RECOMMENDED CASH OFFER

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014

1 July 2020

RECOMMENDED CASH OFFER

for

CELLO HEALTH PLC ("CELLO" OR THE "COMPANY")

by

PHARMA VALUE DEMONSTRATION BIDCO LIMITED ("BIDCO")

a newly incorporated company wholly owned by Value Demonstration UK Holdings Limited ("Value Demonstration"), a company backed by Arsenal Capital Partners V LP and Arsenal Capital Partners V-B LP

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

Summary

· The board of directors of Cello and the board of directors of Bidco are pleased to announce that they have reached agreement on the terms of a recommended all cash offer to be made by Bidco for all of the issued and to be issued share capital of Cello not already owned, or agreed to be acquired, by Bidco (the "Acquisition").

· Under the terms of the Acquisition, Cello Shareholders will be entitled to receive: 

161 pence in cash for each Cello Share

· The Acquisition values the entire issued and to be issued share capital of Cello at approximately £178.8 million.

· The Acquisition represents a premium of approximately:

o 43.8 per cent. to the Closing Price per Cello Share of 112.0 pence on 30 June 2020 (being the last Business Day prior to this Announcement);

o 40.9 per cent. to the volume weighted average price per Cello Share of 114.2 pence in the three months to 30 June 2020 (being the last Business Day prior to this Announcement); and

o 28.3 per cent. to the volume weighted average price per Cello Share of 125.4 pence in the six months to 30 June 2020 (being the last Business Day prior to this Announcement).

o An implied enterprise value multiple of approximately 12.3x Cello Adjusted EBITDA of £14.8 million for the year ended 31 December 2019.

· Bidco is a newly incorporated company wholly owned by Value Demonstration, a company backed by the Arsenal Funds. Bidco has been established for the purpose of making and implementing the Acquisition. Further information in relation to Bidco and Value Demonstration is set out in paragraph 8, and in relation to Arsenal in paragraph 9 of this Announcement.

· The Cello Directors, who have been so advised by Greenhill as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Cello Directors, Greenhill has taken into account the commercial assessment of the Cello Directors. Greenhill is providing independent financial advice to the Cello Directors for the purposes of Rule 3 of the Code.

· Accordingly, the Cello Directors intend to recommend unanimously that Cello Shareholders vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the Cello General Meeting, as the Cello Directors who hold Cello Shares have irrevocably undertaken to do in respect of their own beneficial holdings, amounting in aggregate to 4,972,128 Cello Shares and representing approximately 4.7 per cent. of the issued share capital of Cello as at 30 June 2020 (being the latest practicable date prior to publication of this Announcement).

· Bidco has received irrevocable undertakings or letters of intent in respect of a total of 37,601,781 Cello Shares representing approximately 35.2 per cent. of the existing issued share capital of Cello to vote in favour of the Scheme at the Court Meeting and the Cello General Meeting.

o In addition to the irrevocable undertakings from the Cello Directors, Bidco has received irrevocable undertakings from certain other Cello Shareholders holding, in aggregate, 22,142,591 Cello Shares representing approximately 20.8 per cent. of the existing issued share capital of Cello to vote in favour of the Scheme at the Court Meeting and the Cello General Meeting.

o Consequently, Bidco has received irrevocable undertakings with respect to, in aggregate, 27,114,719 Cello Shares representing approximately 25.4 per cent. of the existing issued share capital of Cello.

o In addition to the irrevocable undertakings, Bidco has obtained letters of intent from Cello Shareholders with respect to, in aggregate, 10,487,062 Cello Shares representing approximately 9.8 per cent. of the existing issued share capital of Cello to vote in favour of the Scheme at the Court Meeting and the Cello General Meeting.

· It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act (or, if Bidco elects, with the consent of the Panel, a takeover offer under Part 28 of the Companies Act).

· Cello has 106,690,531 ordinary shares in issue as at 30 June 2020 (being the last Business Day prior to this Announcement).

The Scheme will also be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.

Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document, which is expected to be dispatched to Cello Shareholders as soon as reasonably practicable and, in any event, within 28 days of the date of this Announcement.

Rothschild & Co is acting as financial adviser to Bidco and Arsenal. Ropes & Gray International LLP is acting as the legal adviser to Bidco, Value Demonstration and Arsenal.

Greenhill is acting as financial adviser, and Cenkos as nominated adviser and broker, to Cello in respect of the Acquisition. Marriott Harrison LLP is acting as legal adviser to Cello.

Commenting on the Acquisition, Jon Williams, CEO of Value Demonstration, said:

"We are delighted at the prospect of working with Cello's management towards our mission: to improve patient health by accelerating and optimizing patient access to medical innovations, especially those that have a transformative impact on people's lives. Cello's breadth of relevant capabilities, scientific credentials, strong client relationships and market reputation for excellence will significantly progress our ambition of becoming the global leader in the space. We are also excited at the prospect of complementing the capabilities of the Cello team with those from the recent acquisition of BresMed. This, we believe, will create a compelling and differentiated services platform, led by strong and seasoned management teams, that consists of strategic consultancy, market access, health economics research and communications. Importantly, the business will be backed by Arsenal, a specialist investor with a deep understanding of the life sciences and pharmaceutical services sector and a strong track record of helping companies accelerate growth and achieve their visions."

Commenting on the Acquisition, Chris Jones, Chairman of Cello, said:

"This exciting partnership strengthens Cello's ability to achieve its long stated ambition to be a truly global company of destination and distinction.

Cello has expanded rapidly since it was founded in 2004, both through internal and acquisition-led growth, and is now a thriving healthcare advisory group.

The all-cash offer from Bidco and Value Demonstration represents an excellent opportunity for current shareholders to realise value for their investment at an attractive premium and valuation multiple."

Mark Scott, Chief Executive Officer of Cello, added:

"The Cello Directors are confident that, as part of the Value Demonstration platform with Arsenal's backing, Cello will be optimally positioned to accelerate its current strategy and capitalise on a broader range of opportunities. This transaction will ensure the continued success of the business for its employees and clients. We firmly believe that, in partnership with Value Demonstration, Cello will build a market leading enterprise that improves the efficiency and efficacy of the healthcare industry and thereby, improves patient outcomes."

This summary should be read in conjunction with, and is subject to, the full text of this Announcement. The Acquisition will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources and bases of certain information contained in this Announcement, Appendix III contains a summary of the irrevocable undertakings received in relation to the Acquisition and Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.

IMPORTANT NOTES

Rothschild & Co, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Arsenal and Bidco and for no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters referred to in this Announcement and will not be responsible to anyone other than Arsenal and Bidco for providing the protections afforded to its clients or for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this Announcement.

Greenhill, which is regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Cello as financial adviser and for no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters referred to in this Announcement and will not be responsible to anyone other than Cello for providing the protections afforded to its clients or for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this Announcement.

Cenkos, which is regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Cello as nominated adviser and broker and for no one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters referred to in this Announcement and will not be responsible to anyone other than Cello for providing the protections afforded to its clients or for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this Announcement.

This Announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely through the Scheme Document (or, if applicable, a Takeover Offer) and the accompanying Forms of Proxy, which will contain the full terms and conditions of the Acquisition and the Scheme, including details of how to vote in respect of the Acquisition and the Scheme. Any approval, decision or other response to the Acquisition and/or the Scheme should be made only on the basis of the information in the Scheme Document (or, if applicable, a Takeover Offer). Scheme Shareholders are strongly advised to read the formal documentation in relation to the Acquisition and the Scheme once it has been dispatched.

The Scheme Document (including notices of the Court Meeting and Cello General Meeting), together with the relevant Forms of Proxy, will be posted to Cello Shareholders as soon as practicable.

This Announcement does not constitute a prospectus or prospectus equivalent document.

This Announcement has been prepared for the purpose of complying with English law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and service of this Announcement shall not give rise to any implication that there has been no change in the facts set out in this Announcement since such date.

Overseas jurisdictions

The release, publication or distribution of this Announcement in, and the availability of the Acquisition to persons who are residents, citizens or nationals of, jurisdictions other than the United Kingdom may be restricted by laws and/or regulations of those jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

In particular, the ability of Overseas Shareholders to vote their Cello Shares at the Court Meeting and/or the Cello General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their Cello Shares in respect of the Court Meeting and/or the Cello General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located. Copies of this Announcement, the Scheme Document, the accompanying Forms of Proxy and any other formal documentation relating to the Acquisition and the Scheme are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction.

