalty from the sale
of that application.
Having a three tiered revenue stream will allow Nanoco to cover development
costs, sell materials and capture a portion of the added value of the quantum
dot containing application sale.
Strategic partnerships
Nanoco has entered into a strategic partnership with a
major Japanese corporation to develop quantum dot based LED's for use as a
backlight in an LCD display. A joint development agreement was entered into in
December 2007 to tailor Nanoco's heavy metal free quantum dots into specific LED
encapsulating resins. Following the successful joint development agreement the
corporation and Nanoco entered into a material supply and licence agreement in
November 2008. This corporation is now working with Nanoco to develop the
quantum dot LED's to produce white light for the LCD backlight market. This
agreement includes a milestone based, non-refundable US$10 million upfront
royalty payment of which Nanoco has to date received US$2 million. The Proposed
Directors believe that all three technical milestones set out below will be
achieved by 31 December 2010 and therefore trigger the payments set out below.
Milestone 1: the achievement of milestone 1 will trigger a US$2 million payment
if small quantities of red and green cadmium free quantum dots demonstrating a
set lighting efficiency, power, spectral width and life expectancy are
demonstrated.
Milestone 2: the achievement of milestone 2 will trigger a further US$2 million
payment if small quantities of red and green cadmium free quantum dots, with
higher efficiency, higher power, tighter spectral width and life expectancy than
in milestone 1 are demonstrated.
Milestone 3: the achievement of milestone 3 will trigger a US$4 million payment
if 1kg of red and 1kg of green cadmium free quantum dots, each made from a
single batch are delivered, at a price to be agreed between the parties.
Under the agreement, royalties will be charged at a rate of 5 per cent. of the
net sales price of this corporation's products (product being defined as a
packaged LED, comprising an LED chip, quantum dots and an encapsulant).
Distribution agreements
In September 2007, Nanoco entered a distribution agreement with USA
headquartered Sigma Aldrich, the world's largest supplier of research chemicals.
Sigma Aldrich sells Nanoco's quantum dot products to universities, government
and corporate laboratories in small lot sizes.
In May 2008, Nanoco entered a five year exclusive distribution agreement for
Asia (excluding China) with Japan headquartered Kisco, a leading Asian
electronics materials trading and manufacturing company. Kisco assists Japanese
customers with the purchase, logistics and supply of Nanoco's quantum dot
materials from the UK into Asia. This agreement does not prohibit Nanoco from
working directly with Asian customers.
Further details of the Kisco Agreement are detailed in paragraph 15 of Part IX
of the Admission Document.
STRATEGY AND USE OF FUNDS
There are two parts to Nanoco's strategy, the first being the continued
development, protection and improvement of its quantum dot technology; and the
second being the establishment of strategic partnerships with quantum dot
application developers across a range of applications and industry sectors.
Nanoco will:
* Continue the development of quantum dot materials and structures;
* Continue to develop the production technology and facilities for larger batches
of quantum dots;
* Continue to develop heavy metal free, RoHS compliant quantum dots;
* Continue to protect its technology through patents;
* Continue to develop strategic partnerships with application developers in a
range of industries;
* Continue to develop its quantum dot device development program; and
* Establish additional distribution channels in order to supply Nanoco materials.
Following Admission, the Enlarged Group will have net funds of approximately
GBP8.1 million. These funds will be applied to the execution of Nanoco's
strategy.
APPLICABLE MARKETS AND CUSTOMERS
The market for quantum dots is currently estimated at GBP10 million and is
projected to reach approximately GBP500 million by 2013. This growth is being
fuelled by the wide variety of quantum dot based applications which are
currently being developed. Nanoco is currently focusing on the development of
products that serve four core application areas; solid state lighting, next
generation displays, solar cells and life science based applications.
Solid state lighting
Solid-state lighting refers to a type of lighting that utilises
light-emitting-diodes (LEDs) as sources of illumination. Recently, next
generation lighting based on LEDs has gained momentum by providing high
efficiencies and long lifetimes to existing lighting applications. Current
estimates for the value of the overall LED backlight market by 2012 vary between
US$4-8 billion.
Although LEDs offer benefits over traditional incandescent and mercury based
lighting, large corporations operating in the solid state lighting field are
providing demand for the use of quantum dots as a colour change media to their
LEDs over other traditional phosphor based solutions.
By mixing red and green quantum dots and applying them to a blue LED, white
light can be efficiently produced. The colour temperature of the white light can
be controlled by "tuning" the emission of the red and green quantum dots. For
LCD display backlight applications the quantum dot LED can be optimised to match
the display's colour filters and is replacing wide spectrum cold cathode
fluorescent lights where up to 80 per cent. of the white light generated is not
utilised resulting in a significant loss of overall operating efficiency.
Quantum dot technology therefore offers a lower-cost, higher efficiency solution
LCD display to existing general lighting application providers.
The following table set out the average efficiencies and life expectancy of
various solid state lighting options:
Type of Light Efficiency Life of Light (Hours)
Incandescent light bulbs 1 - 5 per cent. 500
Mercury discharge lighting 20 - 30 per cent. 3,000
LED lighting including quantum dots >60 per cent. 50,000
The market currently targeted by Nanoco can be split into three sectors based on
performance. Low performance LED's for example holiday lights, toys and other
inexpensive applications; medium performance general lighting and illumination
applications and high performance backlighting for the Liquid Crystal Display
(LCD) TV market.
Nanoco is currently working with a number of major companies to develop and
supply quantum dots for the solid state lighting market.
Next generation displays - Quantum dot electroluminescent displays
An Organic Light Emitting Diode (OLED) comprises an electroluminescent emissive
layer composed of a film of fluorescent and phosphorescent organic compounds.
This market is estimated to be worth over GBP1 billion by 2015.
These structures can be used in television screens, computer displays and small
portable system screens such as mobile phones and PDAs. OLEDs also have the
potential to be used in light sources for general space illumination.
The advantages of OLED displays over conventional LCD displays include the
removal of energy intensive backlights and costly colour filters; allowing for
more energy efficient, lower cost and potentially better quality displays. As
there is no need for a backlight or colour filter, an OLED display can be much
thinner than an LCD panel.
Quantum dots electroluminescent displays work in a similar manner to OLED
displays in that the quantum dots replace the emissive organic layer. The
advantage quantum dots have over OLED materials is improved colour and
potentially longer life.
Nanoco is currently in partnership discussions with a number of multinational
companies in order to develop and commercialise electroluminescent quantum dot
applications.
Photovoltaics
Historically, harnessing solar energy has proven inefficient using traditional
methods; however the use of quantum dots in this sector provides a physically
flexible, more efficient and wider ranging alternative to traditional solar
panels which could eventually be integrated to household and other structures,
theoretically aiding demand for solar energy.
The global photovoltaics market is forecasted to reach US$32 billion by 2012
compared to US$12.9 billion in 2007; a compound annual growth rate of 15 per
cent.
Initial research on multiple exciton generation of quantum dots has demonstrated
that potential sunlight conversion efficiencies of greater than 40 per cent. can
be achieved compared to 10-20 per cent. using traditional methods.
