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Imperial Innovations Group plc: Proposed Placing to Raise Up to £150 million

Imperial Innovations Group plc: Proposed Placing to Raise Up to £150 million

London, UK –  2 June 2014 London, UK – Imperial Innovations Group plc (AIM: IVO, "Innovations") is proposing to raise up to £150 million (before expenses) by way of a non-pre-emptive placing of new Ordinary Shares with existing and new institutional investors (the "Placing"). The Placing and its timetable are subject to a number of factors, including prevailing market conditions and execution of definitive documentation.  It is also subject to the passing of Placing Resolutions by Shareholders at a general meeting of Shareholders to be held on 19 June 2014. Imperial Innovations Group plc (AIM: IVO, "Innovations") is proposing to raise up to £150 million (before expenses) by way of a non-pre-emptive placing of new Ordinary Shares with existing and new institutional investors (the "Placing"). The Placing and its timetable are subject to a number of factors, including prevailing market conditions and execution of definitive documentation.  It is also subject to the passing of Placing Resolutions by Shareholders at a general meeting of Shareholders to be held on 19 June 2014.

Shareholders with beneficial interests in 89.5 per cent. of Innovations' existing share capital have given irrevocable undertakings to vote in favour of the resolutions needed to enable the Placing to proceed.

Highlights
• It is proposed that the Placing will raise up to £150m at not less than 400 pence per Ordinary Share
• Subject to completion, the net proceeds of the Placing are proposed to be used:
o to continue the Group's support of its existing portfolio companies;
o to source investment opportunities in new technologies using the Group's extensive network of academics, entrepreneurs, management teams and co-investors; and
o for general corporate purposes.

A circular will be sent to shareholders today, 2 June 2014, appending a notice of general meeting.

Martin Knight, Chairman of Innovations, said: “The Board believes that strengthening the Group's balance sheet through the Placing would greatly enhance its ability to attract high quality investment opportunities.  It would also improve the Group’s ability to support portfolio companies from inception until their full development, as illustrated by the recent successful IPO of Circassia Pharmaceuticals. We have identified opportunities to increase the capital deployed in a number of our leading portfolio companies, which in aggregate, are seeking to raise over £100 million from investors over the next 12 months. It is gratifying that our core shareholders have evidenced their support for this proposed fundraising by giving irrevocable undertakings to vote in favour of the resolutions needed to enable the Placing to proceed.”

Notes to Editors

Imperial Innovations -
www.imperialinnovations.co.uk

Imperial Innovations is a technology commercialisation company that combines the activities of technology transfer, intellectual property licensing and protection, company incubation, and investment. Imperial Innovations and its group of companies (the "Group") supports scientists and entrepreneurs in the commercialisation of their ideas and intellectual property through: protecting the intellectual property and licensing it to third parties for commercialisation; in appropriate cases, leading the formation of new companies; providing office and laboratory facilities in the early stages; providing investment and facilitating co-investment to accelerate development; providing operational expertise; and helping to recruit high-calibre executive management and board members to its portfolio companies. The Group also runs a company incubator in London that provides office and laboratory space to many of its portfolio companies. The Group is involved in the commercialisation of promising opportunities from a broad range of technology sectors but has built particular expertise in the key sectors of: therapeutics, medtech, engineering and materials, and information & communications technology.

This commercialisation process commences with a detailed review of invention disclosures. Following this review, the Group may develop an intellectual property strategy, invest in patent protection, carry out market research and seek to validate technology through proof of concept studies. Once this essential early groundwork has been completed, and presuming outcomes are favourable, a decision is then taken as to the best way of commercialising particular intellectual property. This can be either through licensing the intellectual property to a commercial partner or through forming a spin-out company.

The Group has a Technology Pipeline Agreement (the "TPA") with Imperial College London that provides access to all the unencumbered intellectual property developed at Imperial College London during the term of the TPA. The TPA provides the Group with flexibility to commercialise intellectual property from Imperial College London in any way it considers appropriate. Typically, this is achieved either through the formation of a spin-out company, or through licensing the intellectual property to an existing company in the same field.

In addition to working with Imperial College London, the Group also works closely with the academic communities associated with the University of Cambridge, the University of Oxford and University College London. This includes working with those universities' own technology transfer offices (Cambridge Enterprise Limited, Isis Innovation and UCL Business PLC, respectively) as well as directly sourcing investment opportunities in early-stage companies and from research institutions within an area broadly bounded by London, Oxford and Cambridge sometimes referred to as the "golden triangle". These other relationships apply the Group's skills of building and investing in technology businesses emanating from those universities, in a way similar to that historically applied just to portfolio companies spun out of Imperial College London.

During the period from the admission of its shares to trading on AIM in 2006 to 31 January 2014, Innovations has invested a total of £160.9 million across its portfolio companies, which have raised collectively investment of over £750.0 million.

Reasons for the Placing and proposed use of proceeds

Following Innovations' 2011 fundraising, the Group has invested large sums in later stages of its portfolio companies' development. This allows the Group to deploy significant amounts of capital in assets that are well known to the Group. The Directors believe that this strategy has resulted in successes to date and further believe that the Placing, if it proceeds, could help Innovations to build upon that success in the future.

The Board believes that strengthening the Group's balance sheet through the Placing would further increase the Group's prominence as a leading investor in the sector, and its ability to attract high quality opportunities by demonstrating its ability to support portfolio companies from inception until their full development.

The Group is engaged with existing and prospective portfolio companies with total funding requirements over the next 12 months in excess of £100 million. Accordingly, if the Placing proceeds, Innovations would propose to use the net proceeds receivable by it under the Placing:
• to continue to support the Group's existing portfolio companies,
• to source investment opportunities in new technologies using the Group's extensive network of academics, entrepreneurs, management teams and co-investors; and
• for general corporate purposes.

