26th Mar 2007 07:03
Care UK PLC26 March 2007 26 March 2007 Care UK Plc Acquisition and Vendor Placing Care UK Plc ("Care UK" or the "Company"), a leading independent provider ofhealth and social care solutions in the UK, announces today it has entered intoa conditional contract to acquire the entire issued share capital of MercuryHealth Holdings Limited ("Mercury Health") from Tribal Group plc ("Tribal") forconsideration of £31.5 million (the "Acquisition"). Care UK will also assume netdebt in Mercury Health of approximately £20.7 million and repay inter-companyborrowings of £24.6 million on completion. The consideration for the Acquisition will be satisfied partly by the issue of5,158,370 new Care UK Ordinary Shares by way of a vendor placing and the balancefrom new and existing bank facilities. The 5,158,370 new Care UK Ordinary Shares(the "Vendor Placing Shares") have been conditionally placed by Investec withinstitutional and other investors at 660 pence per share (the "Vendor Placing").Should the Vendor Placing not complete in accordance with its terms, Care UKwill fund the entirety of the consideration through new and existing debtfacilities. If the Acquisition does not complete, the Vendor Placing will notoccur. All definitions in this announcement are set out at the end of the appendix tothis announcement. Acquisition highlights • Mercury Health provides a wide range of healthcare services to NHS patients including elective surgery, diagnostics and primary care • Mercury Health currently operates one of the Wave 1 Independent Sector Treatment Centre ("ISTC") contracts and one of the Wave 2 diagnostics contracts awarded by the Department of Health and is also currently preferred bidder for an ISTC Wave 2 contract • The Acquisition will strengthen and consolidate Care UK's position as a leading independent sector provider of NHS care and positions the Company well for further growth in advance of further potential large scale opportunities that will require more substantial provider organisations • As recent new entrants to the healthcare market through the ISTC programme, the strategies and cultures of Care UK and Mercury Health are well aligned and the integration of the two organisations under the Care UK brand creates further strength and depth • The Directors believe that the acquisition will be earnings neutral, before integration costs and amortisation charges, in the current financial year (to September 2007) and earnings accretive, before amortisation charges, in its first full year of ownership Mike Parish, Chief Executive of Care UK Plc, commented: "I am delighted that we have reached agreement with Tribal Group regarding theacquisition of Mercury Health. We believe this is a very exciting acquisitionfor Care UK and positions us as a leading provider of acute and primary careservices to the NHS. "As we have said previously, the role of the independent sector in providingclinical care services to NHS patients is only just beginning. We are alreadyseeing significant growth opportunities across the secondary and primary carecontinuum where Mercury Health's current profile and management expertise willbe a great addition to Care UK's business." There will be a conference call for analysts at 8.30 am this morning. Pleasecall Stephanie Badjonat at Weber Shandwick Financial on 020 7067 0727 for thedial-in details and to confirm your attendance. Enquiries Care UK Plc 01206 752552Mike Parish, Chief ExecutivePaul Humphreys, Finance Director Investec Investment Banking 0207 597 5970James GracePatrick RobbMartin Smith Weber Shandwick Financial 020 7067 0700Louise RobsonStephanie Badjonat Introduction Care UK PLC, a leading independent provider of health and social care solutionsannounces today that it has entered into a conditional contract to acquire theentire issued share capital of Mercury Health from Tribal Group plc for aconsideration of £31.5 million. Care UK will also assume net debt of £20.7million within Mercury Health Group and repay inter-company borrowings of £24.6million on Completion. The Acquisition is conditional, inter alia, on approvalby Tribal Group's shareholders, the approval from the Department of Health to achange in Mercury Health's ownership and approval from Mercury Health's currentsenior debt syndicate. The consideration for the Acquisition will be satisfied partly by the issue of5,158,370 new Care UK Ordinary Shares by way of a Vendor Placing and the balancefrom the Company's bank facilities, which are being increased to £230 million intotal. The 5,158,370 new Care UK Ordinary Shares (the "Vendor Placing Shares")have been conditionally placed by Investec with institutional and otherinvestors at 660 pence per share (the "Vendor Placing"). Should the VendorPlacing not complete in accordance with its terms, Care UK will fund theentirety of the consideration through its new and existing debt facilities. Ifthe Acquisition does not complete, the Vendor Placing will not occur. Information on Mercury Health Mercury Health was established in 2003 as a healthcare delivery business to bidfor opportunities presented under the Department of Health's ("DOH") ISTCprogramme. The ISTC programme, a central procurement of elective surgery and diagnosticservices across England, is being awarded in two Waves. Wave 1 accounted forc.£2 billion of revenues and Wave 2 c.