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For immediate release
1 October 2024
Mpac Group
plc
€56 million (c.£46.6 million)
Acquisition of CSi Palletising
Mpac Group plc ("Mpac" or the
"Company") (AIM:
MPAC), the AIM quoted global leader in high-speed
packaging and automation solutions, is pleased to announce
that its indirectly wholly owned subsidiary Mpac
Bidco B.V., has entered into an Acquisition Agreement with the
Sellers to conditionally acquire the entire issued share capital of
Elstar International B.V. a private limited liability company
incorporated under the laws of the Netherlands that operates under
the name CSi Palletising.
Acquisition Highlights
· Acquisition of CSi Palletising, a
leading provider of design, manufacturing and installation services
for end-of-line automation and palletising solutions.
· CSi Palletising has a trading history
of 60 years and has a high-quality established blue-chip customer
base across the FMCG sector. It is headquartered in the Netherlands
and supported by well invested manufacturing facilities in
Romania.
· The Board believes that the Acquisition is transformational
and highly complementary to the existing Mpac business. It also
believes there is clear strategic rationale for the Acquisition,
extending Mpac's product line offering and customer base and
accelerates its previously stated strategic intent to double
revenue over the five-year period ending 31 December
2028.
· CSi Palletising has an attractive historical growth profile
and the results for FY24 are expected to show continuing momentum
in revenue and profit growth.
· For the year ended 31 December 2023, CSi Palletising's audited
results showed €71.5 million of revenue and €7.3 million of
adjusted EBITDA and in the six months to 30 June 2024, CSi
Palletising generated unaudited revenue of €44.4 million and €6.8
million of EBITDA. Audited gross assets as at 31 December 2023 were
€44.3 million.
· As at 30 June 2024, CSi Palletising had a project order book
of €64.3 million, underpinning management forecasts for the
business for the remainder of FY24 and into FY25.
· The
Acquisition presents numerous synergistic opportunities across both
costs and sales to both CSi Palletising and Mpac across all
operating functions. Strong EPS accretion is expected over a
five-year strategic cycle.
·
The consideration payable to
the Sellers for CSi Palletising is an enterprise value of €56
million which is to be satisfied as follows:
o Cash
Consideration of €41.5 million on Completion;
o €5
million through the issue of 1,039,500 Consideration Shares at the
Issue Price of 400 pence per share (subject to a two-year
lock-up);
o €6
million through the Vendor Loans; and
o €3.5
million by two deferred consideration payments of €1.75 million
each which become payable on 1 January 2026 and 1 January
2027.
·
There will also be an
additional cash payment at Completion for the agreed cash, debt and
working capital adjustments in connection with the Acquisition
which the Board expects to be covered by cash and any excess
working capital inherited at Completion by virtue of the
Acquisition1.
· The Cash Consideration will be part funded by a Placing at the
Issue Price of 400 pence per Placing Share to raise gross proceeds
for the Company of approximately £29 million (before fees and
expenses). The Placing is being launched shortly after this
Announcement by way of a separate announcement. In addition, the
Company will also separately announce a Retail Offer to raise gross
proceeds of up to £1 million for the Company (before fees and
expenses) to allow retail Shareholders an opportunity to
participate in the Fundraising at the same price as the
Placing.
· The
balance of the Cash Consideration is being satisfied from the
Company's new Facilities with HSBC which have been entered into in
connection with the Acquisition. The new Facilities consist of a
RCF of £35 million (replacing the Group's existing £25 million RCF)
and a new £12 million Term Loan.
· The Company will have significant undrawn borrowing facilities
post Completion of the Acquisition.
· Net debt/EBITDA is expected to be less than 2.0x on Completion
and the Group is expecting rapid deleveraging to less than 1.0x by
the end of FY25 due to high levels of cash generation by the
enlarged Group.
[1] Subject
also to adjustments to add a daily cash ticker amount for the
period from (and including) 1 October 2024 up to (and including)
the date of Completion and to deduct any leakage during the period
from (and including) 1 March 2024 up to the moment immediately
preceding Completion.
Adam Holland, Chief Executive of
Mpac, commented:
"I'm delighted to announce the
transformational acquisition of CSi Palletising, which along with
our recent acquisitions of BCA and SIGA Vision, will significantly
transform our customer offering and core capabilities, consistent
with our stated strategic ambition. We have substantially expanded
the breadth of our technology and extended our customer reach
globally. We are excited about the numerous growth opportunities
for the enlarged Group."
