TIDMLSIC
RNS Number : 7713I
Lifeline Scientific, Inc
02 September 2016
2 September 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Lifeline Scientific, Inc.
("LSI" or the "Company")
Recommended Cash Acquisition
Lifeline Scientific, Inc. (AIM: LSIC), a leading international
provider of clinical products and services in the field of
transplantation, announces it has entered into a definitive merger
agreement (the "Merger Agreement") with Shanghai Genext Medical
Technology Co., Ltd ("SGM"), and certain of its affiliates. SGM is
a medical products company serving the field of transplantation in
the Asia region. Pursuant to the Merger Agreement, SGM's affiliate
would acquire all of the issued and to be issued shares of common
stock of LSI for an aggregate consideration of up to approximately
US$87.8 million in cash (the "Acquisition"). The LSI Board of
Directors (the "Board"), unanimously approved the Merger Agreement
and will recommend that the Company's shareholders vote in favour
of the Merger Agreement and Acquisition. As described in greater
detail below, this transaction will require approval of LSI's
shareholders at a special shareholder meeting.
Key terms of the Acquisition
LSI is incorporated in the State of Delaware in the USA. The
Acquisition is proposed as a merger in accordance with the Delaware
General Corporation Law ("DGCL"), as amended. The Acquisition is
not subject to the UK City Code on Takeovers and Mergers.
Under the terms of the Merger Agreement, LSI shareholders would
receive the British Pound Sterling equivalent of US$4.083 in cash
for each share that they hold at the closing of the Acquisition
(the "Closing"). The exact amount per share to be paid in British
Pounds Sterling will be determined at the Closing, based on the US
Dollar to British Pound Sterling exchange rate reported by the
Financial Times at such time. Solely as an example, if such
exchange rate is then the same as the exchange rate reported by the
Financial Times on 1 September 2016 of 1.310 US Dollars to 1
British Pound Sterling, this would equate to an offer price of
approximately 312 pence per share. That would represent a premium
of approximately:
-- 0.7 per cent. to the mid-market closing price of 309.5 pence
per LSI share on 1 September 2016, being the last dealing day prior
to the date of this announcement; and
-- 51.3 per cent. to the mid-market closing price of 206 pence
per LSI share on 18 September 2015, being the last dealing day
prior to the date that LSI's Board first announced the Company
would launch a comprehensive review of strategic and financial
alternatives to enhance shareholder value.
As at the date of this announcement, LSI has 19,530,031 Shares
in issue and admitted to trading on AIM and at the Closing there
are expected to be up to 1,975,140 in-the-money options over LSI
shares. Holders of in-the-money options over LSI shares will
receive the British Pound Sterling equivalent of US$4.083 in cash
for each option that they hold at the Closing less the exercise
price of any such option.
Shanghai Genext Medical Technology Company Ltd
Founded in 2004, SGM is a growing medical technology company
specialising in serving the field of transplant medicine in the
Asia region. With headquarters in Shanghai, SGM offers a convenient
one-stop shopping resource for transplant therapeutics, diagnostics
and medical devices designed to help clinicians improve outcomes
for end-stage organ disease patients in need of a life saving
transplant. SGM has arranged its financing for the Acquisition from
a consortium led by the life insurance arm of Sunshine Insurance
Group (SIG). SIG is one of the largest and fastest growing
diversified insurance and financial services groups in China with
total assets reported of over RMB 350 billion (US$55 billion).
Further Details
The Acquisition is subject to certain closing conditions
specified in the Merger Agreement, including regulatory and other
approvals for SGM and the approval of LSI's shareholders for both
the Acquisition and the cancellation of the admission to trading on
AIM of the LSI shares (to the extent such approval of cancellation
is required). Further details of the Acquisition including the
notice of publication of the Offer Document are contained
below.
If approved, the transaction is presently expected to close in
the fourth calendar quarter of 2016 and by no later than 9 December
2016 (subject to extension under certain circumstances). After the
Acquisition, LSI will become a subsidiary of SGM which is
controlled and indirectly majority owned by SGM and in which
members of the consortium led by SIG also have indirect ownership
interests. LSI will continue to operate in its present form under
the direction of its current management, providing its market
leading products and services to the worldwide transplant
community. LSI founder and chief executive officer, David Kravitz
will continue as Chief Executive Officer of the Company and serve
on its board of directors.
