Synectics Regulatory News (SNX)

7 Nov 2007 07:02

Sigma Acquisitions Limited07 November 2007 Not for release, publication or distribution in whole or in part in, into orfrom the United States, Canada, Australia or Japan or any other jurisdictionwhere to do so would constitute a violation of the relevant laws or regulationsof such jurisdiction. FOR IMMEDIATE RELEASE 7 November 2007 RECOMMENDED CASH OFFER BY DELOITTE CORPORATE FINANCE ON BEHALF OF SIGMAACQUISITIONS LIMITED ("SIGMA ACQUISITIONS") FOR SYNEXUS CLINICAL RESEARCH PLC ("SYNEXUS") Summary • The board of Sigma Acquisitions and the IndependentDirectors of Synexus are pleased to announce that they have reached agreement onthe terms of a recommended cash offer for Synexus, to be made by DeloitteCorporate Finance on behalf of Sigma Acquisitions. • The Offer for the entire issued and to be issued sharecapital of Synexus (other than Synexus Shares already contracted to be acquiredby Sigma Acquisitions) will be 78 pence in cash for each Synexus Share andvalues the existing issued share capital of Synexus at approximately £18.1million. • In aggregate, Sigma Acquisitions has received irrevocableundertakings to accept or procure the acceptance of the Offer in respect of atotal of 12,544,868 Synexus Shares, representing 54.18 per cent. of the existingissued share capital of Synexus. • The Independent Directors of Synexus, who have been soadvised by Brewin Dolphin, consider the terms of the Offer to be fair andreasonable and will unanimously recommend that Synexus Shareholders accept theOffer and that Independent Shareholders vote in favour of the Resolution to beproposed at the General Meeting. In providing advice to the IndependentDirectors of Synexus, Brewin Dolphin has taken into account the IndependentDirectors' commercial assessments. • The Independent Directors and Dr Ian Smith, who is adirector of Synexus, have given irrevocable undertakings to accept the Offer andto vote in favour of the Resolution in respect of their entire beneficialholdings, amounting in aggregate to 3,333,219 Synexus Shares, representing 14.4per cent. of the existing issued share capital of Synexus. • The Offer Price represents a premium of 52.9 per cent. tothe Closing Price of 51 pence per Synexus Share on 18 October 2007, being thelast Business Day prior to the announcement by Synexus that it had received anapproach which may or may not lead to an offer for the entire issued and to beissued share capital of the Company. • Sigma Acquisitions was incorporated in England and Wales on24 October 2007 at the direction of Lyceum Capital for the purpose of making theOffer. Following the Offer being declared wholly unconditional, shares in SigmaTopco, the ultimate holding company of Sigma Acquisitions, will be owned by theLyceum II Funds and the Management Team including Michael Fort (ChiefExecutive), Paul McCluskey (Finance Director) and Alan Boyce (Chief OperatingOfficer). • A General Meeting of Synexus will be convened to approvethe proposed arrangements between the Sigma Acquisitions Group and theManagement Team and the Offer will be conditional, inter alia, on the Resolutionrequired to approve the arrangements being duly passed. Commenting on the Offer; Jeremy Hand, Managing Partner of Lyceum Capital said: "Synexus is a great business. It operates in a growth market with adifferentiated offering and has the potential to achieve significant and rapidexpansion. We look forward to working closely with the Synexus team, providingexpertise and further capital to fast-track the company's development." Malcolm Hughes, Interim Chairman of Synexus said: "This is a good deal for shareholders in a sector under pressure and a good dealfor the company and its customers, providing Synexus with access to both capitaland expertise." Michael Fort, Chief Executive of Synexus and a member of the Management Teamsaid: "We are delighted to be working with Lyceum, with their considerable experiencein supporting the rapid growth of companies. This deal allows Synexus tocomplete its international roll-out plans and provide our customers with a trulycompetitive offering." EnquiriesSigma Acquisitions/Lyceum Capital 020 7632 2480Jeremy HandGrant Davidson Deloitte Corporate Finance (financial adviser to Sigma Acquisitions) 020 7936 3000Jonathan HintonJames Lewis PR advisers to Lyceum CapitalChantal Ligertwood 01235 834 091Sally Brown 020 8871 0536 Synexus Clinical Research plc 07785 224 008Malcolm Hughes Brewin Dolphin (financial adviser, nominated adviser and broker to Synexus) 0845 270 8600Mark BradyRichard Evans Biddicks (PR adviser to Synexus) 020 7448 1000Zoe Biddick This summary should be read in conjunction with the full text of the attachedannouncement. The full text of the conditions and principal further terms of the Offer and thebases and sources of assumptions and calculations are set out in Appendices 1and 2 respectively, each of which forms part of, and should be read with, thisannouncement. Defined terms have the meanings set out in Appendix 3, which alsoforms part of and should be read in conjunction with this announcement. This announcement does not constitute an offer or invitation to purchase anysecurities, nor is it a solicitation of any vote or approval in anyjurisdiction, nor shall there be any sale, issuance or transfer of thesecurities referred to in this announcement in any jurisdiction in contraventionof applicable law or regulation. The Offer will be made solely by means of theOffer Document and (in the case of Synexus Shares in certificated form) the Formof Acceptance accompanying the Offer Document, which will contain the full termsand conditions of the Offer including details of how it may be accepted and byway of notice to be published in the London Gazette on or shortly after the dateon which the Offer Document is published. The Offer Document will be posted to Synexus Shareholders shortly and thereafterwill be available for public inspection. Deloitte Corporate Finance is acting for Sigma Acquisitions and Lyceum CapitalPartners LLP and for no-one else in connection with the Offer and will notregard any other person as its client nor be responsible to anyone other thanSigma Acquisitions and Lyceum Capital Partners LLP for providing the protectionsafforded to clients of Deloitte Corporate Finance nor for providing advice inrelation to the Offer or any matter referred to in this announcement. DeloitteCorporate Finance is a division of Deloitte & Touche LLP, which is authorisedand regulated by the Financial Services Authority in respect of regulatedactivities. Brewin Dolphin Investment Banking is acting exclusively for Synexus and for noone else in connection with the Offer and will not regard any other person asits client nor be responsible to anyone other than Synexus for providing theprotections afforded to clients of Brewin Dolphin Investment Banking nor forproviding advice in relation to the Offer or any matter referred to in thisdocument and the accompanying documents. Brewin Dolphin Investment Banking is adivision of Brewin Dolphin Limited, which is a member of the London StockExchange and authorised and regulated by the Financial Services Authority. The availability of the Offer to Synexus Shareholders who are not resident inthe United Kingdom may be affected by the laws or regulations of the relevantjurisdictions in which they are located. Persons who are not resident in theUnited Kingdom should inform themselves about, and observe, applicable legal orregulatory requirements of their jurisdiction. The Offer will not be made, directly or indirectly, in or into, or by use of themails, or by any means or instrumentality (including, without limitation, telex,facsimile transmission, telephone, internet or other forms of electroniccommunication) of interstate or foreign commerce of, or by any facilities of anational securities exchange of, the United States, Canada, Australia or Japanor any other jurisdiction if to do so would constitute a violation of therelevant laws or regulations of such jurisdiction and the Offer cannot beaccepted by any such use, means or instrumentality or otherwise from or withinthe United States, Canada, Australia or Japan or any other jurisdiction if to doso would constitute a violation of the relevant laws or regulations of suchjurisdiction. Accordingly, copies of this announcement are not being, and mustnot be, mailed or otherwise forwarded, distributed or sent in or into or fromany such jurisdiction. All the Sigma Acquisitions Directors and the members of the Lyceum CapitalInvestment Committee accept responsibility for the information contained in thisannouncement, other than for the information which the Synexus Directors and theIndependent Directors accept responsibility. To the best of the knowledge andbelief of the Sigma Acquisitions Directors and the members of the Lyceum CapitalInvestment Committee (having taken all reasonable care to ensure that such isthe case) the information contained in this announcement for which they areresponsible is in accordance with the facts and does not omit anything likely toaffect the import of such information. The Synexus Directors accept responsibility for the information contained inthis announcement relating to Synexus, the Synexus Directors and their immediatefamilies, related trusts and persons connected with them (other than therecommendations in respect of the Offer and associated opinions set out inparagraph 3 of this announcement for which the Independent Directors acceptresponsibility). To the best of the knowledge and belief of the SynexusDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. The Independent Directors accept responsibility for the recommendation andassociated opinions contained in paragraph 3 of this announcement. To the bestof the knowledge and belief of the Independent Directors (who have taken allreasonable care to ensure that such is the case), the information contained inthis announcement for which they are responsible is in accordance with the factsand does not omit anything likely to affect the import of such information. Forward-Looking Statements This announcement, including information included or incorporated by referencein this announcement may contain "forward-looking statements" concerning theOffer, Synexus, members of the Synexus Group, Sigma Acquisitions and members ofthe Sigma Acquisitions Group. Generally the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identifyforward-looking statements. Forward-looking statements involve risk anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Many of these risks anduncertainties relate to factors that are beyond the Company's ability to controlor estimate precisely, such as future market conditions and the behaviours ofother market participants, and therefore undue reliance should not be placed onsuch statements. Sigma Acquisitions and Synexus assume no obligation and do notintend to update these forward-looking statements, except as required pursuantto applicable law and regulation, including the City Code. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes"interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of Synexus, all "dealings" in any relevant securities ofthe relevant company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30 p.m. (London time) on the Business Day followingthe date of the relevant transaction. This requirement will continue until thedate on which the Offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Synexus, they will be deemed to be a single person for thepurpose of Rule 8.3 of the City Code. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Synexus by Sigma Acquisitions or Synexus, or by any of theirrespective "associates", must be privately and publicly disclosed by no laterthan 12.00 noon (London time) on the Business Day following the date of therelevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel.Not for release, publication or distribution in whole or in part in, into orfrom the United States, Canada, Australia or Japan or any other jurisdictionwhere to do so would constitute a violation of the relevant laws or regulationsof such jurisdiction. FOR IMMEDIATE RELEASE 7 November 2007 RECOMMENDED CASH OFFER BY DELOITTE CORPORATE FINANCE ON BEHALF OF SIGMA ACQUISITIONS LIMITED FOR SYNEXUS CLINICAL RESEARCH PLC 1. Introduction Further to the announcement made by the Company on 19 October 2007 that it hadreceived an approach that might or might not lead to an offer being made for theCompany, the Board of Sigma Acquisitions and the Independent Directors ofSynexus are pleased to announce that they have reached agreement on the terms ofa recommended cash offer to be made by Deloitte Corporate Finance on behalf ofSigma Acquisitions, for the whole of the issued and to be issued share capitalof Synexus (other than Synexus Shares already contracted to be acquired by SigmaAcquisitions). The formal Offer will be set out in the Offer Document, which is expected to bedespatched to Synexus Shareholders shortly. All matters relating to the Offer have been considered by the IndependentDirectors, comprising Malcolm Hughes and Ian Miscampbell. 2. The Offer The Offer, which will be made on the terms and subject to the conditions set outin Appendix 1 of this announcement and the further terms and conditions to beset out or referred to in the Offer Document and the Form of Acceptance, will bemade on the following basis: for each Synexus Share 78 pence in cash The Offer, which is wholly in cash, values the existing issued share capital ofSynexus at approximately £18.1 million. The Offer Price represents a premium of 52.9 per cent. to the Closing Price of51 pence per Synexus Share on 18 October 2007, being the last Business Day priorto the announcement by Synexus that it had received an approach which may or maynot lead to an offer for the entire issued and to be issued share capital of theCompany. The Synexus Shares subject to the Offer will be acquired by Sigma Acquisitionsfully paid and free from all liens, equitable interests, charges, encumbrances,rights of pre-emption and other third party interests and rights of whatsoevernature and together with all rights attaching thereto on or after the date ofthis announcement, including the right to receive and retain all dividends andother distributions (if any) declared, made or paid by Synexus on or after suchdate. The Offer extends to all Synexus Shares unconditionally allotted or issued andfully paid on the date of the Offer (except those already contracted to beacquired by Sigma Acquisitions) and any Synexus Shares which are unconditionallyallotted or issued and fully paid (including pursuant to the exercise of optionsunder the Synexus Share Option Schemes) before the date on which the Offercloses (or such earlier date as Sigma Acquisitions may, subject to the CityCode, decide, not being earlier than the date on which the Offer becomesunconditional as to acceptances). 3. Recommendation The Independent Directors of Synexus, who have been so advised by BrewinDolphin, consider the terms of the Offer to be fair and reasonable. In providingadvice to the Independent Directors, Brewin Dolphin has taken into account theIndependent Directors' commercial assessments. Accordingly, the Independent Directors will unanimously recommend that SynexusShareholders accept the Offer and vote in favour of the Resolution, as they haveirrevocably undertaken to do, in respect of their entire beneficial holdings,amounting in aggregate to 15,000 Synexus Shares, representing approximately 0.06per cent. of the existing issued share capital of Synexus. 4. Irrevocable undertakings Sigma Acquisitions has received irrevocable undertakings to accept the Offer inrespect of a total of 12,544,868 Synexus Shares representing, in aggregate,54.18 per cent. of the existing issued share capital of Synexus. Sigma Acquisitions has received irrevocable undertakings to vote in favour ofthe Resolution in respect of a total of 10,325,127 Synexus Shares representing,in aggregate, 49.32 per cent. of the Synexus Shares held by IndependentShareholders. Of this total: Sigma Acquisitions has received irrevocable undertakings to accept the Offer andto vote in favour of the Resolution in respect of the entire beneficial holdingsof two Synexus Directors, Malcolm Hughes (who is also an Independent Director)and Dr Ian Smith, amounting in aggregate to 3,333,219 Synexus Sharesrepresenting, in aggregate, 14.40 per cent. of the existing issued share capitalof Synexus. These undertakings will remain binding even in the event of a highercompeting offer being made for Synexus; Sigma Acquisitions has received irrevocable undertakings to accept the Offer inrespect of the entire beneficial holdings of Michael Fort (which includes theMichael Fort Family Settlement) and Jane Lock, amounting in aggregate to2,219,741 Synexus Shares representing, in aggregate 9.59 per cent. of theexisting issued share capital of Synexus. These undertakings will remain bindingeven in the event of a higher competing offer being made for Synexus; Sigma Acquisitions has received an irrevocable undertaking to accept the Offerand to vote in favour of the Resolution from Mr Michael Redmond, the formerChairman of Synexus, in respect of 1,611,765 Synexus Shares representing 6.96per cent. of the existing issued share capital of Synexus. This undertaking willremain binding even in the event of a higher competing offer being made forSynexus; Sigma Acquisitions has received irrevocable undertakings to accept the Offer andto vote in favour of the Resolution from certain institutional shareholders(namely Close Ventures Limited, Newton Investment Management, Canada LifeAssurance Company and Noble Fund Managers Limited) in respect of, in aggregate5,380,143 Synexus Shares representing, in aggregate, 23.24 per cent. of theexisting issued share capital of Synexus; and In addition, Paul McCluskey and Alan Boyce have agreed, in respect of theSynexus Shares to be acquired by them on the exercise of options granted to themunder the Synexus Share Option Schemes to: (i) accept the Offer in respect of95,075 and 211,538 Synexus Shares respectively, amounting in aggregate to306,613 Synexus Shares; and (ii) sell to Sigma Acquisitions under the terms ofthe Share Exchange Agreement 64,103, and 38,462 Synexus Shares respectively,amounting in aggregate to 102,565 Synexus Shares. Further details of certain of these irrevocable undertakings are set out inAppendix 2 to this document. 5. Background to and reasons for the recommendation of theOffer Since admission to AIM in November 2005 as a UK-centric business with a declaredcorporate development strategy of 'buy-and-build' to establish a global clinicaltrials platform, Synexus has made progress on a number of fronts: • new clinical trials businesses have been acquired in Poland, Hungaryand South Africa and a new centre has been opened in Bulgaria, all of which arelocations with a high treatment local population and low costs of operation; • the established network of UK centres has been rationalised to create asmaller number of larger sites which provide more modern and cost-effectivefacilities; and • the senior management team has been expanded by the recruitment of PaulMcCluskey and Alan Boyce as Chief Financial Officer and Chief Operations Officerrespectively together with Chris Hannigan as Director of Business Development.Synexus considers that the former two appointments have enhanced the financialand operational management of the Company whilst the latter has beeninstrumental in helping Synexus to achieve a significant expansion of its salespipeline. However, despite being recognised by many of the leading global pharmaceuticalcompanies as a cost-effective patient recruiter and clinical trials manager,Synexus still lacks critical mass in a global multi-billion dollar market. In anindustry where, typically, there is a very long lead time from initial enquirythrough to signing and execution of contracts (often extending to a year ormore) Synexus' financial