Background to and reasons for the recommendation. Ultra Group launched its ONE Ultra strategy in January 2020 and its Focus; Fix; Grow transformation plan to: • Focus on the Ultra Group’s core strengths in the Maritime, Intelligence & Communications and Critical Detection & Control markets through executing a clear strategy; • Fix and standardise core processes around: Operating Model, Site Excellence, Operational and Functional Excellence, Procurement, Technology Enablement and creating a ONE Ultra culture; and • Grow value, accelerate growth and deliver exceptional outcomes for all Ultra’s stakeholders. The Focus; Fix; Grow transformation is proceeding well and ahead of expectations, with many workstreams now well into their execution phase. As the transformation has matured, the Ultra Board is increasingly certain of its ability to deliver major benefits to Ultra stakeholders. The transformation is expected to enhance operating performance and efficiency, improve programme execution and delivery and optimise costs. This will provide additional resources to build on and further strengthen Ultra’s strong technology base. In addition, through improving engineering efficiency, Ultra can increase capacity; while investing more in facilities, systems, branding and training improves Ultra’s ability to attract, develop and retain talented people. The Ultra Board expects this, together with an enhanced strategic sales capability, will drive further sustainable growth and value creation. Ultra’s results for the six-month period ended 2 July 2021 show the continued progress which is being made, with 14.3 per cent. organic order book growth, 25.4 per cent. organic underlying operating profit growth, return on invested capital of 21.3 per cent. and a strong balance sheet with only 0.65x net debt to EBITDA and 0.19x on a covenant basis, which excludes pension liabilities and lease liabilities. The Ultra Group’s strong financial performance is evidence of the benefits of Ultra’s strategic re-positioning as an agile player in long-term growth markets. The Ultra Group has a robust business model with excellent order visibility, high returns on invested capital and strong cash generation. This, combined with a strong technology base focused on addressing customers’ future needs and the enhanced potential from the Focus; Fix; Grow transformation plan, is driving expansion in Ultra’s £12 billion sales pipeline and further growth in its order book which, at £1.3 billion, is currently at a record level. As a result, the Ult...
Background to and reasons for the recommendation. The TClarke Directors believe that TClarke’s recognised and strong brand, built upon through a reputation for high quality engineering, reliability and on time delivery, stands as the basis for TClarke’s continued sustainable growth. The TClarke Directors remain confident in both TClarke’s ability to succeed as an independent business and the further opportunities for growth in the UK. Notwithstanding the opportunities to accelerate this growth, the TClarke Directors are conscious of the need to balance this against the uncertainties and risks that exist for the business in the short and medium term. TClarke is not immune to the highly unstable national and international political outlook together with a volatile economic backdrop, all of which have impacted UK economic conditions and UK consumer confidence as well as having led to significant inflation in certain input costs. In addition, the TClarke Directors realise that the TClarke Shares have consistently traded at a discounted valuation multiple to its core peers in the public markets. Further, the TClarke Directors recognise that the market for the TClarke Shares is relatively illiquid, making it challenging for TClarke Shareholders to monetise their holdings in TClarke should they so wish. The TClarke Directors also believe that, in light of the opportunities, risks and historical trading of the TClarke share price, the offer from Regent of 160 xxxxx per TClarke Share in cash presents an opportunity for TClarke Shareholders to accelerate the crystallisation of a certain value from their investment at an attractive premium, de-risks the return of value and allows full liquidity of their investment in TClarke. The Acquisition provides an opportunity for TClarke Shareholders to achieve an attractive premium to the current share price. The Consideration represents a premium of approximately: • 28.00 per cent. to the Closing Price of 125.00 xxxxx per TClarke Share on 15 April 2024 (being the last Business Day before the commencement of the Offer Period);
Background to and reasons for the recommendation. On 22 September 2020, Take-Two made an initial proposal to Codemasters. Following detailed due diligence and negotiation regarding the Take-Two proposal, on 10 November 2020, Take-Two announced a binding offer of 120 xxxxx in cash and 0.02834 new Take-Two Shares for each Codemasters Share, which based on Take-Two’s closing share price of US$159.99 and the exchange rate of US$1.32:£1 on 9 November 2020 (being the last Business Day prior to the date of that announcement) valued each Codemasters Share at 464 xxxxx. For the reasons detailed in the announcement of the Take-Two Offer, the Codemasters Directors concluded that the Take-Two Offer represented an attractive opportunity for Codemasters Shareholders to realise their shareholding in cash and highly liquid Take-Two shares at a fair valuation. Following the binding announcement from Take-Two on 10 November 2020, EA made an initial approach to Codemasters. In accordance with its obligations under the Code and in order to advance discussions in the interests of delivering best value to shareholders, Codemasters engaged with EA to undertake detailed due diligence. On 10 December 2020, the Codemasters Directors received a proposal from EA of 604 xxxxx per Codemasters Share in cash. The EA offer represents a significant increase in value relative to the Take- Two Offer. Specifically, the EA offer represents a premium of 14.4 per cent. to the current value of 528 xxxxx per Codemasters Share implied by the Take-Two Offer (based on Take-Two’s closing price of US$190.21 and the exchange rate of US$1.32:£1 on 11 December 2020, being the last practicable date prior to the date of this Announcement). The Codemasters Directors remain confident that Codemasters’ existing strategy would deliver significant value for Codemasters Shareholders as an independent company as it continues to successfully execute its strategy of growing and enhancing a market leading position in the racing category of the gaming sector. Since its initial public offering in 2018, Codemasters has continued its track record of developing and publishing best-in-class games. This has not only underpinned a robust financial performance, but also been a key driver behind the significant share price increase since IPO. To strengthen the position that Codemasters has built within the racing category, there is an increasing necessity for additional investment in both resources and skills across its portfolio. The Codemasters Directors believe that EA’s d...
