15 NOVEMBER 2022: ASX RELEASE
MSL Solutions Limited to be acquired by Pemba Capital Partners at an equity value of $119 million, equivalent to 29.5 cents per share via a Scheme of Arrangement
Key Highlights:
- MSL Solutions (ASX:MSL) (“MSL”) today announces that it has entered into a Scheme Implementation Agreement (“SIA”) with Plutus Bidco Pty Ltd (ACN 663 418 184) (“Plutus Bidco”), an entity controlled by Pemba Capital Partners (“Pemba”), under which Plutus Bidco has agreed to acquire 100% of the issued share capital of MSL at $0.295 per share by way of a scheme of arrangement (“Scheme”).
- The total cash consideration of $0.295 per share payable by Plutus Bidco (“Scheme Consideration”) implies an equity value of $119 million (on a fully diluted basis) and represents a significant premium of 80.7% to the one-month volume weighted average price of MSL shares up to and including 14 November 2022 (being the last trading day prior to this announcement).
- MSL’s Board of Directors considers the Scheme to be in the best interests of MSL shareholders, and unanimously recommend that MSL shareholders vote in favour of the Scheme and intend to vote or cause to be voted all MSL shares held or controlled by him or her in favour of the Scheme, in each case, in the absence of a Superior Proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of MSL shareholders.
- The Scheme is subject to a number of conditions which must be satisfied (or waived, if applicable) before the Scheme can be implemented.
- MSL shareholders do not need to take any action at this present time.
Overview of the Scheme
MSL has entered into a SIA with Plutus Bidco under which Plutus Bidco will acquire 100% of the issued share capital of MSL for a cash price of $0.295 per share by way of a scheme of arrangement. This is subject to all conditions being satisfied or waived (if applicable) including the Scheme being approved by MSL shareholders at the Scheme Meeting.
MSL Board Unanimously Recommend the Scheme
The MSL Board has carefully considered the Scheme and concluded that it is in the best interests of MSL shareholders because it offers immediate and certain value at a significant premium to MSL’s recent share prices. The MSL Board believes that the Scheme is compelling for MSL shareholders for the following reasons:
- Attractive premium: The Scheme Consideration of $0.295 per MSL share represents a significant premium to the recent historical MSL share prices:
- 63.9% premium to the ASX closing share price of $0.180 on 14 November 2022 (being the last trading day prior to this announcement);
- 80.7% premium to the $0.163 one-month volume weighted average price of MSL shares up to and including 14 November 2022;
- 78.0% premium to the $0.166 three-month volume weighted average price of MSL shares up to and including 14 November 2022; and
- 81.4% premium to the $0.163 six-month volume weighted average price of MSL shares up to and including 14 November 2022.
- Certainty of value: The total cash Scheme Consideration provides MSL shareholders with certainty of value and the opportunity to realise their investment in MSL for cash.
- Limited conditionality: The Scheme is subject to limited, customary conditions for a transaction of this nature (set out in more detail below).
The MSL Board of Directors unanimously recommend that MSL shareholders vote in favour of the Scheme in the absence of a Superior Proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of MSL shareholders.
Subject to the same qualifications, each Director of MSL intends to vote or cause to be voted all MSL shares held or controlled by him or her1 in favour of the Scheme.
Executive Chairman of MSL, Mr Tony Toohey said:
“Our board of directors has undertaken lengthy negotiations with Pemba (a leading investor in small and mid-sized businesses in Australia and New Zealand) to secure an offer which delivers certainty of consideration to our shareholders at a significant premium to the recent historical MSL share prices.”
Scheme Implementation Agreement (SIA)
Implementation of the Scheme is subject to customary conditions, including MSL shareholder approval, Court approval, Foreign Investment Review Board approval, no Target Prescribed Events occurring, no Material Adverse Effect occurring, no material breach of warranty by MSL or Plutus Bidco, an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of MSL shareholders, certain Convertible Notes issued by MSL being converted to MSL shares, consent of certain contractual counterparties to the change in control of MSL, no Performance Rights remaining on issue in MSL, no Court or Regulatory Authority issuing an order, injunction, decree or ruling or taking any action enjoining, restraining
or otherwise imposing a legal restraint or prohibition preventing the Scheme and relevant ASIC and ASX consents, waivers, relief or approvals being obtained.
Plutus Bidco has secured sufficient funding for the Scheme Consideration through binding equity and debt commitments. Implementation of the Scheme is not subject to a financing or funding condition.
The SIA contains customary exclusivity provisions including no shop, no talk and no due diligence restrictions, a notification obligation, and a matching right. MSL is required to pay Pemba a break fee of $1,195,000 in certain circumstances.
Full details of the conditions to the Scheme, as well as other agreed terms are set out in the SIA, a copy of which is attached to this announcement. Capitalised terms which are otherwise not defined in this announcement have the meaning given in the SIA.
Indicative timetable and next steps
MSL shareholders do not need to take any action at this present time.
A Scheme Booklet will be prepared by MSL and provided to all MSL shareholders. The Scheme Booklet will set out the detailed reasons for the MSL Board’s recommendation, 1 Mr Tony Toohey holds 2,341,667 MSL performance rights. If the conditions precedent to the Scheme are satisfied or waived (if applicable), these performance rights will vest prior to implementation of the Scheme. The MSL Board (excluding Mr Toohey) does not consider that these benefits are materially sufficient as to preclude him from providing his recommendation in favour of the Scheme. reasons to vote for or against the Scheme, information about the Scheme Meeting (including how to vote on the Scheme), as well as other important information about the Scheme (including a copy of the Independent Expert’s Report). The Independent Expert’s Report will be prepared by Leadenhall Corporate Advisory Pty Ltd, which will set out whether, in their opinion, the Scheme is in the best interests of MSL shareholders. The Scheme Booklet is expected to be sent to MSL Shareholders in mid December 2022.
It is expected that MSL shareholders will have the opportunity to vote on the Scheme at the Scheme Meeting in early February 2023. Subject to MSL shareholder approval being obtained
and the other conditions of the Scheme being satisfied (or, if applicable, waived), the Scheme is expected to be implemented in mid February 2023.
For further information, please contact:
Patrick Howard (CEO) / David Marshall (CFO)
MSL Solutions Limited
Email: investor@mslsolutions.com
Website: https://www.mslsolutions.com/investors/
About MSL Solutions Limited
MSL Solutions Limited is a leading SaaS technology provider to the sports, leisure and hospitality sectors. We help some of the world's most iconic venues around the world - stadiums & arenas, pubs & member clubs, sporting associations, golf federations and more – to deliver outstanding customer experiences during every engagement. MSL develops and delivers fully integrated and modular systems that connect customers to venues through mobile and contactless entry, ordering and payment solutions. We seamlessly connect front-of-house to back-office, offering an end-to end guest engagement platform which provides actionable insights on key success metrics to venues of all sizes. MSL Solutions has over 8,500 customers with offices in Australia, UK and Denmark. To discover more about MSL, please visit www.mslsolutions.com