TIDMPATH
RNS Number : 5189I
Path Investments plc
13 August 2021
13 August 2021
Path Investments plc
("Path" or the "Company")
Proposed Acquisition of DG Innovate Limited
and
Suspension of Listing
Path Investments plc (TIDM: PATH) , is pleased to announce that
it has entered into a conditional sale and purchase agreement (the
"Agreement") to acquire the entire issued share capital of DG
Innovate Ltd ("DG Innovate") (the "Proposed Transaction").
Highlights
-- Conditional agreement to acquire DG Innovate for GBP32
million to be satisfied by the issue of 5,342,051,305 Path Ordinary
Shares of GBP0.001 each ("Path Shares") at an issue price of 0.6
pence per Path Share.
-- DG Innovate is an advanced research and development company
focusing on novel electric motor technologies and energy storage
solutions.
-- The Proposed Transaction is subject to the approval of Path's
independent shareholders and waiver of Rule 9 of the Takeover Code
by the Takeover Panel.
-- The Proposed Transaction constitutes a reverse takeover under
the Listing Rules as it will result in a fundamental change in the
business of the Company.
-- The Company has requested from the FCA the suspension of the
Company's listing on the Standard Segment of the Official List, and
from trading on the Main Market of the London Stock Exchange from
7.30am today pending the publication of a prospectus and the
application by the Company to have its enlarged share capital
listed on the Standard Segment of the Official List and admitted to
trading on the Main Market.
-- Path is providing a secured loan facility to DG Innovate of
up to GBP600,000 and an initial GBP300,000 has been provided on
signing of the Agreement.
DG Innovate
DG Innovate is a research and development company pioneering
sustainable and environmentally considerate improvements to
electric mobility and storage, focusing on the use of abundant
materials and best engineering and scientific practices. The
business was founded in 2009 by Martin Boughtwood, an engineer and
inventor with over 40 years' experience. It is intended that Martin
will join the board as Chief Technology Officer of the Company on
completion of the Proposed Transaction.
DG Innovate is currently developing products alongside major
manufacturers across the transportation and energy sectors,
research institutions and the UK's Ministry of Defence ("MOD") and
has filed over 20 patents worldwide in the last five years.
DG Innovate's current research and development activities are
broadly split into two areas, focusing on novel electric motor
technologies and energy storage solutions. Its two main products
are:
-- Enhanced Drive Technology (EDT) - ultra high efficiency,
lightweight, cost-effective electric motors and electronics;
and
-- Enhanced Battery Technology (EBT) -fully-recyclable,
sodium-ion batteries utilising abundant materials, and offering
comparable or greater energy density to incumbent battery
technologies at lower cost and environmental impact.
DG Innovate is working with a number of potential customers
across the transportation and energy sectors, including the MOD, a
global Tier 1 commercial vehicle supplier and a major consumer
automotive OEM.
To date, DG Innovate has raised funding from private investors,
the UK Government, the Welsh Development Agency and through
competitive grant awards under the Innovate UK Faraday Challenge.
The Proposed Acquisition is intended to provide DG Innovate with a
more robust capital structure, access to the public equity markets
and an enhanced leadership team as it seeks to move into product
commercialisation in the short-to-medium term.
Further information on DG Innovate may be found at:
https://www.dginnovate.com.
Principal Terms of the Proposed Transaction
Path has agreed to acquire the total issued share capital of DG
Innovate for a consideration of GBP32 million, to be satisfied by
the issue of 5,342,051,305 new Path Shares at an issue price of 0.6
pence per Path Share.
Completion of the Proposed Transaction is subject to conditions,
including the approval of Path shareholders at a general meeting to
be convened in due course and the publication of a prospectus by
Path prepared in accordance with the Prospectus Regulation Rules
made under section 73A of the Financial Services and Markets Act
2000 (as amended) and approved by the UK Financial Conduct
Authority ("FCA") under section 87A of Financial Services and
Markets Act 2000 (as amended). Following publication of the
prospectus, the Board expects Path's ordinary shares to be
readmitted to the Standard Segment of the Official List maintained
by the FCA and readmitted to trading on the Main Market of the
London Stock Exchange. The Agreement includes a long stop date for
the satisfaction of all conditions of 31 October 2021.
The Agreement also contains warranties between the parties
customary for a transaction of this nature.
Temporary Suspension
The Proposed Transaction is classified as a reverse takeover in
accordance with the FCA's Listing Rules. Accordingly, the Company
has requested the suspension of the Company's listing on the
Standard Segment of the Official List and from trading on the Main
Market of the London Stock Exchange be suspended with effect from
7:30am today pending the publication of a prospectus and the
application by the Company to have its enlarged share capital
listed on the Standard Segment of the Official List and admitted to
trading on the Main Market.
The parties intend to proceed as quickly as possible with the
Proposed Transaction. However, there can be no certainty that the
Proposed Transaction will be successfully completed. If the
Proposed Acquisition does not complete for any reason, it is
expected that the suspension of the Company's listing will be
lifted subject to FCA approval and trading in the Path Shares will
recommence.
The Company will make further announcements in due course, as
appropriate.
Commenting, Christopher Theis CEO of Path, said: "We are
delighted to have agreed the terms for the acquisition of DG
Innovate. DG Innovate is at the forefront of motor drive technology
for electric vehicles, with its innovative technology, together
with offering, through its sodium-ion battery technology, a
potentially cleaner and cheaper alternative to incumbent
technologies.
"We believe that DG Innovate's technology and IP portfolio,
targeted at current market technology's shortcomings, coupled with
its strong commercial relationships, high calibre technical staff
and near-term commercialisation opportunities make it the ideal
target for Path.
"We are currently working hard to complete the required
prospectus and look forward to making further announcements as
matters progress."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU No. 596/2014) which is part of UK law by virtue of
the European Union (withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
For further information please contact:
Path Investments plc C/O IFC
Christopher Theis
Jack Allardyce
IFC Advisory (Financial PR & IR) 020 3934 6630
Tim Metcalfe
Zach Cohen
Grant Thornton UK LLP (Financial Adviser)
Samantha Harrison
Harrison Clarke
Lukas Girzadas 020 7383 5100
ETX Capital (Broker) 020 7392 1400
Tom Curran
Thomas Smith
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END
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August 13, 2021 02:45 ET (06:45 GMT)
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