performance can be disproportionately affected bydelays which extend such lead times even further. This was highlighted by theCompany's trading update issued on 26 January 2007. Following the release of the Company's financial results for the year ended 31March 2007 and the pre-close statement announced on 28 September 2007, Synexus'share price has fallen from a high of 104.5 pence at the close of business on 22January 2007 to a low of 30 pence on 19 September 2007 reflecting the change ofinvestor sentiment towards the Company and the sector in which it operates. Thisposition has been further exacerbated by similar changes in investor sentimentaffecting the share prices of comparator stocks such as Premier Research Plc andClinPhone Plc. As a consequence of this re-rating, Synexus has not been able tocontinue its plan to pursue suitable acquisition opportunities given the highlydilutive impact which any substantially equity-financed prospective transactionwould have had on Synexus' shareholders and the Company's share price. The Company was approached by Lyceum Capital on 20 August 2007 with a proposalto formulate an offer in conjunction with the Management Team. At that date,Synexus' share price was 42 pence and, after an initial short evaluation, LyceumCapital sought the agreement of the Independent Directors to undertake duediligence based on putting forward an indicative offer of 78 pence per sharerepresenting a premium of 85.7 per cent. to the then market price. Followingcareful consideration of this proposal with the Company's advisers, theIndependent Directors agreed to this request given their view that such an offerwould represent a substantial premium over the average share price in thepreceding six months and would also be a premium of 20 per cent. to Synexus'share price on admission to AIM on 7 November 2005. Furthermore, Lyceum Capitalare committed to supporting the Management Team with the necessary financialresources to enable the 'buy-and-build' strategy to be resumed in order thatSynexus can achieve the necessary critical mass as an international clinicaltrials operator which the Independent Directors believe would not be possible ifthe Company remained publicly quoted. In its pre-close statement announced on 28 September 2007, the Company confirmedthat trading in the first half of its financial year had been challenging due tocontract delays but that the order book had reached a record level which hadgiven the Synexus Directors confidence in the business outlook for the fullyear. However, whilst this outlook was encouraging, the Independent Directorsconsider that in the absence of the Offer, there is no early prospect of Synexusbeing able to consider new acquisition opportunities and, therefore, theIndependent Directors believe that Sigma Acquisitions' offer represents a fairvaluation given that it equates to a multiple of 20.5x EBITDA and a priceearnings multiple of 37.1x (for the year ended 31 March 2007). 6. Current trading and prospects of Synexus As expected, given previously announced delays to major contracts, trading inthe six months ended 30 September 2007 was challenging. Since 31 March 2007 theSynexus Group's cash balances have been applied into working capital as a resultof the difficult trading conditions that the Synexus Group has faced during thefirst half of its financial year. During the same period the Company also made apayment of €500,000 in deferred consideration relating to its operations inHungary. Further amounts of up to €750,000 in deferred consideration may bepayable in respect of Hungary. However, significant new contract wins since 31March 2007 mean that the Company's forward order book is presently at £18.5million with a further £18.8 million of outstanding bid proposals. The Directors remain confident about the prospects for the Company for theremainder of the financial year. 7. Information relating to Sigma Acquisitions Sigma Acquisitions is a wholly owned subsidiary of Sigma Midco which is a whollyowned subsidiary of Sigma Topco, all companies in the Bidder Group are recentlyincorporated and established for the purpose of making the Offer on behalf ofthe Lyceum II Funds. The directors of Sigma Acquisitions are Jeremy Hand and David Harland.Immediately following the Offer becoming or being declared unconditional in allrespects, the ordinary shares of Sigma Topco will ultimately be held as to 68.3per cent. by the Lyceum II Funds and 31.7 per cent. by the Management Team. Inaddition, Michael Fort and Paul McCluskey have agreed to join the board of SigmaTopco following the Offer becoming or being declared unconditional in allrespects. To date, Sigma Acquisitions has neither traded nor engaged in any activities,other than those in relation to its incorporation and the making of the Offer. 8. Financing of the Offer The Sigma Acquisitions Group is being financed by approximately £0.2 million ofequity to be subscribed by members of the Management Team, approximately £20.3million of equity and loan notes to be subscribed by the Lyceum II Funds andapproximately £0.5 million of loan notes to be subscribed by Michael Fort andthe Michael Fort Family Settlement. Further details will be set out in the OfferDocument. Deloitte Corporate Finance is satisfied that sufficient resources are availableto Sigma Acquisitions to satisfy full acceptance of the Offer in cash. 9. Management Arrangements In accordance with the City Code, the Panel requires the arrangements betweenthe Sigma Acquisitions Group and the Management Team to be approved by way of aresolution of the Independent Shareholders, to be taken on a poll. Accordingly,a General Meeting of Synexus will be convened to approve the ManagementArrangements. The Management Team will in total invest £700,000 in the Sigma AcquisitionsGroup. Synexus Shares owned by Reinvesting Management will be assented to the Offer.Reinvesting Management will be entitled to take cash for their Synexus Sharesand will then reinvest a proportion of their sale proceeds into equity and (inthe case of Michael Fort and the Michael Fort Family Settlement) loan notes. Synexus Shares that will be issued to Rollover Management on the exercise oftheir options pursuant to the EMI Scheme (subject to the rules of the EMIScheme) will be partly assented to the Offer and will partly, subject to theOffer becoming or being declared wholly unconditional, be exchanged for equityin Sigma Topco pursuant to the Share Exchange Agreement. In aggregate theSynexus Shares to be sold pursuant to the Share Exchange Agreement represent 25per cent. of the aggregate holdings of Rollover Management and their connectedpersons. Chris Hannigan, Vice President, Business Development, as a senior member of theexecutive management of Synexus will subscribe for shares in Sigma Topcofollowing the date by which the Offer has been declared or becomes unconditionalin all respects. The Offer is conditional upon, inter alia, the passing of the Resolution. Noneof the Management Team who hold Synexus Shares (or their connected parties whoare holders of Synexus Shares) will be entitled to vote on the Resolution. Brewin Dolphin considers the terms of the Management Arrangements to be fair andreasonable, so far as the Independent Shareholders are concerned. Accordingly,the Independent Directors will unanimously recommend that IndependentShareholders vote in favour of the Resolution. The Independent Directors and Dr Ian Smith have irrevocably undertaken to votein favour of the Resolution in respect of their entire beneficial holdings,amounting in aggregate to 3,333,219 Synexus Shares representing 15.92 per cent.of the Synexus Shares held by Independent Shareholders. 10. Information on Lyceum Capital Lyceum Capital is an independent provider of private equity finance tomid-market service companies primarily in the UK. The partners of Lyceum Capitalhave invested in excess of £0.5 billion in over 40 companies over the past 20years. Lyceum Capital was established in 1999 as West Private Equity. In May 2006 itwas acquired by Jeremy Hand and Philip Buscombe and in March 2007 the businesswas contributed to a newly formed LLP, the members of which entirely comprisethe executives of the business. The Lyceum II Funds currently have, inaggregate, commitments from investors totalling £246.2 million, none of whichhas been drawn. These commitments include £4.8 million from Lyceum Capital(CIP2) L.P., a co-investment and carried interest scheme, which invests as alimited partner in the Lyceum II Funds on behalf of the members, executives andprofessional staff at Lyceum Capital. 11. Background to and reasons for the Offer Lyceum Capital has a proven track record of investing in service sectorbusinesses. Lyceum Capital aims to transform the companies it acquires throughthe systematic implementation of business improvement programmes and theprovision of investment capital and investment expertise to accelerate growththrough add-on acquisitions and other development projects. Since its flotation on AIM in November 2005, Synexus has expanded its businessto become a more broadly based clinical study patient recruitment and managementspecialist. The Company now operates from 13 sites across six countries butremains a small company with a high fixed cost base serving globalpharmaceutical customers. As such its performance has suffered recently as itstruggled to cope with customer concentration and contract delays. LyceumCapital believes that to succeed, Synexus needs to grow significantly in orderthat it may fully utilise its existing infrastructure and enable the Company tooffer a truly global service to its customers. In order to complete thisstrategy, Lyceum Capital believes Synexus requires significant additionalcapital investment. The timeframe within which Synexus expects to see the benefits of this expansionprogram are inherently uncertain owing to the current climate in thepharmaceutical industry and as a consequence, in the short term, Synexus islikely only to incur additional costs and investment outlay associated with theproposed expansion. Lyceum Capital and the Management Team believe that the uncertainty regardingthe timing of earnings and the requirement for equity financing, as Synexus goesthrough this development period, together with the related cash outflows, meansthat Synexus would better realise its longer term strategy within a privatecompany environment. Full acceptance of the Offer will enable Synexus Shareholders to realise theirentire investment for cash (without incurring dealing charges) at a price whichrepresents a premium of 52.9 per cent. to the Closing Price of 51 pence on 18October 2007, being the last Business Day prior to the announcement that Synexushad received an approach which may or may not lead to an offer for the entireissued and to be issued share capital of the Company. 