At least twenty business days prior to completion of the
Acquisition, LSI intends to make an application to the London Stock
Exchange plc for the cancellation of the admission to trading of
the LSI shares on AIM, to take effect on the first business day
after Closing. In accordance with the AIM Rules for Companies, such
cancellation is expected to require the consent of not less than
75% of votes cast by the Company's shareholders given at our
shareholder meeting. Subject to receipt of the requisite consent,
the last day of dealings in, and registration of transfers of, the
LSI shares on AIM is expected to be the business day immediately
prior to the date of Closing. Such approval would be in addition to
the LSI shareholder approval of the Merger Agreement, which would
require approval by the holders of a majority of the LSI shares
outstanding on the record date for such vote.
Four of LSI's significant shareholders have executed and
delivered irrevocable agreements with SGM pursuant to which such
holders agree to vote in favour of the merger and the related
matters at our shareholder meeting. The material terms of such
agreements, including certain other ancillary covenants of such
holders, will be described in the proxy materials provided to our
shareholders entitled to vote on the merger. Such four shareholders
together beneficially own 7,990,647 Shares, representing
approximately 40.9% of LSI's common stock -- and, as such, their
commitments may have a material effect on the likelihood of LSI
obtaining shareholder approval for the merger. The execution and
delivery of such support agreements by such holders was a
requirement imposed by SGM as a condition to entering into the
Merger Agreement.
Commenting on the Acquisition, David Kravitz, Chief Executive
Officer of LSI, said:
"Subject to shareholder approval, the agreement with SGM
represents an all cash offer and provides full liquidity for all
LSI shareholders at Closing. Following the merger, we believe the
combined group will be one of the largest and fastest growing
global medical technology companies dedicated to serving the
clinical transplant sector. The merger also represents an excellent
opportunity for both SGM and LSI to broaden their respective
products and services portfolios to better address the needs of
their respective transplant programme clients. Since announcing its
Strategic Review in September of 2015, the LSI board had been
actively reviewing a number of options to enhance shareholder
value, including possible strategic mergers, strategic
acquisitions, a potential sale of the Company, and a potential
listing of the Company's shares on the NASDAQ market. The
Acquisition of LSI by SGM represents the culmination of the
Company's strategic review process."
Piper Jaffray & Co. and its affiliate, Piper Jaffray Ltd.
(together, "Piper Jaffray") served as exclusive financial advisor
to LSI and provided a fairness opinion to the Company's Board of
Directors. Perkins Coie LLP and Latham Watkins (London) LLP served
as counsel to LSI.
CITIC Securities Co., Ltd served as exclusive financial advisor
to SGM. BFC Group Ltd served as the financing advisor to SGM.
Polsinelli PC and King & Wood Mallesons served as counsel to
SGM
For further information:
Lifeline Scientific, Inc. www.lifeline-scientific.com
David Kravitz, CEO Tel: +1 847 824 2300
Lisa Kieres, CFO Tel: +1 847 824 2300
Piper Jaffray Ltd. (Financial Tel: +44 (0)20 7796
Adviser to LSI) 8400
Neil Mackison / Graeme Smethurst
Panmure Gordon (UK) Limited (NOMAD Tel: +44 (0)20 7886
and Broker to LSI) 2500
Freddy Crossley / Duncan Montieth
(Corporate Finance)
Tom Salvesen (Corporate Broking)
Walbrook PR Limited (PR Tel: +44 (0)20 7933 8780 or
Adviser to LSI) lifeline@walbrookpr.com
Paul McManus Mob: +44 (0)7980 541 893
Lianne Cawthorne Mob: +44 (0)7584 391 303
CITIC Securities Co., Tel: +86 (0)10 6083 6888
Ltd (Financial Adviser
to SGM)
Michael Buckley / Madjid
Messad
About Lifeline Scientific Inc.
Headquartered in Chicago, Illinois, LSI is a global medical
technology company with regional offices in Brussels and Sao Paulo.
The Company's focus is the development of innovative products and
services that improve transplant outcomes and lower the overall
costs of transplantation. Its lead product, LifePort Kidney
Transporter, is the global market-leading medical device for
hypothermic machine preservation of donor kidneys. LifePorts and
novel solutions designed for preservation of other organs are in
development, with LifePort Liver Transporter next in line for
commercial launch. For more information please visit
www.lifeline-scientific.com
LSI Current Trading
LSI has today also announced separately a trading update for the
half year ended 30 June 2016. In summary, for the six months ended
30 June 2016, Lifeline expects to report revenues of US$18.2
million (H1 2015: US$15.0 million), gross profit of US$11.4 million
(H1 2015: US$8.9 million), and operating profit of US$2.0 million
(H1 2015: US$0.1 million). The Company's cash balance at 30 June
2016 was US$7.5 million (31 December 2015: US$6.9 million). The
Company's half-yearly results for the six months ended 30 June 2016
are expected to be published on 26 September 2016 and will be
included in the Offer Document (as defined below).