Background to and reasons for the recommendation. RSA is one of the world's longest standing general insurers, with over 300 years' experience in the industry. RSA today has strong positions in the large general insurance markets of the UK, Scandinavia and Canada, and a compelling standalone strategy which the RSA board believes would deliver attractive value for RSA Shareholders over time. At the same time, the RSA board believes that the Intact and Tryg offer accelerates the delivery of that value, providing an immediate premium, and recognising the value of the component parts of the business, together with the synergies across the combined group that may be realised through the Transaction, and provides RSA Shareholders with certainty of value in cash. In 2014, RSA set out a radical action plan to tighten strategic focus, strengthen its capital position and substantially improve business performance. That plan was supported by a rights issue in 2014 and a disposal programme undertaken between 2014 and 2016 which refocused RSA on its strongest core businesses, including the UK, Scandinavia and Canada. Since that time, RSA has benefited from a consistent strategy, centred on the pursuit of outperformance through strong customer franchises, disciplined business focus, a balance sheet that protects customers and the company, and accomplished operational delivery. This strategy has enabled important improvements to customer service, underwriting and cost effectiveness in recent years, driven by significant development in RSA's capabilities and performance culture, as well as in technology and data science tools. As a result, RSA has recorded its three best underwriting results this century over the last four years. In 2020, COVID-19 has presented challenges for society, for the insurance industry and for RSA. Throughout this period, RSA's priorities have been to sustain customer service, to operate safely and securely, to ensure RSA's resilience and to remain focused on delivering RSA's plans and performance. Focus on these priorities helped RSA to deliver a record underwriting performance3 at its half year results, combined operating ratios better than its stated "best-in-class" ambitions in each of the three divisions and continued improvements in recent focus areas such as UK domestic and Danish commercial lines. In September 2020, RSA took the important step of announcing a resumption of ordinary dividend payments, which had previously been suspended in April 2020, with the Interim Dividend to be paid ...
Background to and reasons for the recommendation. The Spirent Group delivered robust financial and operational performance in the years up to and including 2022. However, as has been widely recognised, the performance in 2023 was impacted by significant challenges to the telecoms sector with a number of the Spirent Group’s customers curtailing their expenditure and technology investments in response to broader macroeconomic conditions. This materially reduced full year revenue in 2023 and, due to the negative operating leverage impact, significantly reduced the profitability of the business. Whilst the Spirent Group has continued to invest in its established business to ensure that it is able to benefit from any recovery in the sector, the Spirent Group has more recently accelerated its focus on other verticals such as its positioning business and in hyperscalers. However, this is not likely to drive material growth in the short-to-medium term. The Spirent Directors believe that the Spirent Group’s prospects are fully recognised in the value of the Acquisition. In assessing the Acquisition, the Spirent Directors recognise the ongoing challenges facing the telecoms market which are expected to last through 2024 and, potentially, into 2025, and the impact these will have on customer spend and decision making. Continuing investment to protect research and development leadership positions is critical, but reduces the opportunity for further material cost saving initiatives, other than those already completed or being implemented. Looking forward, the Spirent Group’s reduced size and scale, lack of visibility on the timing of resumption of customer spending, and ongoing cost inflation, create an uncertain outlook with limited visibility around the ability of the business to return to 2022 levels of revenue and profitability in the short to medium term. As a result, the Acquisition represents a compelling opportunity for Spirent Shareholders to accelerate and de-risk the potential future value creation, and realise an immediate and certain cash exit for their investment at a significant premium to the prevailing share price. In considering the financial terms of the Acquisition, the Spirent Directors have taken into account a number of factors, including: • the Spirent Directors believe that the Acquisition fairly reflects the Spirent Group’s positioning as a trusted partner in the global telecoms and technology space and offers the opportunity to create a new leading presence in the industry; • the Acquisition...