Nanoco is working with a number of companies in this sector and in some cases
has sold evaluation samples to a number of corporations.
Other technologies within the photovoltaic industry where quantum dots could be
applied are solar cell concentrators, dye sensitised solar cells and organic
solar cells.
Biological applications
The life science market, specifically the in-vitro biological imaging market was
the first commercial application for quantum dots. Quantum dots' fluorescent
properties provide an alternative to traditional organic dye based fluorescent
bio-imaging technology for a multitude of uses including cell imaging and
multiplexing techniques (the ability to image a number of different colours at
the same time). In these applications quantum dots are attached to cells and
certain drugs. The quantum dot tagged drug or cell can then be studied under
high powered microscopes. The advantage of using quantum dots over traditional
organic fluorophors are their ability to withstand more intense irradiation from
a high powered microscope for a longer period of time combined with quantum dots
intrinsic narrow emission allowing for multiplexing applications.
Nanoco is least advanced in this area of quantum dot technology due to the focus
on the larger volume optoelectronics market. Nanoco is working to address this
weakness over the coming year.
Nanoco's heavy metal free quantum dots are attractive to customers in this arena
given their non-toxic properties; this has led to a partnership development with
a company who use Nanoco's quantum dot technology for in-vivo imaging of cancer.
Other Sectors
The number of potential markets available to quantum dots is wide ranging and
continues to grow. Additional markets that the Proposed Directors believe will
be applicable to Nanoco in the future include; anti-counterfeiting tags,
industrial sensing and detection, quantum dot containing inks, quantum dot light
emitting diodes and infra-red emitting tags for military personnel.
Further details on Nanoco's applicable markets and customers can be found in
Part III of the Admission Document.
COMPETITION
Nanoco's competition can be split into two groups, direct and indirect. Direct
competition comes from companies working to supply quantum dots to the market.
Indirect competition comes in the form of alternative competing technologies
working to penetrate the market for similar applications that Nanoco and its
development partners are focused on.
There are a number of very small companies using inefficient "dual injection"
technology to supply the life science market with cadmium based quantum dots.
These companies tend to be poorly funded and associated with a university.
Three companies to note which have had significant funding (>US$10 million) are
Nanosys Inc., based in Palo Alto, California which is broadly focused on
nanomaterials and their applications rather than just quantum dots; Evident
Technologies based in Troy, New York which has adopted a "go alone" strategy
to getting quantum dot containing products to the market and QD Vision based in
Watertown, Massachusetts which is focused solely on the quantum dot
electroluminescent display market.
All three competitors are similar in that their technology is based on
restricted heavy metals such as cadmium. The Proposed Directors believe they do
not have the ability to produce large volumes of quantum dots.
The Proposed Directors believe Nanoco is unique in its ability to mass produce
large quantities of high performance cadmium free quantum dots.
INTELLECTUAL PROPERTY
Nanoco has core technology patents that are granted or progressing to grant in
key geographic regions following international patent applications. A report by
Marks and Clerk on the patent portfolio of Nanoco is included in Part IV of the
Admission Document.
Nanoco's IP portfolio is based around the continued development of its
technology and currently contains 15 patent families (nine published, six
unpublished) containing four granted patents and 55 pending patent applications.
Nanoco's earliest patent family dates back to 1995 and contains granted patents
in the US, Germany, France and the UK relating to the use of metal complexes to
produce nanocrystalline material known as the Single Source Precursor
technology. The Single Source Precursor technology was developed by Professor
Paul O'Brien while he was at Imperial College, London and all IP was
subsequently assigned to Nanoco.
Nanoco's next oldest patent family dates from 2004 and relates to a scaleable
process for producing nanoparticles using a molecular cluster compound to seed
and control nanoparticle growth thereby enabling the production of large
quantities of high quality nanoparticles. This family currently contains
pending applications in Australia, Canada, China, Europe, Hong Kong, Israel,
India, Japan, South Korea and USA.
The scale up technology was initially developed by Nanoco's Chief Technology
Officer, Dr Nigel Pickett while at University of Manchester and subsequently all
IP was assigned to Nanoco. This methodology was further developed and refined
over the next three years resulting in two further patent families which contain
pending applications in a number of countries.
A number of prior art documents have been cited against the scale up
technologies during examination and these are discussed in more detail within
the Marks and Clerk report in Part IV of the Admission Document. It is Marks and
Clerk's current view that the fundamental technology that Nanoco currently
employs and which underpins all three of the scale-up patent families should be
patentable in the light of the prior art documents currently cited in respect of
these applications.
More recently, numerous patents have been filed on the next generation cadmium
free materials and methods to manufacture them, other novel semi-conductor
nanoparticles, semi conducting metal oxides and methods for stabilising and
fabricating the quantum dots into an easy to use bead format. Other areas
of patent filing have been in using the Nanoco developed nanoparticles in
devices. One such area is next generation thin film solar cells.
As Nanoco grows and develops its technology, products and methods of producing
products the company will continue with its strategy of filing patents to
protect the technology. The commercial success of the Enlarged Group will depend
in part on its ability to protect and enforce its intellectual property so as to
preserve its exclusive rights in respect of its technology and to preserve
the confidentiality of its own and its collaborators' know-how.
SUMMARY FINANCIAL INFORMATION
The financial information set out in the table below has been extracted from the
historical financial information on Evolutec included in Part V of the Admission
Document. Shareholders should read the full report and not rely solely upon the
summary below.
+--------------------------------------+-------------+--------------+-------------+
| | Year ended | Year ended | Year ended |
| | 31 December | 31 December | 31 December |
| | 2006 | 2007 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+-------------+--------------+-------------+
| Revenue | 14 | 82 | 271 |
+--------------------------------------+-------------+--------------+-------------+
| Operating Loss | (12,857) | (2,288) | (205) |
+--------------------------------------+-------------+--------------+-------------+
| Profit/(loss) after tax | (11,827) | (1,763) | 77 |
+--------------------------------------+-------------+--------------+-------------+
The financial information set out in the table below has been extracted from the
historical financial information on Nanoco, included in Part VI of the Admission
Document. Shareholders should read the full report and not rely solely upon the
summary below;
+---------------+------------+-------------+-------------+-------------+-------------+
| | | Year ended | Year ended | Year ended | Unaudited 5 |
| | | 31 July | 31 July | 31 July | month |
| | | 2006 | 2007 | 2008 | period |
| | | GBP'000 | GBP'000 | GBP'000 | ended 31 |
| | | | | | December |
| | | | | | 2008 |
| | | | | | GBP'000 |
+---------------+------------+-------------+-------------+-------------+-------------+
| Revenue | | 204 | 576 | 1,078 | 1,741 |
+---------------+------------+-------------+-------------+-------------+-------------+
| Operating | | (232) | (844) | (785) | 793 |
| profit/(loss) | | | | | |
+---------------+------------+-------------+-------------+-------------+-------------+
| Profit/(loss) | | (219) | (555) | (551) | 882 |
| after tax | | | | | |
+---------------+------------+-------------+-------------+-------------+-------------+
Revenue growth accelerated in the year ended 31 July 2008 and the five months
ended 31 December 2008 from new licensing and joint development contracts
referred to in this Announcement and in the Admission Document.