Jan de Bruijn, CEO of CSi
Palletising, commented:
"CSi Palletising is very pleased
with the combination of these two companies. It represents a strong
fit with the strategic plans that CSi Palletising has made in the
past for its Dutch, Romanian and Mexican subsidiaries. The
acquisition broadens CSi Palletising's offering to all customers.
Moreover, there is a good cultural fit and it increases the
possibilities for CSi Palletising colleagues to develop themselves
further on an international scale. This is the best possible next
step for CSi Palletising."
Further information on the
Acquisition, including the expected timetable of principal events,
is set out below. This Announcement should be read in its
entirety.
Unless the context otherwise provides, capitalised terms used
in this Announcement have the meanings ascribed to them in the
section headed "Definitions" at the end of this
Announcement.
For
further information please contact:
|
|
Mpac Group plc
Adam Holland, Chief
Executive
Will Wilkins, Group Finance
Director
|
Tel: +44 (0) 24 7642 1100
|
Shore Capital (Nominated Adviser, Joint Broker and Joint
Bookrunner)
Advisory
Patrick Castle
Sophie Collins
Broking
Henry Willcocks
|
Tel: +44 (0) 20 7408 4050
|
Panmure Liberum (Joint Broker and Joint
Bookrunner)
Edward Mansfield
Will King
Anake Singh
Hudson Sandler
Nick Lyon
Nick Moore
Francesca Rosser
|
Tel: +44 (0) 20 3100 2000
Tel: +44 (0) 20 7796 4133
|
|
|
|
| |
Introduction
The Company is pleased to announce
that its indirectly wholly owned subsidiary Mpac Bidco, has entered
into the Acquisition Agreement with the Sellers to conditionally
acquire the entire issued share capital of Elstar International
B.V. a private limited liability company incorporated under the
laws of the Netherlands that operates under the name CSi
Palletising, a leading provider of design, manufacturing and
installation services for end-of-line automation and palletising
solutions.
The Board believes that CSi
Palletising is highly complementary to the existing Mpac business
and is in accordance with its stated acquisition strategy to
develop its 'fuller' line offering.
The consideration payable to the
Sellers for CSi Palletising is an enterprise value of €56 million
which is to be satisfied: (a) on Completion as to €41.5 million in
cash; as to €5 million through the issue of 1,039,500 Consideration
Shares at the Issue Price; and as to €6 million through the Vendor
Loans; and (b) by two deferred consideration payments of €1.75
million each which become payable on 1 January 2026 and 1 January
2027. There will also be an additional cash payment to the Sellers
at Completion for the agreed cash, debt and working capital
adjustments in connection with the Acquisition which the Board
expects to be covered by cash and any excess working capital
inherited at Completion by virtue of the
Acquisition1.
The Cash Consideration will be part
funded by a Placing at the Issue Price of 400 pence per share which
is being announced later today and is expected to raise
approximately £29 million for the Company (before fees and
expenses). In addition, Mpac will also separately announce a Retail
Offer to raise gross proceeds of up to £1 million (before fees and
expenses), to allow retail Shareholders an opportunity to
participate in the Fundraising at the same price as the Placing.
The balance of the Cash Consideration is being satisfied from the
Company's new Facilities with HSBC which have been entered into in
connection with the Acquisition. The Company will have significant
undrawn borrowing facilities within its RCF post
Completion.
The Fundraising is conditional upon,
amongst other things, the approval by the Shareholders of the
Resolutions to be proposed at the General Meeting. The Fundraising
will not be underwritten. The Resolutions must be passed by
Shareholders at the General Meeting in order for the Fundraising to
proceed. The Fundraising is not conditional on the
completion of the Acquisition but the Joint Brokers have a right to
terminate the Placing Agreement if the Acquisition Agreement
terminates before Admission.
If the conditions relating to the
issue of the Placing Shares are not satisfied or the Placing
Agreement is terminated in accordance with its terms, the Placing
Shares will not be issued and the Company will not receive the
associated placing monies. In this scenario, the Retail Offer will
similarly not proceed and the Acquisition will not
complete.
[1] Subject
also to adjustments to add a daily cash ticker amount for the
period from (and including) 1 October 2024 up to (and including)
the date of Completion and to deduct any leakage during the period
from (and including) 1 March 2024 up to the moment immediately
preceding Completion.
Background information on Mpac
Mpac is a specialist in machine
building, i.e. robotics, for clients requiring solutions for
packaging machinery, cartoning and case handling, particularly in
the food and beverage and healthcare sectors, and now emerging in
the field of clean energy. Alongside original equipment
manufacture, Mpac has a well established service offering for its
customers.
On 10 September 2024, the Company
announced its H1 2024 results. In the H1 2024 results, the Company
stated in relation to the half year period, that the Company
delivered 'a strong financial
performance in line with the Board's expectations, with significant
revenue, margin and profit growth'. In the H1 2024 results,
the Company also gave the following update in relation to the
Group's current trading and outlook:
•
Current trading is in line with
the Board's expectations and the Group has a diverse order book
going into H2 2024, providing good revenue coverage supported by a
strong prospect pipeline;
• Confident in relation to the
full year end and, with continued improvement in project margins,
in delivering the H2 underlying profit weighting which was
announced earlier in the year; and
•
The Group's balance sheet remains strong and, as
predicted, the timing of orders led to an expansion of working
capital in H1 which is expected to unwind as the projects
complete.
On 18 September 2024, the Company
announced that it had acquired the entire issued share capital of
BCA for a total consideration of $17 million, before customary
adjustments in respect of cash and working capital, of which $6
million was satisfied through the issue of 1,059,349 new Ordinary
Shares. BCA operates upstream of Mpac and CSi Palletising, in the
processing and handling of products in the food, life sciences and
other general industrial sectors. The Board utilised the Company's
existing shareholder authorities granted at the 2024 AGM to allot
the BCA Consideration Shares.
Information on CSi Palletising
Overview of CSi
Palletising
CSi Palletising, headquartered in
the Netherlands, is a global leader in end-of-line packaging
automation, with production facilities in Romania and additional
sales presence in the USA, Mexico, Germany, France, Spain and the
United Kingdom. It designs, manufactures and installs palletising,
pallet handling and case transport systems, including associated
aftersales services. As at 31 December 2023, CSi Palletising had,
in aggregate, approximately 440 employees. CSi Palletising's sales
have grown from €51.3 million in 2021 to €71.5 million in
2023.
CSi Palletising offers customers comprehensive
end-of-line solutions from case transport and conveying, to
integrated palletising and pallet handling systems. CSi Palletising
specialises in fixed-share products such as cases and bags and its
machines have a low to medium capacity range of up to a maximum of
120 cases per minute. CSi Palletising has
developed integration "know-how" of both internally developed and
third-party systems including autonomous robotics technology and
specialist in-house software.
CSi Palletising has a longstanding customer base
with 100 per cent. customer retention across major "blue chip"
groups and its average length of customer relationship is over 15
years, with the top six strategic accounts each having a
relationship of more than 30 years. The remaining customers in the
top ten strategic accounts of CSi Palletising have an average relationship of 21 years. Key customers
include Lamb Weston, Mondelez International, Nestle, PepsiCo and
Unilever. CSi Palletising also has a
growing global installed base of over 2,500 lines with 80 to 90
solutions being delivered per year as key elements in
systems.
CSi
Palletising financial
summary
The Board believes that CSi
Palletising has a strong
historical financial track record and is on track to achieve its
management budget for 2024 with the remainder of the year
underpinned by a strong forward orderbook which amounted to €64.3
million as at June 2024. The results for CSi Palletising
for the financial year ending 31 December 2024 are
expected to show continuing momentum in revenue and earnings growth
compared to the financial year ended 31 December
2023.
Set out below is the unaudited
financial summary for CSi Palletising
for the year to date to 30 June 2024 and audited
financial information for the financial years ended 31 December 2023, 2022 and
2021.
|
|
Financial year ended 31
December
|
|
YTD to 30 June
2024
€m
|
2023
€m
|
2022
€m
|
2021
€m
|
Revenue
|
44.4
|
71.5
|
63.1
|
51.3
|
Revenue growth
|
-
|
13.3%
|
19.5%
|
-
|
Gross profit
|
26.0
|
38.9
|
33.3
|
30.4
|
Operating expense
|
(19.2)
|
(31.6)
|
(28.2)
|
(26.8)
|
EBITDA
|
6.8
|
7.3
|
5.1
|
3.6
|
EBITDA margin %
|
15%
|
10%
|
8%
|
7%
|
Underlying profit before tax
|
6.3
|
6.0
|
3.9
|
2.4
|
Operating cash-flow
|
5.6
|
16.5
|
7.5
|
(0.6)
|
Source: CSi Palletising
For the financial year ended 31
December 2023, CSi Palletising's top five customers accounted for
80 per cent. of revenue generated, including one very large
blue-chip customer which accounted for slightly over 50 per cent.
of revenue. The revenue from this largest customer in the financial
year ended 31 December 2023 was generated from 47 separate orders
and change orders from many different decision makers, across both
Original Equipment and Service ranging from €10,000 to €12.3
million in value. In 2023, CSi Palletising won 156 orders across
all customers.
