TIDMVENN
RNS Number : 5712L
Venn Life Sciences Holdings PLC
04 October 2016
Venn Life Sciences Holdings Plc
("Venn Life Sciences" or the "Company" or the "Group")
Sale of Innovenn UK Limited
& Notice of General Meeting
Venn Life Sciences (AIM: VENN), a growing Contract Research
Organisation providing drug development, clinical trial management
and resourcing solutions to pharmaceutical, biotechnology and
medical device clients, announces that its wholly owned subsidiary,
Venn Life Sciences Limited, has entered into a conditional
agreement under which it and Lynchwood Nominees Limited, as
custodian for the Helium Rising Stars Fund, would sell the entire
issued share capital of Innovenn UK Limited for a total
consideration of up to GBP4,740,000.
Overview
Information on Innovenn
Innovenn was founded by Venn in 2014 as an innovation vehicle
dedicated to the development and marketing of healthcare products
and technologies. The business acquired Labskin, a living skin
model, and an anti-acne formulation and since acquisition has
invested in the further development and commercialisation of these
assets.
Prior to the Sale, the Subsidiary has converted its loan to
Innovenn of GBP1,294,491 into ordinary shares of GBP0.001 each of
Innovenn, increasing its shareholding to 70% of the issued share
capital of Innovenn. The other shareholder of Innovenn is the
Helium Rising Stars Fund. The Helium Rising Stars Fund is a
Cayman-domiciled fund that invests in small UK companies. The fund
is managed by ISPartners, a hedge fund manager based in Zurich. The
fund is co-managed by David Newton and Christian Benz.
Within the Company's consolidated accounts for the financial
year 2015, the Innovenn division reported a loss before tax of
GBP385,000 and had net liabilities of GBP121,000. Based on the
position as at 31st December 2015, the terms described above would
crystalise a gain on disposal in the Company's consolidated
accounts of approximately GBP959,000. Post the sale Innovenn will
fund its activities from existing cash resources and a EUR1m 5 year
bank loan which is currently guaranteed by Venn (the "Guarantee").
The provision of the Guarantee is a related party transaction as
defined in the AIM Rules and the ESM Rules. Subject to bank
approval it is intended that post-IPO Integumen will replace Venn
as guarantor for this facility.
The Sale
The consideration for Innovenn has been agreed at GBP4,740,000,
subject to adjustment depending on the level of Innovenn' s current
liabilities as at completion. Part of the consideration for the
Sale will be settled by the assumption by Integumen of GBP146,032
of Innovenn's debt, with the balance of GBP4,593,968 being settled
by the allotment of ordinary shares of GBP1.00 each in the capital
of Integumen at par credited as fully paid. At completion an
initial sum of GBP3,675,174 will be settled by the issue of
ordinary shares in the capital of Integumen proportionately to the
Subsidiary and Helium Rising Star Fund with further shares (if
appropriate) being issued to the Subsidiary and the Helium Rising
Star Fund once the level of current liabilities has been
ascertained.
Under the terms of the SPA the Subsidiary has given Integumen
customary warranties and indemnities in respect of Innovenn' s
business and assets.
The Directors believe the Sale will allow the Group to
concentrate on its core activities of drug development and clinical
research services. The Sale will help to simplify the financial
affairs of Venn allowing for a clearer communication and
understanding of the underlying value in its core business.
Under the provisions of section 190 of the Act a company may not
enter into an arrangement under which a director of the company or
of its holding company, or a person connected with such a director,
acquires or is to acquire a non-cash asset valued at more than
GBP100,000 unless the arrangement is conditional upon the approval
of that company's shareholders and the shareholders of its holding
company.
As Anthony Richardson is a director and shareholder of Integumen
and a director of both the Company and the Subsidiary and the share
capital of Innovenn has been valued at more than GBP100,000, the
Sale must be approved by the Company's shareholders pursuant to
Section 190 of the Act. Such approval must be given by a simple
majority of Shareholders voting at a duly convened general
meeting.
On completion of the Sale, Anthony Richardson, a Director of
Venn, will be a non-executive director of Integumen and will serve
on the board of Integumen as Venn's nominee. Declan Service is a
Director of Innovenn, a subsidiary of Venn and a Director of
Integumen. Accordingly, Anthony Richardson and Declan Service are
related parties of the Company as defined in the AIM Rules and the
ESM Rules. As a result, the Sale is treated as a "related party
transaction" under the AIM Rules and the ESM Rules.