Background to and reasons for the recommendation. Performance of Stock Spirits Stock Spirits has achieved strong performance across its business over the last five years, creating significant shareholder value since the current senior management team has been in place. In the four financial periods since 31 December 2016, Stock Spirits has grown revenues by €80 million (7.4 per cent. CAGR) and EBITDA by €19 million (8.9 per cent. CAGR), with a margin improvement of 19.8 per cent. to 20.8 per cent; in the same period, Stock Spirits paid ordinary dividends to shareholders totalling €67.2 million, invested €78.0 million in capital investment1 and acquisitions and reduced leverage to below 1.0x EBITDA, a reflection of robust cash generation over the period. Stock Spirits has also reversed recent market share decline in its largest consumer market of Poland and the share price has increased by approximately 73 per cent. from 155 xxxxx on 29 July 2016 to 268 xxxxx as at 11 August 2021. The directors of Stock Spirits believe that the Stock Spirits Group’s strong financial performance has been driven by the successful implementation of its strategy introduced in March 2018 and, more recently, its Planet, People and Processes ESG strategy. The strategy introduced in March 2018 focused on the four strategic priorities listed below: Premiumisation: in 2020, 35 per cent. of the Stock Spirits Group’s revenue came from premium brands – up from 19 per cent. in 2016 and surpassing the initial target set of 30 per cent. This highlights the Stock Spirits Group’s strength in innovation and new product development, as well as its world-class brand partners. Increased appeal to millennial customers: Stock Spirits continues to address the evolving trends of millennials, a recent example of this being the successful launch of flavoured vodka “Żołądkowa Gorzka Rześka” in Poland which appeals to the growing expectations of taste, freshness, lower ABV (alcohol by volume) and lower sugar content that young adult drinkers seek. Use of digital marketing: Stock Spirits has significantly expanded its digital marketing capabilities through a combined IT and digital strategy and a common digital marketing architecture. This enabled the Stock Spirits Group to target 87 per cent. of its consumers using digital campaigns in the financial year ending 30 September 2020. Strategic M&A opportunities to deliver sustainable and valuable growth across its operations: the Stock Spirits Group continues to seek accretive and value- enhancing ...
Background to and reasons for the recommendation. Following the outbreak of COVID-19, 2021 was a challenging year for the Tungsten Group. Total revenue for the year ended 30 April 2021 (“FY21”) decreased from £36.8 million to £36.1 million and total transaction volumes reduced from 19 million to 18.3 million. Despite this, new products were launched in FY21, with the Tungsten Group continuing to develop strategic partnerships to extend the Tungsten ecosystem and Tungsten implemented a process, successfully reducing costs and improving profitability within the business. On 9 June 2021, Xxxx Xxxxxx was appointed as Chief Executive Officer to replace Xxxxxx Lemonofides, and a number of new appointments were made to the Tungsten Group’s senior leadership team during FY21, together with an overall reduction in headcount and costs within the business. In the year ending 30 April 2021 (“FY22”), the Tungsten growth strategy has remained focused on driving core AP e-invoicing growth; riding the wave of compliance and opening the network through expansion of its interoperation and government gateway footprints; promoting its full suite of capabilities through partnerships and developing total AR. Against a backdrop of gradual global economic recovery, interim results for the six months ended 31 October 2021 (“H1 FY22”), released on 13 December 2021, showed encouraging, positive progress for Tungsten, with revenues increasing by 2% to £18.3 million and by 5% on a constant currency basis. Adjusted EBITDA increased to £3.0 million (up £2.2 million for the six months ended 31 October 2020 (“H1 FY21”)) and net cash increased to £1.9 million (a £0.9 million increase from H1 FY21). Whilst new deal bookings were lower than the prior year, important strategic wins in H1 FY22 included the first Total AR customer win in the insurance sector, a significant existing AP Buyer signing a new contract under the Supply Chain Finance partnership with Orbian and two buyers joining the network via a partnership with a leading US bank. In Tungsten’s H1 FY22 half-year results announcement, Tungsten stated: "We are encouraged by progress made in the period with some significant strategic wins across our portfolio and partnership offerings. Our focus on product and technology innovation has continued to enhance the experience of customers and partners across our digital ecosystem. The Tungsten team remain committed to supporting global enterprises realise tangible operational efficiency in uncertain economic times and ensuring robust risk ...