TERMS OF THE ACQUISITION
The Company announces that it has reached agreement on the terms of a
recommended share acquisition by Evolutec of the entire issued and to be issued
share capital of Nanoco to be effected by means of a court approved scheme of
arrangement between Nanoco and its shareholders pursuant to Part 26 of the 2006
Act (involving a reduction of capital pursuant to section 135 of the 1985 Act).
Upon the Scheme of Arrangement becoming effective, the Company will become the
owner of the whole of the issued share capital of Nanoco. To become effective,
the Scheme of Arrangement requires, amongst other things, the approval at the
Court convened meeting of Nanoco Shareholders (such meeting to be convened
pursuant to section 896 of the 2006 Act) of a majority in number representing
not less than seventy-five per cent. in value of the Nanoco Shareholders present
and voting, either in person or by proxy, at the Court meeting, or at any
adjournment thereof, and the passing of a special resolution necessary to
approve matters to give effect to the Scheme of Arrangement at a separate
extraordinary general meeting of Nanoco. Following the Court meeting and the
extraordinary general meeting of Nanoco, the Scheme of Arrangement (including
the associated reduction of capital of Nanoco) must also be sanctioned by the
Court at the Court Hearing.
Nanoco and the Company have received irrevocable undertakings to vote or (where
applicable) to procure that the registered holder votes, in favour of the Scheme
of Arrangement at the Court meeting and separately, in favour of the special
resolution to be proposed at the extraordinary general meeting, in each case in
respect of in aggregate 32,271,831 Nanoco Shares, representing approximately
92.85 per cent. of Nanoco's existing issued share capital. The irrevocable
undertakings also extend to any Nanoco Shares that may be issued to, or acquired
by, such persons after the date of this Announcement.
The consideration for the Acquisition is to be satisfied by the issue of the
Consideration Shares to the Nanoco Shareholders, on the basis of 4.55
Consideration Shares for every Nanoco Share held. In view of the size of the
Acquisition, in relation to the Company, the Acquisition constitutes a
reverse takeover under the AIM Rules and, as such, is conditional upon the
admission of the Enlarged Issued Share Capital to trading on AIM and the
publication of the Admission Document. In addition, the Acquisition
also requires the approval of Shareholders. Accordingly, a general meeting is
being convened on 24 March 2009 at which Shareholders will be asked to approve
the Acquisition and grant the appropriate authority to permit the Company to
issue the Consideration Shares. If the Resolutions are approved by Shareholders
and subject to the Scheme of Arrangement having become effective in accordance
with its terms, it is expected that Admission will take place, and that dealings
on AIM will commence, on 30 April 2009.
Immediately following Admission the Consideration Shares will comprise
approximately 85.90 per cent. Of the Enlarged Issued Share Capital. Further
details of the Scheme of Arrangement are set out in paragraph 14 of Part IX of
the Admission Document.
CURRENT TRADING AND PROSPECTS
The financial information for the 5 month period ended 31 December 2008 is set
out in Part VI of the Admission Document. There has been no significant change
in the financial or trading position of Nanoco since 1 January 2009.
The Acquisition is expected to strengthen the Company's balance sheet and
provide the Enlarged Group with funding to pursue its proposed strategy as set
out in this Announcement and in Part I of the Admission Document.
A Pro forma Statement of Net Assets is set out in Part VII of the
Admission Document and discloses that the Enlarged Group will have pro forma net
assets of GBP9.037 million inclusive of cash and cash equivalent balances of
approximately GBP8.1 million after paying the estimated expenses of the
Proposals.
DIRECTORS AND THE PROPOSED DIRECTORS
The Directors of the Company as at the date of this Announcement comprise David
Philip Bloxham as non-executive chairman, Graeme Manson Hart, Gordon James Hall
and Mark Barrie Hawtin as non-executive directors. A brief summary of the
Evolutec board members' biographies are set out below:
Current Directors
Dr. David Philip Bloxham (Aged 61) Non-executive Chairman
David has significant experience in the biotechnology industry and has been
successful at both the R&D and commercial levels. In 1984 he joined the
pharmaceutical industry as director of Biology Research at Roche Research in the
UK. Subsequently he became Research and Development director of
Laboratories Almirall. He joined Celltech in 1990 later becoming Chief Operating
Officer. Celltech listed on the London Stock Exchange in 1994. From 1998 to
2001, David was Chief Executive Officer of Cobra Therapeutics Limited until it
was sold to ML Laboratories. David became Chief Executive of Evolutec in May
2001 and non-executive chairman upon the Company's admission to AIM.
Graeme Manson Hart (Aged 64) Non-executive Director
Graeme is an orthopaedic surgeon who has also built a successful business
career. He founded Medic International in 1972 and built this into Health Care
Services, an Unlisted Securities Market quoted company, which was eventually
acquired by Compass Group in 1989. Currently, Graeme is Non-executive Chairman
of Corin Group plc and Neuropharm plc.
Gordon James Hall (Aged 66) Non-executive Director
After an early career in teaching, Gordon built up substantial international
sales, management and development expertise with Rank Xerox and Abbott
Laboratories. He became Chief Executive Officer of Shield Diagnostic Ltd (now
Axis Shield plc) in 1990 and was responsible for listing the company on the
London Stock Exchange. More recently Gordon has been involved with a range of
different companies and he is currently a Non-executive Director of
International Brand Licensing plc which is listed on AIM.
Mark Barrie Hawtin (Aged 46) Non-executive Director
Mark was a Partner of Marshall Wace LLP, a European hedge fund until June 2007.
He launched the Eureka Interactive Fund for Marshall Wace in 1999 which became a
global technology hedge fund. While predominantly investing in quoted
technology, media and telecom companies, the fund also invested in pre IPO and
earlier stage unquoted investments. Prior to Marshall Wace, Mark was at Enskilda
Securities as the director responsible for international equities. Mark is
currently an investment director of GAM International.
Proposed Directors
A summary of the Proposed Directors' biographies are set out below:
Dr. Peter John Rowley (Aged 65) Non-executive Chairman
Peter joined the board of Nanoco in 2006. Previously he led the management
buyout of Victrex from ICI in 1993, followed by the successful listing of
Victrex plc on the London Stock Exchange in 1995. He joined ICI in 1968 and
progressed through a number of positions in the organisation. In 1983 he
became International Business Manager for the widely used polymer PTFE and in
1989 he was appointed General Manager for ICI Advanced Materials Asia Pacific.
Peter has a BSc and PhD in organic chemistry from King's College, London.
Dr. Michael Albert Edelman (Aged 44) Chief Executive Officer
Nanoco is led by Michael Edelman. Michael joined Nanoco in 2004, led the initial
fund-raising and spun Nanoco out of the University of Manchester. Prior to
Nanoco Michael was responsible for licensing the technology developed by the
GE/Bayer joint venture, Exatec LLC. As Vice President and managing director
of yet2.com Michael set up, grew and ran yet2.com's European operation and was
instrumental in successfully selling the business. He was main board director
for Colloids Ltd, a manufacture of colours and additives for plastics with
responsibility for global sales, marketing and restructuring of the business.
