Remote Monitored Systems plc (LON:RMS) has announce that further to the announcement of 17 July 2020, it has signed a binding Share Purchase Agreement for the acquisition of 100% of the share capital of Pharm2Farm Limited. Completion of the Acquisition is subject to regulatory and RMS shareholder approval. The Acquisition will be satisfied by the issue of 600,000,000 new ordinary shares of 0.01 pence each in the capital of the Company, equating to approximately £2,370,000 based on RMS’s closing share price on 20 August 2020.
The vendors of P2F are Braveheart Investment Group plc (51.72%) and Dr. Gareth Cave, the founder of P2F (48.28%) who will receive 310,354,815 and 289,645,185 Consideration Shares respectively. On completion of the Acquisition, Braveheart will hold 509,992,405 ordinary shares, representing 37.12% of the enlarged share capital of the Company. Dr. Gareth Cave will own 21.08% of the enlarged share capital of the Company.
The Vendors are presumed to be acting in concert and as they will own more than 50%, and Braveheart will own more than 30%, of RMS on completion of the Acquisition, the Acquisition is conditional upon a waiver being granted by the UK Panel on Takeovers and Mergers (the “Panel”) from the obligation of Braveheart and the Vendor concert party, to make a mandatory offer for the Company under Rule 9 of the City Code. Such waiver, if granted, will be subject to the Company obtaining approval of independent shareholders of RMS at a General Meeting.
It is also intended that upon completion of the Acquisition, the Company, the Vendors and SP Angel Corporate Finance LLP, as the Company’s nominated adviser, enter into a relationship agreement.
A circular setting out further details of the Acquisition, the relationship agreement and the Rule 9 Waiver (including details in respect of any other parties deemed to be acting in concert with the Vendors), and giving notice of the General Meeting to approve these proposals will be sent to the Company’s shareholders as soon as reasonably practicable.
Related Party Transaction
Braveheart, as a substantial shareholder of the Company, is considered to be a “related party” as defined under the AIM Rules and accordingly, the proposed purchase of Braveheart’s shareholding in P2F as part of the Acquisition, constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.
The Directors independent of the Acquisition, being Paul Ryan (Non‐Executive Chairman) and John Richardson (Chief Operating Officer) consider, having consulted with the Company’s nominated adviser, that the terms of the Acquisition are fair and reasonable insofar as the Company’s shareholders are concerned.
A further announcement will be made in due course.
Pharm2farm uses a patented process for producing and functionalising nanoparticles for various applications including human, animal and crop health. Since, Braveheart Investment Group acquired an interest in Pharm2Farm, the team has moved into a new facility in MediCity Nottingham and more than doubled nanoparticle production capacity. Pharm2Farm’s strategy is focused on two markets:
Crop nutrition: Pharm2Farm has already received orders from key distributors in the UK and South Korea for its unique crop nutrition products. Pharm2Farm is specifically targeting the growing global hydroponics market where its water-soluble nutrients with high bioavailability have a clear competitive advantage. A number of trials are underway to explore further applications of Pharm2Farm formulations
Anti-viral Face Mask: Pharm2Farm is developing a nanotechnology enabled anti-viral face mask. Proof of concept and the design of a prototype is currently underway and expected to be completed by the end of the year. Once proven, Pharm2Farm will commence the commercial manufacture of masks in the UK.
P2F had unaudited revenues of £11,979 and profit of £4,292 for the seven month period ending 31 March 2020.
Remote Monitored Systems considers that the opportunity to acquire and unite the two shareholdings of P2F, a business operating in two vital sectors and on the brink of near term growth, will lead to significant enhancement of shareholder value for RMS shareholders.