Science in Sport PLC - Proposed Acquisition & Placing

Science in Sport plc (AIM: SIS), a UK-headquartered market leading endurance sports nutrition company that develops, manufactures and markets sports nutrition products for elite athletes and sports enthusiasts, announces the proposed acquisition of PhD Nutrition Ltd ("PhD"), a premium, innovation-led protein brand (the "Acquisition") for total consideration of £32.0 million on a cash-free, debt-free basis (subject to certain adjustments) (the "Consideration"). The Consideration is to be satisfied by the payment of £28.5 million in cash and £3.5 million by the issue of 5,833,334 new Ordinary Shares (the "Consideration Shares") to the PhD Seller (or its nominee) based on a price of 60 pence per Consideration Share, being the Placing Price (as defined below).

The Company also announces a proposed placing to raise approximately £29.0 million before expenses (the "Placing") through the issue of 48,394,666 new Ordinary Shares (the "Placing Shares") at a price of 60 pence per Placing Share (the "Placing Price"), in order to fund the majority of the cash Consideration payable to the PhD Seller in connection with the Acquisition.

The Placing Price represents a discount of 14.3 per cent. to the closing middle market price of 70 pence per Ordinary Share on 13 November 2018 (being the latest practicable date prior to this Announcement).

The Placing Shares will be offered by way of an accelerated bookbuild (the "Bookbuild") which will be launched immediately following this Announcement in accordance with the terms and conditions set out in Appendix I. Liberum Capital Limited ("Liberum") is acting as Sole Bookrunner in connection with the Placing.

The Placing Shares are not being made available to the public. It is envisaged that the Bookbuild will be closed no later than 1.30 p.m. today, 14 November 2018. The Placing is not being underwritten.

Acquisition Highlights

·    One of the UK's leading protein brands with a reputation for high quality and innovative products aimed at sports enthusiasts and gym lifestyle consumers

·     Retail a core sales channel with increasing revenue growth through its Amazon sales channel

·    Established and growing international presence in over 45 countries across Europe, the Middle East, China and Australia

·   Experienced management team that has a track record of delivering consistent revenue growth and profitability

·     For the year ended 31 August 2018, PhD generated revenue of £20.8 million and adjusted EBITDA of £2.8 million

·     The Consideration of £32.0 million shall be satisfied (i) in cash from the net proceeds of the Placing and from existing cash resources, and (ii) by the issue of 5,833,334 Consideration Shares at the Placing Price to the PhD Seller (or its nominee) on completion of the Acquisition ("Completion")

Placing Highlights

·   Placing to raise approximately £29.0 million before expenses through the issue of 48,394,666 Placing Shares at a price of 60 pence per Placing Share

·    Placing Shares are being offered by way of an accelerated bookbuild by Liberum which will be launched immediately following this Announcement

·     The Placing is conditional on, inter alia, (i) the passing of the resolutions (the "Resolutions") which are to be proposed at a General Meeting of the Company to be held on 3 December 2018 (the "General Meeting"), (ii) the Acquisition Agreement becoming unconditional in all respects (save in respect of Admission of the Placing Shares and the Consideration Shares) and not having been terminated or rescinded prior to Admission of the Placing Shares, and (iii) Admission of the Placing Shares to trading on AIM taking place no later than 4 December 2018. A circular containing a notice convening the General Meeting will shortly be sent to Shareholders

·     The net proceeds of the Placing (after deduction of the costs and expenses relating to the Placing) will be used by the Company to fund the majority of the cash Consideration payable to the PhD Seller pursuant to the Acquisition Agreement 

Commenting on the Acquisition and the Placing, Stephen Moon, Chief Executive of SiS, said:

"The acquisition of PhD is highly complementary, doubles the size of our business and accelerates our ambition to become a global leader in premium performance nutrition. It is a compelling combination that will deliver a wider product offering, including premium protein, provide broader consumer reach and greater international presence, and dovetails our respective strengths in retail and e-commerce channels. Operating in a rapidly developing market, we see this transaction as an important step towards winning on the global stage. With the clear synergies and growth prospects of the combined group we anticipate delivering strong returns."

SiS announces that it has agreed to acquire the entire issued share capital of PhD, a premium, innovation-led protein brand, for total consideration of £32.0 million on a cash-free, debt-free basis (subject to certain adjustments). The Consideration is to be satisfied by the payment of £28.5 million in cash and £3.5 million by the issue of 5,833,334 Consideration Shares to the PhD Seller (or its nominee).

The Company also announces the proposed Placing to raise approximately £29.0 million before expenses through the issue of 48,394,666 new Ordinary Shares at a price of 60 pence per Placing Share in order to fund the majority of the cash Consideration payable to the PhD Seller in connection with the Acquisition.

The Placing will be made by the way of an accelerated bookbuild which will be carried out by Liberum acting as Sole Bookrunner. The Bookbuild will launch immediately following this Announcement and Appendix I to this Announcement contains the terms and conditions of the Placing. Members of the public are not eligible to take part in the Placing.

The Placing will be subject to the passing of the Resolutions at the General Meeting of the Company to be held on 3 December 2018 to grant the Directors authority to allot and issue the New Ordinary Shares and the raising of the Minimum Gross Placing Proceeds.

The Acquisition Agreement is conditional upon, inter alia, (i) the passing of the Resolutions, (ii) the Placing Agreement having become unconditional in accordance with its terms, and (iii) Admission of the Placing Shares and the Consideration Shares.

Subject to the Resolutions being passed at the General Meeting (i) Admission and commencement of dealings in the Placing Shares on AIM are expected to occur at 8.00 a.m. on 4 December 2018, and (ii) Admission and commencement of dealings in the Consideration Shares on AIM and Completion of the Acquisition are expected to occur at 8.00 a.m. on 6 December 2018.

The Directors believe that the Acquisition is in alignment with the Company's strategy as well as being consistent with the Company's stated objectives.