Acquisition, Placing, Open Offer and Notice of GM

The information contained within this announcement (the "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.

 

19 June 2020

 

Inspiration Healthcare Group plc

("Inspiration Healthcare" the "Group" or the "Company")

 

Proposed Acquisition of S.L.E. Limited

Proposed Placing & Subscription to raise £16.5 million

& Open Offer to raise up to £0.5 million

Notice of General Meeting

 

 

Inspiration Healthcare Group plc (AIM:IHC), the global medical technology company, is pleased to announce that it has today entered into a conditional agreement to acquire the entire issued share capital of S.L.E. Limited, for an aggregate consideration of £18.0 million on a cash free debt free basis (the "Acquisition").

 

The Company also announces that it has conditionally raised £16.5 million (before expenses) by way of a Placing and Subscription to certain institutional and other investors. Furthermore, to enable other Shareholders who are not able to participate in the Placing an opportunity to subscribe for new Ordinary Shares, the Company is proposing to raise up to an additional £0.5 million (before expenses) by way of an Open Offer made to Qualifying Shareholders of up to 767,617 new Ordinary Shares at the Issue Price.

 

Transaction Highlights:

 

·      Acquisition of S.L.E Limited for a total consideration of £18.0 million of which £16.2 million is payable in cash and £1.8 million is payable in Consideration Shares

·      The cash consideration is to be funded by:

-       a Placing and Subscription of 25,384,615 new Ordinary Shares at the Issue Price with new and existing investors to raise £16.5 million

-       an Open Offer to Qualifying Shareholders at the Issue Price to raise up to an additional £0.5 million

-       a new £5.0 million revolving credit facility with HSBC 

·      The Issue Price of 65 pence represents a discount of approximately 1.5 per cent to the closing mid-market price of 66 pence on 18 June 2020

·      S.L.E. Limited is a leader in the design and manufacture of ventilators for neonatal intensive care and generated revenue of £16.1 million and EBITDA of £1.6 million for the fiscal year ended 31 July 2019

·      The Acquisition is expected to be earnings enhancing in the short to medium term, with significant commercial synergies

 

The Company will shortly be posting a Notice of General Meeting and an accompanying circular (the "Circular") to existing shareholders following this announcement. All relevant documents will be available to download at www.inspiration-healthcare.com/investor-relations.

 

Neil Campbell, Chief Executive Officer, said today: "We are delighted to have received such strong support for the Fundraising to drive our growth strategy and the acquisition of S.L.E. Limited, a leading designer and manufacturer of ventilators and capital equipment used in neonatal intensive care. Bringing the two companies together will significantly enhance our position as a leader in the global neonatal intensive care sector and deliver a number of benefits that include broadening the Group's product portfolio, an enlarged global distribution network, added manufacturing facilities and significantly increasing revenues and earnings."

 

Enquiries:

Inspiration Healthcare Group plc Neil Campbell, Chief Executive Officer Mike Briant, Chief Financial Officer	Tel: 01455 840555
Nominated Adviser & Broker Cenkos Securities plc Stephen Keys Mark Connelly Cameron MacRitchie	Tel: 0207 397 8900
Cadogan PR                                                                                          Alex Walters	Tel: 07771 713608

 

 

INTRODUCTION AND SUMMARY

The Company has today announced its proposed acquisition of S.L.E. Limited, together with a conditional Placing and Subscription pursuant to which the Company proposes to raise £16.5 million (before fees and expenses) by the issue and allotment by the Company of 25,384,615 new Ordinary Shares at the Issue Price of 65 pence per Ordinary Share to certain institutional and other investors.

In addition, in order to provide Shareholders who have not taken part in the Placing and Subscription with an opportunity to participate in the proposed issue of new Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Issue Price for an aggregate of up to 767,617 Open Offer Shares, to raise up to £0.5 million (before fees and expenses), on the basis of:

1 Open Offer Share for every 50 Existing Ordinary Shares

held on the Record Date, at 65 pence each, payable in full on acceptance.

The Placing, the Subscription and the Open Offer are conditional, inter alia, upon the satisfaction of certain conditions to the Acquisition, Shareholders approving the Resolutions at the General Meeting, which will grant the Directors the authority to allot the New Ordinary Shares and the power to disapply statutory pre-emption rights in respect of the Placing Shares, the Director Subscription Shares and the Open Offer Shares. The Resolutions are contained in the Notice of General Meeting at the end of the Circular. Admission is expected to occur at 8.00 a.m. on 7 July 2020 or such later time and/or date as Cenkos and the Company may agree, not being later than 8.00 a.m. on 21 July 2020. The Placing, the Subscription and the Open Offer are not underwritten.