£3.5 billion of revenues. All of thecontracts under Wave 1 have been awarded, with the award of Wave 2 contractscurrently ongoing. Contracts awarded in Wave 1 are for a five year, fixed term,with 100 per cent. guaranteed revenue provision (subject to the providercomplying with certain obligations). Contracts awarded in Wave 2 are also forfive year terms but generally have lower levels of guaranteed revenues. In December 2004, Mercury Health was awarded the GC8 contract worth £214 millionover five years, accounting for approximately 10 per cent. of the totalannounced Wave 1 contract revenues. Under this contract Mercury Health currentlyhas four operational centres in the South and South-East of England whichprovide clinical services ranging from minor injury treatment and diagnosticservices to day and in-patient surgery, with a further centre expected to openin early 2008. Mercury expects to treat up to 18,500 patients per year underthis contract. Mercury Health has also signed one Wave 2 ISTC contract, the West Midlandsdiagnostic contract worth approximately £160 million over 5 years. From June2007 Mercury Health is expected to be operating 17 mobile centres providing upto 190,000 diagnostic procedures annually including imaging, endoscopy,audiology MRI, X-ray and Ultrasound across a number of sites in the WestMidlands. Mercury Health has also been appointed preferred bidder in respect of a secondWave 2 contract, the Essex contract which has anticipated fully operationalannual revenues of £30 million per annum. Under the Essex contract MercuryHealth intends to offer up to 29,000 elective surgery, diagnostic and communitybased procedures annually. Mercury Health also has contracts in Primary and Community Care which currentlyhave revenues of less than £1 million per annum but are expected to grow in thefuture. All elective and diagnostic contracts awarded to date are structured toincorporate a significant level of guaranteed income which, whilst subject tocontractual performance criteria, is not subject to referral levels. For the year ended 31 March 2006 Mercury Health and its subsidiaries reportedEBITDA of £2.6 million and earnings before tax of £0.5 million on turnover of£14.8 million. Gross assets were £51.8 million at 31 March 2006. Mercury Health's gross assets at completion of the Acquisition are expected tobe £67.9 million and net liabilities are expected to be £2.5 million. MercuryHealth's expected net debt at completion of the Acquisition is expected to be£20.7 million, excluding inter-company debt of £24.6 million. All figures forMercury Health are reported under UK GAAP. Key employees The directors of Care UK consider the individuals below to be key employees ofMercury Health: Keith Evans - Group Managing DirectorKeith Evans joined Mercury Health in January 2007. He is responsible for groupoperating performance and growth, operating profit and information, managementand technology. Steve Breach - Group Finance DirectorSteve has been with Mercury since November 2003. He is responsible for financialperformance, financial reporting and corporate services. Mark Smith - Group Strategy DirectorMark has been employed by Mercury Health since November 2003. His areas ofresponsibility include: Strategic development, NHS relationships, Businessdevelopment and HR and organisational development. Jeanette McMillan - Managing Director, Elective SurgeryJeanette joined Mercury Health in 2004 and has overall responsibility for thecompany's elective surgery services. Jeanette is a former chief nursing adviserand has over 20 years of healthcare management experience. Paul Hobson - Managing Director, DiagnosticsPaul has been employed by Mercury Health since 2005 and is responsible for thecompany's diagnostic services. Paul is a qualified diagnostic radiographer andsonographer and has in excess of 20 years' management experience in public andprivate sector healthcare organisations. Mark Hunt - Director, Primary CareMark is a Partner of the Frome Medical Practice but has been a member of theMercury Health senior management team since 2005. Mark is a GP and former seniorpolicy adviser in the Department of Health Strategy Unit. He played a leadingrole in the drafting of the 2006 White Paper on Out of Hospital Care. Hilary Thomas - Medical DirectorHilary has only recently joined Mercury Health. Her current responsibilitiesinclude: Clinical governance, clinical strategy, the medical workforce as wellas other external medical relationships. Acquisition Rationale Care UK's stated objective is to be one of the main providers of acute andprimary care services contracted by the NHS. The Directors believe that this isa large and growing addressable market as the NHS continues to focusincreasingly on procurement rather than provision of services. Care UK, through its Clinical Care division, has already had considerablesuccess in winning contracts in elective surgery, diagnostics and primary care: • Partnership Health Group ("PHG"), the Company's 50 per cent. owned jointventure with Life Healthcare of South Africa, has won four ISTC contractsrepresenting approximately 15 per cent. of aggregate Wave 1 contract valueand in December 2006 was appointed preferred bidder on a Wave 2 ISTC contract in Hampshire; • AMC Diagnostics ("AMC"), the joint venture with Alliance Medical has been appointed preferred bidder for the North East Regional Diagnostics contract with service commencement expected in Summer 