IPEL Impellam Group Plc

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO ANY PERSON TO SUBSCRIBE FOR OR PURCHASE ANY SECURITY. 

FOR IMMEDIATE RELEASE

8 February 2024

Impellam Group plc ("Impellam" or the "Company")

Declaration of Dividend in Specie

On 13 December 2023, the boards of directors of Impellam, HeadFirst Global B.V. and Heather Global PLC ("Bidco") announced that they had reached agreement on the terms and conditions of a recommended acquisition pursuant to which Bidco will acquire the entire issued, and to be issued, ordinary share capital of Impellam (the "Acquisition"). The Acquisition is being effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme").

Impellam published a shareholder circular relating to the Scheme on 22 December 2023 (the "Scheme Document"). Capitalised terms used but not defined in this announcement have the meanings given to them in the Scheme Document, unless the context requires otherwise.

On 17 January 2024, Impellam announced that, at both the Court Meeting and General Meeting held on that date in connection with the Acquisition, the requisite majorities voted in favour of all resolutions necessary to approve and give effect to the Scheme.

Dividend in specie

In the Scheme Document, the Impellam Board stated its intention to declare, prior to the Effective Date, a special dividend of, in aggregate, £25 million, equating (on the basis of the Impellam Shares in issue on 12 December 2023, being the last practicable date before the Rule 2.7 Announcement) to approximately 56.1 pence per Impellam Share, to be settled by way of a dividend in specie to eligible Impellam Shareholders of the shares in one or more newly-incorporated subsidiaries of Impellam (the "ShellCo Dividend").

Further to this stated intention, the Impellam Board is pleased to declare the ShellCo Dividend.

The ShellCo Dividend will be effected through the transfer of new ordinary shares in each of Heather Venture Holdings Ltd. ("Heather" and "Heather Shares") and Tapir Holdings Ltd. ("Tapir" and "Tapir Shares", and, together with Heather, the "ShellCos") to Impellam Shareholders on a pro rata basis.

Impellam Shareholders on the Company's register of members at 5.00 p.m. (London time) on Friday 16 February 2024 (the "Record Date") will receive one new Heather Share and one new Tapir Share for each Impellam Share they own on the Record Date.

The ShellCo Dividend will be for an amount per Impellam Share that is equal to £25 million divided by the number of Impellam Shares then in issue on the Record Date. If the Record Date was the date of this announcement, the ShellCo Dividend would equate to approximately 56.2 pence per Impellam Share. However, it is expected that the final amount per share will fractionally increase if Impellam Shares are bought back and cancelled under the Company's 2023 Programme of share buybacks between now and the Record Date.

The ShellCo Dividend is not conditional on the Scheme, and does not require the approval of Impellam Shareholders. Impellam Shareholders will not have the option to elect to receive cash instead of ShellCo Shares.

Dividend timetable

The expected timetable of the ShellCo Dividend is as follows:

Lord Ashcroft and the Lombard Trust 

As the holders of approximately 62.9 per cent. of the Company's issued share capital, Lord Ashcroft and the Lombard Trust (a family trust connected with Lord Ashcroft) will hold approximately 62.9 per cent. of the issued share capital of each ShellCo following payment of the ShellCo Dividend.

Information on the ShellCos

Capital structure

The ShellCos were each incorporated in the British Virgin Islands (the "BVI") as BVI Business Companies on 24 January 2024. As at the date of this announcement, the issued share capital of both Heather and Tapir comprises of one ordinary share of no par value, which is held by the Company and paid up in cash to £12,500,000 per ShellCo. The ShellCos will have no other assets or liabilities.

Immediately following the Record Date, the one ordinary share in issue in each of Heather and Tapir will be subdivided into a number of shares that is equal to the number of Impellam Shares in issue on the Record Date held by Impellam Shareholders. The Heather Shares and Tapir Shares will be transferred to Impellam Shareholders by way of the ShellCo Dividend. Following the transfer of the Shares in each ShellCo by way of the ShellCo Dividend, the Company will not hold any shares in the ShellCos.

ShellCo directors

Both Heather and Tapir have the same directors, being Philip Osborne and Peter Gaze (together, the "ShellCo Directors").

Philip Osborne

Philip Osborne is a solicitor and member of the Law Society of England and Wales. Mr. Osborne previously worked as a legal adviser to the London Stock Exchange and The Securities Association in the United Kingdom and for Clifford Chance and S.J Berwin & Co. He is a member of the Belize Bar Association. Mr. Osborne was previously a director of Waterloo Investment Holdings Limited from 2011 to 2020. Mr. Osborne is a director of Carlisle Support Services Group Limited. Mr. Osborne and his spouse hold approximately 0.1 per cent. of the Impellam Shares in issue as of the date of this Announcement.