The Open Offer provides Qualifying Shareholders with an opportunity to participate in the Fundraising whilst providing the Company with additional capital to invest in the business of the Group.

The Issue Price is at a discount of approximately 1.5 per cent. to the closing middle market price of 66 pence per Existing Ordinary Share on 18 June 2020 (being the last practicable date before publication of this announcement).

 

BACKGROUND TO AND REASONS FOR THE ACQUISITION AND THE FUNDRAISING

The Company has previously stated its ambition to become a global leader in the field of neonatology through growing its core business, investing in disruptive technologies and through acquisition of synergistic companies and technology.  As part of this strategy the Company acquired Vio Holdings Ltd ("Viomedex"), a small UK based manufacturer of neonatal intensive care products used in the field of respiratory medicine in September 2019, the first acquisition towards reaching its goal.

 

The Company is pleased to announce that it has today entered into a conditional agreement to acquire the entire issued share capital of S.L.E. Limited for an aggregate consideration of £18.0 million, on a cash free debt free basis.

 

S.L.E. is a leader in the design and manufacture of ventilators and capital equipment for neonatal intensive care, treating premature and sick babies. S.L.E.'s products are sold across the world through a distribution network built over many years. Approximately 89 per cent. of S.L.E.'s revenue in FY2019 was generated from sales outside of the UK, with a significant proportion of its revenue generated in Asia Pacific and the Middle East. In the financial year ended 31 July 2019, S.L.E. generated revenue of £16.1 million and profit before taxation of £1.5 million.

 

 

Strategic rationale for the Acquisition

The Directors believe that the Acquisition will:

-           increase the Group's profile, in line with the Company's strategic goal of becoming a global leader in neonatal intensive care;

-           be earnings enhancing in the short to medium term, with significant commercial synergies;

-           transform the scale of the Group;

-         broaden the Group's product portfolio in neonatal intensive care, with the addition of neonatal ventilators, accessories and additional distributed products;

-           enable significant cross-selling opportunities within the Enlarged Group, especially for neonatal respiratory disposables such as the recently acquired Viomedex nCPAP products and breathing circuits;

-           reduce the reliance on third party distributed products within the Group's current portfolio;

-          enhance the Group's manufacturing capabilities, with an approximately 30,000 sq. ft. facility in Croydon for the assembly of technically advanced capital equipment;

-          leverage the Group's well-established routes to market globally - Inspiration and S.L.E. had combined exports of circa £20.0 million (approximately 60% of total revenue) based on their last audited full year accounts, as well as the Group's sales and marketing resource, to drive sales of the Group's products; and

-           increase the Group's product development capability and consolidation of regulatory compliance.

 

COVID-19 RISK STATEMENT

The Directors believe that COVID-19 presents an unprecedented and unforeseen risk. Whereas the Board is confident in its projections of synergies and the future of the enlarged business, there are macro-economic factors that could impact the speed at which these synergies are realised and which are outside of the Board's control. 

The Directors believe that neonatal intensive care remains an attractive market which will continue to grow despite investment in critical healthcare infrastructure due to COVID-19 which has been predominantly around adult respiratory medicine. Although there may be a downturn in capital expenditure in hospitals due to macro-economic issues, the Directors believe that infrastructure will continue to grow and ventilation of the neonate will be an important part of this growth to preserve life and improve outcomes of premature and sick babies.

 

SUMMARY OF INSPIRATION HEALTHCARE

Inspiration Healthcare is a global provider of medical technology for use in critical care and operating theatres, with a particular focus on neonatal intensive care. The Group provides high quality innovative products to patients around the world which help to improve patient outcomes and it actively invests in innovative product opportunities and disruptive technologies. In the financial year ended 31 January 2020, the Group generated revenues of £17.8 million (2019: £15.5 million) and EBITDA of £2.3 million (2019 £1.6 million).

The Group sells a range of innovative branded neonatal care solutions, spanning numerous applications including non-invasive respiratory management and thermoregulation for newborns and patient warming for adults. The majority of the Group's branded products are used in the first few days of life, providing technology to premature and sick babies that could have a profound effect on their outcome. Inspiration Healthcare complements its branded products with distributed products to offer a more comprehensive product range, adding value to the customer proposition. The Group sells its products in over 50 countries, principally within the EU, North America and the Middle-East. The Group's distributed products are mainly sold in the UK and Ireland to support specialised surgical procedures, infusion therapies and critical care.