2007; • Care UK has been appointed preferred bidder for the Manchester ClinicalAssessment, Treatment and Support Services project ("Manchester CATSS"); • Care UK directly operates further primary care contracts includingwalk-in centres, out of hours services, GP services, urgent care centres,diagnostic, clinical, treatment and support services. The total annualised revenue value of contracts awarded to the Clinical Caredivision of Care UK, including the Group's share of both the PHG and AMCDiagnostics joint ventures' contracted revenues, will amount to around £95million per annum when fully operational. The Directors believe that Mercury Health will fit well into its Clinical Caredivision and will strengthen and consolidate Care UK's position as a leadingprovider within the ISTC market. Whilst the Directors of Care UK believe thatthere will be some synergy benefits, the acquisition is expected to bringsignificant and broad ranging management, bidding and operational experienceinto the Company, thereby providing additional long term potential for growth. The Acquisition will also position Care UK as one of the largest independentsector providers to the NHS and provides scale which the Board believes willbecome more important given the Department of Health's requirements forproviders having depth of management and balance sheet strength. When all the projects are fully operational, the pro forma annual revenue of theClinical Care division will be approximately £201 million (Care UK - £95 millionand Mercury - £106 million). The Directors of Care UK intend to integrate the Mercury Health business intothe existing Care UK Clinical Care division. The combined business will operateunder the Care UK brand. The Directors believe that the acquisition will be earnings neutral, beforeintegration costs and amortisation charges, in the current financial year (toSeptember 2007) and earnings accretive, before amortisation charges, in itsfirst full year of ownership Acquisition Agreement Care UK has agreed, pursuant to the terms of acquisition agreements dated 26March between Care UK and the Tribal Group plc, to acquire the entire issuedshare capital of Mercury Health from Tribal Group plc for a cash considerationof £31.5 million. Care UK will also assume net debt of £20.7 million withinMercury Health Group and repay inter-company borrowings of £24.6 million onCompletion. The Acquisition is conditional, inter alia, on approval by TribalGroup's shareholders, the approval from the Department of Health to a change inMercury Health's ownership and approval from Mercury Health's current seniordebt syndicate. It is expected that, subject to satisfaction of the all conditions, theAcquisition will be completed on 16 April 2007. Vendor Placing Part of the consideration for the Acquisition is being provided by the issue byway of a vendor placing of 5,158,370 new Care UK Ordinary Shares. Investec haveconditionally placed these new Ordinary Shares with institutional and otherinvestors. The Vendor Placing has been fully underwritten by Investec pursuantto the terms of the Placing Agreement. The expenses of the Vendor Placing willbe paid by Care UK. The Vendor Placing Shares will, when issued, represent approximately 9.99 percent. of the Company's existing issued share capital. The Vendor Placing is conditional on, amongst other things, the AcquisitionAgreement remaining in full force and effect and being completed in accordancewith its terms, including Department of Health consent to the change of control,the Placing Agreement not being terminated in accordance with its terms andAdmission occurring no later than 17 April 2007 (or such later date as may beagreed, being no later than 15 May 2007). The Placing Price represents a discount of 1.7 per cent. to the Closing Price ofan Ordinary Share on 23 March 2007 of 671.5 pence. On Admission, the Vendor Placing Shares will rank pari passu in all respectswith the Company's existing Ordinary Shares. Members of the public are not eligible to take part in the Vendor Placing. TheVendor Placing is only being made to persons falling within articles 19 or 49 ofthe Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (asamended) (the "FPO") who are also qualified investors for the purposes ofsection 86 of the Financial Services and Markets Act 2000 and no other personmay participate in the Vendor Placing or rely on any communication relating toit. Admission, Settlement and Dealings Applications will be made to the UK Listing Authority and to the London Stock Exchange for the Vendor Placing Shares to be admitted to listing and trading, respectively. It is expected that Admission will occur on the day following the date that the Acquisition Agreement completes in accordance with its terms and that dealings will commence on such date (expected to be 17 April 2007) at whichtime it is also expected that the Vendor Placing Shares will be enabled for settlement in CREST. Immediately following Admission, the Company is expected to have 56,742,073 Ordinary Shares issued and fully paid. Investec Investment Banking, a division of Investec, which is authorised andregulated by the Financial Services Authority and is a member of the London Stock Exchange, is acting exclusively for Care UK in connection with the Vendor Placing and is not acting for any other person and will not be responsible to any person other than Care UK for providing