12. Board changes and employees The Board of Sigma Acquisitions attaches great importance to the skills andexperience of the management and employees of Synexus. The Board of SigmaAcquisitions has provided assurances to the Synexus Directors that, upon theOffer becoming or being declared unconditional in all respects, the existingemployment rights of all employees of Synexus, including pension rights, will befully safeguarded. Sigma Acquisitions intends that following the Offer becoming unconditional inall respects, further funding will be made available to Synexus to investigateacquisition targets to allow the Company to expand its geographic presence incertain key markets. No change is expected to the current locations of theCompany's places of business. In addition, following the Offer becoming unconditional in all respects, keymembers of management will remain in their current roles, with Michael Fort andPaul McCluskey expected to join the Board of Sigma Topco. The non-executive directors of Synexus have agreed to resign subject to and witheffect from the Offer being declared unconditional in all respects. Particularsof the payments to the non-executive directors in connection with their extrawork in assisting with the offer process together with payments in respect oftermination of their appointments as directors (and in accordance with the termsof their letters of appointment) will be set out fully in the Offer Document. 13. Synexus Share Option Schemes The Offer extends to any Synexus Shares unconditionally allotted or issued andfully paid pursuant to the exercise of options under the Synexus Share OptionSchemes (except those already contracted to be acquired by Sigma Acquisitions)before the date on which the Offer closes (or such earlier date as SigmaAcquisitions may, subject to the City Code, decide, not being earlier than thedate on which the Offer becomes unconditional as to acceptances). The only options outstanding under the Synexus Share Option Schemes with anexercise price which is less than the Offer Price, such that exercise of theoptions is economical, are held by two members of the Management Team, AlanBoyce and Paul McCluskey. These individuals have agreed that an aggregate of102,565 Synexus Shares, due to be issued on exercise of such options, will beacquired by Sigma Acquisitions under the Share Exchange Agreement. Alan Boyceand Paul McCluskey have irrevocably agreed to assent 306,613 additional SynexusShares due to be issued to them on exercise of their options to the Offer. All other options outstanding under the Synexus Share Option Schemes have anexercise price equal to or in excess of the Offer Price such that exercise ofthese options would be uneconomical. The relevant holders of these options willbe informed in writing of the fact of the Offer and of the effect of the Offeron their rights under the Synexus Share Option Schemes. Although these optionswill become exercisable immediately prior to or on or after the Offer becomes oris declared unconditional in all respects and holders of such options will begiven the opportunity to exercise their options, it is not expected that suchholders will wish to exercise them. No further or additional proposals willtherefore be made to such Synexus Option Holders. 14. Inducement fee As an inducement to Lyceum Capital to continue its preparation for the Offer,Synexus has agreed in certain circumstances to pay a fee to Lyceum Capital of upto one per cent. of the value of the Offer (inclusive of any irrecoverable VAT).The inducement fee letter between Synexus and Lyceum Capital was signed on 19September 2007 and was subsequently varied by a letter of amendment between thetwo parties dated 23 October 2007. The inducement fee is payable in the event that: • a competing proposal (being an offer (whether by tender offer,scheme of arrangement or otherwise, whether pre-conditional or not) for, oragreement to acquire all or a material part (being 50 per cent. or more of theassets of any member of Synexus Group)) is announced by a third party and isrecommended by the Board; or • upon confirmation to the Board that Lyceum Capital intends to makean announcement of an offer at a price of at least 78 pence per Synexus Shareand provides evidence of sufficient resources to do so, and the Board does notagree to recommend such offer within two business days of receipt of suchconfirmation; or • the Board withdraws from discussions with Lyceum Capital or failsto permit it from completing its due diligence on the Synexus Group; or • following this announcement, a competing proposal is announcedwhich is recommended by the Board and which becomes unconditional or isotherwise consummated; or • following this announcement, the Board withdraws its recommendationand modifies it in such a manner as to be adverse to the likelihood of the Offerbecoming or being declared unconditional in all respects. Pursuant to Rule 21.2 of the City Code, the Independent Directors of Synexus andBrewin Dolphin have confirmed to the Panel that they consider the terms of theinducement fee arrangements to be in the best interests of Synexus Shareholders. 15. Disclosure of interests in Synexus Save as disclosed in Appendix 2 of this announcement, as at 6 November 2007, thelast practicable business day prior to this announcement, neither SigmaAcquisitions nor, so far as Sigma Acquisitions is aware, any person acting inconcert with Sigma Acquisitions, had an interest in or right to subscribe forrelevant securities of Synexus or had any short position in relation to relevantsecurities of Synexus (whether conditional or absolute and whether in the moneyor otherwise), including any short position under a derivative, any agreement tosell or any delivery obligation or right to require another person to purchaseor take delivery of any relevant securities of Synexus nor has any such personborrowed or lent therein. Save for the irrevocable undertakings described above and pursuant to the ShareExchange Agreement, neither Sigma Acquisitions nor any person acting in concertwith Sigma Acquisitions has any arrangement in relation to Synexus Shares, orany securities convertible or exchangeable into Synexus Shares or options(including traded options) in respect of, or derivatives referenced to, SynexusShares. For these purposes, "arrangement" includes any indemnity or optionarrangement, any agreement or understanding, formal or informal, of whatevernature, relating to relevant securities which is, or may be, an inducement todeal or refrain from dealing in such securities. 16. Compulsory acquisition, cancellation of admission to trading onAIM and re-registration If Sigma Acquisitions receives acceptances under the Offer in respect of, and/orotherwise acquires, 90 per cent. or more of the Synexus Shares to which theOffer relates and 90 per cent. of the voting rights carried by those shares andthe Offer becomes or is declared unconditional in all respects, SigmaAcquisitions intends to exercise its rights pursuant to the provisions ofChapter 3 of Part 28 of the 2006 Act to acquire compulsorily all the remainingSynexus Shares on the same terms as the Offer. Following the Offer becoming or being declared unconditional in all respects andsubject to any applicable requirements of the AIM Rules, Sigma Acquisitionsintends to procure the making of an application by Synexus for cancellation ofthe admission to and trading of Synexus Shares on AIM. It is anticipated thatsuch cancellation will take effect no earlier than 5 Business Days after SigmaAcquisitions, by virtue of its shareholding (if any) and acceptances of theOffer, has acquired or agreed to acquire 90 per cent. of the voting rightsattached to the Synexus Shares. De-listing and the cancellation of admission to and trading of Synexus Shares onAIM would significantly reduce the liquidity and marketability of any SynexusShares not acquired by Sigma Acquisitions. It is also proposed that, following the Offer being declared unconditional inall respects, and after the admission of the Synexus Shares to trading on AIM iscancelled, Sigma Acquisitions will seek to procure the re-registration ofSynexus as a private company under the relevant provisions of the 1985 Act. 17. General The Offer will be made subject to the conditions and on the terms contained inthis announcement and on the further terms and conditions to be set out orreferred to in the Offer Document and the Form of Acceptance. The Offer willcomply with the provisions of the City Code. The Offer Document, together with the Form of Acceptance, will be posted toSynexus Shareholders and (for information only) to participants in the SynexusShare Option Schemes shortly. EnquiriesSigma Acquisitions/Lyceum Capital 020 7632 2480Jeremy HandGrant Davidson Deloitte Corporate Finance (financial adviser to Sigma Acquisitions) 020 7936 3000Jonathan HintonJames Lewis PR advisers to Lyceum CapitalChantal Ligertwood 01235 834 091Sally Brown 020 8871 0536 Synexus 07785 224 008Malcolm Hughes Brewin Dolphin (financial adviser, nominated adviser and broker to Synexus) 0845 270 8600Mark BradyRichard Evans Biddicks (PR adviser to Synexus) 020 7448 1000Zoe Biddick The full text of the conditions