The Group intends to strengthen its competitive positioning in this niche through new product development and acquisitions of small to medium sized businesses to complement the Group's existing product portfolio, described in more detail below.

 

Core Neonatal Branded Products

Respiratory Portfolio

Inspire nCPAP™ - is an effective solution for supporting a respiratory compromised infant. The Inspire nCPAP™ reduces the amount of effort required for infants to breathe, ensuring they do not tire quickly allowing them to use energy to grow. The Inspire nCPAP™ uses established fluidic principles and is well established in the market, having been launched in 2010.

First Breath nCPAP^TM - the next generation nCPAP system, following on from the successful Inspire nCPAP^TM, acquired into the Group through the acquisition of Viomedex in 2019. The product has been available in the EU since late 2018 and interest is growing in the product line, with three patents granted.

Inspire rPAP™ system - is a non-invasive device for the initial stabilisation and resuscitation of babies. Its innovative, patented design combines the ability to administer inflation breaths with all the clinical benefits of the gold standard fluidic flip nCPAP technology. Consisting of two parts, a 'driver' that controls the flow of fresh gas and the pressure the baby receives, and a 'generator' (patented) that sits on the nose and allows the gas to flow to and from the baby in synchronisation with their breathing pattern and can be used to inflate the lungs should the baby need assistance.

Breathing Circuits - the disposable tubing along which the gas from the Life Support machines to the interface with the baby travels. Medical gases are cold and dry and the circuit, when combined with a humidification device, maintains the gas at physiologically normal conditions. Circuits are supplied as single patient use and are usually changed weekly or when a therapy changes.

Thermoregulation Portfolio

CosyTherm2 (a sub-set of the Group's Patient Warming System) - provides safe and controlled warming to assist in the maintenance of normothermia. The system combines more effective thermal transfer with simplicity of use, which, the Directors believe, make it superior to other warming methods currently available. As well as neonatal, the patented warming technology has applications in paediatric and perioperative environments (where we promote the AlphaCore⁵ brand).

 

LifeStart™ - facilitates optimal cord clamping and bedside resuscitation / stabilisation. The infant is supported on a warm platform (when used in conjunction with the CosyTherm² or equivalent) whilst leaving the umbilical cord intact as the clinician accesses the infant. This can allow improved placental transfusion and smoother cardiovascular transition, along with allowing resuscitation to take place next to the mother giving a more holistic approach to newborn resuscitation.

 

Tecotherm Neo - is a thermo-regulating device that can be used to cool a baby that has suffered from a lack of oxygen at birth (perinatal asphyxia), and gently re-warm them. Its predecessor (the TS med 200) was used on the TOBY trial (published in the New England Journal of Medicine October 2009) that showed a significant reduction in brain injury (cerebral palsy) in a group of babies that had suffered from perinatal asphyxia. It is now sold throughout the world and has helped thousands of babies.

 

Unique+ CFM - cerebral function monitoring ("CFM") of critically ill newborns has been used in diagnosis of brain injury for many years and is routinely used for babies that are suspected of injury that can be treated with the Tecotherm Neo. The Unique+ CFM can be set-up easily and quickly, allowing the neonatologist to diagnose as early as possible.

 

 

SUMMARY OF S.L.E. LIMITED

S.L.E. is a leader in the design and manufacture of ventilators for neonatal intensive care. Founded as 'Specialised Laboratory Equipment Ltd' in 1956, S.L.E. first launched its own neonatal ventilator in 1981 and has since continued to invest in research and development to bring about advances to support neonatal intensive care medicine. S.L.E., an award-winning company, has generated a significant proportion of its revenue of high-end ventilators in the Middle-East and Asia Pacific with established sales in Europe and Latin America. International sales accounted for approximately 89% of revenue in FY2019, of which approximately 90 per cent. were products developed and owned by S.L.E. S.L.E. also acts as a distributor in the UK for a number of manufacturers in the neonatal field. S.L.E have a product development pipeline that includes new additions to the range of capital equipment.

S.L.E. is based in Croydon, just south of London, where it occupies approximately 30,000 sq. ft. of assembly and office space. S.L.E. employs approximately 110 staff, in key functions of sales and marketing, research and development, regulatory affairs and quality assurance with the majority in production and support functions.

