GBP 620 M DEAL - RECOMMENDED CASH ACQUISITION of E2V TECHNOLOGIES PLC by RHOMBI HOLDINGS LIMITED
RECOMMENDED CASH ACQUISITION
of
E2V TECHNOLOGIES PLC
by
RHOMBI HOLDINGS LIMITED
a wholly-owned, indirect subsidiary of TELEDYNE TECHNOLOGIES INCORPORATED
to be effected
by way of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of Teledyne Technologies Incorporated ("Teledyne") and e2v technologies plc ("e2v" or the "Company") are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by Teledyne, through its wholly-owned, indirect subsidiary, Rhombi Holdings Limited ("Teledyne Bidco"), of the entire issued and to be issued ordinary share capital of e2v (the "Acquisition"). It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
· Under the terms of the Acquisition, each e2v Shareholder will be entitled to receive:
275 pence in cash for each e2v Share
(the "Acquisition Price").
· The Acquisition Price represents a premium of approximately:
o 48.2 per cent. to the Closing Price of 185.5 pence per e2v Share on 9 December 2016 (being the last Business Day prior to the date of this Announcement);
o 53.0 per cent. to the volume-weighted average Closing Price of 179.7 pence per e2v Share for the period between the announcement of the Half-year Report on 7 November 2016 and 9 December 2016 (being the last Business Day prior to the date of this Announcement);
o 39.8 per cent. to the volume-weighted average Closing Price of 196.7 pence per e2v Share for the three months ended on 9 December 2016 (being the last Business Day prior to the date of this Announcement);
o 34.4 per cent. to the volume-weighted average Closing Price of 204.6 pence per e2v Share for the six months ended on 9 December 2016 (being the last Business Day prior to the date of this Announcement); and
o 32.6 per cent. to the volume-weighted average Closing Price of 207.4 pence per e2v Share for the twelve months ended on 9 December 2016 (being the last Business Day prior to the date of this Announcement).
· In addition, e2v Shareholders who were on the register of members of e2v as at close of business on 18 November 2016 will be entitled to receive and retain an interim dividend of 1.7 pence per e2v Share, which dividend will be paid on 20 December 2016 (the "Dividend"), without any reduction of the Acquisition Price payable under the Acquisition.
· The Acquisition values the entire issued and to be issued ordinary share capital of e2v at approximately £619.6 million on a fully diluted basis.
· The Teledyne Directors believe that there is a strong, complementary fit between Teledyne and e2v, which should enable both companies to accelerate revenue growth and profitability. Teledyne has a proven track record of acquiring and successfully integrating businesses into its network of companies able to serve multiple industrial growth markets. The Teledyne Directors believe that the e2v business will be an attractive addition to its existing network and will further enhance the Teledyne Group's customer proposition and growth dynamics. The Acquisition of e2v provides Teledyne with complementary products, additional technical resources and management capabilities as well as strong positions in new markets.
· The e2v Directors, who have been so advised by Investec and Rothschild as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing financial advice to the e2v Directors, Investec and Rothschild have taken into account the commercial assessments of the e2v Directors. Investec and Rothschild are providing independent financial advice to the e2v Directors for the purposes of Rule 3 of the Code.
· Accordingly, the e2v Directors intend to recommend unanimously that e2v Shareholders vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if (with the consent of the Takeover Panel) Teledyne Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, accept, or procure acceptances of, such Takeover Offer), as all the e2v Directors who hold e2v Shares (in a personal capacity or through members of their immediate families, related trusts or a nominee or nominees) have irrevocably undertaken to do, or procure to be done, in respect of their own beneficial holdings (and the beneficial holdings of members of their immediate families or related trusts or nominee(s)) of 2,258,390 e2v Shares, in aggregate, representing approximately 1.0 per cent. of the e2v Shares in issue on 9 December 2016 (being the last Business Day prior to the date of this Announcement).
· Teledyne Bidco has also received irrevocable undertakings to vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if (with the consent of the Takeover Panel) Teledyne Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure acceptances of, such Takeover Offer) from AXA Investment Managers UK Limited, GVQ Investment Management Limited, Aberforth Partners LLP (on behalf of its underlying clients) and Artemis Investment Management LLP in respect of 69,008,614 e2v Shares, in aggregate, representing approximately 31.3 per cent. of the e2v Shares in issue on 9 December 2016 (being the last Business Day prior to the date of this Announcement).