Unless otherwise permitted by applicable law and regulation, the Acquisition may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Acquisition may not be capable of acceptance by any such use, means, instrumentality or facilities.

The Acquisition relates to the shares of a UK company and is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, the Acquisition will be subject to the disclosure requirements and practices applicable in the UK and under the Code to schemes of arrangement, which differ from the disclosure requirements and practices of the U.S. proxy solicitation and tender offer rules. Neither the U.S. Securities and Exchange Commission (the "SEC"), nor any securities commission of any state of the United States, has approved the Acquisition, passed upon the fairness of the Acquisition or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States. Financial information included in the relevant documentation has been or will have been prepared in accordance with accounting standards applicable in the UK that may not be comparable to financial information of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

However, if Bidco were to elect to implement the Acquisition by means of a Takeover Offer and determines to extend such Takeover Offer into the United States, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including, if applicable and if an exemption is not available, the U.S. tender offer rules. Such Takeover Offer would be made in the United States by Bidco and no one else.

In accordance with normal UK practice, Bidco, certain affiliated companies and its nominees or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, shares in Cello outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website. If such purchases or arrangements to purchase are made they would be made outside the United States in compliance with applicable law, including the Exchange Act.

It may be difficult for U.S. holders of Cello Shares to enforce their rights and any claim arising out of the U.S. federal securities laws, because Cello and Bidco are located in a non-U.S. country, and some or all of their officers and directors may be residents of a non-U.S. country. U.S. holders of Cello Shares may not be able to sue a non-U.S. company or its officers or directors in a non-U.S. court for violations of the U.S. securities laws. Further, it may be difficult to compel a non-U.S. company and its affiliates to subject themselves to a U.S. court's judgment.

U.S. Cello Shareholders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding the Acquisition.

Forward-looking statements

This Announcement, including the information included in this Announcement, contains certain forward-looking statements. The forward-looking statements contained herein include statements about Arsenal, Value Demonstration, Cello, the Cello Group, the expected effects of the Acquisition on the Cello Group, strategic options, the expected timing and scope of the Acquisition, and all other statements in this Announcement other than those containing historical facts may be forward-looking statements. These statements are based on the current expectations and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "budget", "schedule", "forecast", "project", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "subject to", or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future. Forward-looking statements may include statements relating to the following: future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects. There are a number of factors that could cause actual results, outcomes and developments to differ materially from those expressed in, or implied by, such forward-looking statements and such statements are therefore qualified in their entirety by the risks and uncertainties surrounding these future expectations. Many of these risks and uncertainties relate to factors that are beyond the entities' ability to control or estimate precisely, such as, but not limited to, general business and market conditions both globally and locally, political, economic and regulatory forces, industry trends and competition, future exchange and interest rates, changes in government and regulation including in relation to health and safety, the environment, labour relations and tax rates and future business combinations or dispositions. For a discussion of important factors which could cause actual results to differ from forward-looking statements in relation to the Cello Group, refer to the annual report and accounts for Cello Group for the financial year ended 31 December 2019.

Although it is believed that the expectations reflected in such forward-looking statements are reasonable, neither Arsenal nor Cello give any assurance, representation or guarantee that such expectations will prove to be or have been correct and such forward-looking statements should be construed in light of such factors and you are therefore cautioned not to place reliance on these forward-looking statements which speak only as at the date of this Announcement. Neither Arsenal nor Cello assumes any obligation to update or correct the information contained in this Announcement (whether as a result of new information, future events or otherwise), except as required by applicable law or regulation.

No forward-looking or other statements have been reviewed by the auditors of the Cello Group.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Cello for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Cello.

Right to switch to a Takeover Offer

Bidco reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued ordinary share capital of Cello as an alternative to the Scheme. In such an event, the Takeover Offer will be implemented on the same terms or, if Bidco so decides (with the consent of the Panel), on such other terms being no less favourable (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme and subject to the amendment referred to in Appendix I to this Announcement.

Publication on website and availability of hard copies

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions) at www.cellohealthplc.com and www.pharma-value-demonstration.com by no later than 12 noon (London time) on the Business Day following this Announcement.

Neither the contents of these websites nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.

The global COVID-19 pandemic is restricting the ability of Cello to issue and post hard copy documents in the usual way. As a result, no copies of this Announcement, or a circular summarising the terms and conditions of the Acquisition shall be sent to any person other than the Cello Shareholders and persons with information rights. At the time of this Announcement, it is uncertain to what extent any further requests for hard copy documents can be satisfied during the upcoming period.

Subject to the above, in accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement, free of charge, by contacting Rothschild & Co on +44 (0) 20 7280 5000, Greenhill on +44 (0) 20 7198 7400 or Cenkos on +44 (0) 20 7397 8900. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information be sent to them in relation to the Acquisition should be in hard copy form.

Information relating to Cello Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Cello Shareholders, persons with information rights and other relevant persons for the receipt of communications from Cello may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror, must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror, and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them under Rules 8.1, 8.2 and 8.4 of the Code.

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found on the Disclosure Table tab of the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Relevant securities in issue

In accordance with Rule 2.9 of the Code, Cello confirms that as at the close of business on 30 June 2020, being the last Business Day prior to the date of this Announcement, it has in issue 106,690,531 ordinary shares each with a nominal value of 10p (excluding shares held in treasury). The International Securities Identification Number (ISIN) of the Cello Shares is GB00B0310763.

MAR

The information contained within this announcement is deemed by Cello to constitute inside information as stipulated under the Market Abuse Regulation.

Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014

1 July 2020

RECOMMENDED CASH OFFER

for

CELLO HEALTH PLC ("CELLO" OR THE "COMPANY")

by

PHARMA VALUE DEMONSTRATION BIDCO LIMITED ("BIDCO")

a newly incorporated company wholly owned by Value Demonstration UK Holdings Limited ("Value Demonstration"), a company backed by Arsenal Capital Partners V LP and Arsenal Capital Partners V-B LP

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

1. Introduction

The board of directors of Cello and the board of directors of Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco will acquire the entire issued and to be issued share capital of Cello (the "Acquisition"). The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

Bidco is a newly incorporated company and is wholly owned by Value Demonstration, a company formed with the backing of the Arsenal Funds. Bidco has been established for the purpose of making and implementing the Acquisition. Further information in relation to Bidco and Value Demonstration is set out in paragraph 8, and in relation to Arsenal in paragraph 9 of this Announcement.

2. The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, Cello Shareholders will be entitled to receive:

for each Cello Share 161 pence in cash

The Acquisition values the entire issued and to be issued ordinary share capital of Cello at approximately £178.8 million on a fully diluted basis, and represents a premium of approximately:

o 43.8 per cent. to the Closing Price per Cello Share of 112.0 pence on 30 June 2020 (being the last Business Day prior to this Announcement);

o 40.9 per cent. to the volume weighted average price per Cello Share of 114.2 pence in the three months to 30 June 2020 (being the last Business Day prior to this Announcement); and

o 28.3 per cent. to the volume weighted average price per Cello Share of 125.4 pence in the six months to 30 June 2020 (being the last Business Day prior to this Announcement);

o Such valuation exceeding all-time high closing price;

o An implied enterprise value multiple of approximately 12.3x Cello Adjusted EBITDA of £14.8 million for the year ended 31 December 2019.

It is currently expected that the Scheme Document will be published in mid-July 2020, that the Court Meeting and the Cello General Meeting will be held in early August 2020 and that the Scheme will become Effective in mid-August 2020.

3. Background to and reasons for the Acquisition

Bidco is a private limited company wholly owned by Value Demonstration. Value Demonstration has the ambition to build the global leader focused on helping life sciences companies accelerate and optimise patient access to medical innovations.

Value Demonstration believes that Cello is a global healthcare-focused advisory group comprised of a set of leading clinical, commercial consultancy and digital capabilities, led by a talented management team. Extensive analysis and interaction with Cello's senior management have confirmed Value Demonstration's belief that Cello is a preeminent team of thought leaders working at the cutting edge of science and technology to guide clients to confident decisions at the most critical stages of asset development. Value Demonstration is attracted by the scientific credentials, advisory skill sets, market reputation for excellence and cultural values of Cello, and believes that there is alignment in strategy to help the pharmaceutical and medical device industries improve patient access to innovative therapies that have a positive impact on people's lives.