The Directors believe that the newest product in the portfolio, the SLE6000 infant ventilator, has features which position it well as a technology leader and will maintain S.L.E.'s position at the forefront of neonatal respiratory medicine and can open new markets in forthcoming years. As well as 'conventional' modes of ventilation, the SLE6000 includes High Frequency Oscillatory Ventilation (HFOV) which can be used on the sickest patients as well as CPAP which can be used on stronger, healthier babies in conjunction with, amongst others, the Group's Inspire nCPAP and First Breath nCPAP ranges. Other products in the range include the SLE5000, the predecessor to the SLE6000, and its simpler stable mate, the SLE4000. The SLE6000 has a modular design, allowing it to be easily updated and configured for each patient's needs, with licenses for additional features purchased and installed via a USB stick, such as Oxygenie®, a closed loop oxygen control algorithm.

The Oxygenie® software module monitors oxygen levels in the baby's blood as part of a closed loop feedback system, which increases or decreases the amount of oxygen supplied to the patient within safe limits. Importantly, this technology helps to reduce the number of manual interventions by medical staff so more time can be spent caring for the patient. This technology is licenced from the inventors on an exclusive basis until 7/03/2038 and was CE marked in 2019.

Financial Information on S.L.E. Ltd (as reported in audited financial statements under FRS102)

Year end 31 July	2017 £m	2018 £m	2019 £m
Revenue	14.0	14.9	16.1
Growth	8.7%	6.6%	8.0%
Gross margins	26.4%	28.9%	28.5%
Operating profit	0.7	1.2	1.5
EBITDA*	0.7	1.3	1.6
EBITDA margin	5.2%	8.7%	9.7%
Net income**	0.7	1.2	1.5***
FCF ****	0.2	0.2	1.0
Gross assets	9.5	10.5	11.7

 

*Earnings before interest, tax, depreciation and amortisation
**Historical tax losses have resulted in minimal tax charges
***Excludes property revaluation
**** Excludes dividends paid and repayment of debt that is fully paid down in FY2019

 

S.L.E. has a well-diversified customer base with no single customer accounting for more than 14 per cent. of total revenue. These customers include the NHS, as well as larger customers in China, Japan, India, Russia and throughout the Middle East, EU and Latin America.

 

S.L.E.'s revenue has been growing steadily over the past 3 years as the SLE6000 has gained regulatory release in various jurisdictions around the world. Accordingly, as a higher margin product than its predecessor, the SLE6000 has led to greater profitability due to its modular design and software add-ons. This, combined with leveraging of the overhead base, has generated improving EBITDA margins. S.L.E have invested in R&D and regulatory approvals, the products are not believed to be affected by the introduction of the Medical Device Regulations in Europe that are due to come into force on 26 May 2021. Over the years SLE has accumulated approximately £8.6 million of tax losses as at 31 July 2019, which are intended to be used by the Group to offset future profits of S.L.E. 

 

The Board believe that the product range from S.L.E. complement and supplement the predominantly single use products from Inspiration Healthcare and make a compelling portfolio in the field of respiratory medicine for the neonate. The Directors believe that leveraging S.L.E.'s distribution network in Asia Pacific and the Middle East will give an excellent opportunity to drive cross-selling of non-competing product sales and using the Group's greater reach in other markets will aid the growth of S.L.E.'s products generally subject to any contractual restrictions that may apply.

 

 

Key Terms of the Acquisition & USE OF PROCEEDS

The total consideration payable to acquire the entire issued share capital of S.L.E. Limited and its subsidiaries is £18.0 million on a cash free debt free basis and subject to adjustment for normalised working capital, of which £16.2 million will be payable in cash upon Completion and £1.8 million will be satisfied by the issue and allotment of the Consideration Shares at the Issue Price to the Vendors. The cash consideration will be paid for using the net proceeds from the Placing and the new debt facility detailed below. It is intended that the balance of the proceeds from the Placing, together with any proceeds received pursuant to the Open Offer, will be used for marketing and product development as well as providing working capital for the Enlarged Group and strengthening the Company's balance sheet.

The Vendors have agreed not to dispose (save in certain limited circumstances) of any interest in the Consideration Shares for a period of 12 months from Completion and have agreed to certain orderly market restrictions for a further 12-month period thereafter. The Consideration Shares will rank in full for all dividends with a record date on or after the date of Admission and otherwise equally with the Existing Ordinary Shares, Placing Shares, the Director Subscription Shares and Open Offer Shares in issue from the date of Admission.

The terms of the Acquisition are contained in the Acquisition Agreement which includes certain warranties from the Vendors relating to, inter alia, the business and operations of S.L.E and indemnities in favour of the Company and the limitations on liability under the warranties are set at a market standard level for such a transaction. The Vendors have agreed to procure that S.L.E. shall carry on its business in the ordinary course between the date of signing the Acquisition Agreement and Completion and during such period shall not take certain decisions or carry out certain actions without the prior consent of the Company. The Acquisition Agreement contains termination rights between signing and Completion in favour of the Company in the event of a material breach of the Acquisition Agreement including of these warranties or operational covenants by the Vendors.