Project order intake for the first
eight months of 2024 (January to August 2024) has remained strong
at €32.4 million, with a broader customer mix than revenue for the
financial year ended 31 December 2023, following CSi Palletising
management's strategy of diversifying order intake. As a result,
the largest customer from the financial year ended 31 December 2023
represents 28 per cent. of the order intake to August 2024 and is
no longer the largest contributor to order intake. In addition,
this customer placed 38 separate orders and change orders, ranging
from €12,000 to €1.4 million, whilst its second largest customer
placed 25 separate orders and change orders ranging from €5,000 to
€6.9 million. CSi Palletising has won 104 orders in the first eight
months of 2024 for palletising alone.
Background to and reasons for the
Acquisition
The Directors believe that the
Acquisition is highly complementary to Mpac's existing business,
and significantly improves and increases its capability and
offering in end-of-line and palletising solutions. The Acquisition
is in line with the Company's stated ambition to double revenue in
five years from 2023. The Directors believe that the key
attractions of CSi Palletising and the Acquisition for the Company
are as follows:
· CSi
Palletising is a high-quality provider of solutions for palletising
and material handling;
· CSi Palletising offers an enhanced package of maintenance and
aftermarket services across a growing global installed
base;
· CSi Palletising has long-standing, "blue-chip" customer
relationships in attractive sectors and its top six customers all
exceed 30-year tenures;
· CSi
Palletising has strong robotics and systems integration/turnkey
capabilities;
· CSi
Palletising has long-established, lower-cost manufacturing and
assembly facilities in Romania; and
· CSi
Palletising has an established and self-sufficient leadership teams
across all sites.
Key synergy opportunities
from the Acquisition
Mpac has developed an integration
plan for the Acquisition which it intends to implement on
Completion. The Directors believe that the Acquisition presents
numerous synergistic opportunities to both CSi Palletising and Mpac across all operating
functions, including the opportunity to:
· increase CSi Palletising's
product sales in North America by utilising Mpac's
existing presence and relationships in the United States and
Canada;
· develop a stronger sales presence in Latin America, supported
through a Mexico location, and to drive Mpac sales in the region
through CSi Palletising's experience and relationships;
· secure access to a lower cost manufacturing and assembly
facility in Romania and to drive cost-saving efficiencies within
Mpac's existing operations;
· cross
sell Mpac's equipment to CSi Palletising's
strategic accounts;
· generate pull through sales of CSi Palletising's palletisers to existing Mpac
customers; and
· utilise Mpac's experience in after sales service to drive
cost-saving synergies.
The Company has detailed knowledge
of CSi Palletising's
operating markets and overlapping customer relationships. As a
result, the Board believes execution risk associated with the
Acquisition is mitigated by its integration plan.
Financial effects of the
Acquisition
The Acquisition will provide a step
change in the Group's earnings and create a significantly larger
Group. The Directors expect that the Acquisition will provide
strong EPS accretion to the Group over a five year strategic cycle.
Following Completion, consolidated FY24 net debt/adjusted EBITDA is
expected to be approximately 1.8x. The Board expects the enlarged
Group to be highly cash generative which will drive a rapid
deleveraging and is expecting leverage to fall to below 1.0x by the
end of FY25.
Principal terms of the Acquisition
On 30 September 2024, Mpac Bidco, an
indirectly wholly owned subsidiary of Mpac, incorporated in the
Netherlands for the purposes of making the Acquisition, entered
into the Acquisition Agreement pursuant to which it agreed
conditionally to purchase the entire issued share capital of CSi
Palletising, from the Sellers. The Acquisition Agreement is
governed by the laws of the Netherlands.