Value Demonstration brings complementary capabilities to Cello and, with support from the Arsenal Funds, is positioned to accelerate the growth of Cello organically and through acquisitions. Value Demonstration's management will partner with Cello management and employees in refining and executing on key growth initiatives in line with Cello's stated objectives to strengthen its presence in North America and Europe, improve its ability to generate and communicate clinical evidence of effectiveness and value, further orient the capabilities of Cello Connect to healthcare, and pursue strategic investments in core and adjacent markets.

The Acquisition follows the acquisition of BresMed in February 2020, which marked the first of a series of investments targeted by Value Demonstration to realise its vision of transforming the way medical advances reach the patients who need them. Value Demonstration believes that BresMed is led by an outstanding management team and is well known for scientific and technical excellence. 

Value Demonstration believes that the capabilities of BresMed and Cello are complementary and will enable Value Demonstration to support biopharmaceutical and medical device clients with the strategy, evidence and communication tools to help maximise the value of their products, guiding healthcare stakeholders worldwide in difficult decisions about resource allocation and access to new therapies.

Arsenal has a strong track-record of building market-leading companies in the life sciences services market, helping management teams to accelerate their growth and achieve their visions. Arsenal intends to leverage its industry and operating expertise, relations with industry leading senior advisors and track record of completing acquisitions in North America and Europe in order to accelerate the growth of Cello as part of Value Demonstration.

4. Background to and reasons for the Recommendation

Cello has developed significantly since its inception in 2004 and is today a global, healthcare-focused advisory firm, with experts in Science, Insight, Strategy, and Communications. Given its strong competitive position and excellent reputation in the market, Cello is well-positioned to continue to drive growth across its key capabilities.

Whilst the Cello Directors are confident in the long-term prospects of the business as an independent listed company, they acknowledge the benefits of private ownership, including greater access to capital to pursue new growth opportunities. Cello has a strong track-record of buying and integrating strategic acquisitions, and the combination with Value Demonstration under the ownership of the Arsenal Funds, has the opportunity to accelerate the pursuit of a shared acquisition strategy, which will require continued investment in the business.

In this regard, the Cello Directors believe that:

· Value Demonstration backed by the Arsenal Funds is well-placed to lead the next stage of Cello's development, both as a highly experienced growth investor, and as an organisation with a strong track record in the pharmaceutical services sector;

· The Acquisition reflects the strength of the Cello business today and its future prospects, and provides an opportunity for Cello Shareholders to receive a full price and crystallise, in cash, the value of their investments;

· Priced at 161 pence per Cello Share, the Acquisition represents an attractive premium of 43.8 per cent. to the Closing Price and 40.9 per cent. to the volume weighted average price in the three months to 30 June (being the last Business Day prior to this Announcement);

· The Acquisition will deliver a number of strategic benefits to Cello's business through private ownership and combination with the complementary services offered by Value Demonstration, including the ability to pursue a more active acquisition strategy and increase investments in the existing business to accelerate organic growth; and

· The Acquisition represents an attractive implied enterprise value multiple of approximately 12.3x Cello Adjusted EBITDA of £14.8 million for the year ended 31 December 2019.

In considering the Acquisition, the Cello Directors have taken into account Value Demonstration's stated intentions for the business and its employees. The Cello Directors firmly believe that the Acquisition represents a unique opportunity which results in a positive outcome for all its stakeholders, including customers, employees and shareholders.

5. Recommendation

The Cello Directors, who have been so advised by Greenhill as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Cello Directors, Greenhill has taken into account the commercial assessments of the Cello Directors. Greenhill is providing independent financial advice to the Cello Directors for the purposes of Rule 3 of the Code.

Accordingly, the Cello Directors intend to recommend unanimously that Cello Shareholders vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the Cello General Meeting as the Cello Directors who hold Cello Shares have irrevocably undertaken to do in respect of their own beneficial holdings, amounting in aggregate to 4,972,128 Cello Shares and representing approximately 4.7 per cent. of the issued share capital of Cello as at 30 June 2020 (being the latest practicable date prior to publication of this Announcement).

6. Interests in Cello Shares, irrevocable undertakings and letters of intent

Bidco has received irrevocable undertakings or letters of intent in respect of a total of 37,601,781 Cello Shares representing approximately 35.2 per cent. of the existing issued share capital of Cello to vote in favour of the Scheme at the Court Meeting and the Cello General Meeting.

Bidco has received irrevocable undertakings from each of the Cello Directors who hold Cello Shares to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Cello General Meeting, in respect of a total of 4,972,128 Cello Shares, representing approximately 4.7 per cent. of the share capital of Cello in issue on 30 June 2020 (being the latest practicable date prior to publication of this Announcement). These irrevocable undertakings remain binding in the event of a competing offer.

Bidco has received irrevocable undertakings from certain other Cello Shareholders holding, in aggregate, 22,142,591 Cello Shares representing approximately 20.8 per cent. of the existing issued share capital of Cello to vote in favour of the Scheme at the Court Meeting and the Cello General Meeting.

Therefore, Bidco has received irrevocable undertakings with respect to, in aggregate, 27,114,719 Cello Shares representing approximately 25.4 per cent. of the existing issued share capital of Cello.

In addition to the irrevocable undertakings, Bidco has obtained non-binding letters of intent from Cello Shareholders with respect to, in aggregate, 10,487,062 Cello Shares representing approximately 9.8 per cent. of the existing issued share capital of Cello to vote in favour of the Scheme at the Court Meeting and the Cello General Meeting.

Certain of the irrevocable undertakings will cease to be binding in certain circumstances as set out in Appendix III to this Announcement. Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

7. Information relating to Cello

Cello is a global healthcare-focused advisory group comprised of a set of leading clinical, commercial advisory and digital delivery capabilities. The Company serves 24 of the top 25 pharmaceutical clients globally, as well as a wide range of biotech, devices and other key non-healthcare clients. Cello enables clients to differentiate their assets and drive brand success, operating through nearly 1,000 highly skilled professionals utilising the latest thinking, technology and digital solutions. Its services are delivered from an office network in the UK, USA, and Asia.

Cello is admitted to trading on the AIM market of the London Stock Exchange (AIM: CLL).

8. Information relating to Bidco and Value Demonstration

Bidco is a private limited company wholly owned by Value Demonstration. Bidco was incorporated in the United Kingdom on 16 June 2020 under the Companies Act with registered number 12674221 for the purpose of implementing the acquisition. It has its registered office at First Floor, Templeback, Bristol, United Kingdom, BS1 6FL.

The directors of Bidco are Jon Williams, Gene Gorbach, Michael Bernstein and Stephen McLean.

The principal activity of Bidco, in the event of completion of the Acquisition, will be to act as a holding company for Cello. Bidco's principal investment is the proposed acquisition of Cello Shares pursuant to the Acquisition or otherwise.

Save for activities in connection with the making, implementation and financing of the Acquisition, Bidco has not carried on any business prior to the date of this announcement, nor has it entered into any obligations. Bidco has not paid any dividends or prepared any historical financial accounts.

Bidco is a wholly owned subsidiary of Value Demonstration. Value Demonstration is a specialist healthcare platform focused on building a leading global services provider to help life sciences companies accelerate and optimize patient access to medical innovations.

Backed by the Arsenal Funds, Value Demonstration is ambitious to become a leader in accelerating and improving patient access to medical advances through generating and communicating better evidence of value and effectiveness of novel therapeutics to health professionals, payors and patients. Value Demonstration is led by an experienced team of executives. Value Demonstration's capabilities are currently centred around defining, developing and executing successful health economic and outcomes research (HEOR) strategies to support biopharmaceutical and medical device innovation.

Central to Value Demonstration strategy is the acquisition of best-in-class companies with complementary capabilities in four key segments; Strategy, Evidence Generation, Evidence Analytics and Communication. Value Demonstration is committed to investing in and partnering with acquired companies to build a transformational business that addresses some of the biopharma industry's most significant challenges. Success will be driven by several critical factors, including attracting and retaining the industry's best talent, establishing scientific and methodological leadership in the sector, developing data and technology enabled offerings and creating a culture of "clients first", collaboration and innovation.

The acquisition of Cello follows the acquisition of BresMed in February 2020, which marked the first of a series of investments targeted by Value Demonstration to realise its vision of transforming the way medical advances reach the patients who need them. Value Demonstration believes that BresMed and Cello's complementary capabilities will enable Value Demonstration to support biopharmaceutical and medical device clients with the strategy, evidence and communication tools to help maximise the value of their products, guiding healthcare stakeholders worldwide in difficult decisions about resource allocation and access to new therapies.

9. Information relating to Arsenal

Founded in 2000, Arsenal is a specialized middle market private equity firm, headquartered in the United States, with a strong track-record of building market-leading companies in the life sciences market. Since its inception, Arsenal has invested over $3.5 billion in 48 portfolio companies and has completed more than 150 add-on acquisitions across five funds. Within the healthcare sector, Arsenal is committed to building market-leading companies that improve the efficiency and efficacy of the healthcare industry and thereby, improve patient outcomes. Arsenal possesses extensive depth in pharmaceutical and life sciences services in addition to operational and investment expertise to support management in executing organic and acquisitive growth initiatives.

Arsenal has significant experience and a proven track record of partnering with management teams to help accelerate growth and achieve their visions. Key to Arsenal's success is its broad network of leading scientific, academic and regulatory experts, which it leverages to help inform its investment decisions and drive the commercial success of its portfolio companies. Arsenal understands how to build market-leading enterprises in healthcare, especially recognising the importance of attracting and retaining the best talent in the life sciences industry.

10. Management, employees, research and development, and locations of business

Value Demonstration's strategic plans for Cello

As set out in paragraph 3 (Background to and reasons for the Acquisition) above, Value Demonstration highly values Cello's strong industry expertise, scientific track-record with top life sciences organisations and talented management team. Leveraging the capabilities resident within Value Demonstration and with support of the Arsenal Funds, Value Demonstration intends to assist Cello operationally and to leverage its ability to access capital to facilitate growth through the pursuit of future acquisitions and enhancement of the current platform.

Value Demonstration believes Cello's growth trajectory will be enhanced under private ownership by leveraging the operational and business resources of Value Demonstration and Arsenal's operating and industry expertise, its extensive investment activity in North America and Europe, and access to capital.

Value Demonstration intends to support the management team of Cello in the continued implementation of its current strategy. Value Demonstration recognises the existing and long standing strength of the digital and creative capabilities within the Connect business and fully supports the growing emphasis of Cello Connect towards healthcare. Value Demonstration is looking forward to more fully understanding Signal and related businesses in more detail and collaborating with Cello Management to mutually evaluate strategic priorities, options and opportunities for these businesses.

Existing employment rights and pensions

Value Demonstration expects that the existing personnel of Cello will continue to be an integral part of the success of Cello following completion of the Acquisition. Building on its current strategy, Value Demonstration will support the management team of Cello in executing and refining Cello's current strategy, including the review of strategic priorities, options and opportunities, and, although there will be some limited headcount reduction due to certain roles associated with Cello's listing no longer being required (as described below), it does not intend to initiate any material headcount reductions within the current Cello organisation as a result of the Acquisition. Value Demonstration confirms that, following the completion of the Acquisition, the existing contractual and statutory employment rights, including in relation to pensions, of all Cello management and employees will be fully safeguarded in accordance with applicable law. Value Demonstration does not intend to make any material change to the conditions of employment or in the balance of skills and functions of the employees and management of Cello. Value Demonstration does not intend to make any changes to any employer contributions made by the Cello Group into personal or other pension schemes. The Cello Group does not participate in any defined benefit pension scheme.

Management incentivisation arrangements

Following completion of the Acquisition, Value Demonstration intends to review the management, governance and incentive structure of Cello. Value Demonstration has not entered into any form of incentivisation or any other arrangements with members of Cello's management nor has it had discussions about the terms of any such incentivisation or arrangement. It intends to enter into such discussions for certain members of the Cello management team and put in place appropriate arrangements for management of Cello following completion of the Acquisition.

Headquarters, locations, fixed assets and research & development

Value Demonstration does not intend to initiate any material changes in the location or functions of Cello's operations and places of business as a result of the Acquisition.

As part of a global business serving pharmaceutical and medical device companies in multiple jurisdictions and with strong local leadership teams, many administrative functions such as finance and payroll are addressed on a localised basis, rather than centrally.

Although there are no plans to change the headquarters location of Cello, some modest PLC-related corporate costs and support functions associated with Cello's status as a listed company will not be required to the same extent following completion of the Acquisition. All central sales, general and administrative functions will continue to be required and Cello will evaluate appropriate personnel levels to support the business. It is likely that Cello's management will review the real estate requirements of the business and assess Cello's office footprint in light of COVID-19 implications on physical work environments.

Owing to the nature of its business, Cello has no research and development function.

No redeployment of Cello's fixed asset base is envisaged.

Rule 19.5 of the Takeover Code

No statements in this paragraph 10 (Directors, management, employees, pensions, research and development and locations) are "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.

11. Financing

The Cash Consideration payable by Bidco under the Acquisition will be funded by capital committed by the Arsenal Funds.

Rothschild & Co, financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to enable it to satisfy, in full, the Cash Consideration payable to Cello Shareholders by Bidco under the terms of the Acquisition.

12. Option agreements

The Acquisition shall extend to any Cello Shares which are unconditionally allotted or issued and fully paid pursuant to the exercise of any options which are vested and exercisable under the Cello Share Option Schemes prior to the Scheme Record Time.

Following publication of the Scheme Document, participants in the Cello Share Option Schemes will be contacted separately regarding the effect of the Acquisition on their rights under the Cello Share Option Schemes. In accordance with Rule 15 of the Code, Bidco will make appropriate proposals to participants in the Cello Share Option Schemes in due course and details of these proposals will be set out in the Scheme Document.

13. Acquisition related arrangements

Cello entered into a confidentiality agreement with Value Demonstration UK Holdings Limited dated 29 May 2020 (the "Confidentiality Agreement") pursuant to which each of the parties thereto undertakes to keep confidential information relating to the other party and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation.

The Confidentiality Agreement also contains undertakings from Value Demonstration UK Holdings Limited that until the earlier of the first anniversary of the date of the Confidentiality Agreement or the consummation of the Acquisition, Value Demonstration UK Holdings Limited shall not, without the prior written consent of Cello (subject to customary carve-outs) (i) solicit directors or employees in an executive or managerial position of any Cello Group company or (ii) save in the ordinary course of business, have any contact with Cello clients, customers or suppliers. These confidentiality obligations will cease to have effect on completion of the Acquisition. If the Acquisition, does not complete, the confidentiality obligations shall remain in force until 29 May 2022.

14. Response to COVID-19 pandemic

Cello published trading and operational updates on 7 April 2020 and 20 May 2020 providing details of the impact of the COVID-19 pandemic on the business and the actions taken by the company to mitigate the uncertainty and potential reduction of revenue, and to protect the Cello Group's cash position. These actions included reductions in uncommitted expenditure and staff cost saving initiatives, including some part time working and furloughing. The Cello Group also successfully moved all its staff to remote working and has since been able to deliver a largely uninterrupted service to clients.

15. Current trading

Despite the challenging business environment Cello has continued to trade well in the first half of 2020. The Company's year-to-date net revenues are in line with the equivalent period last year, with a modest increase in net revenues in Cello offsetting net revenue decline in Signal. The Company has continued to display solid cash generation and is confident in the resilience of its net revenue streams, although remains focused on prudent cost control in light of the ongoing uncertainty linked to the COVID-19 pandemic.

16. Further terms and conditions of the Acquisition

It is intended that the Acquisition will be effected by means of a Court-approved scheme of arrangement between Cello and Cello Shareholders under Part 26 of the Companies Act. Bidco reserves the right to elect to implement the Acquisition by way of a takeover offer (subject to Panel consent).

The purpose of the Scheme is to provide for Bidco to become the holder of the entire issued and to be issued share capital of Cello.

Under the Scheme, the Cello Shares will be transferred to Bidco in consideration for which the Cello Shareholders will receive cash consideration on the basis set out in paragraph 2 of this Announcement.

To become effective, the Scheme must be approved by a majority in number of the Cello Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Cello Shares voted.

To become effective, the Scheme will also require a special resolution to be passed at the Cello General Meeting, which will require the approval of Cello Shareholders representing at least 75 per cent. of the votes cast at the Cello General Meeting (either in person or by proxy) and must also be sanctioned by the Court. The Cello General Meeting will be held immediately after the Court Meeting.

The Scheme and the Acquisition will also be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.

Following the Meetings, the Scheme must be sanctioned by the Court. The Scheme will only become effective once a copy of the Scheme Court Order is delivered to the Registrar of Companies. Upon the Scheme becoming effective, it will be binding on all Cello Shareholders, whether or not they attended or voted at the Meetings. Subject to the satisfaction of the Conditions, the Scheme is expected to become effective in mid-August 2020.

The Acquisition will lapse if the Scheme does not become effective by the Long Stop Date.

The global COVID-19 pandemic is restricting the ability of Governmental Entities around the world to conduct their normal operations. Bidco expects that Governmental Entities will not be operating according to their normal schedules during the upcoming period and it may therefore take longer for the Conditions to be satisfied and the Court Meeting or General Meeting to be held. Accordingly, any dates in respect of the expected timetable for the Acquisition set out in this Announcement are indicative, subject to change (by agreement between Bidco and Cello and, the Court, where required) and provided by way of guidance only. Bidco shall keep the Cello Shareholders notified of any updates or changes to the expected timetable as additional guidance is released. Further details regarding the expected timetable will be contained in the Scheme Document.

Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document, which is expected to be dispatched to Cello Shareholders as soon as reasonably practicable and, in any event, within 28 days of the date of this Announcement.

17. Dividends

If any dividend is paid or becomes payable in respect of Cello Shares on or after the date of this Announcement and prior to closing of the Acquisition, Bidco has the right to reduce the Offer Price by an amount up to the aggregate amount of such dividend or distribution.

18. Cancellation of admission to trading on AIM and re-registration

An application will be made to the London Stock Exchange prior to the Effective Date to cancel the admission of the Cello Shares to trading on AIM with effect from shortly after the Effective Date once the Scheme has become effective in accordance with its terms.

It is intended that dealing in Cello Shares will be suspended on or around the Effective Date.

On the Effective Date, Cello will become a wholly-owned subsidiary of Bidco. As soon as possible after the Effective Date, it is intended that Cello will be re-registered as a private limited company.

19. Overseas Shareholders

The availability of the Acquisition to Cello Shareholders who are not resident in the UK may be affected by the laws and/or regulations of their relevant jurisdiction. Therefore, any persons who are subject to the laws and/or regulations of any jurisdiction other than the UK should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdiction. Further details in relation to overseas shareholders will be set out in the Scheme Document. If you are in any doubt, you should consult your professional adviser in the relevant jurisdiction without delay.

20. Expected timetable

It is intended that the Scheme Document containing further details of the Acquisition will be despatched to each Cello Shareholder (other than to persons in a Restricted Jurisdiction) as soon as reasonably practicable and, in any event, not later than 28 days after the date of this Announcement (unless agreed otherwise with the Panel).

21. Opening Position Disclosures and interests

Save in respect of the irrevocable undertakings referred to in paragraph 6 above, as at the close of business on 30 June 2020 (being the last Business Day prior to this Announcement) neither Bidco, nor its directors, nor, so far as Bidco is aware, any person acting in concert (within the meaning of the Code) with it had (i) any interest in or right to subscribe for any relevant securities of Cello; nor (ii) any short positions in respect of relevant Cello Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; nor (iii) borrowed or lent any relevant Cello Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Code); (iv) nor is a party to any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the Code.

22. General

Your attention is drawn to the further information contained in the Appendices to this Announcement, which form part of, and should be read in conjunction with, this Announcement.

Please be aware that addresses, electronic addresses and certain other information provided by Cello Shareholders, persons with information rights and other relevant persons for the receipt of communications from Cello may be provided to Bidco and the Arsenal Funds during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

The Acquisition will be governed by English law. The Acquisition will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the FCA and the AIM Rules.

23. Documents on display

In accordance with Rule 26.2 of the Code, copies of the following documents will, to the extent not already published there, by no later than 12 noon on the Business Day following the date of this Announcement, be published on Bidco's website at www.pharma-value-demonstration.com and on Cello's website at www.cellohealthplc.com during the Offer Period:

· the irrevocable undertakings and letters of intent referred to in paragraph 6 above;

· the written consents of Greenhill, Cenkos and Rothschild & Co;

· the Confidentiality Agreement referred to in paragraph 13 above; and

· a copy of this Announcement.

Further Information

Ropes & Gray International LLP are providing legal advice to Arsenal and Bidco. Marriott Harrison LLP are providing legal advice to Cello. Greenhill is acting as financial adviser, and Cenkos is acting as nominated adviser and broker, to Cello. Rothschild & Co is acting as financial adviser to Bidco, Value Demonstration and Arsenal.

APPENDIX I

CONDITIONS AND FURTHER TERMS OF THE ACQUISITION

Part A: Conditions to the Scheme and the Acquisition

The Acquisition will be subject to the terms and conditions set out in this Appendix I and in the Scheme Document.

1. The Acquisition will be conditional upon the Scheme becoming unconditional and Effective no later than the Long Stop Date.

2. The Scheme will be conditional upon:

2.1 its approval by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) who are on the register of members of Cello at the Voting Record Time and who are present and voting, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting, provided that the Court Meeting may not be adjourned beyond the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date (if any) as Bidco and Cello may agree and the Court may allow); and

2.2 all resolutions necessary to approve and implement the Scheme being duly passed by the requisite majority or majorities at the Cello General Meeting or at any adjournment of that meeting, provided that the Cello General Meeting may not be adjourned beyond the 22nd day after the expected date of the Cello General Meeting to be set out in the Scheme Document in due course (or such later date (if any) as Bidco and Cello may agree and the Court may allow); and

2.3 the sanction of the Scheme (with or without modification but subject to any such modification being acceptable to Bidco and Cello) by the Court and such Scheme Court Hearing being held on or before the 22nd day after the expected date of the Court Hearing to be set out in the Scheme Document in due course (or such later date (if any) as Bidco and Cello may agree and the Court may allow); and

2.4 the delivery of a copy of the Scheme Court Order to the Registrar of Companies in England and Wales.

3. In addition, subject to the requirements of the Panel, Bidco and Cello have agreed that the Acquisition will be conditional upon the following conditions and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied (and continue to be satisfied pending the commencement of the Court Hearing to sanction the Scheme) or, where relevant and capable of waiver, waived prior to the Scheme being sanctioned by the Court:

3.1 any applicable waiting period (including any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and the regulations made thereunder relating to the Acquisition having expired or been terminated, provided that Bidco shall not be obliged to accept or offer any conditions and/or remedies in order to satisfy this Conditions;

3.2 all necessary notifications, filings and applications having been made in connection with the Acquisition, all regulatory and statutory obligations in any relevant jurisdiction reasonably deemed necessary by Bidco having been complied with in connection with the Acquisition, all necessary waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulations of any relevant jurisdiction reasonably deemed necessary by Bidco having expired, lapsed or been terminated in each case in respect of the Acquisition and all necessary authorisations and consents having been obtained in terms and in a form reasonably satisfactory to Bidco from appropriate third parties in connection with the Acquisition or proposed acquisition of any shares or other securities in, or control or management of, Cello or any other member of the Wider Cello Group by any member of the Wider Bidco Group or the carrying on by any member of the Wider Cello Group of its business;

3.3 no central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, employee representative body or any other equivalent or analogous body or person in any jurisdiction (each a "Third Party") having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or enacted, made or proposed to enact or make any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order, or having taken any other steps which would, in each case, reasonably be expected to:

(a) require, prevent or materially delay the divestiture, or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Bidco Group or by any member of the Wider Cello Group of all or any material part of their respective businesses, assets or properties or impose any material limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof, which, in any such case, is material in the context of the Wider Bidco Group or the Wider Cello Group, in either case taken as a whole;

(b) require the divestiture by the Wider Bidco Group of any shares, other securities or other interests in Cello or any member of the Wider Cello Group;

(c) require any member of the Wider Bidco Group or of the Wider Cello Group to (i) acquire, or to offer to acquire, any shares or other securities (or the equivalent) or interest in any member of the Wider Cello Group owned by any third party, or (ii) repay any indebtedness of any member of the Wider Bidco Group (other than in implementation of the Acquisition as agreed between Bidco and Cello);

(d) impose any limitation on, or result in a delay in, the ability of any member of the Wider Bidco Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider Cello Group or the Wider Bidco Group or to exercise management control over any such member;

(e) otherwise adversely affect the business, assets, liabilities, trading position, value, profits, operational performance, or prospects of any member of the Wider Bidco Group or of any member of the Wider Cello Group in a manner which is material in the context of the Wider Bidco Group or the Wider Cello Group, in either case, taken as a whole;

(f) make the Acquisition or its implementation or the acquisition or proposed acquisition by Bidco or any member of the Wider Bidco Group of any shares or other securities in, or control of Cello void, voidable, illegal, and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, prevent, delay or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise challenge or interfere therewith;

(g) impose any limitation on, or result in any delay in, the ability of any member of the Wider Bidco Group or the Wider Cello Group to conduct, integrate or co-ordinate its business, or any part of it, with the businesses of any other members of the Wider Bidco Group and/or the Wider Cello Group which is material in the context of the Acquisition;

(h) require any member of the Wider Cello Group to relinquish, terminate or amend in any way any material contract to which any member of the Wider Cello Group is a party and which is material in the context of the Wider Cello Group taken as a whole; or

(i) result in any member of the Wider Cello Group ceasing to be able to carry on business under any name under which it presently does so,

and all applicable waiting and other time periods (including extensions thereof) during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Cello Shares having expired, lapsed or been terminated;

3.4 all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals necessary for any member of the Wider Cello Group to carry on its business, remaining in full force and effect at the time at which the Acquisition becomes effective or otherwise wholly unconditional and no intimation of any intention to revoke, suspend, materially restrict or materially modify or not to renew any of the same having been made;

3.5 no temporary restraining order, preliminary or permanent injunction, preliminary or permanent enjoinment, or other order issued and being in effect by a court or other Third Party which has the effect of making the Acquisition or any acquisition or proposed acquisition of any shares or other securities in, or control or management of, any member of the Wider Cello Group by any member of the Wider Bidco Group, or the implementation of either of them, void, voidable, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise directly or indirectly prohibiting, preventing, restraining, restricting, delaying or otherwise interfering with the completion or the approval of the Acquisition or any matter arising from the proposed acquisition of any shares or other securities in, or in control of, any member of the Wider Cello Group by any member of the Wider Bidco Group;

3.6 except as Disclosed, there being no provision of any agreement, arrangement, lease, licence, franchise, permit or other instrument to which any member of the Wider Cello Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which as a consequence of the Acquisition or the proposed acquisition of any shares or other securities in Cello or because of a change in the control or management of Cello, would or is reasonably likely to result in (in each case to an extent which is material in the context of the Wider Cello Group taken as a whole):

(a) any moneys borrowed by or any other indebtedness or liabilities (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(b) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being, or becoming capable of being, terminated or adversely modified or adversely affected or any onerous obligation or liability arising or any adverse action being taken or arising thereunder;

(c) any asset owned or used by any member of the Wider Cello Group, or any assets or interests of any such member being or falling to be disposed of or charged or ceasing to be available to any member of the Wider Cello Group or any right arising under which any such asset or interest could be required to be disposed of or charged or cease to be available to any member of the Wider Cello Group;

(d) the creation, save in the ordinary and usual course of trading, or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interest of any such member or any such mortgage, charge or other security (whenever created, arising or having arisen) becoming enforceable;

(e) the rights, liabilities, obligations or interests of any such member in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or adversely affected;

(f) the value of any such member or its business, assets, value, financial or trading position, profits, operational performance or prospects being prejudiced or adversely affected;

(g) any such member ceasing to be able to carry on business under any name under which it presently does so;

(h) the creation or acceleration of any liability, actual or contingent, by any such member (including any material tax liability);

(i) any liability of any member of the Wider Cello Group to make any severance, termination, bonus or other payment to any of its directors or other officers; or

(j) any requirement on any member of the Wider Cello Group to acquire, subscribe, pay up or repay any shares or other securities in another corporate entity (other than another member of the Wider Cello Group),

and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Cello Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would or is reasonably likely to result in any of the events or circumstances as are referred to in sub-paragraphs (a) to (j) of this Condition, in each case to the extent which is material in the context of the Wider Cello Group taken as a whole);

3.7 except as Disclosed, no member of the Wider Cello Group having, since 31 December 2019:

(a) save as between Cello and wholly-owned subsidiaries of Cello or for Cello Shares issued pursuant to the exercise of options granted under the Cello Share Option Schemes, issued, agreed to issue, authorised or proposed the issue of additional shares of any class;

(b) save as between Cello and wholly-owned subsidiaries of Cello or for the grant of options under the Cello Share Option Schemes, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;

(c) other than to another member of the Cello Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;

(d) save for intra-Cello Group transactions or transactions in the ordinary and usual course of trading, merged or demerged with any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in any such case to an extent which is material in the context of the Wider Cello Group taken as a whole;

(e) save for intra-Cello Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital, in each case to the extent to which is material in the context of the Wider Cello Group taken as a whole;

(f) save for intra-Cello Group transactions or transactions in the ordinary and usual course of trading, issued, authorised or proposed the issue of any debentures, incurred or increased any indebtedness or become subject to any guarantee or actual or contingent liability;

(g) save for intra-Cello Group transactions, purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (a) above, made any other change to any part of its share capital;

(h) save for intra-Cello Group transactions, implemented, or authorised, proposed or announced its intention to implement, any joint venture, asset or profit sharing arrangement, partnership, composition, assignment, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business or in respect of the Acquisition;

(i) sold or transferred or agreed to sell or transfer any Cello Shares held by Cello as treasury shares except for the issue or transfer out of treasury of Cello Shares on the exercise of employee share options;

(j) entered into, varied, authorised or proposed entry into or variation of the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, commitment, arrangement, service agreement with any director or senior executive of any member of the Wider Cello Group;

(k) except in the ordinary and usual course of trading, entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or could reasonably be expected to be materially restrictive on the businesses of any member of the Wider Cello Group which, taken together with any other such transaction, arrangement, agreement, contract or commitment, is material in each case in the context of the Wider Cello Group taken as a whole;

(l) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings instituted or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed, and in each such case, to the extent which is material in the context of the Wider Cello Group taken as a whole;

(m) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business which is material in the context of the Wider Cello Group taken as a whole otherwise than, in any such case;

(n) waived, compromised or settled any claim otherwise than in the ordinary course of business and in any case which is material in the context of the Wider Cello Group as a whole or in the context of the Acquisition;

(o) except in relation to changes made or agreed as a result of being required as a result of changes to legislation, having made or agreed or consented to any material change to:

(i) the terms of the trust deeds, rules, policy or other governing documents constituting the pension schemes or other retirement or death benefit arrangement established by any member of the Wider Cello Group for its directors, former directors, employees, former employees or each of their respective dependents;

(ii) the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder;

(iii) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(iv) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued or made;

(p) carried out any act:

(i) which would or could reasonably be expected to lead to the commencement of the winding up of any pension plan;

(ii) which would or might create a material debt owed by an employer to any pension plan;

(iii) which would or might accelerate any obligation on any employer to fund or pay additional contributions to any pension plans;

(iv) which would or might give rise indirectly or directly to a liability in respect of a pension plan; or

(v) to change the trustee or trustee directors or other fiduciary of the relevant pension plans;

(q) proposed, agreed to provide or modified the terms of any share option scheme or incentive scheme or other benefit constituting a material change relating to the employment or termination of employment of a material category of person employed by the Wider Cello Group or which constitutes a material change to the terms or conditions of employment of any senior employee of the Wider Cello Group;

(r) made any material alteration to its constitutional documents (in each case, other than an alteration in connection with the Scheme;

(s) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of any administrator, receiver, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed, in each case which is material in the context of the Wider Cello Group;

(t) terminated or varied the terms of any agreement or arrangement between any member of the Wider Cello Group and any other person in a manner which would or is reasonably likely to have a material adverse effect on the financial position of the Wider Cello Group taken as a whole;

(u) having taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Cello Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; or

(v) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to, or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition;

3.8 except as Disclosed, since 31 December 2019:

(a) no adverse change and no circumstance having arisen which would or might be expected to result in any adverse change or deterioration in the business, assets, value, liabilities, financial or trading position, operational performance or profits or prospects of any member of the Wider Cello Group which is material in the context of the Wider Cello Group taken as a whole;

(b) no litigation, arbitration proceedings, prosecution or other legal proceedings including, without limitation, with regard to intellectual property rights used by the Wider Cello Group having been threatened, announced or instituted by or against or remaining outstanding against any member of the Wider Cello Group or to which any member of the Wider Cello Group is or may become a party (whether as a claimant, defendant or otherwise) and no enquiry, review, investigation or enforcement proceedings by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Cello Group having been instituted announced or threatened by or against or remaining outstanding in respect of any member of the Wider Cello Group, which, in each case might reasonably be expected to have an adverse effect on such member to an extent which is material, in the context of the Wider Cello Group taken as a whole;

(c) (other than in relation to the matters contemplated in paragraphs 3.1, 3.2 and 3.4, no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened in writing, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Cello Group, in each case which might reasonably be expected to adversely affect any member of the Wider Cello Group;

(d) no contingent or other liability in respect of any member of the Wider Cello Group having arisen, increased or become apparent to Cello (other than in the ordinary course of business) which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Cello Group; in each case to an extent which is material in the context of the Wider Cello Group taken as whole; and

(e) no member of the Wider Cello Group having conducted its business in breach of any applicable laws and regulations which in any case is material in the context of the Wider Cello Group taken as a whole;

3.9 except as Disclosed, Bidco not having discovered:

(a) that any financial, business or other information concerning the Wider Cello Group as contained in the information disclosed at the time by or on behalf of any member of the Wider Cello Group publically to any member of the Wider Cello Group is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not materially misleading (and which was not subsequently corrected before the date of this Announcement by disclosure either publicly or otherwise to Bidco);

(b) that any member of the Wider Cello Group is subject to any liability (contingent or otherwise) and which is material in the context of the Wider Cello Group taken as a whole;

(c) any information which affects the import of any information disclosed at any time prior to this Announcement by or on behalf of any member of the Wider Cello Group and which is material in the context of the Wider Cello Group taken as a whole; and

3.10 except as Disclosed, Bidco not having discovered that:

(a) any past or present member, director, officer or employee, agent, consultant or designated representative of the Wider Cello Group or any person that performs or has performed services for or on behalf of the Wider Cello Group is or has at any time engaged in any or has paid or agreed to pay any bribe including any "inducement fee" given or agreed to give any similar gift or benefit or paid or agreed to pay to a concealed bank account or fund to or for the account of, any customer, supplier, governmental official or employee, representative of a political party, or other person for the purpose of obtaining or retaining business or otherwise engaged in any activity, practice, conduct or any such things (or omitted to do such things) in contravention of the Bribery Act 2010, as amended, or the US Foreign Corrupt Practices Act 1977, as amended or any other anti-corruption legislation applicable to the Wider Cello Group;

(b) any asset of any member of the Wider Cello Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition);

(c) any past or present member, director, officer or employee, agent, consultant or designated representative of the Wider Cello Group has engaged in any activity or business with or made any investments in, or made any payments, funds or assets available, to or received any funds or assets from: (i) any government, entity or individual in respect of which US or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs; or (ii) any government, entity or individual named by any of the economic sanctions of the United Nations or the European Union or any of their respective member states;or

(d) a member of the Wider Cello Group has engaged in any transaction which would cause the Wider Bidco Group to be in breach of any law or regulation upon its acquisition of Cello, including the economic sanctions of the United States Office of Foreign Assets Control, or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states.

Part B: Certain further terms of the Acquisition

Waiver and invocation of the Conditions

4. Subject to the requirements of the Panel in accordance with the Code, Bidco reserves the right in its sole discretion to waive, in whole or in part:

(a) any of the Conditions set out in the above Condition 2 of Part A relating to the timing of the Court Meeting, the General Meeting and the sanctioning of the Scheme. If any of the deadlines for those events are not met, Bidco shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Cello to extend the deadline in relation to the relevant Condition; and

(b) any of the Conditions set out in the above Condition 3 of Part A.

If Bidco is required by the Panel to make a Takeover Offer for Cello Shares under the provisions of Rule 9 of the Code, Bidco may make such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule.

5. The Conditions (excluding Conditions 2.1, 2.2, 2.3 or 2.4) must be fulfilled, or be determined by Bidco to be or remain satisfied or (if capable of waiver) be waived prior to the commencement of the Court Hearing, failing which the Acquisition will lapse and the Scheme will not proceed, or if the Acquisition is implemented by way of a Takeover Offer, no later than as permitted by the Panel. Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or treat as fulfilled any of the Conditions at any time prior to the Long Stop Date, notwithstanding that the other Conditions (or any of them) may at an earlier date have been waived (if capable of waiver), satisfied or fulfilled and that there are, at such earlier date, no circumstances indicating that any such Condition may not be capable of satisfaction or fulfilment. Bidco undertakes that it will, immediately before the Scheme Court Hearing, provide notice in writing to Cello that either: (i) the Conditions (except Conditions 2.1, 2.2, 2.3 and 2.4) have each been satisfied or that Bidco has waived or treated as waived such Conditions; or (ii) it intends to invoke or treat as incapable of satisfaction each or any such Condition, which will always be subject to the Panel's consent.

6. Under Rule 13.5 of the Code, Bidco may not invoke a Condition so as to cause the Scheme not to proceed, or to lapse, or so as to cause the Acquisition to lapse or be withdrawn, unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. Conditions 1 and 2 of Part A (and, if applicable, any acceptance condition adopted on the basis specified in paragraph 5 below in relation to any Takeover Offer) and paragraph 4 below are not subject to this provision of the Code.

7. Bidco reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a Takeover Offer as it may determine in its absolute discretion. In such event, such Takeover Offer will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition including (without limitation and subject to the consent of the Panel) an acceptance condition set at 90 per cent. (or such lesser percentage, being more than 50 per cent., as Bidco may decide): (i) in nominal value of the shares to which such Acquisition relates; (ii) of the voting rights attached to those shares; and (iii) of the voting rights normally exercisable at a general meeting of Cello, including, for this purpose, any such voting rights attaching to Cello Shares that are unconditionally allotted or issued before the Takeover Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise. Further, if sufficient acceptances of such Takeover Offer are received, it is the intention of Bidco to apply the provisions of the Companies Act to acquire compulsorily any outstanding Cello Shares to which such Takeover Offer relates.

8. Arsenal and Bidco the right, with the prior consent of the Panel, for any other member of the Wider Bidco Group from time to time to implement the Acquisition.

Certain further terms of the Acquisition

9. The Acquisition will be governed by English law and be subject to the exclusive jurisdiction of the English courts and to the Conditions and terms set out in this Announcement and in due course in the formal Scheme Document. The Acquisition will comply with the applicable rules and regulations of the FCA and the London Stock Exchange, the AIM Rules, the Panel and the Code.

10. The Scheme shall lapse and shall not become Effective if:

10.1 insofar as the Acquisition constitutes, or is deemed to constitute, a concentration with an EU dimension within the scope of the EUMR, the European Commission either initiating proceedings under Article 6(1)(c) of the EUMR or making a referral to the CMA under Article 4(4) or Article 9(1) of the EUMR and the CMA then referring the Acquisition or matter arising from or relating to it to its chair for the constitution of a merger reference group under schedule 4 to the Enterprise and Regulatory Reform Act 2013 in order to conduct a Phase 2 investigation pursuant to sections 22 or 33 of the Enterprise Act 2002; or

10.2 insofar as the Acquisition does not constitute, or is not deemed to constitute, a concentration with an EU dimension within the scope of the EUMR, the Acquisition or any matter arising from or relating to it becoming subject to a reference to the chair of the CMA for the constitution of a merger reference group under schedule 4 to the Enterprise and Regulatory Reform Act 2013 in order to conduct a Phase 2 investigation pursuant to section 22 or 33 of the Enterprise Act 2002,

in either case before the Court Meeting.