 

NEW DEBT FACILITY

In order to part finance the cash element of the consideration of the Acquisition and to provide additional working capital, the Group has conditionally entered into the £5 million HSBC RCF. Interest on the amount drawn down under the HSBC RCF is payable at a rate of 2.5 per cent. over LIBOR. The loan agreement also provides for financial covenants, which relate to interest cover, leverage and capital expenditure, to be tested quarterly. Entry into the HSBC RCF is conditional, inter alia, on Admission. 

 

BOARD CHANGES

As announced on 26 February 2020, Mike Briant, the Group's Chief Financial Officer, will be retiring from the Board at the end of June 2020. Mike has agreed to continue to work with the Group during a handover period which will end in November 2020. It is intended that Jonathan Ballard, currently Inspiration's Group Financial Controller, will become the Group's Chief Financial Officer with effect from 1 July 2020. A further announcement concerning Jonathan's proposed appointment to the Board of Inspiration Healthcare will be made in due course.

 

DIRECTORS' PARTICIPATION IN THE FUNDRAISING

As part of the Fundraising, certain Directors and a person discharging managerial responsibility ("PDMR") intend to subscribe (either personally or through a nominee) for an aggregate of 61,500 Director Subscription Shares at the Issue Price. Details of the Director Subscription Shares for which the Directors intend to subscribe (either personally or through a nominee) are displayed below:

 

Name	Title	Number of Existing Ordinary Shares	Number of New Ordinary Shares  subscribed for	Value of New Ordinary Shares subscribed  for	Resulting shareholding following proposed subscription	Percentage of enlarged share capital following proposed subscription
Mark Abrahams	Non-executive Chairman	241,201	15,375	£9,993	256,576	0.4%
Neil Campbell	Chief Executive Officer	4,536,271	15,375	£9,993	4,551,646	6.7%
Toby Foster	Commercial Director	3,899,907	15,375	£9,993	3,915,282	5.8%
Jon Ballard	Group Financial Controller	-	15,375	£9,993	15,375	0.0%

 

RELATED PARTY TRANSACTION

The participation in the Placing by Premier Miton Group plc, an existing substantial shareholder in the Company, for 5,178,000 Placing Shares at the Issue Price is deemed to be a related party transaction pursuant to Rule 13 of the AIM Rules. Having consulted with Cenkos, the Company's Nominated Adviser, the Directors consider that the terms of Premier Miton's participation in the Placing are fair and reasonable insofar as the Company's shareholders are concerned. 

 

CURRENT TRADING AND PROSPECTS

On 6 May 2020, the Company announced a trading update for the first quarter of the fiscal year ended 31 January 2021. In this announcement, the Company disclosed that trading for the first quarter has been strong, with revenues up by approximately 27 per cent. on the comparative period for the fiscal year ended 31 January 2020. The increase in revenues does not include the contracts won for the supply of ventilators to the UK National Health Service announced on the 16 and 20 March and 15 June 2020 which, when combined, are worth over £5 million of additional revenue to the Company and are expected to be accounted for in the second quarter of the financial year subject to product availability from our manufacturing partners. Without these exceptional orders, the Company's order book remains strong and the Company is receiving considerable interest in its products.

 

DETAILS OF THE PLACING

The Company has conditionally raised approximately £16.5 million before expenses by the conditional Placing of 25,323,115 new Ordinary Shares at the Issue Price by Cenkos, as agent for the Company, with Placees. 

 

The Placing is conditional, inter alia, upon:

 

(a)      the passing of the Resolutions at the General Meeting by Shareholders;

(b)      the Placing Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

(c)      Admission becoming effective by no later than 8.00 a.m. on 7 July 2020 or such later time and/or date (being no later than 8.00 a.m. on 21 July 2020) as Cenkos and the Company may agree.

 

If any of the conditions are not satisfied, the Placing Shares will not be issued and all monies received from the Placees will be returned to the Placees (at the Placees' risk and without interest) as soon as possible thereafter. The Placing is not being underwritten.

 

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

 

For the avoidance of doubt, subscribers for Placing Shares will not be entitled to participate in the Open Offer in respect of those shares.

