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

20 January 2020

RECOMMENDED CASH ACQUISITION

of

Harwood Wealth Management Group PLC ("Harwood")

by

Hurst Point Topco Limited ("Bidco")

a newly formed company indirectly controlled by funds managed by Carlyle

PUBLICATION AND POSTING OF THE SCHEME DOCUMENT

On 23 December 2019, the boards of Harwood and Bidco announced that they had reached agreement on the terms of a recommended cash acquisition pursuant to which Bidco shall acquire the entire issued share capital of Harwood (the "Acquisition"). The Acquisition is to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme").

Publication and posting of the Scheme Document

Harwood and Bidco are pleased to announce that the circular in relation to the Scheme (the "Scheme Document") setting out, amongst other things, a letter from the Chairman of Harwood, details of the Acquisition, the full terms and conditions of the Scheme, an expected timetable of principal events and notices convening the Court Meeting and the General Meeting, together with the related Forms of Proxy and a Form of Election, are being published and posted today to Harwood Shareholders. Harwood Shareholders will receive the Scheme Document in accordance with the notice provisions in the Harwood Articles and any notice elections they may have given. 

Action required

As further detailed in the Scheme Document, in order to become effective the Scheme requires, amongst other things, approval by a majority in number of the Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting, or any adjournment of that meeting, representing not less than 75 per cent. in value of the Harwood Shares voted by those Harwood Shareholders and the passing of the related resolution at the General Meeting. The Scheme is also subject to the satisfaction or (if applicable) waiver of the Regulatory Condition and the other Conditions and the further terms set out in the Scheme Document. The Scheme must also be sanctioned by the Court.

The Court Meeting is scheduled to be held at 10.00 a.m. on 12 February 2020 and the General Meeting is scheduled to be held at 10.15 a.m. (or as soon thereafter as the Court Meeting shall have been concluded or adjourned) on 12 February 2020, in each case at the offices of Blake Morgan LLP, 6 New St Square, Holborn, London EC4A 3DJ.

The Harwood Directors, who have been so advised by Evercore and N+1 Singer as to the financial terms of the Cash Offer, consider the Cash Offer to be fair and reasonable. In providing their advice to the Harwood Directors, Evercore and N+1 Singer have each taken into account the commercial assessments of the Harwood Directors. Evercore and N+1 Singer are each providing independent financial advice to the Harwood Directors for the purposes of Rule 3 of the Takeover Code.

Accordingly, the Harwood Directors recommend unanimously that Harwood Shareholders vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting, as those Harwood Directors (and their connected persons) who hold Harwood Shares have each irrevocably undertaken to do in respect of their own beneficial holdings of 41,792,095 Harwood Shares, representing, in aggregate, approximately 66.8 per cent. of the share capital of Harwood in issue on 17 January 2020 (being the latest practicable date prior to the publication of the Scheme Document).

It is important that, for the Court Meeting, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of Harwood Shareholder opinion. Harwood Shareholders are therefore strongly urged to complete, sign and return both of their Forms of Proxy in accordance with the instructions printed on them, or (as applicable) to appoint a proxy through CREST, as soon as possible. 

Harwood Shareholders should note that if there is insufficient Scheme Shareholder support for the Scheme at the Court Meeting, the Scheme will not become Effective.

Harwood Shareholders should carefully read the Scheme Document in its entirety before making a decision with respect to the Scheme.

Harwood Trading Update

The Harwood Directors expect Harwood to report total revenue of £33.6m for the year ended 31 October 2019, a modest increase relative to the total revenue of £32.7m reported for the year ended 31 October 2018, and adjusted EBITDA which is broadly in line with management's expectations. 

Since 1 November 2019, Harwood has continued to trade broadly in line with the same period of the 2019 financial year, having completed the acquisition of the trade and assets of CIC Financial Solutions Limited on 25 September 2019 and the acquisition of the trade and assets of Andrew Routley Pensions Limited on 19 December 2019. Harwood continues to have a healthy pipeline of acquisition opportunities at various stages in the process, with heads of terms signed in relation to a further four potential acquisitions.

