Provision of Nominated Adviser Services in a Reverse Takeover of an AIM quoted company
In 2015 AIM-quoted investing company, Verdes Management PLC agreed the terms of a reverse takeover of REACT Specialist Cleaning Limited, a newly formed company which had been established to own the specialist cleaning division of Autoclenz Group Limited.
The transaction involved a number of complex aspects:
- the demerger of the specialist cleaning division of Autoclenz
- obtaining appropriate tax clearances
- a reorganisation and share consolidation of Verdes’ share capital
- production of an Admission Document for what constituted a “reverse takeover” (“RTO”)
- a requirement to obtain shareholders’ approval of the RTO under the AIM Rules
- a “whitewash” required under the Takeover Code, allied to several related party aspects.
In addition the Company sought to raise £2.1m in a placing and a non-underwritten open offer to Verdes’ shareholders, all whilst working to a “hard” deadline imposed by the AIM Rules, by which the transaction had to be completed.
Neil Baldwin and Mark Brady of SPARK’s AIM services team acted as Nominated Adviser to Verdes on the RTO, and to REACT Group (post RTO):
- Project managed the production of the Admission Document
- Co-ordinated underlying workstreams, together with the Company’s other advisors
Outcome: Verdes successfully obtained shareholders’ unanimous approval of the RTO, and the Open Offer of £0.4m was 93% subscribed (with the balance placed with third party investors shortly afterwards).
The acquisition, share consolidation and change of name swiftly followed, and REACT Group is currently implementing its new growth strategy.