Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

7 March 2022

Totally plc

("Totally", "the Company" or "the Group")

Acquisition of Pioneer Health Care Limited

Acquisition is immediately earnings enhancing and adds outsourcing capabilities

 to Totally's portfolio

The Board of Totally plc (AIM: TLY), a leading provider of frontline healthcare services, corporate fitness and wellbeing services across the UK and Ireland, is pleased to announce that the Company has entered into an agreement to acquire the entire issued share capital of Pioneer Health Care Limited ("Pioneer" or "Pioneer Healthcare"), an established independent provider of specialist NHS secondary care services (the "Acquisition"). The total consideration for the Acquisition is up to £13.0 million (the "Consideration"), on a cash-free and debt-free basis. The Consideration is to be paid 80% in cash and the remaining 20% will be satisfied by the issue of new ordinary shares in Totally. £6.9 million is payable on completion, on a cash-free and debt-free basis, and up to £6.1 million is payable on a deferred basis, based on the financial performance of Pioneer in the year ending 31 March 2022. Completion is expected to take place on or around 10 March 2022, being the date of Admission (as defined below).

Pioneer Healthcare delivers insourcing and outsourcing services across a wide range of surgical and medical specialities to NHS patients and holds contracts with NHS Foundation Trusts and Clinical Commissioning Groups ("CCGs"), predominantly across the North of England. Pioneer also holds the difficult-to-acquire Any Qualified Provider ("AQP") status, which enables it to offer services direct to NHS patients across the whole of England, free at the point of delivery, where there is sufficient demand. The business is led by three experienced, senior NHS consultants, Mr Hesham Zaki, Professor Prasad Godbole and Mr John McMullan, who are well recognised in their chosen fields, and will continue to hold senior leadership roles within the business following the Acquisition.

Pioneer Healthcare and Totally Healthcare, which forms Totally's Insourcing division, will be brought together to create a single, established, provider of insourcing and outsourcing services under the Pioneer brand. This combined business will leverage the strengths within each organisation to deliver its combined range of services to new and existing NHS foundation trusts, hospitals and CCGs across the UK and Ireland.

The initial cash Consideration payable will be satisfied using the existing cash resources of the Company and the remaining 20% of the initial consideration will be settled through the issue of 4,246,154 new ordinary shares in Totally (the "Initial Consideration Shares") at a price of 32.5 pence per share (the "Issue Price"), demonstrating the commitment of Pioneer's current leadership team to the future of the business within the enlarged Totally group. The vendors, being Professor Godbole, Henderson Whitehall Limited (a company jointly owned by Mr Zaki and Mr McMullan) and Nicola Salkeld, the Director of Operations for Pioneer (the "Vendors"), have agreed that they will not dispose of their Initial Consideration Shares for a period of 12 months from Admission (as defined below) and for the period of 12 months thereafter that they will only dispose of their Initial Consideration Shares in an orderly manner via the Company's brokers. 

The Acquisition is the Company's second in three months and supports the Board's buy and build strategy, utilising the substantial cash balances held by the Company to strengthen its service proposition and bring further earnings-enhancing opportunities to the Group. 

Why Pioneer Healthcare?

Pioneer Healthcare is a highly reputable and independent healthcare provider of specialist NHS secondary care services, free at the point of delivery and which the Board believes provides an additional platform for further future profitable growth.

·    The NHS is set to receive the bulk of a new £36 billion health and social care funding package over the next three years, with the intention of addressing the growing backlog and waiting list position.

·    Pioneer, along with Totally Healthcare, holds contracts with NHS foundation trusts, hospitals and CCGs across a wide range of surgical and medical specialties, with significant opportunities to expand services regionally, nationally and into new clinical specialisms.

·    Pioneer's AQP status offers patients the choice of choosing Pioneer as their elective service provider. Such accreditation is now difficult to achieve, and Pioneer is one of a limited number of independent providers across England with this qualification. Totally will now be able to offer its existing specialties direct to patients as a result of Pioneer's AQP status.

·    Pioneer is CQC-registered and is listed on key frameworks which present a barrier to entry for new entrants. It is listed as one of 18 providers on the 2018 NHS Insourced Clinical Services Framework and one of 37 providers on the 2020 Outsourced Clinical Services Framework nationally. These positions on key frameworks reflect Pioneer's credentials in this market, with a track record of delivery and access to a large pool of qualified staff.