 

THE PLACING AGREEMENT

Pursuant to the terms of the Placing Agreement, Cenkos, as agent for the Company, has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares. Cenkos has conditionally placed the Placing Shares with certain institutional and other investors at the Issue Price. The Placing and the Open Offer have not been underwritten. The Placing Agreement is conditional upon, inter alia, the Resolutions being duly passed at the General Meeting and Admission becoming effective on or before 8.00 a.m. on 7 July 2020 (or such later time and/or date as Cenkos and the Company may agree, but in any event by no later than 8.00 a.m. on 21 July 2020).

The Placing Agreement contains customary warranties from the Company in favour of Cenkos in relation to, inter alia, the accuracy of the information in this announcement and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Cenkos in relation to certain defined liabilities that it may incur in respect of the Fundraising.

Cenkos has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a material breach of the warranties given to Cenkos in the Placing Agreement or a material adverse change affecting the business, financial trading position or prospects of the Company or the Group as a whole.

The Placing Agreement also provides for the Company to pay all costs, charges and expenses of, or incidental to, the Fundraising and the Admission including all legal and other professional fees and expenses.

The Placing Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

 

THE OPEN OFFER

The Company considers it important that Qualifying Shareholders have an opportunity (where it is practicable for them to do so) to participate in the Fundraising and accordingly the Company is making the Open Offer to Qualifying Shareholders. The Company is proposing to raise up to approximately £0.5 million (before expenses) (assuming full take up of the Open Offer) through the issue of up to 767,617 Open Offer Shares.

The Open Offer Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Issue Price of 65 pence per Open Offer Share, payable in full on acceptance. Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Issue Price on the following basis:

1 Open Offer Share for every 50 Existing Ordinary Shares
held by the Shareholder on the Record Date

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to Qualifying Shareholders but will aggregated and be made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer.

Further details of the Open Offer and the application process relating to the Open Offer are set out in the Circular.

 

THE GENERAL MEETING

The General Meeting is to be held at the offices of the Company at 2 Satellite Business Village, Fleming Way, Crawley, West Sussex RH10 9NE, on 6 July 2020 at which the following resolutions will be proposed as ordinary or special resolutions as indicated below:

·      Resolution 1, which will be proposed as an ordinary resolution, is to authorise the Directors:

(a)         to allot the Placing Shares in connection with the Placing;

(b)         to allot the Open Offer Shares in connection with the Open Offer;

(c)         to allot the Director Subscription Shares in connection with the Director Subscriptions; and

(d)         to allot the Consideration Shares in connection with the Acquisition.

The authorities granted under this resolution are in addition to any other authorities in existence at the date of the General Meeting.

·      Resolution 2, which will be proposed as a special resolution and which is subject to the passing of Resolution 1, dis-applies Shareholders' statutory pre-emption rights in relation to the issue of the Placing Shares pursuant to the Placing; the Director Subscription Shares pursuant to the Director Subscriptions and the Open Offer Shares pursuant to the Open Offer.

 

The disapplication authority under this resolution is in addition to any other authorities in existence at the date of the General Meeting.

 

RECOMMENDATION

The Directors consider the Acquisition and the Fundraising to be in the best interests of the Company and its Shareholders as a whole and accordingly recommend unanimously Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting and the Directors confirm that they intend to vote in favour of the Resolutions in respect of their beneficial holdings amounting, in aggregate, to 8,746,025 Existing Ordinary Shares, representing approximately 22.4 per cent. of the existing issued ordinary share capital of the Company.

FUNDRAISING STATISTICS

 

Issue Price	65 pence
Number of Existing Ordinary Shares	39,052,146
Number of Placing Shares being issued by the Company pursuant to the Placing	25,323,115
Number of Director Subscription Shares to be issued by the Company	61,500
Number of Consideration Shares to be issued pursuant to the Acquisition Agreement	2,769,231
Open Offer basic entitlement	1 Open Offer Share for every 50 Existing Ordinary Shares
Number of Open Offer Shares (in aggregate) (assuming take-up in full of the Open Offer by Qualifying Shareholders)	up to 767,617
Number of New Ordinary Shares to be issued pursuant to the Placing, Director Subscriptions, Open Offer and the Acquisition Agreement(1)	up to 28,921,463
Number of Ordinary Shares in issue following Admission([1])	up to 67,973,609
New Ordinary Shares as a percentage of the Enlarged Share Capital	42.5 per cent.
Gross proceeds of the Placing	£16.46 million
Gross proceeds of the Director Subscriptions	£0.04 million
Gross proceeds of the Open Offer(1)	up to £0.50 million
Estimated net proceeds of the Fundraising receivable by the Company(1)	£15.77 million
Value of the Consideration Shares at the Issue Price	£1.80 million
Ordinary Share ISIN	GB00BXDZL105
Open Offer Basic Entitlements ISIN	GB00BMC5BG94
Open Offer Excess Entitlements ISIN	GB00BMC5BH02
(1)    Assuming take-up in full of the Open Offer by Qualifying Shareholders.