Peter Gaze

Peter Gaze is a Fellow of the Institute of Chartered Accountants in England and Wales having trained with PricewaterhouseCoopers in London. During its expansion in the UK and US, Mr. Gaze was a senior financial executive at ADT Group Limited until 1997 at which time it was acquired by Tyco International. Mr. Gaze was previously Chief Financial Officer of Waterloo Investment Holdings Limited from 2011 to 2015. Mr. Gaze is also a non-executive director of Waterloo Investment Holdings Limited, Marlowe Holdings PLC, Carlisle Support Services Group Limited and Hawley Group Limited. Mr. Gaze and his immediate family hold approximately 1.1 per cent. of the Impellam Shares in issue as of the date of this Announcement.

ShellCos' business strategy

Goals and objectives

The ShellCo Directors have informed the Company that the primary goals and objectives of each ShellCo are to:

a)     establish each ShellCo as a key operator and provider in its chosen field of activity primarily in the business services sector;

b)    grow each ShellCo over time through a combination of acquisitions and organic growth; and

c)     maximise shareholder value and returns,

in accordance with the legal constraints discussed below.

Business strategy

The ShellCo Directors have informed the Company that the strategic focus of each ShellCo will be on business opportunities where one or more of the following characteristics is present:

a)     there is an opportunity to acquire a controlling stake in businesses that are underperforming and where operational performance modification will achieve substantially improved performance and profitability;

b)    businesses that possess recurring contractual revenues under multi-year, long term agreements with potentially low annual erosion of the contract base;

c)     businesses with good potential free cash flow achievable with low recurring capital expenditure needs;

d)    businesses within a fragmented competitive landscape where there is potential to execute consolidation of operations and acquisitions, to leverage of economies of scale and to apply service model replication across multiple clients;

e)    businesses in sectors where regulatory compliance pressures and environmental change provide opportunities for outsourcing services to specialist providers;

f)     businesses in markets where there is opportunity to bundle related services to achieve operational efficiencies or scale, and improved profitability for each ShellCo; or

g)     businesses where high operational expertise or brand position create barriers to entry, or ability to convert customers to longer term agreements.

Market Sectors

The ShellCo Directors have informed the Company that they currently intend to seek business opportunities in organisations providing business and outsourced services including:

a)     Business Services - Companies in this sector provide operational support to their customers' key business activities. Examples include technical support to staff through call centres and digital solutions and software-as-a-service models.

b)    Business Process Outsourcing Services - In this sector organisations outsource an entire business process to a third party company. Examples of process outsourcing services include front office customer contact centres, or back office human resource and payroll services providers.

c)     Healthcare Support Services - Organisations in this sector address market requirements for integrated patient centred healthcare. Examples are the logistical movement of the patient from the hospital to specialty medical facilities to the home, coordination of homecare and social care services, and remote monitoring of chronic or ongoing healthcare issues.

d)    Workplace and Facility Services - Organisations in this sector provide operating staff to perform a combination of support services within a client's facilities but are generally not responsible for the core business activities of the client. These services include workplace supplies, reception and catering, recycling and environmental services, safety and compliance services, facility cleaning and other support services.

The ShellCo Directors have informed the Company that they believe that these sectors present an opportunity for creating attractive returns from a combination of operational improvements, strategic repositioning, business model re-design, scale through bundling services or buy-and-build opportunities. 

Legal considerations

The ShellCo Directors have informed the Company that the goals and objectives of the ShellCos and the business strategy to achieve them are consistent with and will be implemented with the intention that each ShellCo is not and does not become a collective investment undertaking for the Alternative Investment Fund Managers Directive (2011/61/EU) as implemented in the UK by the Alternative Investment Fund Managers Regulations (SI 2013/1773) nor a non-mainstream pooled investment as defined by the UK's Financial Conduct Authority i.e. (A) it has a business strategy which includes characteristics such as running predominantly (i) a commercial activity, involving the purchase, sale and/or exchange of goods or commodities and/or the supply of non-financial services, or (ii) an industrial activity, involving the production of goods or construction of properties, or (iii) a combination of (i) and (ii); or (B) it will as a holding company invest in the shareholdings of one or more other companies with the commercial purpose of carrying out its business strategies through one or more subsidiaries, associated companies or shareholder participations in order to contribute to their long-term value and it is not being established for the main purpose of generating returns for its investors by the divestment of its subsidiaries, associated companies or its shareholder participations; or (C) a combination of (A) and (B).