·    Pioneer's core USP is its ability to access the best consultants and theatre staff combined with the benefit from several agreements with public and private healthcare facilities, enabling Pioneer to undertake the procedures required by its patients.

·    Pioneer has been established and run by NHS consultants, who will remain with the business in senior leadership roles, presenting an excellent opportunity to expand the business through increased management focus and acceleration of the growth plan, supported by the expertise of staff within Totally's existing insourcing business, Totally Healthcare, which will become part of the Pioneer brand.

·    The business is led by the following experienced, senior NHS consultants:

Mr Hesham Zaki

-     MBBch, Msc, MD, FRCS(Ed), FRCS(Glasg), FRCSEd (Neuro.surg)

-     Chairman & CEO, Pioneer Healthcare

-     Clinical Director Division of Surgery, Anaesthesia and Critical Care

-     Lead Paediatric Neurosurgeon, Sheffield Children's Hospital

-     Consultant Adult Neurosurgeon, The Royal Hallamshire Hospital

-     Chairman, CNS Cancer North Trent Region

-     Hon. Senior Lecturer in Neurosurgery, University of Sheffield UK

Professor Prasad Godbole 

-     FRCS, FRCS(Paeds), FEAPU, MBA, LLM

-     Medical Director, Pioneer Healthcare

-     Consultant Paediatric Urologist and Deputy Medical Director, Sheffield Children's NHS Foundation Trust

-     Honorary Senior Lecturer, University of Sheffield 

-     Chairman Prasanna Autism Centre and Prism Foundation, Pune, India

Mr John McMullan

-     MA (Cantab), MB BChir, FRCS (Neurosurgery)

-     Consultant Paediatric Neurosurgeon, Sheffield Children's NHS Foundation Trust

-     Consultant Neurosurgeon, Sheffield Teaching Hospitals NHS Foundation Trust

Mr Zaki, Professor Godbole and Mr McMullan are well recognised in their chosen fields and will continue to hold senior leadership roles within the business following the Acquisition, bringing additional expertise to the broader Group.

Background to Pioneer Healthcare

Pioneer Healthcare has a strong track record, having been incorporated in 2007, it has grown under the direction of three senior NHS consultants, Mr Zaki, Professor Godbole and Mr McMullan, who identified the opportunity for independent providers to help the NHS reduce waiting lists whilst maintaining patient care and quality.

In line with Totally, Pioneer has a patient-focused approach that seeks to deliver the most suitable solution within the shortest possible waiting times whilst providing the best possible clinical outcomes.

Based on unaudited management accounts for the year ended 31 March 2021, Pioneer generated revenue of £5.13 million and profit before tax of £0.80 million. Gross assets at 31 March 2021 were £2.82 million.

Further information on Pioneer Healthcare can be found at www.pioneerhealthcare.co.uk.

Pioneer Health Care International Limited, a company with overseas operations in which some of the Vendors have an interest, is not part of the Acquisition.

Principal terms of the Acquisition

Totally has entered into an agreement to acquire the entire issued share capital of Pioneer Healthcare on a cash-free and debt-free basis for a maximum consideration of £13.0 million.

At completion, £5.52 million will be payable to the Vendors in cash, on a cash-free and debt-free basis, from the Company's existing cash resources. The remainder of the initial consideration, being £1.38 million, will be satisfied by the issue of 4,246,154 Initial Consideration Shares at the Issue Price (being the average mid-market price of Totally's ordinary shares for the five business days prior to the date the agreement in relation to the Acquisition was entered into).

In addition, at completion Totally will pay the Vendors £1.11 million on account of the debt-free/cash-free adjustment. £0.89 million of this will be paid to the Vendors in cash, from the Company's existing cash resources, and a further 20% of the debt-free/cash-free adjustment, totalling £0.22 million, is being settled through the issue of 682,360 new ordinary shares in Totally at the Issue Price (the "Additional Consideration Shares").

Further deferred consideration of up to £6.1 million is payable subject to Pioneer achieving certain EBITDA targets for the year ended 31 March 2022 which shall be satisfied 80% in cash, to be settled from the Company's existing cash resources, and 20% through the issue of new ordinary shares in Totally (the "Deferred Consideration Shares").