the protections afforded to its customers or for providing advice on the transactions or arrangements referred to in this announcement. Outlook At the Annual General Meeting of the Company held on 7 February 2007, John Nashgave the following update on trading: "Momentum across the four Care UK divisions continues to be positive. Theannualised value of the current preferred bidder awards, projects in construction, and recent acquisitions represents substantial growth for the Group. Beyond this, we remain confident of further opportunities for growth in our social carefocussed services and we are fundamentally of the view that the role of the independent sector in providing clinical services to NHS patients is only just beginning." Appendix Terms and conditions of, and Important Information relating to, the Vendor Placing If a Placee chooses to participate in the Vendor Placing by making an offer toacquire Vendor Placing Shares, it will be deemed to have read and understoodthis Appendix in its entirety and to be making such offer on the terms andconditions, and to be providing the representations, warranties andacknowledgements, contained in this Appendix. The Vendor Placing and the terms and conditions herein are directed exclusivelyat investment professionals (within Article 19(5) of the Financial Services andMarkets Act 2000 (Financial Promotion) Order 2005 (as amended) ("FPO")) and highnet worth companies, unincorporated associations etc (within Article 49 of theFPO) who are also qualified investors for the purposes of section 86 of theFinancial Services and Markets Act 2000 ("FSMA"). Such persons are togetherreferred to as "Relevant Persons." No person other than Relevant Personscontacted by Investec may participate in the Vendor Placing or rely on anycommunication relating to it. Accordingly, this announcement is exempt from thegeneral restriction set out in section 21 of FSMA on the communication ofinvitations or inducements to engage in investment activity and has not beenapproved by a person who is an authorised person under the FSMA. Members of the public are not entitled to take part in the Vendor Placing andthis announcement is communicated to them for the purposes of information only.The offer of the Vendor Placing has not been made to the public for the purposesof section 102B of FSMA. This announcement and the terms and conditions hereinmust not be relied on, acted on or responded to by persons who are not RelevantPersons. This announcement and this Appendix do not constitute an offer to sell or issueor solicitation of an offer to buy or subscribe for Vendor Placing Shares in anyjurisdiction, including, without limitation, the United Kingdom, the UnitedStates, Canada, Australia, Japan and the Republic of Ireland. This announcementand the information contained herein are not for publication or distribution,directly or indirectly, to persons in the United States, Canada, Australia,Japan, the Republic of Ireland or in any jurisdiction in which such publicationor distribution is unlawful. The Vendor Placing Shares referred to in thisannouncement have not been and will not be registered under the US SecuritiesAct of 1933 (the "Securities Act") and may not be offered or sold within theUnited States absent registration or an exemption from registration. The distribution of this announcement and the Vendor Placing and/or issue of theVendor Placing Shares in certain jurisdictions may be restricted by law. Personsto whose attention this announcement has been drawn are required by the Companyand Investec to inform themselves about and to observe any such restrictions. Any acquisition or application for Vendor Placing Shares by Placees should onlybe made on the basis of information contained in this announcement and thisAppendix. The Vendor Placing Under the Placing Agreement, Investec has, as agent of the Company,conditionally agreed with the Company to use its reasonable endeavours toprocure Placees to accept the issue and allotment of Vendor Placing Shares atthe Placing Price on the terms of the Placing Agreement and the terms andconditions set out in this Appendix. In the event that Investec is not able toprocure Placees for the Vendor Placing Shares, Investec shall itself asprincipal accept the issue and allotment of any remaining Vendor Placing Sharesat the Placing Price. The Vendor Placing will raise approximately £34.0 million (or approximately£33.0 million net of expenses).Application will be made for the admission of theVendor Placing Shares to the Official List maintained by the Financial ServicesAuthority and for the admission of such shares to trading on the London StockExchange's main market. It is expected that Admission will occur on the dayafter the date that the Acquisition Agreement completes in accordance with itsterms and that dealings will commence on such date (expected to be on 17 April2007) at which time it is also expected that the Vendor Placing Shares will beenabled for settlement in CREST. Immediately following Admission, the Company isexpected to have 56,742,073 Ordinary Shares issued and fully paid. Prospective Placees will be contacted by Investec to invite them to submit anapplication for allotment of Vendor Placing Shares. If a bid is successful, thePlacee's allocation will be confirmed to it orally following the close of theVendor Placing process, and a conditional contract note will be dispatched