and principal further terms of the Offer and thebases and sources of assumptions and calculations are set out in Appendices 1and 2 respectively, each of which forms part of, and should be read with, thisannouncement. Defined terms have the meanings set out in Appendix 3, which alsoforms part of and should be read in conjunction with this announcement. This announcement does not constitute an offer or invitation to purchase anysecurities, nor is it a solicitation of any vote or approval in anyjurisdiction, nor shall there be any sale, issuance or transfer of thesecurities referred to in this announcement in any jurisdiction in contraventionof applicable law. The Offer will be made solely by means of the Offer Documentand (in the case of Synexus Shares in certificated form) the Form of Acceptanceaccompanying the Offer Document, which will contain the full terms andconditions of the Offer including details of how it may be accepted and by wayof notice to be published in the London Gazette on or shortly after the date onwhich the Offer Document is published. The Offer Document will be posted to Synexus Shareholders shortly and thereafterwill be available for public inspection. Deloitte Corporate Finance is acting for Sigma Acquisitions and Lyceum CapitalPartners LLP and for no-one else in connection with the Offer and will notregard any other person as its client nor be responsible to anyone other thanSigma Acquisitions and Lyceum Capital Partners LLP for providing the protectionsafforded to clients of Deloitte Corporate Finance nor for providing advice inrelation to the Offer or any matter referred to in this announcement. DeloitteCorporate Finance is a division of Deloitte & Touche LLP, which is authorisedand regulated by the Financial Services Authority in respect of regulatedactivities. Brewin Dolphin Investment Banking is acting exclusively for Synexus and for noone else in connection with the Offer and will not regard any other person asits client nor be responsible to anyone other than Synexus for providing theprotections afforded to clients of Brewin Dolphin Investment Banking nor forproviding advice in relation to the Offer or any matter referred to in thisdocument and the accompanying documents. Brewin Dolphin Investment Banking is adivision of Brewin Dolphin Limited, which is a member of the London StockExchange and authorised and regulated by the Financial Services Authority. The availability of the Offer to Synexus Shareholders who are not resident inthe United Kingdom may be affected by the laws or regulations of the relevantjurisdictions in which they are located. Persons who are not resident in theUnited Kingdom should inform themselves about, and observe, applicable legal orregulatory requirements of their jurisdiction. The Offer will not be made, directly or indirectly, in or into, or by use of themails, or by any means or instrumentality (including, without limitation, telex,facsimile transmission, telephone, internet or other forms of electroniccommunication) of interstate or foreign commerce of, or by any facilities of anational securities exchange of, the United States, Canada, Australia or Japanor any other jurisdiction if to do so would constitute a violation of therelevant laws or regulations of such jurisdiction and the Offer cannot beaccepted by any such use, means or instrumentality or otherwise from or withinthe United States, Canada, Australia or Japan or any other jurisdiction if to doso would constitute a violation of the relevant laws or regulations of suchjurisdiction. Accordingly, copies of this announcement are not being, and mustnot be, mailed or otherwise forwarded, distributed or sent in or into or fromany such jurisdiction. All the Sigma Acquisitions Directors and the members of the Lyceum CapitalInvestment Committee accept responsibility for the information contained in thisannouncement, other than for the information which the Synexus Directors and theIndependent Directors accept responsibility. To the best of the knowledge andbelief of the Sigma Acquisitions Directors and the members of the Lyceum CapitalInvestment Committee (having taken all reasonable care to ensure that such isthe case) the information contained in this announcement for which they areresponsible is in accordance with the facts and does not omit anything likely toaffect the import of such information. The Synexus Directors accept responsibility for the information contained inthis announcement relating to Synexus, the Synexus Directors and their immediatefamilies, related trusts and persons connected with them (other than therecommendations in respect of the Offer and associated opinions set out inparagraph 3 of this announcement for which the Independent Directors acceptresponsibility). To the best of the knowledge and belief of the SynexusDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. The Independent Directors accept responsibility for the recommendation andassociated opinions contained in paragraph 3 of this announcement. To the bestof the knowledge and belief of the Independent Directors (who have taken allreasonable care to ensure that such is the case), the information contained inthis announcement for which they are responsible is in accordance with the factsand does not omit anything likely to affect the import of such information. Forward-Looking Statements This announcement, including information included or incorporated by referencein this announcement may contain "forward-looking statements" concerning theOffer, Synexus, members of the Synexus Group, Sigma Acquisitions and members ofthe Sigma Acquisitions Group. Generally the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identifyforward-looking statements. Forward-looking statements involve risk anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Many of these risks anduncertainties relate to factors that are beyond the Company's ability to controlor estimate precisely, such as future market conditions and the behaviours ofother market participants, and therefore undue reliance should not be placed onsuch statements. Sigma Acquisitions and Synexus assume no obligation and do notintend to update these forward-looking statements, except as required pursuantto applicable law and regulation, including the City Code. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes"interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of Synexus, all "dealings" in any relevant securities ofthe relevant company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30 p.m. (London time) on the Business Day followingthe date of the relevant transaction. This requirement will continue until thedate on which the Offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Synexus, they will be deemed to be a single person for thepurpose of Rule 8.3 of the City Code. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Synexus by Sigma Acquisitions or Synexus, or by any of theirrespective "associates", must be privately and publicly disclosed by no laterthan 12.00 noon (London time) on the Business Day following the date of therelevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. APPENDIX 1 TERMS AND CONDITIONS OF THE OFFER PART A CONDITIONS OF THE OFFER The Offer, which will be made by Deloitte Corporate Finance on behalf of SigmaAcquisitions, will comply with the rules of the Financial Services Authority andthe London Stock Exchange and the City Code. The Offer will be conditional upon: (a) valid acceptances of the Offer being received (and not, wherepermitted, withdrawn) by not later than the first closing date of the Offer (orsuch later times and/or dates as Sigma Acquisitions may, subject to the rules ofthe Code, decide) in respect of not less than 90 per cent. (or such lesserpercentage as Sigma Acquisitions may decide) in nominal value of the SynexusShares to which the Offer relates, and not less than 90 per cent. (or suchlesser percentage as Sigma Acquisitions may decide) of the voting rights carriedby the Synexus Shares to which the Offer relates, provided that this conditionwill not be satisfied unless Sigma Acquisitions and/or any of its associatesshall have acquired or agreed to acquire, whether pursuant to the Offer orotherwise, Synexus Shares carrying in aggregate more than 50 per cent. of thevoting rights then exercisable at a general meeting of Synexus including, to theextent (if any) required by the Panel, any voting rights attaching to anySynexus Shares which are unconditionally allotted before the Offer becomes or isdeclared unconditional as to acceptances pursuant to the exercise of anyoutstanding conversion or subscription rights or otherwise. For the purposes ofthis condition: (i) Synexus Shares which have been unconditionallyallotted shall be deemed to carry the voting rights which they will carry uponissue; and (ii) the expressions "Synexus Shares to which theOffer relates" and "associates" shall be construed in accordance with sections974 to 991 of the Companies Act 2006; (b) the passing at the General Meeting of Synexus (or at anyadjournment of such a meeting) of the Resolution; (c) no government or governmental, quasi-governmental, supranational,statutory, regulatory or investigative body, authority, court, trade agency,association or institution or professional or environmental body or any othersimilar person or body whatsoever in any relevant jurisdiction (each a "ThirdParty") having decided to take, institute, implement or threaten any action,proceedings, suit, investigation, enquiry or reference or having required anyaction to be taken or information to be provided or otherwise having doneanything or having made, proposed or enacted any statute, regulation, order ordecision or having done anything which would or might reasonably be expected to: (i) make the Offer or its implementation, or theacquisition or the proposed acquisition by Sigma Acquisitions of any shares orother securities in, or control of, Synexus or any of its subsidiaries orsubsidiary undertakings or associated undertakings (including any joint venture,partnership, firm or company in which any member of the Synexus Group issubstantially interested) (the "wider Synexus Group" (and "member of the widerSynexus Group" shall be construed accordingly)) void, illegal or unenforceablein any jurisdiction, or otherwise directly or indirectly restrain, prohibit,restrict, prevent or delay the same or impose additional materially adverseconditions or financial or other obligations with respect thereto, or otherwisechallenge or interfere therewith; (ii) require, prevent or materially delay thedivestiture or alter the terms envisaged for any proposed divestiture by SigmaAcquisitions or any of its subsidiaries or subsidiary undertakings or associatedundertakings (including any joint venture, partnership, firm or company in whichany member of the Bidder Group is substantially interested) (the "wider BidderGroup" (and "member of the wider Bidder Group" shall be construed accordingly))of any Synexus Shares or of any shares in a member of the wider Bidder Group; (iii) require, prevent or materially delay thedivestiture or alter the terms envisaged for any proposed divestiture by anymember of the wider Bidder Group or by any member of the wider Synexus Group ofall or any material portion of their respective businesses, assets or property,or (to an extent which is material in the context of the Offer or the widerSynexus Group concerned taken as a whole) impose any limit on the ability of anyof them to conduct their respective businesses (or any of them) or to own orcontrol any of their respective assets or properties or any part thereof; (iv) impose any material limitation on, or result inany material delay in, the ability of any member of the wider Bidder Group orany member of the wider Synexus Group to acquire, hold or exercise effectively,directly or indirectly, all or any rights of ownership of Synexus Shares or anyshares or securities convertible into Synexus Shares or to exercise voting ormanagement control over any member of the wider Synexus Group or any member ofthe wider Bidder Group in any such case which is material in the context of thewider Synexus Group; (v) require any member of the wider Bidder Group and/or of the wider Synexus Group to acquire or offer to acquire or repay any sharesor other securities in and/or indebtedness of any member of the wider SynexusGroup owned by or owed to any Third Party in circumstances which would impose onSigma Acquisitions or any member of the Synexus Group a liability which ismaterial in the context of the wider Bidder Group or the wider Synexus Group asthe case may be; (vi) impose any material limitation on the ability ofany member of the wider Bidder Group and/or of the wider Synexus Group tointegrate or co-ordinate its business, or any material part of it, with thebusiness of any member of the wider Synexus Group or of the wider Bidder Grouprespectively; or (vii) otherwise adversely affect any or all of thebusinesses, assets, prospects, profits or financial or trading position of anymember of the wider Synexus Group or any member of the wider Bidder Group to anextent which is material in the context of the Offer or any such group taken asa whole, and all applicable waiting and other time periods during which anyThird Party could institute, implement or threaten any such action, proceedings,suit, investigation, enquiry or reference under the laws of any relevantjurisdiction, having expired, lapsed or been terminated; (d) all necessary filings and applications having been made and allnecessary waiting and other time periods (including any extensions thereof)under any applicable legislation or regulations of any relevant jurisdictionhaving expired, lapsed or been terminated and all statutory or regulatoryobligations in any relevant jurisdiction having been complied with in each caseas may be necessary in connection with the Offer and its implementation or theacquisition or proposed acquisition by Sigma Acquisitions or any member of thewider Bidder Group of any shares or other securities in, or control of, Synexusor any member of the wider Synexus Group and all authorisations, orders,recognitions, grants, consents, clearances, confirmations, licences,certificates, permissions and approvals ("Authorisations") which are materialand necessary or appropriate for or in respect of the Offer or the acquisitionor proposed acquisition by Sigma Acquisitions of any shares or other securitiesin, or control of, Synexus or the carrying on by any member of the wider SynexusGroup of its business or in relation to the affairs of any member of the widerSynexus Group having been obtained in terms and in a form reasonablysatisfactory to Sigma Acquisitions from all appropriate Third Parties or personswith whom any member of the wider Synexus Group has entered into contractualarrangements and all such Authorisations remaining in full force and effect andall filings necessary for such purpose having been made and there being nonotice or intimation of any intention to revoke, suspend, restrict or amend ornot renew the same at the time at which the Offer becomes or is declared whollyunconditional and there being no indication that the renewal costs of anyAuthorisation might be materially higher than the renewal costs for the currentAuthorisation in each case where the absence of such Authorisation would have amaterial adverse effect on the wider Synexus Group or on the wider Bidder Grouptaken as a whole; (e) except as Disclosed, there being no provision of any arrangement,agreement, licence or other instrument to which any member of the wider SynexusGroup is a party or by or to which any such member or any of its respectiveassets is or are or may be bound, entitled or subject or any circumstance which,in consequence of the making or implementation of the Offer or the proposedacquisition of any shares or other securities in, or control of, Synexus bySigma Acquisitions could reasonably be expected to result in (to an extent whichis material in the context of the wider Synexus Group taken as a whole): (i) any indebtedness or liabilities actual orcontingent of, or any grant available to, any member of the wider Synexus Groupbeing or becoming repayable or capable of being declared repayable immediatelyor prior to its stated maturity or the ability of any such member to borrowmonies or incur any indebtedness being withdrawn or inhibited or capable ofbeing withdrawn or inhibited; (ii) the creation or enforcement of any mortgage,charge or other security interest over the whole or any material part of thebusiness, property, assets or interests of any member of the wider Synexus Groupor any such security (whenever created, arising or having arisen) being enforcedor becoming enforceable; (iii) any such arrangement, agreement, licence orinstrument or the rights, liabilities, obligations, or interests of any memberof the wider Synexus Group under any such arrangement, agreement, licence orinstrument or the interests or business of any such member in or with any otherperson, firm, company or body being or becoming capable of being terminated oradversely modified or adversely affected or any adverse action being taken orany onerous obligation or liability arising thereunder; (iv) any asset or interest of any member of the widerSynexus Group being or falling to be disposed of or charged (otherwise than inthe ordinary course of business) or ceasing to be available to any member of thewider Synexus Group or any right arising under which any such asset or interestcould be required to be disposed of or charged or could cease to be available toany member of the wider Synexus Group (otherwise than in the ordinary course ofbusiness); (v) any member of the wider Synexus Group ceasing tobe able to carry on business under any name under which it presently does so; (vi) any member of the wider Bidder Group and/or ofthe wider Synexus Group being required to acquire or repay any shares in and/orindebtedness of any member of the wider Synexus Group owned by any Third Party; (vii) any change in or effect on the ownership or useof any intellectual property rights owned or used by any member of the widerSynexus Group; (viii) the value or financial or trading position orprospects of any member of the wider Synexus Group being prejudiced or adverselyaffected in a manner which would be material in the context of the wider SynexusGroup taken as a whole; or (ix) the creation of any material liability, actual orcontingent, by any such member (other than in the ordinary course of business), and no event having occurred which, under any provision of anysuch arrangement, agreement, licence or other instrument, might reasonably beexpected to result in any of the events referred to in this condition (e) to anextent which would be material in the context of the wider Synexus Group takenas a whole; (f) since 31 March 2007 and except as Disclosed no member of the widerSynexus Group having: (i) issued or agreed to issue or authorised orproposed the issue of additional shares or securities of any class, orsecurities convertible into or exchangeable for shares, or rights, warrants oroptions to subscribe for or acquire any such shares, securities or convertiblesecurities (save for issues between Synexus and any of its wholly-ownedsubsidiaries or between such wholly-owned subsidiaries and save for options asDisclosed and granted under the Synexus Share Option Schemes before the date ofthis announcement or the issue of any Synexus Shares allotted upon the exerciseof options granted before the date of this announcement under the Synexus ShareOption Schemes) or redeemed, purchased, repaid or reduced or proposed theredemption, purchase, repayment or reduction of any part of its share capital orany other securities; (ii) recommended, declared, made or paid or proposedto recommend, declare, make or pay any bonus, dividend or other distributionwhether payable in cash or otherwise other than any distribution by anywholly-owned subsidiary within the Synexus