There is €56
million of consideration payable to the Sellers
pursuant to the terms of the Acquisition Agreement consisting
of:
· €41.5 million in
cash, payable at Completion;
·
the Vendor Loans which will be
put in place at Completion and comprise: (i) a €1.5 million loan
from the Sellers to Mpac Bidco which is repayable at any time up to
the date falling 12 months following Completion; and (ii) a €4.5
million loan from the Sellers to Mpac Bidco repayable at any time
up to the date falling 24 months following Completion, each of
which bears interest at 10 per cent. per annum, payable in cash
quarterly;
· the
issue to the Sellers at Completion of Consideration Shares with a
value of €5 million at the Issue Price; and
· two deferred consideration payments of €1.75 million each
which become payable on 1 January 2026 and 1 January 2027,
respectively.
There is also an additional €21
million (approximately) for the agreed cash, debt and working
capital adjustments, payable in cash to the Sellers at Completion
which the Board expects to be covered by
cash and any excess working capital inherited at Completion by
virtue of the Acquisition1.
In relation to the Consideration
Shares, the Sellers have undertaken that, subject to certain
limited exceptions, they will not dispose of any interest they hold
in the Consideration Shares during the period from the date of
issue of the Consideration Shares until and including the date 24
months after Completion.
The Acquisition is conditional upon,
amongst other things, the Placing Agreement having become
unconditional in all respects, the Acquisition having been
unconditionally authorised from a national security perspective by
a decision of the Romanian Competition Council on terms that are
reasonably satisfactory to Mpac Bidco, the Resolutions being duly
passed and the consultation procedures with the works council
established at the level of CSi Industries B.V. in accordance with
article 25 of the Dutch Works Council Act (Wet op de ondernemingsraden) having
been complied with. The Company has already submitted a
notification to the Romanian Competition Council for its
authorisation of the Acquisition from a national security
perspective and, based on advice it has received, the Company
expects a decision to be made within two to three
months.
The Acquisition Agreement contains
certain customary warranties (including tax warranties) given by
the Sellers in favour of Mpac Bidco, subject to certain customary
limitations, as well as other customary undertakings and
restrictive covenants given by the Sellers.
Mpac Bidco has obtained a buy-side
warranty and indemnity insurance policy which, subject to certain
exceptions, provides cover for claims against the Sellers under the
business and tax warranties and the tax indemnity in the
Acquisition Agreement of up to €16.8
million and under the fundamental warranties in the Acquisition
Agreement of up to €52.5 million, subject to an aggregate cap for
all claims under the insurance policy of €52.5 million. The Sellers
have agreed to bear the vast majority of the premium payable for
the insurance policy.
1 Subject
also to adjustments to add a daily cash ticker amount for the
period from (and including) 1 October 2024 up to (and including)
the date of Completion and to deduct any leakage during the period
from (and including) 1 March 2024 up to the moment immediately
preceding Completion.
Principal terms of the Facilities
Facilities
Agreement
On 30 September 2024, the Company
(as borrower), Mpac Corporate Services Limited, Mpac Overseas
Holdings Limited and Mpac Lambert Limited (as guarantors) (together
the "Obligors") and HSBC
(as lender) entered into the Facilities Agreement, pursuant to
which HSBC has agreed to provide the Company with a term loan
facility of £12 million (the "Term
Loan") and a revolving credit facility of £35 million (the
"RCF"), replacing the
Group's existing bank facilities. Certain other subsidiaries of the
Company incorporated in Canada, the US and the Netherlands have
acceded to the Facilities Agreement in order to provide guarantees
and indemnities immediately after the Company's entry into the
Facilities Agreement, and certain members of CSi Palletising's
group will also accede to the Facilities Agreement after
Completion.
Amounts borrowed under the Term Loan
are to be used for funding the acquisition of CSi Palletising and
amounts borrowed under the RCF are to be used for funding the
Acquisition and for general corporate and working capital purposes,
including for permitted acquisitions and refinancings.
The Term Loan is repayable quarterly
in instalments of £1 million of principal plus any related interest
due on such repayment instalments. The final repayment instalment
(covering the balance of all amounts outstanding in relation to the
Term Loan) will be due on 30 September 2027.
Amounts borrowed under the RCF are
repayable quarterly, unless rolled over into the following quarter
at the option of the Company, with the final repayment due on 30
September 2027.
The Company has the option to extend
the provision of the RCF until 30 September 2028 and again until 30
September 2029, with the consent of HSBC (subject to an agreed
extension fee at the relevant time). There are also options for the
Company to request increase or incremental facilities up to a
maximum of £12 million if the Term Loan is not drawn (subject to
fees to be agreed at the time).
