Strix Group to raise approximately £10 million by way of an accelerated bookbuild

Strix Group

Strix Group Plc (LON:KETL), the AIM quoted global leader in the design, manufacture and supply of kettle safety controls and other complementary water temperature management components, has announced its intention to undertake an equity placing to raise gross proceeds of approximately £10 million (the “Placing “).

The net proceeds of the Placing will be used to prepay certain debt facilities that the Group has negotiated in connection with the acquisition of Billi, a leading Australian brand supplying premium filtered and non-filtered instant boiling, chilled and sparkling water systems (the “Acquisition”). Details of the Acquisition and related debt facilities are contained in a separate announcement released by the Company today (the “Acquisition Announcement”), which should be read in conjunction with this announcement (the “Announcement”).

Proposed Placing

The Group announces a proposed non pre-emptive placing to raise gross proceeds of approximately £10 million through the issue of 8,695,652 new ordinary shares of 1 penny each in the capital of the Company (the “Placing Shares”) at the price of 115p per Placing Share (the “Placing Price”) to new and existing eligible investors. The Placing Price represents a discount of 10.0% to the closing mid market price on 4 October 2022 (being the last practicable day prior to the release of this Announcement) and 8.0% when taking into account the interim dividend of 2.75p. The Placing Shares represent 4.2% of the issued share capital of Strix.

The Placing will be conducted through an accelerated bookbuild process being managed jointly by Zeus Capital Limited (“Zeus“) and Stifel Nicolaus Europe Limited (“Stifel”) acting as joint bookrunners (“Joint Bookrunners”). The accelerated bookbuild will be launched immediately following this Announcement. The Placing is conditional upon, amongst other things, Admission becoming effective and the placing agreement between the Company and the Joint Bookrunners becoming unconditional and not having been terminated in accordance with its terms.

Certain directors of the Company have indicated their intention to participate in the Placing as follows:

DirectorPlacing AmountPlacing Shares
Mark Bartlett£15,00013,043
Raudres Wong(1)£100,00086,956
Gary Lamb(2)£200,000173,913
Richard Sells£5,0004,347
Mark Kirkland£50,00043,478
Total£370,000321,737

1         Shares held in the name of her husband, Wing Yip Fong

2         Shares registered in the name of GEL Investments Limited, a company controlled by Gary Lamb

The Placing is subject to the terms and conditions set out in the Appendix to this Announcement. The Placing structure has been chosen as it reduces the execution risk in respect of the Acquisition and minimises cost, time to completion and use of management time.

Details of the Placing

The Group is proposing to raise gross proceeds of approximately £ 10 million through the issue of the Placing Shares at the Placing Price. In accordance with the terms of the term and revolving credit facilities agreement that the Group has agreed in connection with the Acquisition, the net proceeds of the Placing will be used in their entirety to partially prepay and cancel the term loan commitment. Failure to prepay and cancel the term loan in the amount of not less than £10 million from the proceeds of the Placing (or an alternative equity raise) within three months of the effective date of the amendment and restatement agreement in respect of the facility agreement will constitute an event of default under the facility agreement. The Company has conducted a market sounding exercise and is therefore confident that there will be sufficient demand in the Placing to meet the minimum required prepayment of the term loan.

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The Placing will be conducted by way of an accelerated bookbuild process (“Bookbuild”) which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement. The Bookbuild process will be managed by Zeus and Stifel acting as Joint Bookrunners.

The Joint Bookrunners have today entered into a placing agreement with the Company (the “Placing Agreement”). Under the terms of the Placing Agreement, the Joint Bookrunners have each agreed, subject to certain conditions, to use their respective reasonable endeavours to procure placees for the Placing Shares.

The timing of the closing of the Bookbuild and the final number and allocation of Placing Shares will be determined at the discretion of the Company (in consultation with Stifel and Zeus). The Bookrunners reserve the right, by agreement with the Company, to increase the size of the Placing to accommodate additional demand.

The Placing, which is subject to the terms and conditions set out in the Appendix to this Announcement, is conditional upon, inter alia, Admission becoming effective and the Placing Agreement becoming unconditional in all respects by no later than 8.00 a.m. on 10 October 2022 (or such later time and/or date, being not later than 17 October 2022, as the Company, Zeus and Stifel may agree). Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 10 October 2022.

The Placing Shares will rank, on issue, pari passu in all respects with the existing ordinary shares of 1 penny each in the capital of the Company and will be issued free from all liens, charges and encumbrances.

The Placing is not conditional on Shareholder approval, nor is the Placing conditional on the completion of the Acquisition, which is expected to be before year end. Completion of the Placing is not a condition to completion of the Acquisition.

The Joint Bookrunners are not underwriting the Placing.

A further announcement will be made following closing of the Placing, confirming the final details.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the “Important Notice” section below.

The Appendix to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in the Appendix.

Expected Timetable of Principal Events                                                                                                     

2022

Announcement of the Acquisition and Placing5 October
Announcement of the results of the Placing5 October
Admission and commencement of dealings of the Placing Shares10 October
Placing Shares credited to CREST stock accounts10 October
Completion of the AcquisitionBefore year end

Notes:

(i)   References to times are to London time (unless otherwise stated).

(ii)   If any of the above times or dates should change, the revised times and/or dates will be notified by Strix Group via an announcement to an RIS.

(iii)  The timing of the events in the above timetable that fall after the publication of this Announcement are indicative only and subject to change.

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