Bermuda Stock Exchange Listing

The ShellCo Directors have informed the Company that they intend to submit prospectuses to the Bermuda Stock Exchange as part of the application procedure for the Heather Shares and the Tapir Shares to be listed on the Bermuda Stock Exchange. The Board currently expects that the listing will be completed for both ShellCos within 30 days of this announcement. There can be no assurance that such listing approval will be obtained and, if obtained, whether the listing will be maintained by either of the ShellCos.

CREST Depositary Interests

Shareholders who hold ordinary shares in the Company in uncertificated form in CREST are expected to receive their Heather Shares and Tapir Shares in CREST by way of depository interests representing Heather Shares and Tapir Shares ("ShellCo DIs").

Securities issued by non-UK companies, such as Heather and Tapir, cannot be directly held or transferred in the CREST system. As a result, the ShellCo Directors are arranging for Link Market Services Trustees Limited (the "Depositary") to issue depositary interests representing Heather Shares and Tapir Shares to allow trading and settlement in respect of the Heather Shares and Tapir Shares in CREST. Heather Shares and Tapir Shares to be represented by depositary interests will be transferred to an account of the Depositary (or a nominated custodian which will hold them as nominee for the Depositary) which will in turn hold its interest in the underlying Heather Shares and Tapir Shares on trust for holders of Heather Shares and Tapir Shares. The Depositary will issue dematerialised depositary interests representing entitlements to interests in the underlying Heather Shares and Tapir Shares on a one for one basis. ShellCo DIs are independent securities constituted under English law and can be traded and settled within the CREST system in the same way as any other CREST security. Shareholders who hold ordinary shares in the Company in uncertificated form in CREST on the Record Date are expected to receive Heather Shares and Tapir Shares in uncertificated form in the form of ShellCo DIs. The ShellCo DIs will be issued pursuant to the terms of a Deed Poll to be entered into by the Depositary.

Each ShellCo's share register, which will be kept by the Registrar, Link Market Services (Guernsey) Limited, will show the Depositary or its nominated custodian as the holder of the Heather Shares and Tapir Shares represented by Depositary Interests but the beneficial interest will remain with the Shareholders who will continue to receive all the rights attaching to the Heather Shares and Tapir Shares as they would have if they had themselves been entered on each ShellCo's share registers. Shareholders can withdraw their Heather Shares and Tapir Shares back into certificated form at any time using standard CREST messages.

Dealings, share certificates and CREST Depositary Interests

Definitive share certificates in respect of Heather Shares and Tapir Shares are expected to be posted to Impellam Shareholders within 14 Days of the Payment Date. Shareholders who hold ordinary shares in the Company in uncertificated form in CREST are expected to receive their ShellCo DIs representing Heather Shares and Tapir Shares on or after the Payment Date, being 11 March 2024.

In the event that the Depositary arrangements with Link Market Services Trustees Limited are not concluded by the ShellCos by the Payment Date, then Shareholders who hold ordinary shares in the Company in uncertificated form in CREST will receive Heather Shares and Tapir Shares in certificated form, but will be able to elect to hold their Heather Shares and Tapir Shares in uncertificated form in the form of ShellCo DIs once the Depositary arrangements are in place with Link Market Services Trustees Limited.

Share certificates will be despatched at the Shareholders' risk to their registered address on the Company's share register. In the case of joint holders, certificates will be despatched to the person whose name appears first on the Company's share register. Prior to despatch of definitive share certificates in respect of those Heather Shares and Tapir Shares, it is intended that transfers of Heather Shares and Tapir Shares will be certified against the register of members of each ShellCo. No temporary documents of title for Heather Shares and Tapir Shares will be issued.

Enquiries:

Important notices:

The release, distribution or publication of this announcement in jurisdictions other than the United Kingdom may be restricted by the laws of the relevant jurisdictions and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. The information disclosed in this announcement may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Notices related to financial advisers:

Houlihan Lokey UK Limited ("Houlihan Lokey"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Impellam and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than Impellam for providing the protections afforded to clients of Houlihan Lokey or for providing advice in relation to contents of this announcement or any other matters referred to in this announcement. Neither Houlihan Lokey nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Houlihan Lokey in connection with this announcement, any statement contained herein or otherwise.

Canaccord Genuity Limited ("Canaccord Genuity"), which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser and corporate broker exclusively for Impellam and for no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Impellam for providing the protections afforded to clients of Canaccord Genuity, nor for providing advice in relation to the contents of this announcement or any other matter referred to in this announcement.

Rule 26.1 disclosure:

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on the Company's website at https://investors.impellam.com/offer-for-impellam-group-plc/ by no later than 12 noon (London time) on the Business Day following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.