The Facilities Agreement contains
adjusted leverage and interest cover financial covenants, each to
be tested quarterly in respect of each period of 12 months ending
on or about the last day of each financial quarter.
The Facilities Agreement also
contains terms relating to default and mandatory repayment, as well
as covenants and undertakings that are customary for agreements of
this type.
The Facilities Agreement is governed
by English law.
Security
On 30 September 2024, the Obligors
also entered into a debenture and security confirmation deed in
favour of HSBC, both of which are governed by English
law.
Under the terms of the debenture,
each Obligor has granted security over all of its assets, including
the shares of certain subsidiaries owned by the Company. The
security is granted to secure all present and future obligations
owing to HSBC by any of the Obligors.
Pursuant to the terms of the
security confirmation deed, the Obligors confirm that various
guarantees and security provided to HSBC under previous financings
will remain in full force and effect and will secure the debt
outstanding under the Facilities Agreement.
Expected timetable of Events
Announcement of the Acquisition
|
1 October
2024
|
Announcement of the Placing
|
1 October
2024
|
Announcement of the Retail Offer
|
1 October
2024
|
Announcement of the results of the Placing
|
1 October
2024
|
Publication
of the Circular
|
2 October
2024
|
Announcement of the results of the Retail Offer
|
8 October
2024
|
Latest time
and date for receipt of completed proxy appointments and
CREST voting instructions
|
9.00 a.m.
on 16 October 2024
|
General
Meeting
|
9.00 a.m. on 18 October 2024
|
Announcement of results of General Meeting
|
18 October
2024
|
First
Admission and commencement of dealings in the Fundraising Shares on
AIM
|
8.00 a.m.
on 21 October 2024
|
Where
applicable, expected date for crediting of the Fundraising Shares
in uncertificated form to CREST accounts
|
As soon as
possible following First Admission
|
Where applicable, expected date for
despatch of share certificates in respect of the Fundraising
Shares
|
Within 10
business days of
First Admission
|
Expected timing for
Completion
|
Approximately December 2024
|
Notes:
1.
All references to times in this document are to
London time.
2.
The dates and times set out in the
above timetable and in the rest of this document are indicative
only and may be subject to change. If any such dates and times
should change, the revised times and/or dates will be notified by
the Company by announcement via RIS.
3.
All events in the above timetable scheduled to
take place after the General Meeting are conditional on the
approval by the Shareholders of the Resolutions.
Definitions
The following definitions apply
throughout this Announcement (unless the context otherwise
requires):
"2024
AGM"
the annual general meeting of the Company held on
15 May 2024;
"Acquisition"
the proposed acquisition by the Company of the
entire issued share capital of CSi Palletising pursuant to the
terms of the Acquisition Agreement;
"Acquisition
Agreement"
the conditional acquisition agreement dated 30
September 2024 between Mpac Bidco and the Sellers, further details
of which are set out in this Announcement;
"Act"
the Companies Act 2006 (as amended from time to
time);
"Admission"
First Admission and Second Admission, as the
context may require;
"AIM"
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 (as amended from time to time);
"BCA"
Boston Conveyor & Automation, Inc., which was
acquired by the Company on 18 September 2024;
"BCA Consideration
Shares"
the 1,059,349 new Ordinary Shares which were
allotted in connection with the acquisition of BCA;
"Bookbuild
Platform"
the online capital markets platform developed by
BB Technology Limited;
"Cash
Consideration"
€41.5 million (plus an
additional sum for the agreed cash, debt and working capital
adjustments which the Board expects to be covered by cash and any
excess working capital inherited at Completion by virtue of the
Acquisition) payable in cash by Mpac Bidco to the Sellers in
accordance with the Acquisition Agreement;
"certificated form" or
"in certificated
form" an Ordinary Share recorded on a company's share
register as being held in certificated form (namely, not in
CREST);
"Company" or "Mpac"
Mpac Group plc, a company incorporated and
registered in England and Wales with registered number 00124855;
"Completion"
completion of the Acquisition in accordance with the terms of the
Acquisition Agreement;
"Consideration"
the consideration payable under the Acquisition
Agreement, being the Cash Consideration, the Consideration Shares
and the Vendor Loans;
"Consideration Shares"
the 1,039,500 new Ordinary Shares to be issued by
the Company to the Sellers in connection with the
Acquisition;
"CREST"
the relevant system (as defined in the CREST
