TIDMDMTR
RNS Number : 0495L
DeepMatter Group PLC
20 December 2018
THIS ANNOUNCEMENT, INCLUDING THE APPICES AND THE INFORMATION
CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE
OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR
INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW
ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
20 December 2018
DeepMatter Group plc
("DeepMatter" or the "Company")
Market Update,
Conditional Acquisition and
Proposed Placing
DeepMatter, the AIM-listed company focusing on digitizing
chemistry, is pleased to announce that it has agreed to acquire
from global publisher Springer Nature the entire issued share
capital of Infochem GmbH (the "Acquisition" or "Infochem"), a
specialist in cheminformatics, for a total consideration of
approximately EUR2.0 million to be satisfied as to EUR0.36 million
in cash and 68,400,000 new ordinary shares in the capital of the
Company ("New Ordinary Shares"). The Company also announces that it
intends to raise a minimum of GBP3.0 million by way of a proposed
placing of New Ordinary Shares at a price of 2.5 pence per
share.
Market update
Since the Company's Interim Results announcement on 6 September
2018, it has continued to make good progress against its stated
growth strategy. In May 2018, the Company initiated its Pioneer
Programme, entering into a select number of trial agreements with
target users for its DigitalGlassware(TM) platform across a range
of companies and institutions, allowing observation of technology
performance in different operating environments and locations. In
the last two months, the programme has expanded from five to seven
partners, each of whom are entitled to multiple instances of the
platform, deployed across three continents.
To date, across the Pioneer Programme, the DigitalGlassware(TM)
platform has been used to collect data from over 650 days (1.8
years) of chemistry across over 700 individual experimental runs.
Data has been collected and structured, comprising nearly 3.7
billion sensor readings over 90 million samples. Of the most
frequently used synthetic reaction types in medicinal chemistry, as
reported in the frequently cited publication by Brown and Boström
of pharmaceutical company AstraZeneca in the Journal of Medicinal
Chemistry*, more than 50% are now represented in the
DigitalGlassware(TM) platform.
* J. Med. Chem. 59, 4443 (2016)
These data will be subjected to deep learning methodologies in
the quest for unique chemical insights. To that end, the Company is
in the process of filing its first patent application where it has
demonstrated the ability of its platform to use virtual sensors to
collect chemical measurements and outcomes of interest. In the
early part of 2019, the Company will be directing a proportion of
its data science resources to create new IP to help research a
better understanding of chemical trajectory, in particular, looking
to monitor real-time reaction completion.
On the back of the successful Pioneer Programme, the Company is
now gearing up for deployment of its DigitalGlassware(TM) platform
to a broader user community.
Acquisition highlights
-- The Company has agreed conditionally to acquire the entire
issued share capital of Infochem, a specialist in cheminformatics,
for a total consideration of approximately EUR2.0 million
to be satisfied as to EUR0.36 million in cash and 68,400,000
New Ordinary Shares. The Acquisition is conditional, inter
alia, on completion of the Proposed Placing, details of
which are set out below.
-- Founded in 1989, Infochem is based in Munich, Germany,
is owned by Springer-Verlag GmbH, part of the Springer
Nature and has 25 employees. It has extensive scientific
expertise and a long tradition in developing successful
software solutions for handling retrieval, structures
and reactions.
-- Its established base of users is in the same industries
as those being targeted by the Company.
-- In the Directors' opinion, the Acquisition will accelerate
the Company's strategy by providing cost effective access
to established data sources and chemical information software
tools, assisting in the accelerated development of the
DigitalGlassware(TM) platform, as well as providing specialist
staff, recurring revenues and an additional sales channel.
-- The total consideration payable for the Acquisition of
approximately EUR2.0 million comprises a payment in cash
of EUR0.36 million and the issue of the Consideration
Shares (comprising 25,600,000 Initial Consideration Shares
and 42,800,000 Deferred Consideration Shares). Given that
Infochem will have EUR0.48 million of cash on its balance
sheet, the Acquisition will be a net cash positive deal
for DeepMatter.
-- The Enlarged Group will be strengthened both technically,
operationally and financially as it focuses on building
credibility, awareness and understanding of the DigitalGlassware(TM)
platform before rolling it out in full to the broader
scientific community.
-- Bettina Goerner, Managing Director Database Research Group
at Springer Nature, will be appointed to the DeepMatter
board as a Non-Executive Director, with effect from Completion,
strengthening the relationship between the two companies.
