March 28, 2017 – Nordic Capital and Avista (each as defined below) have today agreed the sale of a 19.95% shareholding (the “Sale”) in ConvaTec Group Plc (“ConvaTec”) to Novo A/S, the investment holding company in the Novo group, responsible for the management of the assets of the Novo Nordisk Foundation, a charitable foundation focused on contributing significantly to research and development that improves the health and welfare of people. The Sale will comprise 389.3 million shares and will be completed at a price of 260 pence per share.
As a result of the Sale, Novo A/S will obtain the right to appoint one director to the board of directors of ConvaTec (the “ConvaTec Board”), to replace one of the existing shareholder nominated directors, pursuant to the relationship agreement between Nordic Capital, Avista and ConvaTec. Novo A/S has nominated Mr Kasim Kutay, the Chief Executive Officer of Novo A/S, for appointment to the board of ConvaTec with effect from completion of the Sale. Mr Kutay’s appointment has been approved by the Nomination Committee and Board of ConvaTec. At least one Nordic Capital or Avista nominated director will resign from the ConvaTec Board on completion of the Sale.
Raj Shah, Partner, NC Advisory (UK) LLP, advisor to the Nordic Capital Funds, commented:
“We are delighted to be able to introduce a supportive, long-term investor of the calibre of Novo A/S to the ConvaTec register. ConvaTec is a leading global medical technology company and the interest of Novo A/S in acquiring a cornerstone shareholding is a validation of ConvaTec’s strategy and outlook. We have also decided to take advantage of strong reverse enquiry from institutional investors following ConvaTec’s maiden results earlier this month to conduct a placing of shares.”
Proposed placing to institutional investors (the “Proposed Placing”)
In addition to the Sale to Novo A/S, Goldman Sachs International (“Goldman Sachs”), Merrill Lynch International (“BofA Merrill Lynch”) and UBS Limited (“UBS”) have been appointed as Joint Bookrunners by Nordic Capital and Avista to sell approximately 300 million ordinary shares (the “Placing Shares”) of ConvaTec to institutional investors by way of an accelerated bookbuild which will be launched immediately following this announcement.
Nordic Capital and Avista currently own 849,181,983 shares (43.51%) and 366,540,257 shares (18.78%), respectively. Following the Sale and Proposed Placing, this will reduce to approximately 366.7 million shares being held by Nordic Capital and 159.7 million shares being held by Avista (18.79% and 8.19%), respectively.
The final number of Placing Shares to be placed and the price at which the Placing Shares are to be placed will be agreed by the Joint Bookrunners and Nordic Capital and Avista at the close of the bookbuild process, and the result of the Proposed Placing will be announced as soon as practicable thereafter.
In connection with the Sale, Novo A/S, Nordic Capital and Avista has each agreed with the other not to sell any ordinary shares in ConvaTec which are not sold in the Proposed Placing for a period of 90 days after completion of the Sale and Proposed Placing (subject to certain customary exceptions, including the consent of other parties, the ability to accept or agree to accept offers for over 50% of the share capital of ConvaTec, and any enforcement by the lenders under the terms of existing margin loans entered into by Nordic Capital and Avista).
In connection with the Proposed Placing, Nordic Capital and Avista have agreed not to sell any ordinary shares in ConvaTec which are not sold in the Proposed Placing for a period of 90 days after completion of the Proposed Placing (subject to waiver by the Joint Bookrunners and certain customary exceptions, including any enforcement by the lenders under the terms of existing margin loans entered into by Nordic Capital and Avista).
To permit the Sale to Novo A/S and the Proposed Placing, BofA Merrill Lynch, Goldman Sachs and UBS have waived the 180 day lock-up arrangement put in place at the time of the ConvaTec IPO in October 2016, which was due to expire on 29 April 2017, in respect of shares in the Sale and the Proposed Placing.
ConvaTec will not receive any proceeds from the Sale or the Proposed Placing.
About Novo A/S and the Novo Nordisk Foundation
Novo A/S is a private limited liability company wholly owned by the Novo Nordisk Foundation.
The company is the holding company in the Novo Group and responsible for managing the Foundation’s assets. Besides being the major shareholder in the Novo Group companies, Novo A/S provides seed and venture capital to development-stage companies, takes significant ownership positions in well-established companies within the life sciences and manages a broad portfolio of financial assets. Read more at www.novo.dk.
The Novo Nordisk Foundation is a Danish foundation with corporate interests. The Foundation has two objectives: 1) to provide a stable basis for the commercial and research activities of the companies in the Novo Group; and 2) to support scientific, humanitarian and social purposes.
The vision of the Foundation is to contribute significantly to research and development that improves the health and welfare of people.
Since 2010, the Foundation has donated more than DKK 10 billion, primarily for research at public institutions and hospitals in Denmark and the other Nordic countries. Read more at www.novonordiskfoundation.com.