Furthermore, the Sale, because of its size relative to the
Company is a substantial transaction in accordance with rule 12 of
each of the AIM Rules and ESM Rules.
Information on Integumen Limited
Integumen has been established for the purpose of building a
business in the area of human surface science. Anthony Richardson
and Declan Service are the founding directors of Integumen. Anthony
Richardson will serve as a Non-Executive Director of Integumen on
completion of the Sale. Declan Service will fulfil an executive
management role.
Integumen plans to acquire the business of Innovenn and
complementary businesses in the areas of Skin Science, Oral-health
and Woundcare. Integumen has two subscriber shares in issue, one
owned by Anthony Richardson and one owned by Declan Service. The
acquisition of Innovenn and other businesses is to be completed by
way of the issue of new shares in Integumen. The allocation of a
subscriber share to Anthony Richardson and Declan Service was to
facilitate the creation of Integumen as a legal entity and not for
the purposes of financial reward. It is calculated that Anthony
Richardson and Declan Service will each (and other than through the
Company) own less than 1% of the enlarged Integumen business.
Integumen plans to seek admission of its shares to trading on AIM
in due course and plans to raise capital to fund the future
development and commercialisation of the technology portfolio.
Integumen has appointed advisors in this regard. Prior to a
potential listing and fundraise Integumen will fund its activities
out of existing cash reserves and a bank loan facility for EUR1m
which Venn currently guarantees.
In addition to the acquisition of Innovenn, Integumen is in the
process of acquiring three additional businesses. The first of
these transactions will be completed by way of the purchase of
assets of a skin-care company, currently listed on US OTC and owner
of a consumer skincare brand. The agreement to acquire these assets
is will be conditional on the approval of shareholders in the
target company.
In addition to Innovenn and the asset purchase described above,
Integumen has agreed terms to acquire a European based Oralhealth
company. The purchase will be by way of a purchase of shares and
Integumen is targeting the completion of this transaction in the
coming weeks. The target currently has an oral hygiene product in
the market place with strong international distribution.
Finally Integumen will complete the acquisition of a woundcare
business with products in development in the areas of wound
diagnostics and infection control. This acquisition will be
completed by way of a purchase of shares and Integumen expects to
complete this transaction in the coming days.
On completion of the aforementioned transactions, Integumen will
have a portfolio of intellectual property and products across four
complementary healthcare sectors. On completion of all four
transactions Venn would own 30% of the equity of the combined
businesses.
Although the Board understands that Integumen intends to enter
into the above transactions there is no guarantee that all or any
of these will be completed. If Integumen is unsuccessful in
acquiring the other businesses and/or concluding a fundraise then
the Venn board will consider other options regarding the disposal
of its investment. In the event that integumen completes the
aforementioned transactions and successfully lists its shares, the
board of Venn will decide whether to retain the investment in Venn
or distribute the shares to Venn's shareholders.
Recommendation
The Independent Directors, being Allan Wood, Jonathan Hartshorn,
Gracielle Schutjens, Cornelius Groen, Michael Ryan, Paul Kennedy
and Mary Sheahan, who are not related parties under the AIM Rules
and ESM Rules for the purpose of the Sale and the Guarantee, having
consulted with Davy, the company's NOMAD and ESM adviser, for the
purpose of the AIM Rules and ESM Rules, consider that the Sale and
Guarantee are fair and reasonable insofar as the shareholders of
the company are concerned. Anthony Richardson has not taken part in
the Board's consideration of these matters.
The Independent Directors consider the Sale to be in the best
interests of the Company and its Shareholders as a whole and
accordingly unanimously recommend that Shareholders vote in favour
of the Resolution to be proposed at the General Meeting as they
intend to do in respect of their own beneficial holdings amounting,
in aggregate, to 6,199,655 Ordinary Shares, representing
approximately 10.29% per cent. of the Ordinary Shares in issue.
General Meeting
A General Meeting, notice of which has been sent to shareholders
today, is to be held at 12 noon on 26 October 2016 at the offices
of Jeffries Henry, Finsgate, 5-7 Cranwood Street, London EC1
9VE.
The full Circular to Shareholders is available on the Company's
website:
http://www.vennlifesciences.com/shareholder-information/
Tony Richardson, Chief Executive Officer of Venn, said: "As
shareholders know, Innovenn has made significant progress in moving
from its development phase into commercialisation and that it was
our intention to set this business on an independent footing, with
its own source of funding and a value that can be clearly
established. This transaction will also allow the strong
performance of Venn's core CRO business to be seen more
clearly."