Michael started his career with ICI, has a Ph.D. in organo-metallic chemistry
from the University of Sussex, UK, and undergraduate degree in classics and
chemistry from Tufts University, Boston, MA, USA.
Dr. Nigel Leroy Pickett (Aged 39) Chief Technical Officer
Nanoco's technology team is led by Dr Nigel Pickett who is a co-founder of
Nanoco and inventor of Nanoco's key quantum dot scale-up technology. Nigel
graduated from Newcastle University in 1991 and chose to remain at Newcastle to
pursue a Ph.D. in the field of main group organometallics. After graduation in
1994 he undertook a postdoctoral fellowship at St. Andrews University, Scotland,
in the field of precursor design for MOVPE growth and synthesis of nanoparticles
using CVD techniques. In 1996 he won a Japan Society for the Promotion of
Science (JSPS) fellowship and spent the following year working at Tokyo
University of Agriculture and Technology, Japan. In 1998 he became a research
fellow at Georgia Institute of Technology, USA, working on the design and
evaluation of precursor used in MOVPE. Nigel co-founded Nanoco in 2001.
Michael Anthony Bretherton (Aged 53) Chief Financial Officer
Michael Bretherton graduated in Economics from University of Leeds in 1978. He
worked as an accountant and manager with PriceWaterhouse for seven years in both
London and the Middle East before joining The Plessey Company Plc in 1985 as a
corporate financial manager. Michael was appointed finance director of the fully
listed Bridgend Group Plc in 1988 where he was involved in the strategic
evaluation and commercial implementation of a broad range of business
initiatives over a twelve year period, including acquisitions, disposals and
company restructurings. He subsequently worked at the property and
services company, Mapeley Limited, as financial operations director until he was
recruited to the entertainment software games developer, Lionhead Studios
Limited, in 2002 where he helped to complete a venture capital syndicate funding
and also a trade sale of the business to Microsoft in 2006. Michael is
currently also a director of ORA Capital and joined the board of Nanoco on 23
June 2006.
Michael will continue working with the Company on a part-time basis, until such
time that the size or requirements of the Enlarged Group demand a full-time
finance director.
Details of service contracts and letters of appointment relating to the Proposed
Directors are set out in paragraph 6 of Part IX of the Admission Document.
Upon completion of the Proposals the board of the Company will comprise the
Proposed Directors and Gordon James Hall. David Philip Bloxham, Graeme Manson
Hart and Mark Barrie Hawtin will step down from the board of the Company on
Completion. Evolutec has no employees.
The following agreements have been entered into by the Proposed Directors:
Dr. Peter John Rowley (Aged 65) Non-executive Chairman
A letter of appointment between (1) Nanoco and (2) Peter John Rowley dated 13
July 2006 pursuant to which Peter John Rowley was appointed as Non-executive
Chairman of Nanoco at an annual fee of GBP10,000 (subject to deduction of tax
and national insurance contributions) commencing on 13 July 2006 and terminable
in accordance with the articles of association of Nanoco or by either party on
six months' written notice. Conditional upon Admission, Peter John Rowley will
vary the terms of his letter of appointment with the Company such that his
annual fee will be increased to GBP12,000.
Dr. Michael Albert Edelman (Aged 44) Chief Executive Officer
A service agreement between (1) Nanoco and (2) Michael Albert Edelman dated 27
June 2006 pursuant to which Michael Albert Edelman was appointed Chief Executive
Officer of Nanoco, the appointment commencing on 27 June 2006 and then
terminable by either party on 12 months' written notice. Michael Albert
Edelman's appointment under the service agreement is at a current annual salary
(subject to annual review) of GBP117,344. Michael Albert Edelman will also be
eligible to participate in a bonus scheme on terms determined by the
remuneration committee from time to time. Conditional upon Admission,
Michael Albert Edelman will vary the terms of his service agreement with Nanoco
such that his annual salary will be increased to GBP120,000.
Dr. Nigel Leroy Pickett (Aged 39) Chief Technical Officer
A service agreement between (1) Nanoco and (2) Nigel Pickett dated 27 June 2006
pursuant to which Nigel Pickett was appointed Chief Technical Officer of Nanoco,
the appointment commencing on 27 June 2006 and terminable by either party on 12
months' written notice. Nigel Pickett's appointment under the service agreement
is at a current annual salary (subject to annual review) of GBP81,120. Nigel
Pickett is also eligible to participate in a bonus scheme on terms determined by
the remuneration committee from time to time. Conditional upon Admission, Nigel
Pickett will vary the terms of his service agreement with Nanoco such that his
annual salary will be increased to GBP85,000.
Michael Anthony Bretherton (Aged 53) Chief Financial Officer
A conditional service agreement between (1) the Company and (2) Michael
Anthony Bretherton dated 25 February 2009 pursuant to which, conditional upon
Admission, Michael Bretherton was appointed the Company's Chief Financial
Officer, the appointment to take effect on Admission and to be terminable by
either party on six months' written notice. Michael Bretherton's appointment
under the agreement is at a current annual salary (subject to annual review) of
GBP12,000. Michael Bretherton is also eligible to participate in a bonus scheme
on terms determined by the remuneration committee from time to time.
KEY MANAGEMENT AND EMPLOYEES OF NANOCO
Nanoco currently employs 28 people with three additional consultants. The
majority of Nanoco's personnel have extensive technical experience. The company
invests time in the recruitment of key technical staff with quantum dot
experience. Of the 31 people working directly or as a consultant for Nanoco, 23
hold a Ph.D. in chemistry or physics. Dr Nigel Pickett, CTO and co-founder, is
the executive director responsible for leading the technical team on a day to
day basis. He is supported by four section heads, all of whom have relevant
technical and industrial experience.
Following Admission Professor Paul O'Brien will become the Chief Scientific
Adviser to the Company.
Business development and sales is headed by Dr. Michael Edelman, who is
supported by Vice President of Business Development, Steve Reinhard in the USA
and Dr. Nobuaki Tamagawa in Asia.
Professor Paul O'Brien - Chief Scientific Adviser
Professor O'Brien was responsible for developing Nanoco's patented cluster
technology while a professor at Imperial College, London. Since 1999 Paul
O'Brien has held the chair of Inorganic Materials Chemistry at the University of
Manchester - spanning both the Chemistry Department and the Manchester
Materials Science Centre. In September 2002 he was appointed head of the
Chemistry Department at the University of Manchester. Previously Paul has held
professorial positions at Imperial and Queen Mary and Westfield Colleges and has
been a visiting professor at Georgia Institute of Technology. Paul has published
over 100 papers.
Dr. Nobuaki Tamagawa - Vice President - Asia
Dr. Nobuaki Tamagawa joined Nanoco in August 2005. Previously Dr Tamagawa was
Vice President for yet2.com responsible for setting up and growing their Asian
business. He spent 17 years working for DuPont as Technical director which
included responsibility for DuPont's Advanced Materials Laboratory. Dr Tamagawa
was with Sony for 21 years during which time he held positions of Scientist,
Plant Manager responsible for setting up USA based factories and General Manager
for product development and marketing of Sony's video systems.
Dr Tamagawa holds a Ph.D. in physics from Hokkaido National University. He
served at National Ordnance Laboratory as a visiting researcher and taught
physics at the American University as a visiting professor in Washington D.C.
for five years.
Steve Reinhard - Vice President - Business Development
Steve is based in the USA and focuses his efforts on developing Nanoco's
business in the USA and supporting Dr Tamagawa in Asia. Prior to Nanoco, Steve
was responsible for business development at Dynamic Organic Light (Quantum
Dot-Electroluminescent displays), Displaytech Inc. and Lockheed Martin
Corporation. He has a degree in industrial engineering from Pennsylvania State
University and an MBA from State University of New York.
SHARE OPTIONS
The Proposed Directors recognise the importance of ensuring that employees of
the Enlarged Group are well motivated and identify closely with the future
success of the Enlarged Group.
Long Term Incentive Plan
The Directors and Proposed Directors aim to align the interests of all
employees' as closely as possible with the interests of shareholders. They
therefore regard employee share ownership as a key incentive. The Company
intends to administer the Long Term Incentive Plan with the object of giving
employees at all levels the opportunity to acquire and hold shares in the
Company.
Nanoco Share Incentive Plan
In addition, there are existing employee options over 1,828,000 Nanoco Shares
outstanding pursuant to the Nanoco Share Incentive Plan which may be exercised
prior to and conditional upon the Scheme of Arrangement being sanctioned by the
Court, and which, to the extent not so exercised, would lapse upon the Scheme of
Arrangement becoming effective.
In accordance with the rules of the Nanoco Share Incentive Plan, the Company has
agreed to offer holders of such options the opportunity to release their
unexercised options in consideration of the grant to them of new options over
Ordinary Shares equivalent (as nearly as practicable without involving fractions
of shares) to 4.55 Ordinary Shares for every 1 Nanoco Share the subject of the
existing option. Any such new options taken up would remain subject to the rules
of the Nanoco Share Incentive Plan and, in accordance with such rules, will
become exercisable at any time more than six months following Admission
(provided that any such option so exercised less than three years after the date
of grant of the original option by Nanoco, will only be exercisable in respect
of a proportion of the total number of shares being subject to the option, such
proportion being equivalent to the proportion of three years elapsed since the
original date of grant).
In respect of those EMI Options granted pursuant to the Nanoco Share Incentive
Plan, confirmation has been obtained from the Shares and Assets Division of HM
Revenue & Customs that such replacement options will be of equivalent value and
as such will continue to be treated as qualifying EMI Options. If such options
were exercised in full this would equate to 8,317,400 Ordinary Shares
representing approximately 4.32 per cent. of the Enlarged Issued Share Capital,
as diluted by the issue of such Ordinary Shares.
Further details of the Long Term Incentive Plan and Nanoco Share Incentive Plan
are set out in paragraph 5 of Part IX of the Admission Document.
LOCK IN ARRANGEMENTS
Certain Restricted Shareholders, who include the Proposed Directors, agree they
will not (save in certain specific circumstances) dispose of 124,188,804 of the
Consideration Shares (or any Ordinary Shares held or acquired anytime before the
second anniversary of Admission) for a period of 15 months following Admission,
and thereafter for a further 9 months have agreed only to dispose of Ordinary
Shares through the Company's broker in an orderly manner.
Certain Restricted Shareholders agree they will only (save in certain specific
circumstances) dispose of 22,891,363 of the Consideration Shares and 6,743,999
of the Existing Ordinary Shares (or any Ordinary Shares held or acquired anytime
before the second anniversary of Admission) for a period of 24 months following
Admission with the prior consent of the Company's broker and in an orderly
manner.
The Restricted Shareholders, who include the Proposed Directors, will have an
aggregate interest in Ordinary Shares immediately following Admission amounting
to 153,824,166 Ordinary Shares representing 83.56 per cent. of the Enlarged
Issued Share Capital.
Further details of the lock in and orderly market arrangements are set out in
paragraph 15.5 of Part IX of the Admission Document.
THE CITY CODE ON TAKEOVERS AND MERGERS
The terms of the Proposals give rise to certain considerations and consequences
under the Takeover Code.
Brief details of the Panel, the Takeover Code and the protections they afford to
Shareholders are described below.
The Takeover Code is issued and enforced by the Panel. The Panel has been
designated as the supervisory authority to carry out certain regulatory
functions in relation to takeovers pursuant to the Directive. Its statutory
functions are set out in and under Chapter 1 of Part 28 of the 2006 Act. The
Panel is a designated authority for the purposes of the FSMA and the 2006 Act
and as such, it receives specific practical assistance from the FSA as the rules
of the FSA require certain persons regulated by the FSA to co-operate with the
Panel in its investigations.
Under Rule 9 of the Takeover Code, any person who acquires, an interest in
shares which, taken together with shares in which he is already interested and
in which persons acting in concert with him are interested, carry 30 per
cent. or more of the voting rights of a company, is normally required by the
Panel to make a general offer in cash to the shareholders of that company to
acquire the balance of the shares not held by such person or group of persons
acting in concert at not less than the highest price paid by him or any persons
acting in concert with him for any such shares within the preceding 12
months. Rule 9 of the Takeover Code also provides, inter alia, that where any
person, together with persons acting in concert with him, is interested in
shares carrying not less than 30 per cent. but not more than 50 per cent. of a
company's voting rights and such person, or any person acting in concert with
him, acquires an additional interest in shares which increase his percentage of
the voting rights in that company, such person is normally required to make a
general offer in cash to all shareholders of that company at not less than
the highest price paid by him or any person acting in concert with him for any
such shares within the preceding 12 months.
The Takeover Code also provides that where any person, together with persons
acting in concert with him, holds more than 50 per cent. of a company's voting
rights, no obligation will normally arise under Rule 9 to make a general offer
in cash to all shareholders of that company, save as described below, as a
result of any acquisition by such person or any person acting in concert with
him of any further shares carrying voting rights in the company. However, the
Panel will regard as giving rise to an obligation to make an offer the
acquisition by a single member of a concert party of shares sufficient to
increase his individual holding to 30 per cent. or more of a company's voting
rights, or, if he already holds more than 30 per cent. but less than 50 per
cent., an acquisition which increases his shareholding in that company.
For the purposes of the Takeover Code, a concert party arises where persons
acting in concert pursuant to an agreement or understanding (whether formal or
informal) co-operate to obtain or consolidate control of a company or to
frustrate the successful outcome of an offer for a company. Control means an
interest, or interests, in shares carrying in aggregate 30 per cent. or more of
the voting rights of the company, irrespective of whether such interest or
interests give de facto control.
As a result of the issue of the Consideration Shares, the Acquisition will lead
to a change of control of the Company. Under the Takeover Code, ORA Capital, ORA
Guernsey, Michael Anthony Bretherton and James Lawrence Ede-Golightly together
constitute a concert party.
Following the issue of the Consideration Shares, the Concert Party would be
interested in 70,630,848 Ordinary Shares representing 38.37 per cent. of the
Enlarged Issued Share Capital.
The relevant interests of the members of the Concert Party, now and following
completion of the Proposals, will be as follows;
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
| | Number | Percentage | Number | % | Number of | Total | % of |
| | of | Holding in | of | holding | Consideration | number of | Shares in |
| | Shares | Evolutec | Shares | in | Shares | Shares in | the |
| | in | | in | Nanoco | | the | Company |
| | Evolutec | | Nanoco | | | Company | following |
| | | | | | | following | Completion |
| | | | | | | Completion | |
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
| ORA | Nil | Nil | 14,702,437 | 42.30 | 66,896,088 | 66,896,088 | 36.34 |
| Guernsey | | | | | | | |
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
| ORA | 2,870,260 | 11.06 | Nil | Nil | Nil | 2,8770,260 | 1.56 |
| Capital* | | | | | | | |
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
| Michael | Nil | Nil | 50,000 | 0.14 | 227,500 | 227,500 | 0.12 |
| Anthony | | | | | | | |
| Bretherton | | | | | | | |
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
| James | Nil | Nil | 140,000 | 0.40 | 637,000 | 637,000 | 0.35 |
| Lawrence | | | | | | | |
| Ede-Golightly | | | | | | | |
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
| Total | 2,870,260 | 11.06 | 14,892,437 | 42.84 | 67,760,588 | 70,630,848 | 38.37 |
+---------------+-----------+------------+------------+---------+---------------+------------+------------+
(a) ORA Guernsey is a holding company which is a wholly owned subsidiary of ORA
Capital.
(b) ORA Capital is a London based investment company whose principal activity is
the growth and development of businesses in which ORA Capital has a significant
shareholding. Further details on ORA Guernsey and ORA Capital are set out in
Part VIII of the Admission Document.
(c) Michael Anthony Bretherton is a director of ORA Capital and will be a
director of the Company on Completion.
(d) James Lawrence Ede-Golightly is a director of ORA Capital.
*ORA Capital has a contract for difference interest in Evolutec over 2,870,260
Ordinary Shares representing 11.06 per cent. of the issued share capital of the
Company. This contract does not give ORA Capital any voting rights or any option
to purchase these Ordinary Shares in the future.
No member of the Concert Party holds any shares in the Company at the date of
this Announcement and none of them has sold or purchased Ordinary Shares in the
12 months prior to the date of this Announcement. The waiver of the obligation
to make a general offer under Rule 9 will be invalid if purchases of shares in
the Company are made by any member of the Concert Party in the period between
the date of this Announcement and the General Meeting. Each member of the
Concert Party has undertaken to the Company that it will not make any such
purchases of shares in the Company.
The members of the Concert Party have confirmed to the Board that they are not
at present proposing any changes to the board of the Company beyond those
described in the Admission Document and that it is their intention that,
following completion of the Acquisition, the business of the Enlarged Group be
continued in substantially the same manner as at present with no repercussions
on employment and the principal locations of the Enlarged Group's business. The
Concert Party will honour the existing employment rights, including pension
rights, of the employees of the Enlarged Group. The Concert Party does not
intend to redeploy any of the fixed assets of the Enlarged Group. The Concert
Party supports the strategy of the Directors and Proposed Directors for the
Enlarged Group as set out in paragraph 7 of Part I of the Admission.
Further information on the Concert Party can be found in Part VIII of the
Admission Document.
The Panel has agreed, subject to Resolution 2 being passed (on a poll) by the
Independent Shareholders at the General Meeting, to waive the obligation on the
Concert Party, under Rule 9 of the Takeover Code, to make a general offer for
the entire issued share capital of the Company which would otherwise arise as a
result of the Proposals. Accordingly, Independent Shareholders' approval (on a
poll) for the waiver of any obligations of the Concert Party under Rule 9 is
sought in Resolution 2.
Following completion of the Proposals the members of the Concert Party will be
interested in shares comprising 30 per cent. or more of the Company's voting
share capital but will not hold shares comprising more than 50 per cent. of such
voting rights and (for as long as they are to be treated as acting in concert)
any further increase in their aggregate interest in Shares will be subject to
the provisions of Rule 9.
CORPORATE GOVERNANCE
The Directors and Proposed Directors recognise the importance of sound corporate
governance and intend to ensure that, following Admission, the Company continues
to apply policies and procedures which reflect the principles of Good Governance
and Code of Best Practice as published by the Committee on Corporate Governance
(commonly, known as "the Combined Code") as are appropriate to the size, nature
and stage of development of the Company. The Directors and Proposed Directors
intend to comply with the QCA Guidelines in such respects as are appropriate for
a company of its size, nature and stage of development following Admission. The
Company has an audit committee, a remuneration committee and a nomination
committee with formally delegated duties and responsibilities.
The audit committee's primary responsibilities are to monitor the integrity of
the financial affairs and statements of the Company, to ensure that the
financial performance of the Company and any subsidiary of the Company is
properly measured and reported on, to review reports from the Company's auditors
relating to the accounting and internal controls and to make recommendations
relating to the appointment of the external auditors. Following Admission the
audit committee comprises Michael Bretherton, who acts as chairman of the
committee, and the non-executive directors.
The remuneration committee's primary responsibilities are to review the
performance of the executive directors of the Company and to determine the broad
policy and framework for their remuneration and the terms and conditions of
their service and that of senior management (including the remuneration of
and grant of options to such person under any share scheme adopted by the
Company). The remuneration committee will, following Admission comprise Peter
Rowley, who will act as chairman of the committee, and the non-executive
directors. The remuneration of non-executive directors shall be a matter for
the chairman and the executive members of the board of the Company.
The nomination committee's primary responsibilities are to regularly review the
structure, size and composition required of the board of the Company, prepare a
description of the role and capabilities required of an appointment, make
recommendations to the directors on all new appointments of directors and senior
management, interviewing nominees, to take up references and to consider related
matters. The nomination committee will, following Admission comprise of Peter
Rowley, who will act as chairman of the committee, and the non-executive
directors.
The Company has adopted a model code for directors' dealings in securities of
the Company which is appropriate for a company quoted on AIM. The Directors
comply with Rule 21 of the AIM Rules relating to directors' dealings and also
take all reasonable steps to ensure compliance by the Group's
"applicable employees" as defined in the AIM Rules.
The Directors have considered the guidance issued by the Institute of Chartered
Accountants in England and Wales (commonly known as the Turnbull Report)
concerning the internal requirements of the Combined Code.
DIVIDEND POLICY
Whilst it remains the Directors' and Proposed Directors' intention to consider
the payment of a dividend when appropriate and when commercially prudent, they
currently consider it prudent to retain cash to fund the further expansion of
the Company. As a result, the Directors believe it inappropriate to give
an indication of the likely level and timing of future dividends.
GENERAL MEETING
Completion of the Acquisition is conditional upon Shareholders' approval being
obtained at the General Meeting and on the Scheme of Arrangement becoming
effective. Accordingly, you will find set out at the end of the Admission
Document a notice convening the GM to be held at 7 Devonshire Square, London
EC2M 4YH at 3.30 p.m. on 24 March 2009 for the purposes of considering and, if
thought fit, approving the following Resolutions:
* Resolution 1 is an ordinary resolution to approve the Acquisition;
* Resolution 2 is an ordinary resolution to approve the Waiver;
* Resolution 3 is an ordinary resolution approving the Long Term Incentive Plan;
* Resolution 4 is an ordinary resolution to increase the Company's authorised
share capital from GBP7,700,000 to GBP25,000,000 by the creation of 173,000,000
new Ordinary Shares;
* Resolution 5 is an ordinary resolution to authorise the directors under Section
80 of the Act to allotrelevant securities up to an aggregate nominal value of
GBP21,406,944.72, such authority expiring at the conclusion of the next Annual
General Meeting of the Company or 15 months after the passing of this
Resolution, whichever is earlier;
* Resolution 6 is a special resolution to dis-apply the statutory pre-emption
rights contained in Section 89(1) of the Act in connection with the allotment of
Ordinary Shares to be allotted pursuant to the authority contained in Resolution
5, such authority expiring on expiration of the authority provided pursuant to
Resolution 5;
* Resolution 7 is a special resolution to alter the memorandum of association of
the Company;
* Resolution 8 is a special resolution to amend the articles of association of the
Company; and
* Resolution 9 is a special resolution to change the name of the Company to Nanoco
Group plc.
In accordance with the requirements of the Panel, Resolution 2 to approve the
Waiver will be taken on a poll of Independent Shareholders.
The attention of Shareholders is also drawn to the recommendations and voting
intentions of the Directors as set out in paragraph 25 of the Admission
Document.
ACTION TO BE TAKEN
A Form of Proxy has been posted to Shareholders along with the Admission
Document for use at the General Meeting. Whether or not Shareholders intend to
be present at the meeting Shareholders are requested to complete, sign and
return the Form of Proxy to the Company's registrars, Capita Registrars, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible but in
any event so as to arrive not later than 3.30 p.m. on 20 March 2009. The
completion and return of a Form of Proxy will not preclude Shareholders from
attending the meeting, speaking at the General Meeting and/or voting in person
should they subsequently wish to do so.
FURTHER INFORMATION
Your attention is drawn to the further information set out in Parts III to IX of
the Admission Document which provide financial and additional information on the
Enlarged Group, and in particular to the Risk Factors relating to the Enlarged
Group and relating to any investment in Ordinary Shares set out in Part II of
the Admission Document.
RECOMMENDATION AND VOTING INTENTIONS
The Directors, who have been so advised by Zeus Capital, consider that the
Proposals are fair and reasonable and in the best interests of the Company and
its Independent Shareholders as a whole. In giving its advice to the Directors,
Zeus Capital has taken into account the Directors' commercial assessment of the
Proposals.
Accordingly, the Directors unanimously recommend Shareholders vote in favour of
the Resolutions as they have irrevocably undertaken to do in respect of their
own beneficial share holdings which amount in aggregate to 312,311 Ordinary
Shares representing 1.20 per cent. of the existing ordinary issued share capital
of the Company.
In addition to the Directors, Shareholders who in aggregate have a beneficial
interest in 9,564,338 Ordinary Shares representing 36.86 per cent. of the
Existing Issued Share Capital, have irrevocably undertaken to vote in favour of
the Resolutions.
Further details of the undertakings and intentions given by Directors and
holders of Existing Ordinary Shares can be found in paragraph 6.8 of Part IX of
the Admission Document.
DEFINITIONS AND GLOSSARY
The following words and expressions shall have the following meanings in the
Announcement, unless the context otherwise requires:
+---------------------------------+-----------------------------------------------+
| "2006 Act" | the Companies Act 2006, |
+---------------------------------+-----------------------------------------------+
| "Acquisition" | the proposed acquisition by the Company of |
| | the entire issued and to be issued share |
| | capital of Nanoco pursuant to the Scheme of |
| | Arrangement; |
+---------------------------------+-----------------------------------------------+
| "Act" | the Companies Act 1985, as amended; |
+---------------------------------+-----------------------------------------------+
| "Acts" | those provisions of the Companies Act 1985 |
| | and 1989 and the 2006 Act for the time being |
| | in force and every other enactment for the |
| | time being in force concerning companies |
| | (including any orders, regulations or other |
| | subordinated legislation made under those |
| | Acts or enactments) so far as they apply to |
| | the Company and the Enlarged Group; |
+---------------------------------+-----------------------------------------------+
| "Admission" | admission of the Enlarged Issued Share |
| | Capital to trading on AIM becoming effective |
| | on 30 April 2009 in accordance with Rule 6 of |
| | the AIM Rules; |
+---------------------------------+-----------------------------------------------+
| "Admission Document" | the admission document dated 25 February |
| | 2009; |
+---------------------------------+-----------------------------------------------+
| "AIM" | the market of that name operated by the |
| | London Stock Exchange; |
+---------------------------------+-----------------------------------------------+
| "AIM Rules" | the AIM Rules for Companies published by the |
| | London Stock Exchange from time to time |
| | governing the admission to and the operation |
| | of AIM; |
+---------------------------------+-----------------------------------------------+
| "Announcement" | this announcement dated 25 February 2009; |
+---------------------------------+-----------------------------------------------+
| "Board" or "Directors" | the directors of the Company as at the date |
| | of this Announcement whose names appear on |
| | page 7 of the Admission Document against the |
| | heading "Directors", and "Director" means any |
| | of the Directors; |
+---------------------------------+-----------------------------------------------+
| "Combined Code" | the combined code on corporate governance; |
+---------------------------------+-----------------------------------------------+
| "Company" or "Evolutec " | Evolutec Group plc whose registered office is |
| | at 3 More London Riverside, London, SE1 2AQ |
| | (registered in England and Wales under number |
| | 5067291); |
+---------------------------------+-----------------------------------------------+
| "Completion" | completion of the Acquisition; |
+---------------------------------+-----------------------------------------------+
| "Concert Party" | for the purposes of the Takeover Code, ORA |
| | Capital, ORA Guernsey, James Lawrence |
| | Ede-Golightly and Michael Anthony Bretherton |
| | further details of whom are set out in Part I |
| | and in Parts VIII and IX of the Admission |
| | Document; |
+---------------------------------+-----------------------------------------------+
| "Consideration Shares" | the 158,138,036 Ordinary Shares to be issued |
| | to Nanoco Shareholders; |
+---------------------------------+-----------------------------------------------+
| "Court" | the High Court of Justice in England and |
| | Wales; |
+---------------------------------+-----------------------------------------------+
| "Court Hearing" | the hearing by the Court of the claim form to |
| | sanction the Scheme of Arrangement and to |
| | confirm the associated reduction of capital |
| | of Nanoco; |
+---------------------------------+-----------------------------------------------+
| "CREST Regulations" | the Uncertificated Securities Regulations |
| | 2001 (SI 2001/3755) (as amended); |
+---------------------------------+-----------------------------------------------+
| "Directive" | the Directive in Takeover Bids (2004/25/EC); |
+---------------------------------+-----------------------------------------------+