Regulations) in respect of which Euroclear is the operator (as defined in those regulations) which
facilitates the transfer of title to shares in uncertificated
form;
"CREST Regulations"
the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755)
(as amended from time to time);
"CSi Palletising"
Elstar International B.V., a private limited liability company
incorporated under the laws of the Netherlands, registered with the
Dutch trade register under number 17202065, and which operates
under the name 'CSi Palletising';
"Directors" or "Board"
the directors of the Company or any duly authorised committee
thereof;
"EBITDA"
earnings before interest, tax, depreciation and
amortisation;
"Enlarged Share
Capital"
the issued share capital of the Company following
First Admission (including the Fundraising Shares, assuming full
take-up under the Retail Offer);
"Euroclear"
Euroclear UK & International Limited, the
operator of CREST;
"Existing Ordinary Shares"
21,533,773 ordinary shares of £0.25 (25 pence)
each in the capital of the Company in issue at the date of this Announcement, all of which are admitted to trading on
AIM;
"Facilities"
the facilities made available to the Group
pursuant to the Facilities Agreement;
"Facilities
Agreement"
the facilities agreement between, amongst others,
the Company (as borrower) and HSBC (as lender), further details of which are set out in this
Announcement;
"FCA"
the UK Financial Conduct Authority;
"First
Admission"
admission of the Fundraising Shares to trading on
AIM becoming effective in accordance with Rule 6 of the AIM
Rules;
"FSMA"
the Financial Services and Markets Act 2000 (as
amended from time to time);
"Fundraising"
the Placing and the Retail Offer;
"Fundraising
Shares"
the Placing Shares and the Retail Offer
Shares;
"FY24"
financial year ending 31 December 2024;
"FY25"
financial year ending 31 December 2025;
"General
Meeting"
the general meeting of the Company to be held at 2
Argosy Court, Coventry, CV3 4GA at 9.00 a.m. on Friday 18 October
2024 (or any adjournment thereof);
"Group"
the Company, its subsidiaries and its subsidiary
undertakings (each as defined in the Act) as at the date of this
document;
"H1
2024"
the six month period ended 30 June
2024;
"H2
2024"
the six month period ended 31 December
2024;
"HSBC"
HSBC UK Bank plc, the lender under the
Facilities;
"ISIN"
International Securities Identification
Number;
"Issue
Price"
400 pence per New Ordinary Share;
"Joint Brokers"
SCS and Panmure Liberum;
"London Stock
Exchange"
London Stock Exchange plc;
"Mpac
Bidco"
Mpac Bidco B.V., a private limited liability
company incorporated under the laws of the Netherlands, registered
with the Dutch trade register under number 94964823 and which was
incorporated for the purposes of the Acquisition;
"New Ordinary
Shares"
together, the Placing Shares, the Consideration
Shares and the Retail Offer Shares;
"Notice of General
Meeting"
the notice convening the General Meeting which
will be included in the Circular;
"Official
List"
the Official List of the FCA;
"Ordinary
Shares"
the ordinary shares of £0.25 (25 pence) each in
the capital of the Company;
"Panmure
Liberum"
Panmure Liberum Limited, the Company's joint
broker;
"Placing"
the conditional placing of the Placing Shares by
the Joint Brokers, as agents on behalf of the Company, pursuant to
the Placing Agreement,;
"Placing
Agreement"
the conditional agreement dated 1 October 2024
between: (i) SCC; (ii) SCS; (iii) Panmure Liberum; and (iv) the
Company relating to the Placing;
"Placing
Shares"
the new Ordinary Shares to be issued, conditional
on First Admission, in connection with the Placing;
"Prospectus Regulation
Rules"
the prospectus regulation rules made by the FCA
pursuant to section 73A of the FSMA;
"RCF"
the revolving credit facility of £35 million made
available to the Company pursuant to the Facilities
Agreement;
"Registrar"
Link Group Limited, the Company's
registrar;
"Resolutions"
the shareholder resolutions set out in the Notice
of General Meeting to be proposed at the General Meeting to grant
the Directors the authority to allot and issue the New Ordinary
Shares on a non-pre-emptive basis;
"Retail Investors"
retail Shareholders, who are resident in the
United Kingdom, and are a customer of one of the intermediaries
operating through the Bookbuild Platform;
"Retail
Offer"
the separate offer by the Company of the Retail
Offer Shares, through the Bookbuild Platform, for Retail Investors,
further details of which will be announced later today;
"Retail Offer
Shares"
up to 250,000 new Ordinary Shares to be issued,
conditional on First Admission, in connection with the Retail
Offer;
"RIS"
a regulatory information service operated by the
London Stock Exchange as defined in the AIM Rules;
"SCC"
Shore Capital and Corporate Limited, the Company's
nominated adviser for the purposes of the AIM Rules;
"SCS"