Background to and reasons for the recommendation. At the time of the MSIP Xxxxx, the Augean Directors concluded that the MSIP Xxxxx was a fair reflection of the current and potential value of Xxxxxx, and provided an opportunity for Augean Shareholders to realise their investment in Augean in cash in the near term. The Offer is a material increase and represents a significantly higher cash price per share to Augean Shareholders. The terms of the Offer represent a significant premium in cash to Xxxxxx's volume- weighted share price over the preceding two months prior to the date of MSIP's announcement that it was considering making an approach to Xxxxxx. As previously stated, the Augean Board believes that an infrastructure investor such as MSIP or Ancala and Fiera Infrastructure is ideally placed to highly value Xxxxxx's business activities that are both cash generative and offer defensive characteristics. Accordingly, following careful consideration of the above factors, the Augean Directors intend unanimously to recommend the Offer to Augean Shareholders. The Augean Directors have withdrawn their recommendation of the MSIP Offer and will adjourn the MSIP Offer shareholder meetings.
Background to and reasons for the recommendation. Xxxxxxx Xxxxxx is a leading international provider of professional services and technology solutions to numerous clients across the global insurance market. It operates 24 hours a day across the globe to support every stage of the insurance lifecycle and every aspect of the insurance operating model. With approximately 3,100 employees spanning 30 countries, Xxxxxxx Xxxxxx brings together the skills and expertise of people across the organisation to deliver the best possible outcomes to its clients. Xxxxxxx Xxxxxx operates three principal business units: Claims Services manages specialist claims, adjusts complex losses, offers 24/7 medical assistance and provides expert technical services. It combines technical expertise, efficient processes and effective technology to deliver better outcomes for insurers and insureds. Insurance Management establishes and manages insurance programmes and entities from end to end under a model of long-term partnership with clients. InsureTech helps insurance businesses operate and drive change through the delivery of technology-enabled solutions. It provides insurance market technology consultancy and software implementation using proprietary software solutions to enable clients to transform their businesses. Over a five-year period ended on 31 December 2018, Xxxxxxx Xxxxxx has grown revenues by 115 per cent., while returning approximately £32 million to shareholders through dividends. Over the same period, Xxxxxxx Xxxxxx has sought to create value for shareholders through the execution of an organic growth strategy and through targeted acquisitions. The Xxxxxxx Xxxxxx Directors believe that Xxxxxxx Xxxxxx can continue to execute against its current strategy by leveraging its strong brand, extensive and strong relationships and deep technical expertise in providing end-to- end professional services and by rolling out its technology offering. By doing so Xxxxxxx Xxxxxx can continue to deliver growth and create further shareholder value over the long-term. Notwithstanding this, the Proposed Acquisition is expected to deliver a number of strategic benefits for Xxxxxxx Xxxxxx’x business, including the opportunity to operate in a private context, and against this backdrop LMP Bidco has been able to offer a price to Xxxxxxx Xxxxxx Shareholders that recognises the value created by Xxxxxxx Xxxxxx'x strategy to date and the value that this strategy is expected to generate in the future. The Xxxxxxx Xxxxxx Directors are pleased ...
Background to and reasons for the recommendation. At the time of the Viavi Offer, the Spirent Directors unanimously concluded that the Viavi Offer provided Spirent Shareholders with a compelling opportunity to accelerate and de-risk the potential future value creation, and realise an immediate and certain cash exit for their investment at a significant premium to the prevailing share price. Following the announcement of the Viavi Offer, Keysight requested access to certain due diligence information in order to assess a possible offer for Spirent. Spirent provided access to due diligence information (in accordance with its obligations under the Takeover Code) and subsequently engaged in discussions with Xxxxxxxx in the interest of delivering the best value to Spirent Shareholders. The Spirent Directors, together with its financial advisers Rothschild & Co and UBS, have carefully considered and evaluated the commercial fit, strategic rationale, and financial terms and deliverability of the Keysight Offer and concluded that the Keysight Offer represents a superior proposition for Spirent and Spirent’s Shareholders relative to the Viavi Offer. The Spirent Directors also carefully evaluated Xxxxxxxx’s stated intentions regarding the business, management, employees, pensions schemes and other stakeholders of the Spirent business under Xxxxxxxx’s ownership. Accordingly, as noted above, after careful consideration, the Spirent Directors have unanimously decided to withdraw their recommendation for the Viavi Offer and intend to recommend unanimously that Spirent Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution(s) to be proposed at the Spirent General Meeting, each of which is to be convened in due course. The Spirent Directors unanimously support and intend to take the relevant actions to implement the Acquisition. In considering the terms of the Keysight Offer and determining whether they reflect an appropriate valuation of Spirent and its future prospects, the Spirent Directors took into account a number of factors, including that: • the Acquisition Value represents a premium of approximately:
