8 December 2022
RECOMMENDED CASH OFFER
for
Crestchic plc (Crestchic or the Company)
by
Aggreko Limited
(Aggreko)
to be effected by way of scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of Aggreko and Crestchic are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash offer to be made by Aggreko for the entire issued and to be issued ordinary share capital of Crestchic. The Offer is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act between Crestchic and Crestchic Shareholders.
· Under the terms of the Offer, Crestchic Shareholders will be entitled to receive:
for each Ordinary Share 401 pence in cash
· The Offer values the entire issued and to be issued ordinary share capital of Crestchic at approximately £122 million representing an implied enterprise value of approximately £122 million. The terms of the Offer represent :
o a premium of approximately 44 per cent to the Closing Price per Ordinary Share of 279 pence on 15 November 2022 (being the last Business Day prior to the date the Offer was first received by the Crestchic Directors);
o a premium of approximately 13 per cent to the Closing Price per Ordinary Share of 356 pence on 8 December 2022 (being the date of the commencement of the Offer Period);
o a premium of approximately 41 per cent to the volume-weighted average price per Ordinary Share of 285 pence for the 60 day period to 8 December 2022 (being the date of the commencement of the Offer Period); and
o an implied enterprise value multiple of approximately 13.7 times Crestchic’s EBITDA from continuing operations (excluding the impact of IFRS 16) of £8.9 million for the twelve months ended 30 June 2022.
If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes payable by Crestchic in respect of the Ordinary Shares on or after the date of this announcement and prior to the Effective Date, Aggreko will have the right to reduce the value of the consideration payable for each Ordinary Share by up to the amount per Ordinary Share of such dividend, distribution or return of value.
Overview of Aggreko
Aggreko is one of the global market leaders in delivering power and temperature control solutions. Working at the forefront of a rapidly changing energy market, Aggreko provides customers with sector-specific, cost-effective and flexible solutions (including power, heating and air conditioning). Aggreko has more than 55 years of operational experience, over 5,500 permanent employees and 159 sales and service centres across the globe to support its customers across 69 countries.
In August 2021 Aggreko was acquired by funds managed by TDR and I Squared. TDR and I Squared have a proven track record and deep expertise in investing in power and energy transition infrastructure and equipment rental businesses which generate stable cash flows in attractive markets supported by growing demand.
Background to and reasons for the Offer
Aggreko has a business priority to add new capabilities through M&A. Crestchic’s business is well-aligned with Aggreko’s overarching objective of supporting its customers through the energy sector’s transition to more renewable sources of energy. Aggreko has a complementary product offering and the addition of Crestchic to the Aggreko Group will help accelerate Aggreko’s plan to target high-growth attractive end-markets such as renewable energy and data-centres. Aggreko, and its shareholders, are excited by the opportunities Crestchic is addressing and believe that the support of the Wider Aggreko Group will allow Crestchic to accelerate and de-risk delivery of its strategy. Aggreko believes that securing Crestchic’s future in a group with a well-aligned strategy is the best path forward for Crestchic’s employees, customers and wider stakeholders.
Crestchic Recommendation
The Crestchic Directors, who have been so advised by Smith Square Partners on the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Crestchic Directors, Smith Square Partners has taken into account the commercial assessments of the Crestchic Directors.
Accordingly, the Crestchic Directors intend to recommend unanimously that Crestchic Shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting as all Crestchic Directors holding Ordinary Shares as at the date of this announcement have irrevocably undertaken to do so in respect of their own Ordinary Shares, being a total of 1,716,666 Ordinary Shares (representing, in aggregate, approximately 6.1 per cent of the Voting Shares in issue on 8 December 2022 (being the date of this announcement)).
Irrevocable Undertakings and letter of intent
Aggreko has also received irrevocable undertakings from certain of the Crestchic Shareholders as detailed below to vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting in respect of 7,066,717 Ordinary Shares (representing, in aggregate, approximately 25.1 per cent of the Voting Shares in issue on 8 December 2022 (being the date of this announcement)):
· Harwood Capital LLP in respect of:
o 164,500 Ordinary Shares it beneficially owns; and
o 3,902,217 Ordinary Shares beneficially owned by Rockwood Strategic Plc;
· Harwood Capital Management (Gibraltar) Limited in respect of the 3,000,000 Ordinary Shares beneficially owned by Oryx International Growth Fund Limited.
Aggreko has therefore received irrevocable undertakings in respect of 8,783,383 Ordinary Shares (representing, in aggregate, approximately 31.2 per cent of the Voting Shares in issue on 8 December (being the date of this announcement).