 

 

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

Record Date for entitlements under the Open Offer	6:00 p.m. on 17 June 2020
Announcement of the Placing, Open Offer and Acquisition	19 June 2020
Publication and despatch of the Circular, the Proxy Form and, to Qualifying Non-Crest Shareholders, the Application Form	19 June 2020
Existing Ordinary Shares marked "ex" by the London Stock Exchange	8:00 a.m. on 22 June 2020
Open Offer Entitlements and Excess Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	23 June 2020
Latest recommended time and date for requesting withdrawal of Basic Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 29 June 2020
Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST	3.00 p.m. on 30 June 2020
Latest time and date for splitting of Application Forms under the Open Offer	3.00 p.m. on 1 July 2020
Latest time and date for receipt of Forms of Proxy and CREST voting instructions	11.00 a.m. on 2 July 2020
Latest time and date for receipt of Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 3 July 2020
General Meeting	11.00 a.m. on 6 July 2020
Results of the General Meeting and the Open Offer announced	6 July 2020
Admission of the New Ordinary Shares to trading on AIM and commencement of dealings	8.00 a.m. on 7 July 2020
Where applicable, expected date for CREST accounts to be credited in respect of New Ordinary Shares in uncertificated form	7 July 2020
Where applicable, expected date for despatch of definitive share certificates for New Ordinary Shares in certificated form	Within 5 business days from Admission

Notes:

1.             Each of the above times and/or dates is subject to change at the absolute discretion of the Company and Cenkos. If any of the above times and/or dates should change, the revised times and/or dates will be announced through a Regulatory Information Service.

2.             All of the above times refer to London time unless otherwise stated.

3.             All events listed in the above timetable following the General Meeting are conditional on the passing of the Resolutions at the General Meeting.

 

DEFINITIONS

 

The following definitions apply throughout this announcement unless the context otherwise requires:

"Acquisition"	the proposed acquisition by the Company of the entire issued share capital of the Target
"Acquisition Agreement"	the agreement relating to the Acquisition, made between the Company and the Vendors
"Act"	the Companies Act 2006 (as amended)
"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules
"AIM"	the AIM market operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies published by the London Stock Exchange from time to time
"AIM Rules for Nominated Advisers"	the AIM rules for nominated advisers published by the London Stock Exchange from time to time
"Articles"	the articles of association of the Company
"Application Form"	the application form accompanying the Circular to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer
"Business Day"	a day (other than a Saturday, a Sunday or a public holiday) on which clearing banks are open for all normal banking business in the city of London.
"Cenkos" or "Nominated Adviser" or "Broker"	Cenkos Securities plc, as the Company's nominated adviser and sole broker
"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 "Inspiration" or "Inspiration Healthcare"	Inspiration Healthcare Group plc, a company incorporated under the laws of England and Wales with company number 03587944
"Completion"	means completion of the Acquisition, pursuant to the Acquisition Agreement
"Consideration Shares"	the 2,769,231 new Ordinary Shares to be issued and allotted to Vendors pursuant to the Acquisition Agreement
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations)
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755) (as amended)
"Director Subscriptions" or the "Subscription"	the subscriptions intend to be made at the Issue Price by, or on behalf of, the following persons: a      Mark Abrahams in respect of 15,375 new Ordinary Shares; b      Neil Campbell in respect of 15,375 new Ordinary Shares; c      Toby Foster in respect of 15,375 new Ordinary Shares; and d      Jon Ballard in respect of 15,375 new Ordinary Shares.
"Director Subscription Agreements"	the subscription agreements to be entered into on or about the date of this announcement between the Company and each of the persons subscribing for Director Subscription Shares
"Director Subscription Shares"	the 61,500 new Ordinary Shares to be issued pursuant to the Director Subscriptions
"Directors" or "Board"	the directors of the Company
"Document" or "Circular"	the Circular posted to shareholders on 19 June 2020,  which for the avoidance of doubt does not comprise a prospectus (under the Prospectus Regulation Rules) or an admission document (under the AIM Rules)
"Enlarged Group"	the Group following Completion
"Enlarged Share Capital"	the issued Ordinary Shares immediately following Admission, assuming the maximum number of New Ordinary Shares are issued
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Open Offer Entitlement in accordance with the terms and conditions of the Open Offer
"Excess CREST Open Offer Entitlements"	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to his Open Offer Entitlement) to apply for Open Offer Shares pursuant to the Excess Application Facility, which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular
"Excess Open Offer Entitlements"	an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to his Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular
"Excess Shares"	Open Offer Shares which are not taken up by Qualifying Shareholders pursuant their Open Offer Entitlement and which are offered to Qualifying Shareholders under the Excess Application facility
"Ex-entitlement Date"	the date on which the Existing Ordinary Shares are marked "ex" for entitlement under the Open Offer, being 8.00 a.m. on 22 June 2020
"Existing Group"	the Company and its subsidiaries prior to completion of the Acquisition
"Existing Ordinary Shares"	the 39,052,146 Ordinary Shares in issue at the date of this announcement, all of which are admitted to trading on AIM
"FCA"	the UK Financial Conduct Authority
"Form of Proxy"	the form of proxy for use in connection with the General Meeting which accompanies the Circular
"FSMA"	the Financial Services and Markets Act 2000 (as amended)
"Fundraising"	the Placing, the Director Subscriptions and the Open Offer
"General Meeting"	the general meeting of the Company to be held at the offices of the Company at 2 Satellite Business Village, Fleming Way, Crawley, West Sussex RH10 9NE at 11.00 a.m. on 6 July 2020, notice of which is set out at the end of the Circular
"Group"	the Company, its subsidiaries and its subsidiary undertakings
"HSBC"	HSBC UK Bank plc
"HSBC RCF"	a four year £5 million revolving credit facility entered into by the Company with HSBC
"IP"	intellectual property
"Issue Price"	65 pence per New Ordinary Share
"Link Asset Services"	a trading name of Link Market services Limited
"London Stock Exchange"	London Stock Exchange plc
"Money Laundering Regulations"	The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended)
"New Ordinary Shares"	the Placing Shares, the Director Subscription Shares, the Open Offer Shares and the Consideration Shares
"Notice of General Meeting"	the notice convening the General Meeting which is set out at the end of the Circular
"Open Offer"	the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and, in the case of Qualifying Non-CREST Shareholders, in the Application Form
"Open Offer Entitlement"	the individual entitlements of Qualifying Shareholders to subscribe for Open Offer Shares allocated to Qualifying Shareholders pursuant to the Open Offer
"Open Offer Shares"	up to 767,617 new Ordinary Shares to be issued by the Company pursuant to the Open Offer
"Ordinary Shares"	ordinary shares of 10 pence each in the capital of the Company
"Overseas Shareholders"	Shareholders with a registered address outside the United Kingdom
"Placees"	subscribers for the Placing Shares
"Placing"	the conditional placing of the Placing Shares by Cenkos, as agents on behalf of the Company, pursuant to the Placing Agreement, further details of which are set in the Circular
"Placing Agreement"	the conditional placing and open offer agreement dated 18 June 2020 and made between Cenkos and the Company in relation to the Fundraising, further details of which are set out in the Circular
"Placing Shares"	the 25,323,115 new Ordinary Shares to be issued pursuant to the Placing
"Prospectus Regulation Rules"	the regulation (EU) No 2017/1129 of the European Parliament and of the Council
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares in uncertificated form
"Qualifying Non-CREST Shareholders	Qualifying Shareholders holding Existing Ordinary Shares in certificated form
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date but excluding any Overseas Shareholder who has a registered address in any Restricted Jurisdiction
"Record Date"	6:00 p.m. on 17 June 2020
"Registrars" and "Receiving Agent"	Link Asset Services, 34 Beckenham Road, Beckenham, Kent BR3 4TU
"Regulatory Information Service"	a service approved by the FCA for the distribution to the public of regulatory announcements and included within the list maintained on the FCA's website
"Resolutions"	the resolutions set out in the Notice of General Meeting
"Restricted Jurisdiction"	means the United States of America, Australia, Canada, the Republic of South Africa, New Zealand,  Japan or any other jurisdiction where the New Ordinary Shares may not be offered, sold, taken up, delivered or transferred into or from
"Shareholders"	holders of Ordinary Shares
"Target" or "S.L.E."	S.L.E. Limited, the subject of the Acquisition Agreement
"UK"	the United Kingdom of Great Britain and Northern Ireland
"US" or "United States"	the United States of America, each State thereof, its territories and possessions (including the District of Columbia) and all other areas subject to its jurisdiction
"uncertificated" or "in uncertificated form"	an Ordinary Share recorded on a company's share register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
"Vendors"	the existing shareholders of the Target
"£", "pounds sterling", "pence" or "p"	are references to the lawful currency of the United Kingdom