Placing to raise £3.2 million

Cardiff, UK; 1st April 2016: MedaPhor Group plc (AIM: MED), the global provider of advanced ultrasound training simulators for medical professionals, has conditionally raised £3.2 million by way of a placing of 7,111,112 new Ordinary Shares at 45 pence each with certain existing and new shareholders.  The Placing Shares have been conditionally placed by Cenkos, as agent for the Company, with institutional and other investors.

On 1 March 2016, the Company announced that it had signed a three year agreement with the American Board of Obstetrics and Gynecology (“ABOG”) for the planned use of ScanTrainer as the ABOG’s ultrasound skills examination simulator within its obstetrics and gynaecology certification exams.  The ABOG is the official body for certifying obstetricians and gynaecologists in the United States and conducts nearly 2,000 certification examinations per annum. Over 200 hospitals in the US run obstetrics and gynaecology residency programmes and the Directors believe these training hospitals will be key targets for ScanTrainer simulator systems.

The net proceeds of the Placing will therefore allow the Company to:

  • Further develop its US based direct sales team and customer support resources;
  • Fund the continued growth of the existing business, including further development of its ScanTrainer simulation platforms and cloud-based services;
  • Further develop its reseller support network; and
  • Provide general working capital.

The Directors believe that the net Placing proceeds will fund the Company through to profitability.

Stuart Gall, CEO of Medaphor, commented:

”We are delighted by the strong level of support from new and existing investors in the Placing. This fundraising represents an important milestone in the development of the Group as we look to drive sales of our leading ScanTrainer product around the world.

The proceeds of the fundraising will allow us to take advantage of the exciting product growth opportunities available to us, particularly as a result of the ABOG agreement.”

Enquiries:

CEO, MedaPhor Group plcStuart Gall Tel: +44 (0)2920 756534
Nominated Advisor, CenkosBobbie Hilliam Tel: +44 (0)207 3978900
Corporate Broking, CenkosJulian Morse Tel:  +44 (0)207 3978900Oliver Baxendale: +44 (0)207 3978900

 

DETAILS OF THE PLACING

Summary of Placing

A total of £0.3 million, representing the issue of 714,000 new Ordinary Shares, has been raised, by way of the Firm Placing, utilising the Company’s existing share authorities put in place at the Company’s annual general meeting held on 6 May 2015. The balance of the Placing, being £2.9 million, representing 6,397,112 new Ordinary Shares (the Conditional Placing), is conditional on the passing of certain shareholder resolutions at the Company’s general meeting convened for 19 April 2016.

Subject to the satisfaction of the conditions under the Firm Placing and the conditions under the Conditional Placing, the Company will issue in total 7,111,112 new Ordinary Shares to raise approximately £3.2 million, before expenses of approximately £0.2 million (excluding VAT). The Placing Shares have been conditionally placed by Cenkos, as agent for the Company, with institutional and other investors.

Application has been made for the Firm Placing Shares to be admitted to trading on AIM, with dealings expected to commence on 4 April 2016. Following the issue and admission of the Firm Placing Shares, the total number of Ordinary Shares in the Company with voting rights will be 20,850,300. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

The Firm Placing is conditional, amongst other things, upon:

  1. compliance by the Company in all material respects of its obligations under the Placing Agreement; and
  2. admission of the Firm Placing Shares to trading on AIM becoming effective by not later than 8.00 a.m. on 4 April

In due course application will be made for the Conditional Placing Shares to be admitted to trading on AIM and, on the assumption that, amongst other things, the Resolutions are passed, dealings are expected to commence on 20 April 2016. Following the issue and admission of the Conditional Placing Shares, the total number of Ordinary Shares in the Company with voting rights at that time will be 27,247,412. This figure may then be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

The Conditional Placing is conditional, amongst other things, upon:

  1. the Resolutions to be proposed at the General Meeting being passed without amendment;
  2. compliance by the Company in all material respects of its obligations under the Placing Agreement; and
  • admission of the Conditional Placing Shares to trading on AIM becoming effective by not later than 8.00 a.m. on 30 June 2016.

The Placing Shares issued pursuant to the Placing will represent approximately 26.1 per cent. of the Enlarged Share Capital. The Placing Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued Ordinary Share capital of the Company after the date of their issue and will otherwise rank pari passu in all other respects with the Existing Ordinary Shares. The Placing Price represents a discount to the closing mid-market price of 9.1 per cent. per Ordinary Share as at 31 March 2016 (being the latest practicable date prior to the date of this announcement).

Pursuant to the Placing Agreement, Cenkos, as agent for the Company, has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing is not underwritten.

Shareholders and investors should be aware that the Firm Placing and Conditional Placing and not inter-conditional and therefore the Firm Placing may proceed without the Conditional Placing completing.