Shareholder helpline

If Harwood Shareholders have any questions relating to this announcement, the Scheme Document or the completion and return of the Forms of Proxy or the Form of Election, please call Harwood's registrar, Computershare on 0370 707 1836 if calling from the UK, or +44 (0)370 707 1836 if calling from outside the UK. Lines are open between 8.30 a.m. - 5.30 p.m. Monday to Friday excluding public holidays in England and Wales. Please note that Computershare cannot provide legal, tax or financial advice or any advice on the merits of the Scheme or the Acquisition.

Expected timetable

The Scheme Document contains an expected timetable of principal events relating to the Scheme, which is also set out below. Subject to approval at the relevant Harwood Meetings, receipt of the Court sanction and the satisfaction or waiver of the other Conditions set out in the Scheme Document, the Scheme is expected to become Effective in the second quarter of 2020.

It is intended that, following the Scheme becoming Effective, the London Stock Exchange will be requested to cancel trading of Harwood Shares on AIM.

The dates and times given are indicative only and are based on Harwood's and Bidco's current expectations and may be subject to change (including as a result of changes to Court times and the regulatory timetable). If any of the dates and/or times in this expected timetable change, the revised dates and/or times will be notified to Harwood Shareholders by announcement through a Regulatory Information Service.           

Principal events

The following dates and times associated with the Scheme are subject to change and will depend on, among other things, the date on which the Conditions to the Scheme are satisfied or waived, and the date on which the Court sanctions the Scheme. Harwood will give adequate notice of all of these dates and times, when known, by issuing an announcement through a Regulatory Information Service. Further updates and changes to these times will, at Harwood's discretion, be notified in the same way. See also note (1) below.

The Election Return Time is expected to be on or after 1.00 p.m. on 14 February 2020 and the Scheme Record Time is expected to be on or after 6.00 p.m. on 18 February 2020.

 Notes:

(1)   The dates and times given are indicative only, are based on current expectations and may be subject to change (including as a result of changes to the regulatory timetable). References to times are to London time, unless otherwise stated. If any of the times and/or dates above change, the revised times and/or dates will be announced via a Regulatory Information Service.

(2)   The BLUE Form of Proxy for the Court Meeting may, alternatively, be handed to Harwood's Registrar or the Chairman of the Court Meeting at the start of the Court Meeting (or any adjournment thereof). However, if possible, Harwood Shareholders are requested to lodge BLUE Forms of Proxy with Harwood's Registrar at least 48 hours before the time appointed for the Court Meeting (or any adjournment thereof).

(3)   The YELLOW Form of Proxy for the General Meeting must be lodged with Harwood's Registrar by no later than 10.15 a.m. on 10 February 2020 in order for it to be valid, or, if the General Meeting is adjourned, no later than 48 hours before the time fixed for the holding of the adjourned meeting. If the YELLOW Form of Proxy is not returned by such time, it will be invalid.

(4)   If either of the Harwood Meetings is adjourned, the Voting Record Time for the adjourned Harwood Meeting will be 7.00 p.m. on the date which is two days before the date of the adjourned Harwood Meeting.

(5)   To commence at the time fixed or, if later, immediately after the conclusion or adjournment of the Court Meeting.

(6)   Or such later date and time (if any) as Harwood and Bidco may agree and Harwood may announce through a Regulatory Information Service.

(7)   The "Regulatory Condition" is the Condition set out in paragraph 2(a) of Part A of Part III of the Scheme Document. If the Conditions were all satisfied or waived (where applicable) prior to the date of the Harwood Meetings, then this date is expected to be a date not later than 14 days after the date of the Harwood Meetings.

(8)   The "Scheme Effective Time" of the Scheme is the date and time at which the Scheme becomes effective pursuant to its terms and will be on delivery of the Scheme Court Order to the Registrar of Companies in the UK. The Scheme Court Order is expected to be delivered to the Registrar of Companies following the Scheme Record Time on the date on which the Court makes the Scheme Court Order, at which time the Scheme will become Effective. The events which are stated as occurring on subsequent dates, including the crediting of CREST accounts, are conditional on the Scheme Effective Time and operate by reference to this time.

(9)   This is the latest date by which the Scheme may become Effective. However, the Long Stop Date may be extended to such later date as Bidco and Harwood may, with the consent of the Panel, agree and, if required, the Court may allow. 

General

Capitalised terms in this announcement, unless otherwise defined, have the same meanings as set out in the Scheme Document. All references to times in this announcement are to London times unless otherwise stated.

Enquiries:

IMPORTANT NOTICES

Evercore, which is authorised and regulated by the Financial Conduct Authority in the UK, is acting exclusively as financial adviser to Harwood and no one else in connection with the Acquisition, the other matters referred to in this announcement and the Scheme Document, and will not be responsible to anyone other than Harwood for providing the protections afforded to clients of Evercore nor for providing advice in connection with the matters referred to herein. Neither Evercore nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Evercore in connection with this announcement, any statement contained herein, the Acquisition or otherwise. Apart from the responsibilities and liabilities, if any, which may be imposed on Evercore by FSMA, or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither Evercore nor any of its affiliates accepts any responsibility or liability whatsoever for the contents of this announcement, and no representation, express or implied, is made by it, or purported to be made on its behalf, in relation to the contents of this announcement, including its accuracy or completeness or with respect to the verification of any other statement made or purported to be made by it, or on its behalf, in connection with Harwood or the matters described in this announcement. To the fullest extent permitted by applicable law, Evercore and its affiliates accordingly disclaim all and any responsibility or liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any statement contained herein.

N+1 Singer Advisory LLP, which is authorised and regulated by the FCA in the United Kingdom, is acting as financial adviser, nominated adviser and corporate broker exclusively for Harwood and no one else in connection with the Acquisition and the matters set out in this announcement, and will not be responsible to any person other than Harwood for providing the protections afforded to clients of N+1 Singer, nor for providing advice in relation to the Acquisition or any matter referred to herein. Neither N+1 Singer nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in delict, under statute or otherwise) to any person who is not a client of N+1 Singer in connection with this announcement, any statement contained herein or otherwise.

RBC Capital Markets is the trading name for RBC Europe Limited, which is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and the Prudential Regulation Authority and is a subsidiary of Royal Bank of Canada. RBC Capital Markets is acting exclusively for Bidco and Carlyle and for no one else in connection with the Acquisition and will not be responsible to anyone other than Bidco and/or Carlyle for providing the protections afforded to its clients nor for providing advice in relation to the Acquisition or any other matters referred to in this document. Neither RBC Capital Markets nor any of its affiliates accepts any responsibility or liability whatsoever for the contents of this announcement, and no representation, express or implied, is made by it, or purported to be made on its behalf, in relation to the contents of this announcement, including its accuracy or completeness or with respect to the verification of any other statement made or purported to be made by it, or on its behalf, in connection with Harwood or the matters described in this announcement. To the fullest extent permitted by applicable law, RBC Capital Markets and its affiliates accordingly disclaim all and any responsibility or liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any statement contained herein.

Publication on a website

A copy of this announcement and the Scheme Document shall be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Harwood's website at www.harwoodwealth.co.uk by no later than 12 noon (London time) on 21 January 2020. For the avoidance of doubt, neither the contents of this website nor the content of any website accessible from hyperlinks is incorporated into or forms part of this announcement or the Scheme Document.

Request for hard copy

Harwood Shareholders may request a hard copy of this announcement and the Scheme Document (and any information incorporated by reference in the Scheme Document) by contacting Computershare Investor Services PLC on +44 (0)370 707 1836 between 8.30 a.m. to 5.30 p.m. Monday to Friday or by submitting a request in writing to Computershare at The Pavilions, Bridgwater Road, Bristol BS99 6ZZ, United Kingdom). Please note that Computershare cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. Harwood Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Important Information

If Harwood Shareholders are in any doubt about the Acquisition, the contents of this announcement, the Scheme Document or the action they should take, they are recommended to seek their own independent financial, tax and legal advice immediately from their stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if they are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.