Proposed Placing
The Company also announces that it intends to raise a minimum of
GBP3.0 million by way of a proposed placing of New Ordinary Shares
to institutional and other investors at a price of 2.5 pence per
share (the "Placing Price") (the "Proposed Placing"). To date, the
Company has secured conditional irrevocable undertakings from each
of IP Venture Fund II LP, IP2IPO Portfolio LP, and Ora Limited an
entity controlled by Richard Griffiths, and a letter of comfort
from an IP Group entity in relation to a co-investment partner, to
subscribe, in aggregate, for at least GBP3.0 million in the
Proposed Placing. This would take the IP Group Concert Party's
percentage interest in the enlarged issued share capital of the
Company to 36.1 per cent. The Proposed Placing is conditional on
the Panel on Takeovers and Mergers (the "Panel") granting a waiver
of the obligation that would otherwise arise for the IP Group
Concert Party to make an offer under Rule 9 of the City Code on
Takeovers and Mergers (the "Rule 9 Waiver"). The Panel Executive
has confirmed that it will grant the waiver if it is approved by
way of an ordinary resolution passed on a poll by the Independent
Shareholders of the Company at a general meeting. The Company's
directors currently have the authority to allot shares for cash on
a non pre-emptive basis equivalent to one third of the Company's
issued share capital at 2.5 pence per share.
The net proceeds of the Proposed Placing will be used to further
finance ongoing DigitalGlassware(TM) technology development,
including integration of cheminformatics capabilities, user and
partner support, marketing, data science, manufacture and for
working capital requirements of the Enlarged Group.
The Company intends in due course to publish a circular
containing details of the Acquisition, the Proposed Placing, the
Rule 9 Waiver and a notice convening a general meeting to approve
the Rule 9 Waiver (the "Circular"). Further announcements will be
made as appropriate. Further information and details of the
Acquisition will be included in subsequent announcements and the
Circular in compliance with Rule 12 and Schedule Four of the AIM
Rules for Companies.
Related Party Transaction
It is likely that the participations of IP Venture Fund II LP
and IP2IPO Portfolio LP in the Proposed Placing will be classified
as related party transactions for the purpose of Rule 13 of the AIM
Rules for Companies.
Commenting on the Acquisition, Mark Warne, CEO of DeepMatter,
said:
"Our aim is to integrate chemistry with technology, thereby
enabling a greater use of machine learning and artificial
intelligence and reaching a point where chemicals can be
autonomously synthesised through robotics. Our first step towards
this was the launch of our DigitalGlassware(TM) Pioneer Programme
in 2018 and we have been delighted with its success. The platform
is now deployed across seven Pioneer partners in three continents,
providing valuable insight into the power of the platform and the
benefits it can bring to the scientific community.
"The acquisition of Infochem will accelerate our strategy,
bringing additional expertise, software tools and an existing sales
channel, strengthening and accelerating the commercialisation of
our platform. The net proceeds of the Proposed Placing will enable
further technology development, including integration of Infochem's
cheminformatics capabilities into DigitalGlassware(TM) and an
increase in our marketing activities, as we seek to expand our user
base in 2019.
"We look forward to being able to welcome the Infochem team to
the enlarged group and look to the future with confidence."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information
Service, this inside information is now considered to be in the
public domain.
For further information:
DeepMatter Group plc T: 0141 548 8156
Mark Warne, Chief Executive Officer
Stockdale Securities Limited T: 020 7601 6100
Tom Griffiths
Edward Thomas
Alma PR T: 020 3405 0209
Caroline Forde deepmatter@almapr.co.uk
Rebecca Sanders-Hewett
Susie Hudson
About DeepMatter:
DeepMatter's long term strategy is to integrate chemistry with
technology, thereby enabling a greater use of artificial
intelligence and reaching a point where chemicals can be
autonomously synthesised through robotics. In the near term this
involves the provision of an integrated software, hardware and
artificial intelligence enabled platform, DigitalGlassware(TM), to
scientists across research and process development sectors.
The DigitalGlassware(TM) platform allows chemistry experiments
to be accurately and systematically recorded, coded and entered
into a shared data cloud. The platform is designed to enable
chemists to work together effectively; sharing the details of their
experiments from anywhere and in real-time, so that work is not
needlessly duplicated, time and money wasted, and ultimately so new
discoveries may be made faster.
More information is available here:
http://www.deepmattergroup.com
About Springer Nature:
Springer Nature is a leading research, educational and
professional publisher, providing quality content to its
communities through a range of innovative platforms, products and
services. Springer Nature's imprints, books, journals and resources
reach millions of people around the globe - helping researchers,
students, teachers and professionals to discover, learn and achieve
more. Through its family of brands, Springer Nature aims to serve
and support the research, education and professional communities by
delivering the highest possible standards in content and
technology, and helping shape the future of publishing for their
benefit and for society overall.
Visit: www.springernature.com/group
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END
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