The Initial Consideration Shares, the Additional Consideration Shares and the Deferred Consideration Shares will be subject to a 12-month lock-in from the date of issue and will be subject to a further 12-month orderly marketing restriction.

The consideration payable will be subject to adjustment pursuant to a completion accounts process.

Issue of equity and change to total voting rights

Application has been made for 4,928,514 new ordinary shares (comprising the 4,246,154 Initial Consideration Shares and the 682,360 Additional Consideration Shares) to be admitted to trading on AIM and it is expected that admission will take place on or around 10 March 2022 ("Admission").

Upon Admission, the issued share capital of the Company will consist of 187,228,802 ordinary shares. The Company does not hold any shares in treasury, therefore, the total number of voting rights in the Company from Admission will be 187,228,802.  This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in or a change to their interest in the Company under the FCA's Disclosure Guidance and Transparency Rules. 

Wendy Lawrence, Chief Executive Officer of Totally, said:

"We are delighted to welcome Pioneer Healthcare into the Totally Group. This is Totally's second acquisition in three months, demonstrating our commitment to growing the business, delivering enhanced shareholder value through our 'buy and build' strategy and moving into areas where we know demand for services is outstripping current capacity.

"The Acquisition creates new opportunities for the Group and will ensure we can continue giving vital support to the NHS as it recovers from the COVID-19 pandemic. 

"Pioneer's services closely complement those provided by Totally Healthcare. The combined insourcing and outsourcing business will benefit from its stronger footprint across the UK and Ireland and the additional significant experience of the Pioneer leadership team. Pioneer has an excellent reputation in the market and we look forward delivering on the undeniable potential that is available to the combined business."

Investor presentation

The Company is pleased to announce that Wendy Lawrence, Chief Executive Officer, and Lisa Barter, Chief Financial Officer, will provide a live presentation in relation to today's announcement, which will take place at 10 am on Tuesday, 8 March 2022.

The online presentation is open to all existing and potential investors and will consist of a presentation followed by a Q&A session held on the Investor Meet Company platform.

Investors can sign up to Investor Meet Company for free and then click "Add to meet" Totally plc via https://www.investormeetcompany.com/totally-plc/register-investor.      

Investors who have already registered and clicked "Add to meet" Totally plc, will be automatically invited.

For further information please contact:

Notes to editors

Totally plc is a leading healthcare service provider in the UK and Ireland, working in partnership with the NHS and other providers to deliver healthcare services through its divisions of Urgent Care, Planned Care and Insourcing.

On 16 December 2021, Totally acquired Energy Fitness Professionals Limited, an established corporate fitness provider with operations across the UK and a focus on workplace wellbeing.

Totally is committed to pursuing a progressive buy-and-build consolidation strategy within the fragmented healthcare market and looks to capitalise on the attractive opportunities that its disruptive service model offers, to generate value to shareholders.

Urgent Care

Totally offers a full range of urgent care services via its subsidiaries, Vocare and Greenbrook Healthcare, two of the largest urgent care providers in the UK, including:

·    NHS 111 services

·    Clinical Assessment services

·    GP Out-of-Hours services

·    Urgent Treatment Centres

www.vocare.org.uk

www.greenbrook.nhs.uk

Planned Care

Totally delivers planned care services, which include community based Out-Patient Services, Referral Management Services, Physiotherapy and Podiatry Services. It provides these through its planned care subsidiaries, About Health, Premier Physical Healthcare and Optimum Physiotherapy.

www.abouthealthgroup.com

www.premierphysicalhealthcare.co.uk

www.optimum-hcs.com

Insourcing

Launched in October 2019, Totally Healthcare provides bespoke insourcing solutions across multiple specialities to trusts and hospitals in the UK and Ireland, reducing waiting lists by utilising their spare capacity outside of normal working hours and at weekends.  On 7 March 2022, Totally announced its intention to acquire Pioneer Health Care Limited, an independent provider of specialist NHS secondary care services.  Post-acquisition, Pioneer Healthcare and Totally Healthcare will be brought together to create a single, established, provider of insourcing and outsourcing services under the Pioneer brand.

www.totallyhealthcarelimited.com

www.pioneerhealthcare.co.uk 

Energy Fitness Professionals Limited

An established corporate fitness provider with operations across the UK and a focus on workplace wellbeing.

www.energy-fitpro.co.uk 

More information on Totally plc can be found at the following link: www.totallyplc.com.