Group; (iii) save as between Synexus and its wholly-ownedsubsidiaries, effected, authorised, proposed or announced its intention topropose any change in its share or loan capital which in each case would bematerial in the context of the wider Synexus Group taken as a whole; (iv) save as between Synexus and its wholly-ownedsubsidiaries, effected, authorised, proposed or announced its intention topropose any merger, demerger, reconstruction, arrangement, amalgamation,commitment or scheme or any material acquisition or disposal or transfer ofassets or shares (other than in the ordinary course of business) or any right,title or interest in any assets or shares or other transaction or arrangement inrespect of itself or another member of the wider Synexus Group which in eachcase would be material in the context of the wider Synexus Group taken as awhole; (v) acquired or disposed of or transferred (otherthan in the ordinary course of business) or mortgaged, charged or encumbered anyassets or shares or any right, title or interest in any assets or shares (otherthan in the ordinary course of business) or authorised the same or entered into,varied or terminated or authorised, proposed or announced its intention to enterinto, vary, terminate or authorise any agreement, arrangement, contract,transaction or commitment (other than in the ordinary course of business andwhether in respect of capital expenditure or otherwise) which is of aloss-making, long-term or unusual or onerous nature or magnitude, or whichinvolves or could involve an obligation of such a nature or magnitude, in eachcase which is material in the context of the wider Synexus Group taken as awhole; (vi) entered into any agreement, contract,transaction, arrangement or commitment (other than in the ordinary course ofbusiness) which is material in the context of the wider Synexus Group taken as awhole; (vii) entered into any contract, transaction orarrangement which would be restrictive on the business of any member of thewider Synexus Group or the wider Bidder Group or which is or could involveobligations which would or might reasonably be expected to be so restrictive; (viii) issued, authorised or proposed the issue of ormade any change in or to any debentures, or (other than in the ordinary courseof business) incurred or increased any indebtedness or liability, actual orcontingent, which is material in the context of the wider Synexus Group taken asa whole; (ix) been unable or admitted that it is unable to payits debts or having stopped or suspended (or threatened to stop or suspend)payment of its debts generally or ceased or threatened to cease carrying on allor a substantial part of its business or proposed or entered into anycomposition or voluntary arrangement with its creditors (or any class of them)or the filing at court of documentation in order to obtain a moratorium prior toa voluntary arrangement or, by reason of actual or anticipated financialdifficulties, commenced negotiations with one or more of its creditors with aview to rescheduling any of its indebtedness; (x) made, or announced any proposal to make, anychange or addition to any retirement, death or disability benefit or any otheremployment-related benefit of or in respect of any of its directors, employees,former directors or former employees; (xi) save as between Synexus and its wholly-ownedsubsidiaries, granted any lease or third party rights in respect of any of theleasehold or freehold property owned or occupied by it or transferred orotherwise disposed of any such property; (xii) entered into or varied or made any offer (whichremains open for acceptance) to enter into or vary the terms of any serviceagreement with any director or senior executive of Synexus or any director orsenior executive of the wider Synexus Group; (xiii) taken or proposed any corporate action or had anyproceedings started or threatened against it for its winding-up (voluntary orotherwise), dissolution, striking-off or reorganisation or for the appointmentof a receiver, administrator (including the filing of any administrationapplication, notice of intention to appoint an administrator or notice ofappointment of an administrator), administrative receiver, trustee or similarofficer of all or any material part of its assets or revenues or for anyanalogous proceedings or steps in any jurisdiction or for the appointment of anyanalogous person in any jurisdiction; (xiv) made any amendment to its memorandum or articlesof association; (xv) waived or compromised any claim or authorised anysuch waiver or compromise, save in the ordinary course of business, which ismaterial in the context of the wider Synexus Group taken as a whole; (xvi) taken, entered into or had started or threatenedagainst it in a jurisdiction outside England and Wales any form of insolvencyproceeding or event similar or analogous to any of the events referred to inconditions (f)(ix) and (xiii) above; or (xvii) agreed to enter into or entered into an agreementor arrangement or commitment or passed any resolution or announced any intentionwith respect to any of the transactions, matters or events referred to in thiscondition (f); (g) except as publicly announced by Synexus prior to the date of thisannouncement through a Regulatory Information Service or disclosed in writing toSigma Acquisitions prior to the date of this announcement, since the lastbalance sheet date of Synexus: (i) there having been no material adverse change ordeterioration in the business, assets, financial or trading position or profitsor prospects of the wider Synexus Group taken as a whole; (ii) no litigation, arbitration proceedings,prosecution or other legal proceedings to which any member of the wider SynexusGroup is or may become a party (whether as claimant or defendant or otherwise),and no material enquiry or investigation by or complaint or reference to anyThird Party, against or in respect of any member of the wider Synexus Group,having been threatened, announced or instituted or remaining outstanding by,against or in respect of any member of the wider Synexus Group; and (iii) no contingent or other liability having arisenor become apparent or increased which might be likely in either case to have amaterial adverse effect on the wider Synexus Group taken as a whole; (h) save as fairly disclosed by or on behalf of Synexus to SigmaAcquisitions or its advisers in writing prior to the date of this announcement,Sigma Acquisitions not having discovered: (i) that any financial, business or otherinformation concerning Synexus or the wider Synexus Group which is contained inthe information publicly disclosed at any time by or on behalf of any member ofthe wider Synexus Group either publicly or in the context of the Offer containsa material misrepresentation of fact which has not, prior to the date of thisannouncement, been corrected by public announcement through an RIS or omits tostate a fact necessary to make the information contained therein not materiallymisleading; (ii) any information which materially affects theimport of any such information as is mentioned in condition (h)(i); or (iii) that any member of the wider Synexus Group issubject to any liability, contingent or otherwise, which is not disclosed in theannual report and accounts of Synexus for the financial year ended 31 March 2007which is material in the context of the wider Synexus Group taken as a whole; Sigma Acquisitions reserves the right to waive all or any of conditions (c) to(h) inclusive, in whole or in part. Condition (b) must be fulfilled or waived within 21 days after the later of thefirst closing date of the Offer and the date on which condition (a) is fulfilledand conditions (c) to (h) inclusive must be satisfied as at, or waived on orbefore, midnight on the 21st day after the later of the first closing date ofthe Offer and the date on which condition (a) is fulfilled (or in each such casesuch later date as Sigma Acquisitions may, with the consent of the Panel,agree), failing which the Offer will lapse provided that Sigma Acquisitionsshall be under no obligation to waive or treat as fulfilled any of conditions(c) to (h) inclusive by a date earlier than the latest date specified above forthe fulfilment thereof notwithstanding that the other conditions of the Offermay at such earlier date have been fulfilled and that there are at such earlierdate no circumstances indicating that any of such conditions may not be capableof fulfilment. Except with the Panel's consent Sigma Acquisitions will not invoke any of theabove conditions (except for the acceptance condition in (a) and the conditionin (b) above) so as to cause the Offer not to proceed, to lapse or to bewithdrawn unless the circumstances which give rise to the right to invoke therelevant conditions are of material significance to Sigma Acquisitions in thecontext of the Offer. References to a "substantial interest" in an undertaking or other enterprise andsimilar expressions shall be taken to refer to a direct or an indirect interestof 20 per cent. or more of the voting rights exercisable in relation to theundertaking or enterprise concerned or in the equity capital or any class ofequity capital of such undertaking or enterprise. If the Offer lapses, it will cease to be capable of further acceptance and SigmaAcquisitions and holders of Synexus Shares shall thereupon cease to be bound byprior acceptances. The Offer will lapse if the proposed acquisition of Synexus by SigmaAcquisitions is referred to the Competition Commission before 1.00pm on thefirst closing date of the Offer or the date when the Offer becomes or isdeclared unconditional as to acceptances, whichever is the later. In suchcircumstances, the Offer will cease to become capable of further acceptances andaccepting Synexus Shareholders and Sigma Acquisitions shall cease to be bound byacceptances delivered on or before the date on which the Offer so lapses. Sigma Acquisitions reserves the right to make such changes to the aboveconditions as may be appropriate in the