Shore Capital Stockbrokers Limited, the Company's
joint broker;
"Second
Admission"
admission of the Consideration Shares to trading
on AIM becoming effective in accordance with Rule 6 of the AIM
Rules;
"Securities
Act"
the United States Securities Act of 1933, as
amended;
"Sellers"
CSitsme B.V., Aaseck B.V. and Lust4Life Holding
B.V.;
"Shareholders"
holders of the Ordinary Shares of the Company from
time to time;
"Shore
Capital"
SCC and/or SCS as the case may be;
"Term Loan"
the term loan facility of £12 million provided by
HSBC to the Company pursuant to the Facilities
Agreement;
"UK"
the United Kingdom of Great Britain and Northern
Ireland;
"UK
Market Abuse
Regulation"
the Market Abuse Regulation (Regulation 596/2014)
(as it forms part of UK domestic law by virtue of the European
Union (Withdrawal) Act 2018, as amended);
"uncertificated
form"
Ordinary Shares recorded on the share register as
being held in uncertificated form in CREST and title to which, by
virtue of the CREST Regulations, may be transferred within the
CREST settlement system;
"US" or
"USA"
the United States of America, each State thereof
(including the District of Columbia), its territories, possessions
and all areas subject to its jurisdiction; and
"Vendor
Loans"
loans with an aggregate value of €6 million to be
made at Completion by the Sellers to Mpac Bidco in connection with
the Acquisition, further details of which are set out in this
Announcement.
Important
Notices
Shore Capital is authorised and
regulated by the FCA in the United Kingdom and is acting
exclusively for Mpac and no one else in connection with the
Placing, and Shore Capital will not be responsible to anyone
(including any Placees) other than Mpac for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or any other matters referred to in this
Announcement.
Panmure Liberum is authorised and
regulated by the FCA in the United Kingdom and is acting
exclusively for Mpac and no one else in connection with the
Placing, and Panmure Liberum will not be responsible to anyone
(including any Placees) other than Mpac for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or any other matters referred to in this
Announcement.
No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability is or will be accepted by the
Joint Bookrunners or by any of their respective Representatives as
to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly
disclaimed.
The responsibilities of SCC as
Mpac's nominated adviser under the AIM Rules for Nominated Advisers
are owed solely to the London Stock Exchange and are not owed to
Mpac or to any Director or to any other person.
This Announcement may contain, or
may be deemed to contain, "forward-looking statements" with respect
to certain of Mpac's plans and its current goals and expectations
relating to its future financial condition, performance, strategic
initiatives, objectives and results. Forward-looking statements
sometimes use words such as "aim", "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "seek",
"may", "could", "outlook" or other words of similar meaning. By
their nature, all forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances
which are beyond the control of Mpac, including amongst other
things, United Kingdom domestic and global economic business
conditions, market-related risks such as fluctuations in interest
rates and exchange rates, the policies and actions of governmental
and regulatory authorities, the effect of competition, inflation,
deflation, the timing effect and other uncertainties of future
acquisitions or combinations within relevant industries, the effect
of tax and other legislation and other regulations in the
jurisdictions in which Mpac and its affiliates operate, the effect
of volatility in the equity, capital and credit markets on Mpac's
profitability and ability to access capital and credit, a decline
in Mpac's credit ratings; the effect of operational risks; and the
loss of key personnel. As a result, the actual future financial
condition, performance and results of Mpac may differ materially
from the plans, goals and expectations set forth in any
forward-looking statements. Any forward-looking statements made in
this Announcement by or on behalf of Mpac speak only as of the date
they are made. Except as required by applicable law or regulation,
Mpac expressly disclaims any obligation or undertaking to publish
any updates or revisions to any forward-looking statements
contained in this Announcement to reflect any changes in Mpac's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
No statement in this Announcement is
intended to be a profit forecast or estimate, and no statement in
this Announcement should be interpreted to mean that earnings per
share of Mpac for the current or future financial years would
necessarily match or exceed the historical published earnings per
share of Mpac.