Venn Life Sciences Holdings www.vennlifesciences.com
Plc
Tony Richardson, Chief Executive Tel: +353 154 99 341
Officer
Davy (Nominated Adviser, ESM
Adviser and Joint Broker)
Fergal Meegan / Matthew de Vere Tel: +353 1 679 6363
White (Corporate Finance)
Paul Burke (Corporate Broking)
Hybridan LLP (Co-Broker)
Claire Louise Noyce Tel: +44(0)20 3764 2341
Walbrook PR Ltd Tel: +44(0)20 7933 8787 or
venn@walbrookpr.com
Paul McManus Mob: +44(0) 7980 541 893
About Venn Life Sciences: Venn Life Sciences is a Contract
Research Organisation providing drug development, clinical trial
management and resourcing solutions to pharmaceutical,
biotechnology and medical device organisations. With dedicated
operations in France, Germany, the Netherlands, the UK, Ireland and
Europe wide representation - Venn specialises in rapid deployment
and management of multisite projects. Venn also has an innovation
division - Innovenn - focused primarily on breakthrough development
opportunities in Skin Science.
DEFINITIONS
The following words and expressions shall have the following
meanings in this document, the Notice of General Meeting and the
Form of Proxy unless the context otherwise requires:
"Act" the Companies Act 2006
"AIM Rules" the AIM Rules for Companies as published
by the London Stock Exchange plc
from time to time
"Board" or "Directors" the directors of the Company
"certificated" a share or other security which
or "in certificated is not in uncertificated form (that
form" is, not in CREST)
"Company" or "Venn" Venn Life Sciences Holdings plc,
a public limited company registered
in England and Wales with a registered
number 07514939
"ESM" the Enterprise Securities Market
of the Irish Stock Exchange
"ESM Rules" the ESM Rules for Companies as published
from time to time by the Irish Stock
Exchange
"Form of Proxy" the form of proxy for use at the
General Meeting which accompanies
this document
"General Meeting" the general meeting of the Company,
notice of which is set out at the
end of this document
"Group" the Company and its subsidiary undertakings
"Guarantee" the guarantee by Venn of a EUR1m,
5 year bank loan to Innovenn
"Helium Rising Helium Rising Stars Fund is a Cayman-domiciled
Star Fund" fund launched in January 2014 as
the follow-on venture of the Helium
Special Situations Fund originally
launched in July 2006. The Helium
Rising Stars Fund invests in quoted
small companies and up to 30% of
NAV in private equity type of investments,
predominantly pre-IPO situation,
public-to-private transactions and
private placements. Its focus is
on UK companies with a market cap
of less that GBP50m across all sectors
excluding mining and natural resources.
The fund is managed by ISPartners,
a hedge fund manager based in Zurich.
The fund is co-managed by David
Newton and Christian Benz.
"Independent Directors" being Allan Wood, Jonathan Hartshorn,
Gracielle Schutjens, Cornelius Groen,
Michael Ryan, Paul Kennedy and Mary
Sheahan
"Innovenn" Innovenn UK Limited
"Integumen" Integumen Limited, a company owned
and controlled by Anthony Richardson
and Declan Service for the purpose
of facilitating the acquisition
of Innovenn and other businesses
"London Stock Exchange" London Stock Exchange plc
"Lynchwood Nominees a custodian for the Helium Rising
Limited" Stars Fund
"Notice of General the notice of the General Meeting,
Meeting" which is set out at the end of this
document
"Ordinary Shares" ordinary shares of 0.1 pence each
in the share capital of the Company
"Registrars" SLC Registrars at 42-50 Hersham
Road, Walton-on-Thames, Surrey KT12
1RZ
"Resolution" the resolution to be proposed at
the General Meeting, as set out
in the Notice of General Meeting
"Sale" the sale of all the issued share
capital of Innovenn UK Limited to
Integumen Limited
"Shareholder(s)" holder(s) of Ordinary Shares
"SPA" the share purchase agreement dated
3 October 2016 between (1) the Company
and Lynchwood Nominees Limited (as
custodian for the Helium Rising
Stars Fund) and (2) Integumen Limited
"Subsidiary" Venn Life Sciences Limited, a wholly
owned subsidiary of the Company
"UK" or "United the United Kingdom of Great Britain
Kingdom" and Northern Ireland
"uncertificated" a share or security recorded in
or "in uncertificated the Company's register of members
form" as being held in uncertificated
form, title to which may be transferred
by means of CREST
This information is provided by RNS
The company news service from the London Stock Exchange
END
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