Irrevocable Undertakings

The Company has obtained irrevocable undertakings from each of the IP Group entities, Finance Wales Investments (5) Limited and Finance Wales Investments (6) Limited and each of the Directors who hold Ordinary Shares to vote in favour of the Resolutions in respect of the Existing Ordinary Shares held by them which represent, in aggregate, approximately 78.5 per cent. of the Company’s current issued share capital.

Lock-Ins and Orderly Market Agreements

IP Group plc, Finance Wales Investments (5) Limited and Finance Wales Investments (6) Limited have undertaken to the Company and Cenkos that they will not (without the prior written consent of the Company or Cenkos) dispose of any interest in Existing Ordinary Shares or Placing Shares for the period of 12 months following Admission, except in certain limited circumstances. In addition, IP Group plc, Finance Wales Investments (5) Limited and Finance Wales Investments (6) Limited have undertaken to the Company and Cenkos that they will not (without the prior written consent of the Company or Cenkos) dispose of any interest in Existing Ordinary Shares or Placing Shares for the period of 12 months following the first anniversary of Admission other than through Cenkos, who shall arrange such disposal within 5 business days or the relevant party will otherwise be free to make such disposal.

The lock-in undertakings have been given in respect of 14,142,000 Ordinary Shares (representing 70.2 per cent. of the Enlarged Share Capital).

Related parties’ participation in the Placing

IP Group, across its various entities, has agreed to subscribe for 2,221,162 Placing Shares pursuant to the Placing. IP Group plc is a “related party” (as defined by the AIM Rules) of the Company by virtue of being an existing substantial shareholder in the Company. David Baynes, a non-executive director of the Company, is also a director of, and therefore holds an indirect interest in, IP Group plc.  Prior to their subscription of Placing Shares, IP Group held (and consequently Mr Baynes is deemed to have an indirect interest in) 9,500,000 Ordinary Shares representing 47.18 per cent. of the current issued Ordinary Share capital. Immediately following Admission, it is expected that IP Group will hold (and consequently Mr Baynes will be deemed to have an indirect interest in) 11,721,162 Ordinary Shares representing 43.0 per cent. of the Enlarged Share Capital.

The Directors, save for David Baynes, consider, having consulted with Cenkos, the Company’s Nominated Adviser for the purposes of the AIM Rules, that the terms of the related party subscription are fair and reasonable insofar as the shareholders of the Company are concerned.

General Meeting

A notice is set out at the end of a circular posted to Shareholders today convening a General Meeting to be held at MedaPhor Group plc, Cardiff Medicentre, Heath Park, Cardiff, CF14 4UJ, at 10.00 a.m. on 19 April 2016 at which the following Resolutions will be proposed:

  • Resolution 1, which will be proposed as an ordinary resolution, is to authorise the Directors to allot relevant securities up to an aggregate nominal value of £63,971.12;
  • Resolution 2, which will be proposed as a special resolution and which is subject to the passing of Resolution 1, disapplies statutory pre-emption rights, provided that such authority shall be limited to, inter alia, the allotment of 6,397,112 equity securities.

These Resolutions are in addition to the authorities granted to Directors at the last AGM.  Resolution 1 authorises the allotment of such number of new Ordinary Shares as are necessary for the Conditional Placing.  Consequently, Resolution 2 authorises the disapplication of statutory pre-emption rights in respect of such number of new Ordinary Shares as are necessary for the Conditional Placing.

Recommendation

The Directors consider the Placing to be in the best interests of the Company and the Shareholders as a whole and, accordingly, unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do in respect of their own beneficial holdings amounting, in aggregate, to 1,674,000 Existing Ordinary Shares, representing approximately 8.3 per cent. of the Existing Ordinary Shares.

The Conditional Placing is conditional, inter alia, upon the passing of the Resolutions at the General Meeting. Shareholders should be aware that if the Resolutions are not approved at the General Meeting, the Conditional Placing will not proceed. The Firm Placing is not conditional upon the passing of the Resolutions at the General Meeting and may proceed without the Conditional Placing completing.

Capitalised terms used in this announcement have the meanings given to them in the Circular, to be posted to Shareholders on or around 1 April 2016.

 

Expected timetable of principal events
This document posted to Shareholders1 April 2016
Admission and dealings in the Firm Placing Shares expected to commence on AIM4 April 2016
Expected date for CREST accounts to be credited for Firm Placing Shares to be held in uncertified form4 April 2016
Latest time and date for receipt of Forms of Proxy10.00 a.m. on 15 April 2016
General Meeting19 April 2016
Admission and dealings in the Conditional Placing Shares expected to commence on AIM20 April 2016
Expected date for CREST accounts to be credited for Conditional Placing Shares to be held in uncertified form 

Despatch of definitive share certificates in respect of the Conditional Placing Shares to be held in certificated form, if applicable

20 April 2016 

 

By 4 May 2016

 

Notes:
1. Each of the times and dates above are indicative only and if any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service.
2. All of the above times refer to London time unless otherwise stated.
3. All events listed in the above timetable in relation to the Conditional Placing are conditional on the passing at the General Meeting of the Resolutions.