Offer Document (or Proxy Statement)
LSI plans to send to its shareholders an Offer Document, known
as a Proxy Statement, in connection with its proposed merger with
an affiliate of SGM, pursuant to which LSI would be acquired by
such affiliate of SGM. The Proxy Statement will contain important
information about the proposed merger and related matters.
SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN
IT BECOMES AVAILABLE AND PROMPTLY RESPOND AS PROVIDED IN SUCH
DOCUMENT. Such Proxy Statement will be mailed to all record holders
of LSI shares as of the record date, and we expect that additional
copies will be made available to nominee holders to share with
their underlying beneficial holders. Shareholders will also be able
to obtain free copies of the Proxy Statement (when it is available)
and other documents notified by LSI in accordance with the AIM
Rules for Companies through the web site maintained by LSI at
www.lifeline-scientific.com. In addition, shareholders will be able
to obtain free copies of the Proxy Statement from LSI by contacting
investor relations by telephone at +44 20 7933 8780, by email at
lifeline@walbrookpr.com, Attn: Investor Relations, or by going to
LSI's Investor Relations page on its corporate website at
www.lifeline-scientific.com.
LSI and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders
of LSI in connection with the proposed merger. Information
regarding the interests of these directors and executive officers
in the transaction described herein will be included in the proxy
statement described above.
Additional Information
This announcement is for information only and does not
constitute an offer or invitation to underwrite, subscribe for or
otherwise acquire or dispose of any securities or investment advice
in any jurisdiction, including without limitation, the United
Kingdom, the United States, Australia, Canada or Japan. Persons
needing advice should consult an independent financial adviser.
The distribution of this announcement in certain jurisdictions
may be restricted by law. Persons into whose possession this
announcement comes are required by LSI and Piper Jaffray to inform
themselves about, and to observe, such restrictions. Any failure to
comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
Piper Jaffray Ltd., which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority ("FCA"), is
acting exclusively for LSI and no one else in connection with the
Acquisition and will not be responsible to anyone other than LSI
for providing protections afforded to clients of LSI.
CITIC Securities Co., Ltd, which is authorised and regulated in
the People's Republic of China by the China Securities Regulatory
Commission ("CSRC"), and its affiliates, are acting exclusively for
SGM and no one else in connection with the Acquisition and will not
be responsible to anyone other than SGM for providing protections
afforded to clients of SGM.
Forward-Looking Statements
This announcement contains (or may contain) certain
forward-looking statements with respect to LSI plans and its
current goals and expectations relating to future events and its
future financial condition and performance and which involve a
number of risks and uncertainties. LSI caution readers that no
forward-looking statement is a guarantee of future performance and
that actual results could differ materially from those contained in
the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts.
Forward-looking statements sometimes use words such as 'aim',
'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan',
'goal', 'believe', or other words of similar meaning. Examples of
forward looking statements include, among others, statements
regarding LSI's future financial position, income growth,
impairment charges, business strategy, projected levels of growth
in its markets, projected costs, estimates of capital expenditure,
and plans and objectives for future operations of LSI and other
statements that are not historical fact.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances,
including, but not limited to, UK and US domestic and global
economic and business conditions, the effects of continued
volatility in credit markets, market-related risks such as changes
in interest rates and exchange rates, the policies and actions of
governmental and regulatory authorities, changes in legislation,
the further development of standards and interpretations under US
Generally Accepted Accounting Principles ("US GAAP") applicable to
past, current and future periods, evolving practices with regard to
the interpretation and application of standards under US GAAP, the
outcome of pending and future litigation, the success of future
acquisitions and other strategic transactions and the impact of
competition - a number of which factors are beyond LSI's control.
As a result, LSI's actual future results may differ materially from
the plans, goals, and expectations set forth in LSI's
forward-looking statements. Any forward-looking statements made
herein by or on behalf of LSI speak only as of the date they are
made.
Except as required by the FCA, AIM or applicable law, LSI
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained in this announcement to reflect any changes in LSI's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
The price of shares and the income from them may go down as well
as up and investors may not get back the full amount invested on
disposal of the shares.
Neither the content of LSI's websites (or any other website) nor
the content of any website accessible from hyperlinks on LSI's
websites (or any other website) is incorporated into, or forms part
of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGRMMGGLFZKGVZG
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