assoon as possible thereafter. Investec's oral confirmation to the Placee afterthe Vendor Placing process has closed will constitute a legally bindingcommitment upon the Placee to accept the issue and allotment of the number ofVendor Placing Shares allocated to it on the terms and conditions set out inthis Appendix. Investec is arranging the Vendor Placing as an agent of theCompany. Participation will only be available to persons invited to participateby Investec. Terms of the Placing Agreement The Vendor Placing is conditional upon, inter alia, the Acquisition Agreementremaining in full force and effect and having been completed on Admission inaccordance with its terms, Admission having become effective and on the PlacingAgreement having become unconditional and not having been terminated inaccordance with its terms prior to Admission. If the conditions of the PlacingAgreement are not fulfilled or waived on or before 8.00 am on 17 April 2007 (orsuch later time and date as Investec may permit, being no later than 8.00 am on15 May 2007) the Vendor Placing will not become unconditional and the placingmonies will be returned to the Placees, without interest, as soon as practicablethereafter. Investec is entitled to terminate the Placing Agreement in certain circumstancesprior to Admission, including: • if there shall develop, occur or come into effect any substantial change in national or international political, military, diplomatic, terrorist, monetary, industrial, economic, financial or stock market conditions or there shall occur or come about any disruption to the settlement of security transactions or the operation of payment or clearance services which, in the opinion of Investec would be likely to prejudice the success of the Vendor Placing or which would make it impracticable or inadvisable to proceed with the Vendor Placing or with Admission; or • there shall have been an adverse change, or a development involving a prospective adverse change, in or affecting the business, management, financial or trading position or prospects, shareholders' funds or results of the Company or any other member of the Group or the Target Group, whether or not arising in the ordinary course of business, which, in any such case, would be likely materially to prejudice the success of the Vendor Placing or which would make it impracticable or inadvisable to proceed with the Vendor Placing or with Admission; or • the Company fails to comply in any material respect with any of its obligations under the Placing Agreement (and, for the avoidance of any doubt, the Company shall be deemed to have failed to comply in a material respect with any of its obligations under the Placing Agreement if it breaches any of the undertakings set forth in clause 5.2 of such agreement), or with the requirements of any laws or regulations (including FSMA and the Listing Rules) in relation to the Vendor Placing or Admission; or • Investec becomes aware of any fact, matter or circumstance which constitutes or will or is likely to constitute a breach of any of the warranties set forth in the Placing Agreement or which would indicate that any of such warranties has become or will or is likely to become untrue, inaccurate or misleading by reference to facts, matters or circumstances from time to time subsisting, up to Admission; or • any of the conditions to the Placing Agreement shall have become incapable of fulfilment before 15 May 2007 (as extended pursuant by Investec pursuant to clause 2.4 of the Placing Agreement, if applicable) and has not been waived as provided in clause 2.4 of the Placing Agreement or; • it should come to the notice of Investec that any statement contained in this Announcement is untrue, inaccurate or misleading which Investec (acting reasonably) considers to be material in the context of the Vendor Placing and/or Admission or that matters have arisen which would, if the Announcement were issued at that time, constitute an omission therefrom which Investec (acting reasonably) considers to be material in the context of the Vendor Placing and/or Admission, and such matter may not, in the opinion of Investec, reasonably be addressed by the publication of a further document or the making of an announcement. The exercise by Investec of any right of termination under the Placing Agreementshall be within its absolute discretion. Investec shall not have any liabilityto any Placee, or any other person for whom any Placee is subscribing VendorPlacing Shares, in respect of any decision which it may make as to whether ornot to exercise any right of termination or any of its other rights under thePlacing Agreement. General These terms and conditions apply to persons accepting the issue and allotment ofVendor Placing Shares under the Vendor Placing. Each person to whom theseconditions apply, as described above, who confirms to Investec (which mayinclude Investec and/or its nominee(s)) his agreement to accept the issue andallotment of the Vendor Placing Shares under the Vendor Placing, hereby agreeswith each of Investec and the Company to be bound by these terms and conditionsas being the terms and conditions on which the Vendor Placing Shares will beissued under the Vendor Placing. A Placee shall, without limitation, become sobound if Investec confirms to it (i) the Placing Price and (ii) its allocation(the "Confirmation"), being the number of Vendor Placing Shares in respect ofwhich such Confirmation is given or such lesser number of Vendor Placing Sharesas Investec shall specify and of which Investec shall notify the Company'sregistrar on behalf of the Company, conditional on these terms and conditionsand this announcement. Conditional, inter alia, on (i) Admission occurring on 17 April 2007 or suchlater date as Investec may permit (not being later than 15 May 2007) and (ii)Investec having given the Confirmation, each Placee agrees to accept the issueand allotment to it of such number of Vendor Placing Shares as is specified inits Confirmation (or such lesser number as Investec shall specify) at thePlacing Price. To the fullest extent permitted by law, each Placee acknowledgesand agrees that it will not be entitled to exercise any remedy of rescission atany time. This does not affect any other rights a Placee may have. A conditionalcontract note will be dispatched as soon as possible following the Confirmation. Each Placee undertakes to pay the Placing Price for the Vendor Placing Sharesissued to such Placee in such manner as shall be directed by Investec. Liabilityfor stamp duty and stamp duty reserve tax is described below. In the event offailure by any Placee to pay as so directed, (without prejudice to Investec'srights against such Placee) the relevant Placee shall be deemed hereby to haveappointed Investec or any nominee of Investec to sell (in one or moretransactions) any or all of the Vendor Placing Shares in respect of whichpayment shall not have been made as directed by Investec. This announcement is the sole responsibility of the Company. Investec is actingfor the Company in connection with the Vendor Placing and is not providingadvice to any other person in relation to the Vendor Placing. Investec shall notbe responsible to any person other than the Company for providing theprotections afforded to the customers of Investec nor for advising any personother than the Company on the transactions and arrangements referred to in thisdocument. No offering document or prospectus has been or will be submitted to be approvedby the Financial Services Authority in relation to the Vendor Placing andPlacees' commitments will be made solely on the basis of the informationcontained in this announcement. Each Placee, by accepting a participation in theVendor Placing, agrees that the content of this announcement has been preparedby and is exclusively the responsibility of the Company and confirms that it hasneither received nor relied on any other information, representation, warrantyor statement made by or on behalf of Investec or the Company and neitherInvestec nor the Company will be liable for any Placee's decision to accept thisinvitation to participate in the Vendor Placing based on any other information,representation, warranty or statement which the Placee may have obtained orreceived. Each Placee acknowledges and agrees that it has relied on its owninvestigation of the business, financial or other position of the Company indeciding to participate in the Vendor Placing. Nothing in this paragraph shallexclude the liability of any person for fraudulent misrepresentation. By participating in the Vendor Placing, each Placee irrevocably represents,warrants and undertakes to Investec (for itself and as agent of the Company)that: (a) it has read this announcement, including this Appendix; (b) it and/or each person on whose behalf it is participating (in whole or inpart) in the Vendor Placing or to whom it allocates Vendor Placing Shares inwhole or in part: (i) has the capacity and authority and is entitled to enter into and perform its obligations as a person who has accepted the allotment and issue of the Vendor Placing Shares are issued and allotted and will honour such obligations; and (ii) has fully observed all laws of relevant jurisdictions and obtained all necessary governmental or other consents in either case which may be required in relation to the issue and allotment to it of Vendor Placing Shares; (c) it is not a person who is resident in, or a citizen of, the United States,Canada, Australia, Japan or the Republic of Ireland (or an agent or nominee ofsuch a person) or a corporation, partnership or other entity organised under thelaws of any such jurisdiction (or an agent or nominee of such a person); (d) it is a Relevant Person; (e) in agreeing to accept the issue and allotment of Vendor Placing Shares ithas received and read this announcement including this Appendix and is notrelying on any information, representation or warranty relating to the VendorPlacing, the Vendor Placing Shares or the Company other than as contained inthis document and it has not relied on and is not relying on any representationor warranty or agreement by Investec or the Company or any of their respectivedirectors, employees or agents or any other person except as set out in theexpress terms herein; (f) save where Investec has agreed in writing to the contrary, in participatingin the Vendor Placing it is acting as principal and for no other person and thatits acceptance of that participation will not give any other person acontractual right to require the issue by the Company of any of the VendorPlacing Shares; (g) it irrevocably confirms Investec's discretion with regard to the PlacingAgreement and agrees that Investec owes it no fiduciary or other duties inrespect of any claim it may have relating to the Vendor Placing; (h) it acknowledges that the Vendor Placing Shares have not been and will not beregistered under the Securities Act or under the securities laws of any State ofthe United States, that the relevant clearances have not been and will not beobtained from the Securities Commission of any province of Canada and that theVendor Placing Shares have not been and will not be registered under thesecurities laws of Australia, the Republic of Ireland or Japan and, therefore,the Vendor Placing Shares may not, subject to certain exceptions, be directly orindirectly offered or sold in the United States, Canada, Australia, the Republicof Ireland or Japan; (i) it acknowledges and agrees that neither it nor any affiliate, nor any personacting on its or any affiliate's behalf, has or will offer, sell, take up,renounce, transfer or deliver directly or indirectly any Vendor Placing Shareswithin the United States, Canada, Australia, the Republic of Ireland or Japan oroffer, sell, take up, renounce, transfer or deliver in favour of a resident ofthe United States, Canada, Australia, the Republic of Ireland or Japan; (j) it has not offered or sold and will not offer or sell any Vendor PlacingShares in the United Kingdom prior to Admission except in circumstances whichhave not resulted and will not result in an obligation to publish an approvedprospectus arising under section 85(1) of the FSMA or a breach of such section; (k) it has complied with all relevant laws of all territories, or obtained allrequisite governmental or other consents which may be required in connectionwith its participation in the Vendor Placing; that it has complied with allrequisite formalities and that it has not taken any action or omitted to takeany action which will or may result in Investec, the Company or any of theirrespective directors, officers, agents, employees or advisers acting in breachof the legal and regulatory requirements of any territory in connection with theVendor Placing or its application; that it is not in a territory in which it isunlawful to make an offer to subscribe for Vendor Placing Shares; and that itwill pay any issue or other taxes due under any relevant laws having effectoutside of the United Kingdom; (l) it acknowledges and agrees in connection with its participation in theVendor Placing that Investec is not acting for it in relation to the VendorPlacing or otherwise and that Investec will not have any duties orresponsibilities to it for providing the protections afforded to its customersor for advising it with regard to the Vendor Placing or the Vendor PlacingShares, nor do the contents of this announcement constitute the giving ofinvestment advice by Investec to it and nor does it expect Investec to have aduty to it similar or comparable to the "best execution", "suitability" and"risk warnings" rules of The Financial Services Authority; (m) it has obtained all necessary consents and authorities to enable it to giveits commitment to accept the issue and allotment to it of Vendor Placing Sharesand to perform its obligations as set out herein; (n) save where Investec has been given prior written notice to the contrary, itis not a person falling within subsections (6), (7) or (8) of sections 67 or 70or subsections (2) and (3) of section 93 or subsection (1) of section 96 of theFinance Act 1986 (or an agent or nominee of such person);(o) save where Investechas been given prior written notice to the contrary, the issue and allotment ofVendor Placing Shares to it (whether as principal, agent or nominee) will not besubject to stamp duty or stamp duty reserve tax at the increased rates referredto in sections 67 or 93 (Depositary Receipts) or sections 70 or 96 (ClearanceServices) of the Finance Act 1986; (p) in the case of a person who confirms to Investec on behalf of a Placee anagreement to accept the issue and allotment of Vendor Placing Shares and/or whoauthorises Investec to notify the Placee's name to the Company's registrar, thatperson represents and warrants that he has authority to do all such acts onbehalf of the Placee; (q) to the extent that a Placee is accepting the issue and allotment of VendorPlacing Shares on behalf of a third party and prior written agreement of suchmatter has been given by Investec as contemplated by paragraph (f) of thisAppendix: (i) such Placee has carried out applicable procedures to verify the identity of such third party for the purposes of the Money Laundering Regulations 2003 (the "Regulations"); (ii) such Placee has complied fully with its obligations pursuant to the Regulations; and (iii) such Placee will provide Investec on demand with any information it might require for the purposes of verification under the Regulations; (r) it is aware of, has complied with and will comply with its obligations inconnection with money laundering under the Proceeds of Crime Act 2002 andinsider dealing under the Criminal Justice Act 1993; (s) it acknowledges that the issue and allotment of the Vendor Placing Shares toit will be issued subject to the terms and conditions set out herein; (t) acknowledges that no offering document or prospectus has been prepared inconnection with the Vendor Placing; (u) acknowledges that the content of this announcement is exclusively theresponsibility of the Company and that neither Investec nor any person acting ontheir behalf is responsible for or shall have any