· In addition, Teledyne Bidco has received letters of intent to vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if (with the consent of the Takeover Panel) Teledyne Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure acceptances of, such Takeover Offer) from Aviva Investors Global Services Limited and Henderson Global Investors Limited in respect of 29,712,115 e2v Shares, in aggregate, representing approximately 13.5 per cent. of the e2v Shares in issue on 9 December 2016 (being the last Business Day prior to the date of this Announcement).
· Therefore, as at the date of this Announcement, Teledyne Bidco has received irrevocable undertakings and letters of intent to vote, or procure votes, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if (with the consent of the Takeover Panel) Teledyne Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure acceptances of, such Takeover Offer) with respect to a total of 100,979,119 e2v Shares, in aggregate, representing approximately 45.8 per cent. of the e2v Shares in issue on 9 December 2016 (being the last Business Day prior to the date of this Announcement).
· Full details of the irrevocable undertakings and the letters of intent received by Teledyne Bidco are set out in Appendix III to this Announcement.
· The cash consideration payable to Scheme Shareholders under the terms of the Acquisition will be funded from an acquisition debt facility provided by Bank of America, N.A. (as lender and administrative agent) ("BofA").
· It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (or, if Teledyne Bidco elects and with the consent of the Takeover Panel, a Takeover Offer). The purpose of the Scheme is to provide for Teledyne Bidco to become the owner of the entire issued and to be issued ordinary share capital of e2v. The Scheme will be put to e2v 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. The Resolutions required to implement the Scheme must also be approved by the requisite majority of e2v Shareholders at the General Meeting.
· The Acquisition is subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.
· Further details of the Acquisition will be contained in the Scheme Document which is intended to be posted to e2v Shareholders, and, for information only, to participants in the e2v Share Schemes, along with the notices of the Court Meeting and the General Meeting and the Forms of Proxy, within 28 days of the date of this Announcement, unless Teledyne Bidco and e2v otherwise agree, and the Takeover Panel consents, to a later date. Subject to the Conditions and certain further terms set out in Appendix I to this Announcement, the Scheme is expected to become Effective in the first half of 2017.
Commenting on the Acquisition, Dr. Robert Mehrabian, Chairman, President and Chief Executive Officer of Teledyne, said:
"We have followed e2v for more than a decade. Over time, as both Teledyne and e2v evolved, our businesses have become increasingly aligned. In fact, every business within e2v is highly complementary to Teledyne. As important, there is minimal product overlap. For example, we are both leaders in space and astronomy imaging, but Teledyne largely provides infrared detectors and e2v provides visible light sensors. While we both provide microwave devices, e2v's largest product and market are magnetrons for cancer radiotherapy. Teledyne supplies solid state and vacuum microwave systems, but no magnetrons, and we primarily serve defence markets such as electronic warfare, radar and communications. However, Teledyne serves the healthcare market with specialised X-ray sensors.
"In machine vision applications, e2v's advanced capabilities in proprietary CMOS sensor design add to Teledyne's strengths in cameras and vision systems. While Teledyne designs advanced mixed signal circuits for government and commercial applications, e2v's broader product portfolio enhances our offerings and channels to market".
Commenting on the Acquisition, Neil Johnson, Chairman of e2v, said:
"Teledyne has recognised the value inherent in our business and prospects by making a cash offer at an attractive premium to the share price. The Board of e2v has also considered the merits of being part of a larger, complementary group with enhanced scale and a wider range of capabilities to service its key customers and management and employees having access to the opportunities available in a larger group. The Board of e2v is therefore unanimously recommending e2v Shareholders to vote in favour of the Acquisition".
This summary should be read in conjunction with, and is subject to, the full text of this Announcement and its Appendices. In particular, the Acquisition is subject to the Conditions and further terms as set out in Appendix I (and the full terms and conditions to be set out in the Scheme Document). Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings and letters of intent referred to in this Announcement. Appendix IV contains details of the e2v Profit Forecast. Appendix V contains definitions of certain terms used in this Announcement.