TIDMLDG
RNS Number : 1747I
Logistics Development Group PLC
01 December 2022
1 December 2022
Logistics Development Group plc
("LDG" or the "Company")
Synsion Investment and Intended Further Share Buyback
LDG is pleased to announce an investment of EUR18.5m
(c.GBP15.9m) into Synsion TopCo Ltd ("Synsion Topco"), the private
holding company of a group of companies (the "Synsion Group")
formed by DBAY Advisors Limited ("DBAY"), the Company's investment
manager, specifically to invest in SQLI S.A. (ENXTPA:SQI) ("SQLI")
(the "Investment"), a leading pan-European digital transformation
business. The Company is also pleased to announce its intention to
initiate a further share buyback, additional details of which are
set out below.
Synsion / SQLI Investment
The Synsion Group is controlled by funds discretionally managed
by DBAY (the "DBAY Funds") and currently holds 72.3% of SQLI,
following a number of historical investments by the DBAY Funds made
via the Synsion Group, culminating in a tender offer to SQLI
shareholders, announced in September 2021. The Investment will be
utilised by the Synsion Group to acquire an additional stake in
SQLI at EUR44.25 per share and is expected to increase the Synsion
Group's holding in SQLI by c.9%, to c.81.3%.
LDG's investment into Synsion Topco will initially be made by
way of an EUR 18.5m loan, which will be converted into an
approximate 11.1% equity interest in Synsion Topco corresponding to
an see-through stake in SQLI of approximately 9% in due course.
Synsion Topco's management accounts, for the period from date of
incorporation on 16 July 2021 to 31 December 2021, reported
unaudited net assets of EUR40.6m (c.GBP35.0m) and net losses of
EUR278.9k (c.GBP240.4k).
SQLI, listed on the Euronext Paris, is a pan-European digital
transformation business with a leading positions in the
fast-growing ecommerce/omnichannel integration space. SQLI is
headquartered in Paris and has more than 2,100 employees in over 13
countries, including over 600 in its offshoring delivery centre in
Morocco. The company's blue-chip clients include LVMH, Airbus,
Nestle, Carlsberg, L'Oreal, Bridgestone, Adidas and Generali. For
the year ending 31 December 2021, SQLI reported revenues of
EUR225.4m (c. GBP194.3m), EBITDA (excl. IFRS16) of EUR15.2m (c.
GBP13.1m), net assets of EUR100.9m (c.GBP87.0m) and net profits of
EUR5.3m (c. GBP4.6m). For the half year ending 30 June 2022 SQLI
reported revenues of EUR124.5m (up EUR10.7m on H1 2021; +9.4%) and
EBITDA (excl. IFRS16) of EUR12.1m (up EUR4.1m on H1 2021).
The Investment is in excess of the threshold for individual
investments (10 per cent. of NAV) set out in the Company's
investing policy, therefore DBAY has sought and obtained LDG Board
approval for the Investment.
Related Party Transaction
Synsion Topco is an associate of DBAY, which, as LDG's
investment manager and 25.58% shareholder, is a Related Party to
LDG. Accordingly, the Investment is being treated as a Related
Party Transaction pursuant to AIM Rule 13 and the independent
directors (being the LDG directors excluding Peter Nixon, who is a
DBAY appointee), having consulted with Strand Hanson as the
Company's nominated adviser, consider the terms of the Investment
to be fair and reasonable insofar as the shareholders are
concerned.
Proposed Share Buyback
On 14 January 2022, the Company announced a reduction of
capital, change of Investing Policy and share buyback (the "Prior
Buyback"). Shareholder approval to complete the Prior Buyback was
obtained on 31 January 2022 and, pursuant to the Prior Buyback, the
Company acquired 140,441,180 ordinary shares of 1 pence each in the
capital of the Company ("Ordinary Shares"), in market trades via
its retained broker, at an average price of 15.7 pence per share,
between 25 February 2022 and 6 April 2022. Following completion of
the Prior Buyback, the Company has made a number of new
investments, however, trading in the Company's Ordinary Shares has
returned to a level which represents a significant discount to the
Company's net asset value (NAV) per Ordinary Share.
Accordingly, the Company intends to seek shareholder authority
to acquire additional Ordinary Shares in the market, up to an
amount representing approximately 20% of the Company's issued share
capital (the "Further Share Buyback"), which the Board believes may
serve to reduce the observed discount to NAV per Ordinary Share.
The Board expects to limit the total consideration for the Further
Share Buyback to GBP15.0m.
The Board believes that the Further Share Buyback may also
provide an exit opportunity for any shareholders who do not wish to
retain their investment in the Company. Shareholders should note,
however, that there is no guarantee that the proposed Further Share
Buyback, if implemented, will either eliminate or reduce the
observed discount to NAV per Ordinary Share, nor that any
shareholders wishing to do so will be able to exit their investment
in the Company in full under the Further Share Buyback.
DBAY, which represents the Company's largest shareholder (with
one of its managed funds, DBAY Fund III, holding approximately
25.58% of the Company's issued share capital), and certain
associates presumed to be acting in concert with DBAY (together
with DBAY, the "Concert Party") together hold in aggregate
approximately 32.98% of the Company's issued share capital. Given
the Concert Party holds interests in Ordinary Shares, in aggregate,
between 30% and 50% of the Company's issued ordinary share capital,
any increase in the Concert Party's aggregate percentage voting
rights as a result of the Share Buyback would require the Concert
Party to make an offer for the Ordinary Shares not owned by the
Concert Party in accordance with Rule 9 of the City Code on
Takeovers and Mergers (the "Takeover Code"). Accordingly, the
Company's ability to commence the Further Share Buyback programme
will be conditional on independent shareholders passing a
Resolution approving a waiver of the obligation for the Concert
Party to make a general offer pursuant to Rule 37 of the Takeover
Code.
Accordingly, the Company will apply to the Takeover Panel for a
waiver from the obligation for the Concert Party to make a general
offer that would otherwise arise as a result of the Further Share
Buyback, subject to the approval, on a poll, of independent
shareholders (the "Whitewash Resolution"). Accordingly, with the
consent of the Takeover Panel, the Whitewash Resolution will be
proposed at a General Meeting and will be taken on a poll at a
General Meeting, notice of which will be set out in the Circular to
be distributed to shareholders in due course.
Further announcements will be made as and when appropriate.
For enquiries:
Logistics Development Group Via FTI Consulting
plc
FTI Consulting
Nick Hasell
Alex Le May
Cally Billimore +44 (0) 20 3727 1340
Strand Hanson Limited
(Financial and Nominated Adviser)
James Spinney
James Dance
Abigail Wennington +44 (0) 20 7409 3494
Investec Bank plc
(Broker)
Gary Clarence
Harry Hargreaves +44 (0) 20 7597 5970
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END
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December 01, 2022 02:30 ET (07:30 GMT)
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