| "EMI Options" | an option which is an enterprise management |
| | incentive option satisfying the provisions of |
| | Schedule 5 to ITEPA; |
+---------------------------------+-----------------------------------------------+
| "Enlarged Group" | the Company and its subsidiary undertakings |
| | following Completion; |
+---------------------------------+-----------------------------------------------+
| "Enlarged Issued Share Capital" | the issued ordinary shares as at Admission, |
| | comprising the Existing Ordinary Shares and |
| | the Consideration Shares; |
+---------------------------------+-----------------------------------------------+
| "Existing Ordinary Shares" | the 25,949,996 Ordinary Shares in issue at |
| | the date of this Announcement; |
+---------------------------------+-----------------------------------------------+
| "Form of Proxy" | the form of proxy included with the Admission |
| | Document for use by Shareholders in |
| | connection with the General Meeting; |
+---------------------------------+-----------------------------------------------+
| "FSA" | the Financial Services Authority; |
+---------------------------------+-----------------------------------------------+
| "FSMA" | the Financial Services and Markets Act 2000 |
| | (as amended); |
+---------------------------------+-----------------------------------------------+
| "GM" or "General Meeting" | the general meeting of the Company to be held |
| | on 24 March 2009, notice of which is set out |
| | at the end of the Admission Document; |
+---------------------------------+-----------------------------------------------+
| "GM Notice" | the notice of the GM, set out at the end of |
| | the Admission Document; |
+---------------------------------+-----------------------------------------------+
| "Group" | the Company and its subsidiary undertakings |
| | at the date of this Announcement; |
+---------------------------------+-----------------------------------------------+
| "IP" | intellectual property; |
+---------------------------------+-----------------------------------------------+
| "Independent Shareholders" | Shareholders excluding the members of the |
| | Concert Party; |
+---------------------------------+-----------------------------------------------+
| "ITEPA" | the Income Tax (Earnings and Pensions) Act |
| | 2003; |
+---------------------------------+-----------------------------------------------+
| "London Stock Exchange" | London Stock Exchange plc; |
+---------------------------------+-----------------------------------------------+
| "Long Term Incentive Plan" | the Company's share option scheme (further |
| | details of which are set out in paragraph 5 |
| | of Part IX of the Admission Document); |
+---------------------------------+-----------------------------------------------+
| "Nanoco" | Nanoco Tech Public Limited Company whose |
| | registered office is at 46 Grafton Street, |
| | Manchester, M13 9NT (registered in England |
| | and Wales under number 5853720); |
+---------------------------------+-----------------------------------------------+
| "Nanoco Shareholders" | the holders of Nanoco Shares; |
+---------------------------------+-----------------------------------------------+
| "Nanoco Shares" | the ordinary shares of GBP0.10 each in the |
| | share capital of Nanoco; |
+---------------------------------+-----------------------------------------------+
| "Nanoco Share Incentive Plan" | the Nanoco Tech Share Incentive Plan |
| | established by Nanoco on 1 September 2006; |
+---------------------------------+-----------------------------------------------+
| "Nanoco Technologies" | Nanoco Technologies Limited (registered in |
| | England and Wales under company number |
| | 04206123); |
+---------------------------------+-----------------------------------------------+
| "ORA Capital" or "ORA" | ORA Capital Partners plc (registered in |
| | England and Wales under number 5614046); |
+---------------------------------+-----------------------------------------------+
| "ORA Guernsey" | ORA (Guernsey) Limited (registered in |
| | Guernsey under number 49949); |
+---------------------------------+-----------------------------------------------+
| "Ordinary Shares" | ordinary shares of 10 pence each in the |
| | capital of the Company; |
+---------------------------------+-----------------------------------------------+
| "Panel" | The Panel on Takeovers and Mergers; |
+---------------------------------+-----------------------------------------------+
| "Pira International" or "Pira" | Pira International Limited (registered in |
| | England and Wales under number 3858209); |
+---------------------------------+-----------------------------------------------+
| "Proposals" | the Acquisition, the proposed approval of the |
| | Waiver and Admission; |
+---------------------------------+-----------------------------------------------+
| "Proposed Directors" | Dr. Peter John Rowley, Dr. Michael Albert |
| | Edelman, Dr. Nigel Leroy Pickett and Michael |
| | Anthony Bretherton; |
+---------------------------------+-----------------------------------------------+
| "QCA" | Quoted Companies Alliance; |
+---------------------------------+-----------------------------------------------+
| "QCA Guidelines" | the corporate governance guidelines for AIM |
| | companies, published by the QCA; |
+---------------------------------+-----------------------------------------------+
| "Resolutions" | the resolutions referred to in the GM Notice |
| | set out at in this Announcement and at the |
| | end of the Admission Document; |
+---------------------------------+-----------------------------------------------+
| "Restricted Shareholders" | holders of certain Consideration Shares and |
| | certain Existing Ordinary Shares, who include |
| | the Proposed Directors, who have entered into |
| | the lock-in and orderly market agreements |
| | referred to in paragraph 15.5 of Part IX of |
| | this document; |
+---------------------------------+-----------------------------------------------+
| "Restricted Shares" | the Consideration Shares issued to the |
| | Restricted Shareholders; |
+---------------------------------+-----------------------------------------------+
| "Scheme of Arrangement" | the scheme of arrangement under Part 26 of |
| | the 2006 Act between Nanoco and the Nanoco |
| | Shareholders to implement the Acquisition, |
| | with or subject to any modification thereof, |
| | or addition thereto, or condition approved or |
| | imposed by the Court, and agreed by Nanoco |
| | and Evolutec; |
+---------------------------------+-----------------------------------------------+
| "Scheme Document" | the document to be sent by Nanoco to Nanoco |
| | Shareholders, of which the Scheme of |
| | Arrangement will form part; |
+---------------------------------+-----------------------------------------------+
| "Shareholders" | holders of Existing Ordinary Shares; |
+---------------------------------+-----------------------------------------------+
| "Takeover Code" | the City Code on Takeovers and Mergers |
| | published by the Panel (as amended from time |
| | to time); |
+---------------------------------+-----------------------------------------------+
| "UK" | the United Kingdom of Great Britain and |
| | Northern Ireland; |
+---------------------------------+-----------------------------------------------+
| "USA" | the United States of America, its territories |
| | and possession, any state of the United |
| | States of America and the District of |
| | Columbia; |
+---------------------------------+-----------------------------------------------+
| "Voting Record Time" | 5.00 p.m. on the day which is two days before |
| | the date of the Court Meeting or, if such |
| | Court Meeting is adjourned, 5.00 p.m. on the |
| | day which is two days before the date of such |
| | adjourned meeting; |
+---------------------------------+-----------------------------------------------+
| "Waiver" | the conditional waiver by the Panel that |
| | would otherwise arise under Rule 9 of the |
| | Takeover Code for the Concert Party to make a |
| | general offer for the whole of the Company's |
| | issued share capital; |
+---------------------------------+-----------------------------------------------+
| "Zeus Capital" | Zeus Capital Limited (registered in England |
| | and Wales under number 4417845). |
+---------------------------------+-----------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Evolutec (LSE:EVC)
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