11. The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Any persons who are subject to the laws of, or are otherwise resident in, any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements. Further information in relation to Overseas Shareholders will be contained in the Scheme Document.

12. The Acquisition will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Acquisition will not be capable of acceptance by any such use, means, instrumentality or facility or from within, any Restricted Jurisdiction.

13. Cello Shares which will be acquired pursuant to the Acquisition will be acquired with full title guarantee, fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including (without limitation) voting rights and the right to receive and retain in full all dividends and other distributions (if any) announced, declared, paid or made or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the date of this Announcement and before the Effective Date.

14. If, on or after the date of this Announcement and before the Effective Date, any dividend and/or other distribution and/or other return of capital is announced, declared or paid in respect of the Cello Shares, Bidco reserves the right (without prejudice to any right of Bidco to invoke Condition 3.5(c)), to reduce the offer consideration for the Cello Shares by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid, in which case any reference in this Announcement or in the Scheme Document to the offer consideration for the Cello Shares will be deemed to be a reference to the offer consideration as so reduced. To the extent that any such dividend and/or other distribution and/or other return of capital is announced, declared or paid and it is: (i) transferred pursuant to the Acquisition on a basis which entitles Bidco to receive the dividend or distribution and to retain it; or (ii) cancelled, the offer consideration will not be subject to change in accordance with this paragraph. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Acquisition. For the further avoidance of doubt, any payments made in cash or by way of the delivery of shares on the vesting of awards calculated by reference to dividends accrued in respect of those underlying vested shares are not to be construed as a dividend, distribution or return of capital for these purposes.

Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

1. The value of the Acquisition on a fully diluted basis has been calculated on the basis of a fully diluted issued ordinary share capital of 111,079,683 Cello Shares, calculated as

(a) the total number of Cello Shares in issue of 106,690,531 as at the last practicable date prior to the date of this announcement; plus

(b) the additional 4,389,152 Cello Shares that, as at the last practicable date prior to the date of this announcement, may be issued upon the exercise of outstanding options under the Cello Share Option Schemes. In total, an additional 4,686,652 Cello Shares may be issued pursuant to the Cello Share Option Schemes. However, following the Remuneration Committee assessment of the performance conditions which the outstanding options are subject to, only 4,389,152 Cello Shares are expected to be issued pursuant to the Cello Share Option Schemes in the context of the Acquisition.

2. The enterprise value of £181.8 million is calculated by reference to a Cello share capital as calculated per paragraph 1 above, and;

(a) Cash position of approximately £11.7 million and drawn down facilities of £7.0 million as of 31 March 2020 as announced by Cello in its COVID-19 update on 7 April 2020; plus

(b) Maximum total deferred acquisition obligations payable of $8.8 million as of 31 December 2019 converted to £6.6 million using the exchange rate as of 31 December 2019; plus

(c) Dividend payment (paid on 22 May 2020) of £1.1 million related to the interim dividend of 1.0 pence per share declared on 7 April 2020.

3. Adjusted EBITDA of £14.8 million for the year ended 31 December 2019 is calculated as:

(a) Headline operating profit of £13.5 million for the year ended 31 December 2019; plus

(b) Depreciation of £4.3 million for the year ended 31 December 2019, calculated as Depreciation of property, plant and equipment of £1.4 million plus Depreciation of right-to-use assets of £3.0 million; less

(c) Lease payments during the year ended 31 December 2019 of £3.0 million.

4. The enterprise value to Adjusted EBITDA multiple of approximately 12.3x is based on Cello enterprise value calculated as per paragraph 2 above divided by Cello Adjusted EBITDA calculated as per paragraph 3 above.

5. Unless otherwise stated in this announcement:

(a) financial information relating to Cello is extracted (without material adjustment) from the audited consolidated financial statements of Cello for the year end 31 December 2019, prepared in accordance with IFRS;

(b) all prices for Cello Shares have been derived from Factset and represent Closing Prices on the relevant date(s).

6. Volume-weighted average prices have been derived from Factset and have been rounded to the nearest one decimal place.

7. Exchange rates have been derived from Factset and have been rounded to the nearest six decimal places.

8. When CD&R Artemis UK Bidco Limited acquired Huntsworth Plc, the 'implied enterprise value' to 'Adjusted EBITDA' multiple for the year ended 31 December 2019 set out in the Rule 2.7 announcement dated 03 March 2020 was stated as approximately 10.8x.

APPENDIX III

IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

Irrevocable Undertakings

The following holders, controllers or beneficial owners of Cello Shares, have given to Bidco irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting (or, if (with the consent of the Panel) Bidco exercises its right to implement the Acquisition by way of an Offer, to accept, or procure acceptances of, such Offer) in relation to the following Cello Shares:

Part 1 - Cello Directors undertakings

These irrevocable undertakings will continue to be binding if a higher competing offer is made for Cello.

Each of the irrevocable undertakings described above will cease to be binding in the following circumstances:

(a) where the Offer is implemented by way of a Scheme, the Scheme lapses or is withdrawn or the Scheme has not become effective by 5:00pm on the Long Stop Date or such later time or date as is agreed between Bidco and the Company and no public announcement has been made by Bidco in relation to electing (having received the Panel's consent) to implement the Offer by way of a takeover offer;

(b) where the Offer is implemented by way of takeover offer, the takeover offer lapses or is withdrawn without becoming unconditional in all respects and no public announcement has been made by Bidco in relation to electing (having received the Panel's consent) to implement the Offer by way of a Scheme; or

(c) the Offer does not become effective, lapses, is withdrawn or otherwise becomes incapable of ever becoming effective, as the case may be.

Part 2 - Irrevocable undertakings from other Cello shareholders

The irrevocable undertaking described above and signed by: (i) Liontrust Investment Partners LLP, will cease to be binding if a third party makes a competing cash offer at a value which exceeds the value per Cello Share under Bidco's offer by ten (10) per cent. or more per Cello Share (provided that, if no later than 5:00pm on the fifth business day after the day on which the third party's offer is made, the consideration per Cello Share under Bidco's offer is increased such that its value (in Cello's reasonable opinion on the advice of Greenhill) is equal to or exceeds the third party's offer, the irrevocable undertaking shall not lapse); (ii) Ennismore Fund Management Limited, will cease to be binding if a third party makes a competing cash offer at a value which is equal to or exceeds a price of 177 pence per Cello Share (provided that, if no later than 5:00pm on the fifth business day after the day on which the third party's offer is made, the consideration per Cello Share under Bidco's offer is increased such that its value (in Cello's reasonable opinion on the advice of Greenhill) is equal to or exceeds the third party's offer, the irrevocable undertaking shall not lapse); and (iii) each of Paul Stuart-Kregor and Lisa Bentley will continue to be binding if a higher competing offer is made for Cello.

In addition, each of the irrevocable undertakings described above will cease to be binding in the following circumstances:

(d) where the Offer is implemented by way of a Scheme, the Scheme lapses or is withdrawn or the Scheme has not become effective by 5:00pm on the Long Stop Date or such later time or date as is agreed between Bidco and the Company and no public announcement has been made by Bidco in relation to electing (having received the Panel's consent) to implement the Offer by way of a takeover offer;

(e) where the Offer is implemented by way of takeover offer, the takeover offer lapses or is withdrawn without becoming unconditional in all respects and no public announcement has been made by Bidco in relation to electing (having received the Panel's consent) to implement the Offer by way of a Scheme; or

(f) the Offer does not become effective, lapses, is withdrawn or otherwise becomes incapable of ever becoming effective, as the case may be.

Letters of intent

The following holders, controllers or beneficial owners of Cello Shares, have given to Bidco non-binding letters of intent to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting in relation to the following Cello Shares:

APPENDIX IV

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking" and "undertaking" have the meanings given by the Companies Act 2006, "associated undertaking" has the meaning given by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 other than paragraph 19(1)(b) of Schedule 6 to those Regulations which shall be excluded for this purpose.

All references to time in this Announcement are to London time unless otherwise stated.