liability for any information,representation or statement relating to the Company contained in thisannouncement or any information previously published by or on behalf of theCompany and will not be liable for any Placee's decision to participate in thePlacing based on any information, representation or statement contained in thisannouncement or otherwise; and (v) represents and warrants that it has not received a prospectus or otheroffering document and has not relied on any information other than informationcontained in this announcement or any information previously published by or onbehalf of the Company and acknowledges and agrees that it has relied on its owninvestigation of the business, financial or other position of the Company indeciding to participate in the Vendor Placing. In the event that a Placee is not able to give the warranties and undertakingsin (n) and (o) above, stamp duty or stamp duty reserve tax may be chargeable ormay be chargeable at a higher rate. Neither Investec nor the Company will beresponsible for any resulting liability to stamp duty or stamp duty reserve tax,which shall be for the account of the Placee and in respect of which the Placeeagrees to indemnify, and keep indemnified, Investec and the Company. Each Placee irrevocably appoints any duly authorised officer of Investec as itsagent for the purpose of executing and delivering to the Company and/or itsregistrars any documents on its behalf necessary to enable it to be registeredas the holder of any of the Vendor Placing Shares issued and allotted to it. Settlement of the transactions in the Vendor Placing Shares following Admissionwill take place within the CREST system against Investec's CREST account 331. In the case of a joint agreement to subscribe for Vendor Placing Shares,references to a "Placee" in this Appendix are to each Placee who is a party tosuch agreement and each such Placee's liability is joint and several. These terms and conditions and all documents and agreements into which theseterms and conditions are incorporated by reference or validly form part will begoverned by and construed in accordance with English law. For the exclusivebenefit of Investec and the Company, each Placee irrevocably submits to theexclusive jurisdiction of the English courts in respect of these matters. Thisdoes not prevent an action being taken against the Placee in anotherjurisdiction. In this Announcement (including the Appendix), the following expressions havethe following meanings unless inconsistent with the context: "Acquisition" the proposed acquisition by the Company of the entire issued share capital of Mercury for a maximum consideration of £31.5 million pursuant to the Acquisition Agreement "Acquisition the agreement dated 26 March 2007 between Tribal and the CompanyAgreement" providing for the sale and purchase of the entire issued share capital of Mercury "Admission" the admission of the Vendor Placing Shares to the Official List by the making of an announcement in accordance with paragraph 3.2.7 of the Listing Rules and the admission of such shares to trading on the London Stock Exchange's main market for listed securities in accordance with paragraph 2.1 of the Admission and Disclosure Standards "Admission the admission and disclosure standards published by the Londonand Stock Exchange from time to timeDisclosureStandards" "Closing the closing middle market quotation of an Ordinary Share asPrice" derived from the daily official list published by the London Stock Exchange "Company" or Care UK PLC (registered number 01668247), whose registered office"Care UK" is at Connaught House, 850 The Crescent, Colchester Business Park, Colchester, Essex, CO4 9QB "CREST" the computer based system and procedures which enable title to securities to be evidenced and transferred without a written instrument and which is operated by CRESTCo Limited "FSMA" The Financial Services and Markets Act 2000 (as amended) "Group" the Company and its subsidiaries at the date hereof and "member of the Group" shall be construed accordingly "Investec" Investec Bank (UK) Limited (registered number 489604), whose registered office is at 2 Gresham Street, London EC2V 7QP "Listing the listing rules made by the Financial Services Authority underRules" section 74 of FSMA and in force as at the date of the Placing Agreement "London London Stock Exchange plcStock Exchange" "Official the official list maintained by the Financial Services AuthorityList" "Ordinary ordinary shares of 10p each in the capital of the CompanyShares" "Placees" persons who are procured by Investec to have Vendor Placing Shares allotted and issued to them pursuant to the provisions of the Placing Agreement "Placing the agreement dated 26 March 2007 between the Company andAgreement" Investec "Placing 660 pence per Vendor Placing SharePrice" "Target" or Mercury Health Holdings Limited (registered number 04421200)"Mercury" "Target the Target and each of its subsidiariesGroup" or "MercuryGroup" "Tribal" Tribal Group Plc (registered number 04128850) "Vendor the conditional placing by way of vendor placing of the VendorPlacing" Placing Shares at the Placing Price on the terms and subject to the conditions of the Placing Agreement and this Appendix "Vendor 5,158,370 new Ordinary Shares which are the subject of thePlacing Vendor PlacingShares" This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CUK.LTribal Grp.