Details of the Placing

Innovations is proposing to raise up to £150 million (before expenses) by way of a non-pre-emptive placing of new Ordinary Shares with existing and new institutional investors.

The Placing and its timetable are subject to a number of factors, including (without limitation): the passing of the Placing Resolutions (as defined in the circular that will be sent to Shareholders today, 2 June 2014) by Shareholders at the General Meeting; the approval of the Placing by the Board of Innovations; prevailing market conditions; and execution of definitive documentation. Accordingly, Shareholders and potential shareholders should not base their decisions, investment-related or otherwise, on Innovations' preliminary intentions in relation to the Placing. The final size and pricing of the Placing has not yet been determined, but Innovations would not proceed at a placing price of less than 400 pence per Ordinary Share. 

Currently, the Company does not have sufficient authority in place to allot Ordinary Shares on a non-pre-emptive basis for the purposes of the Placing. Accordingly, it is proposed that the following resolutions will be proposed at the General Meeting in order that the Placing can proceed:
• to authorise the Directors to issue and allot up to 37,500,012 Ordinary Shares; and
• to disapply pre-emption rights in connection with the proposed allotment and issue of Ordinary Shares pursuant to that authority.

If approved, the authorisations to allot up to 37,500,012 Ordinary Shares and the disapplication of pre-emption rights in relation to such allotment will expire on 31 December 2014. It is expected that, if the Placing proceeds, the new Ordinary Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of those Ordinary Shares and will otherwise rank on admission pari passu in all respects with the Ordinary Shares in issue as at the date of this announcement.  It is the Directors' intention to exercise the authority and power conferred by the Placing Resolutions only in connection with the Placing and not otherwise.

The details of the Placing Resolutions are contained in the notice of meeting (the "Notice") appended to a circular sent to shareholders today, 2 June 2014, which includes a recommendation from the Board that Shareholders vote in favour of the resolutions, including the Placing Resolutions.

The Board believes that the flexibility provided by a non-pre-emptive placing makes it the most appropriate fundraising structure for Innovations at this time. It would allow a number of both existing institutional holders and new institutional investors to participate in the Placing.

Innovations has received undertakings from Imperial College London (30.3 per cent.), Invesco Asset Management Limited (42.7 per cent.), Lansdowne Developed Markets Master Fund Limited (13.7 per cent.) and Woodford Investment Management LLP (2.9 per cent.) to vote in favour of each of the resolutions to be proposed at the General Meeting. These parties together have an aggregate beneficial holding amounting to 89.5 per cent. of Innovations' issued share capital.

If the Placing proceeds, application will be made to the London Stock Exchange for the new Ordinary Shares issued pursuant to the Placing to be admitted to trading on AIM. Innovations will keep under review the possibility of transferring from AIM to the premium segment of the Official List and to trading on the Main Market and it is an objective of the Board to do so, but only when conditions and circumstances indicate that it is appropriate, especially taking into account the requirement to maintain at least 25 per cent of Innovations' issued share capital in public hands.

Capitalised terms used but not defined in this announcement shall have the meaning given to them in the circular that will be sent to Innovations' shareholders today (2 June 2014).

IMPORTANT NOTICE

Nothing in this document should be interpreted as and does not constitute or form part of and should not be construed as an offer for sale or subscription or, of securities, a solicitation of an offer to buy or subscribe for securities in Innovations or securities in any other entity in any jurisdiction, or a term or condition of the same.  This announcement shall it not, nor shall any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

This announcement is not an offer of securities for sale or the solicitation of an offer to buy the securities discussed herein in the United States, Australia, Canada, Japan or in any jurisdiction in which such offer or solicitation is unlawful.  No securities may be offered or sold in the United States unless the securities are registered under the Securities Act of 1933, as amended, or an exemption from registration requirements is available.  Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan.  Imperial Innovations Group plc has not and does not intend to register any securities in the United States, Australia, Canada or Japan.  There will be no public offer of the securities in the United States or elsewhere. Copies of this announcement are not being, and should not be, distributed, published or transmitted into the United States.

This announcement does not constitute an offer of securities to the public in the United Kingdom. This announcement, insofar as it constitutes an invitation or an inducement to participate in the Placing or otherwise, is directed only at (i) persons outside the United Kingdom and (ii) persons falling within Article 19(5) ("investment professionals") of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") who have professional experience in matters relating to investments, and/or (iii) high net worth companies, unincorporated associations and other bodies and persons to whom it may otherwise lawfully be communicated in accordance with Article 49(2) of the Order, provided that in the case of persons falling into categories (ii) or (iii), this communication is only directed at persons who are also "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000 (all such persons together being referred to as "relevant persons").  This announcement must not be acted on or relied on by any person who is not a relevant person.  Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "projects", "assumes", "expects", "intends", "may", "will", "would" or "should", or in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding Innovations' intentions, beliefs or current expectations concerning, among other things, Innovations' results of operations, financial condition, prospects, growth strategies and the industries in which it operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including without limitation: conditions in the markets, market position, Innovations' earnings, financial position, return on capital, anticipated investments and capital expenditures, changing business or other market conditions and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

Subject to Innovations' regulatory obligations, it is not under any obligation to update publicly or revise any forward looking-statement whether as a result of new information, future events or otherwise. None of the statements made in this announcement in any way obviates the requirements of Innovations' to comply with its regulatory obligations.

The contents of Innovations' website do not form part of this announcement.

 

Issued for and on behalf of Imperial Innovations.

To contact the Imperial Innovations team at Instinctif Partners, email imperialinnovations@instinctif.com

 

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