In addition, Aggreko has received a letter of intent from Artemis Investment Management LLP, acting in its capacity as investment adviser for and on behalf of Artemis UK Smaller Companies Fund confirming its intention to vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting in respect of 2,081,461 Ordinary Shares (representing approximately 7.4 per cent of the Voting Shares in issue on 8 December 2022 (being the date of this announcement)).
Aggreko has therefore received irrevocable undertakings or letters of intent in respect of 10,864,844 Ordinary Shares (representing, in aggregate, approximately 38.5 per cent of the Voting Shares in issue on 8 December 2022 (being the date of this announcement)).
Further details of these irrevocable undertakings and the letter of intent are set out in Appendix III to this announcement.
Timetable and Conditions
It is intended that the Offer will be effected by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. However, Aggreko reserves the right to elect to implement the Offer by way of a Takeover Offer, subject to the Panel’s consent and the terms of the Co-operation Agreement.
The Offer will be put to Crestchic Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent in value of the Scheme Shares voted. In addition, the approval of the resolutions required to approve and implement the Scheme, as set out in the notice of the General Meeting (including, without limitation, the Resolutions) by the requisite majority of Crestchic Shareholders at the General Meeting (expected to be held directly after the Court Meeting) is also required for the implementation of the Scheme, together with the sanction of the Scheme by the Court. Finally, a copy of the Court Order must be delivered to the Registrar of Companies for registration, upon which the Scheme will become effective.
The Offer will be made in accordance with the Takeover Code and on the terms and subject to the Conditions which are set out in Appendix I to this announcement and on the further terms and conditions that will be set out in the Scheme Document.
The Scheme Document, containing further information about the Offer and notices of the Court Meeting and the General Meeting and the Forms of Proxy, shall be published as soon as practicable and, in any event, within 28 days of the date of this announcement, unless Aggreko and Crestchic otherwise agree, and the Panel consents, to a later date.
It is expected that:
· the Scheme Document will be published as soon as practicable and, in any event, on or before 5 January 2023;
· the Court Meeting and the General Meeting will be held on or around 6 February 2023; and
· the Scheme will become effective on or around 14 February 2023, subject to the prior satisfaction or, where permitted, waiver of the Conditions set out in Appendix I to this announcement.
Commenting on the Offer, Mike Smith, Chairman of Aggreko said:
“Crestchic is a world-class business operating in an attractive and specialised area of the power reliability market. In Aggreko, Crestchic will have a supportive and well-capitalised owner who shares Crestchic’s desire to execute against its long-term vision of providing solutions aligned with the changing requirements of our customers. We look forward to Crestchic becoming part of the Aggreko Group to provide the best platform for success for Crestchic’s customers, employees and wider stakeholders”
Commenting on the Offer, Peter Harris, Executive, Chairman of Crestchic, said:
“The Crestchic Board is pleased with the considerable progress made by the Company following the implementation and delivery of its refocused strategy, and believes that Crestchic has the potential to generate significant value for shareholders in the long-term. However, the Board recognises that Crestchic, as a relatively small business, could accelerate its growth and shareholder value creation by combining with a significantly larger player in related global markets. The Offer of 401 pence per Crestchic share in cash represents an attractive, immediate premium for shareholders, and I am confident that under Aggreko’s responsible long-term stewardship the business will continue to thrive.”
This summary should be read in conjunction with the full text of this announcement and its appendices. The Offer shall be subject to the Conditions and further terms that are set out in Appendix I to this announcement and to the full terms which shall be set out in the Scheme Document. Appendix II to this announcement contains the sources of information and bases of calculations set out in this announcement. Appendix III to this announcement contains further details of the irrevocable undertakings and the letter of intent. Appendix IV to this announcement contains definitions of certain terms used in this summary and in this announcement. The appendices form part of this announcement.
| Enquiries: | |
| Centerview Partners UK LLP , financial adviser to AggrekoHadleigh Beals and Alexander Gill | Tel: +44 (0)20 7409 9700 |
| Tulchan Communications LLP, public relations adviser to AggrekoJonathan Sibun | Tel: +44 (0)20 7353 4200 |
| CrestchicPeter Harris, Executive ChairmanIwan Phillips, Finance Director | Tel: +44 (0)128353 1645 |
| Smith Square Partners, financial adviser to CrestchicJohn Craven, Angus Grierson and Paul Baines | Tel: +44 (0)203696 7260 |
| Shore Capital, Nominated Adviser and broker to CrestchicRobert Finlay, David Coaten and Henry Willcock | Tel: +44 (0)207408 4050 |
| Buchanan Communications Ltd, public relations adviser to Crestchic |