event that the conditions of the Offerare required to be amended to comply with Rule 9 of the City Code. This Offer and all contracts between Sigma Acquisitions and Synexus Shareholdersas a result of the Offer are and will be governed by English law and the CityCode and will be subject to the jurisdiction of the English courts and to theconditions and further terms set out in the Offer Document and Form ofAcceptance. APPENDIX 2 BASES AND SOURCES (a) The value attributed to the existing issued share capital ofSynexus is based upon the 23,154,172 Synexus Shares in issue on 6 November 2007(being the latest practicable date prior to the release of this announcement). (b) The 20,934,431 Shares held by Independent Shareholders iscalculated as the existing issued share capital of Synexus less the 2,219,741Synexus Shares held by the Management Team. (c) The EBITDA multiple in paragraph 5 of this announcement isbased on the Offer Price of 78 pence compared with an EBITDA per share of 3.8pence. EBITDA per share is based on the aggregate of operating profit,depreciation and amortisation divided by the weighted average number of SynexusShares; all figures being derived from the financial information of Synexus forthe year ended 31 March 2007 to be included in Appendix III of the OfferDocument. The price earnings multiple in paragraph 5 of this announcement isbased on the Offer Price of 78 pence compared with an earnings per share of 2.1pence, as derived from the financial information of Synexus for the year ended31 March 2007 to be included in Appendix III of the Offer Document. (d) Unless otherwise stated, the financial information concerningSynexus has been extracted from the audited annual report and account for theSynexus Group for the year ended 31 March 2007. (e) Synexus Share prices have been derived from the London StockExchange and represent the Closing Price on the relevant date. (f) The Offer premium of 20 per cent. to Synexus' share price onadmission to AIM on 7 November 2005 has been calculated using an admission priceof 65 pence per Synexus Share. (g) Malcolm Hughes is the only Independent Director who ownsSynexus Shares, and he has given an irrevocable undertaking to accept the Offerand to vote in favour of the Resolution in respect of the following SynexusShares owned by him: Name Number of Synexus Shares Percentage of existing issued share capitalMalcolm Hughes 15,000 0.06 Dr Ian Smith, a director of Synexus has given an irrevocable undertaking toaccept the Offer and to vote in favour of the Resolution in respect of thefollowing Synexus Shares owned by him: Name Number of Synexus Shares Percentage of existing issued share capitalDr Ian Smith 3,318,219 14.33 (h) By virtue of the arrangements with the Management Team to beset out in the Offer Document, each of Sigma Acquisitions and the members of theManagement Team subject to these arrangements are deemed to be acting in concertwith Sigma Acquisitions. Accordingly Sigma Acquisitions and its concert partieshave an interest in, or a right to subscribe for, the number of Synexus Sharesset out below. The details of each member of the concert party and theirshareholdings or interests are as follows: Name Number of Synexus Shares Percentage of existing issued share capitalMichael Fort 1,966,921 8.49Jane Lock 252,820 1.09 Name Scheme Date of Grant Number of Exercise date/ Exercise Synexus vesting date price Shares (pence)Alan Boyce EMI Scheme 19 February 2007 250,000 20 February 2010 52.5Michael Fort SAYE Scheme 12 April 2006 11,987 1 July 2009 78.0Jane Lock EMI Scheme 19 June 2006 67,001 20 June 2009 99.5Jane Lock SAYE Scheme 12 April 2006 11,987 1 July 2009 78.0Paul McCluskey EMI Scheme 22 December 2006 116,290 21 September 2009 99.5Paul McCluskey EMI Scheme 14 June 2007 159,178 14 June 2010 62.5 It should be noted that it would be uneconomic for any options granted with anexercise price at or greater than the Offer Price to be exercised. (i) In the interests of secrecy, Sigma Acquisitions has notmade enquiries in respect of certain parties who may be deemed to be acting inconcert with it for the purposes of the Offer. (j) Irrevocable undertakings to accept the Offer and vote infavour of the Resolution have been received by Sigma Acquisitions from certaininstitutional and other shareholders of Synexus as follows: Name of shareholder Number of Synexus Percentage of existing Shares issued share capitalClose Ventures Limited 2,422,259 10.46%Newton Investment Management 2,040,000 8.81%Michael Redmond 1,611,765 6.96%Noble Fund Managers Limited 461,538 1.99%Canada Life Assurance Company 456,346 1.97%Total 6,991,908 30.20% Of these undertakings, that given by; (i) Close Ventures Limited is not binding in the event thatthere is a higher competing offer for Synexus provided that such competing offerexceeds the value of the Offer by more than 5 per cent.; (ii) Newton Investment Management is not binding in the eventthat there is a higher competing offer for Synexus provided that such competingoffer exceeds the value of the Offer by more than 5 per cent. and is recommendedfor acceptance by the Board; (iii) Michael Redmond remains binding even in the event of ahigher competing offer being made for Synexus; (iv) Noble Fund Managers Limited is not binding in the event thatthere is a higher competing offer for Synexus provided that such competing offerexceeds 85 pence per ordinary share and is recommended for acceptance by theIndependent Directors; and (v) Canada Life Assurance Co. is not binding in the event thatthere is a higher competing offer for Synexus provided that such competing offerexceeds the value of the Offer by more than 5 per cent. and is recommended foracceptance by the Board. Appendix 3Definitions The following definitions apply throughout this announcement unless the contextrequires otherwise: "1985 Act" or "Companies Act 1985" the Companies Act 1985 (as amended)"2006 Act" or "Companies Act 2006" the Companies Act 2006 (as amended)"AIM" a market operated by the London Stock Exchange"AIM Rules" the AIM Rules for Companies as published by the London Stock Exchange from time to time"Articles of Association" the articles of association of Synexus"Bidder Group" or "Sigma Acquisitions Sigma Acquisitions, Sigma Midco, Sigma Topco and theirGroup" respective subsidiaries and subsidiary undertakings"Board" the existing board of directors of Synexus"Brewin Dolphin" Brewin Dolphin Investment Banking, a division of Brewin Dolphin Limited of 12 Smithfield Street, London EC1A 9BD, the independent financial adviser, nominated adviser and broker to Synexus"Business Day" any day other than a Saturday or a Sunday or public holiday when banks generally are open in London for general banking business"certificated" or "in certificated form" a share or other security which is not in uncertificated form (that is, not in CREST)"Capita Registrars" a trading name of Capita Registrars Limited"Closing Price" the middle market price of a Synexus Share at the close of business on the day to which such price relates, as derived from the AIM Appendix to the Daily Official List"Code" or "City Code" The Takeover Code"CREST member" a person who has been admitted by Euroclear as a system member (as defined in the Regulations)"CREST participant" a person who is, in relation to CREST, a system-participant (as defined in the Regulations)"CREST payment" has the meaning given to that term in the CREST manual issued by Euroclear"CREST sponsor" a CREST participant admitted to CREST as a CREST sponsor"CREST sponsored member" a CREST participant admitted to CREST as a sponsored member"CREST" the relevant system (as defined in the Regulations) in respect of which Euroclear is the operator (as defined in the Regulations)"Deloitte Corporate Finance" Deloitte Corporate Finance, a division of Deloitte & Touche LLP of Stonecutter Court, 1 Stonecutter Street, London, EC4A 4TR"Disclosed" disclosed in the Synexus Annual Report and Accounts or as otherwise publicly announced by or on behalf of Synexus (by the delivery of an announcement to a Regulatory Information Service as specified in the AIM Rules) or as otherwise fairly disclosed in writing to a member of the Bidder Group by or on behalf of Synexus or its advisers prior to the date of this announcement"Electronic Acceptance" the inputting and settling of a TTE instruction which constitutes or is deemed to constitute an acceptance of the Offer on the terms of this document"EMI Scheme" the Synexus Enterprise Management Incentives and Unapproved Share Scheme"ESA instruction" an Escrow Account Adjustment Input (AESN), transaction type "ESA" (as described in the CREST manual issued by Euroclear UK & Ireland)"Escrow Agent" Capita Registrars, (in its capacity as an escrow agent, as described in the CREST manual issued by Euroclear)"Euroclear" Euroclear UK & Ireland Limited"exempt fund manager" a person who manages investment accounts on a discretionary basis and is recognised by the Panel as an exempt fund manager for the purposes of the Code"exempt principal trader" a principal trader who is recognised by the Panel as an exempt principal trader for the purposes of the Code"Form of Acceptance" the form of acceptance and authority relating to the Offer accompanying the Offer Document, which may only be completed by holders of Synexus Shares in certificated form"Form of Proxy" the form of proxy relating to the General Meeting accompanying the Offer Document, which may be completed by Independent Shareholders"FSA" the Financial Services Authority"FSMA" the Financial Services Markets Act 2000 as amended"General Meeting" or "GM" the general meeting of Synexus convened for 12 noon on Monday 26 November 2007 at Halliwells LLP, One Threadneedle Street, London EC2R 8AY and any adjournment thereof"Independent Directors" Malcolm Hughes and Ian Miscampbell"Independent Shareholders" means the Synexus Shareholders other than the members of the Management Team and their connected parties"Investment Agreement" the investment agreement dated 6 November 2007 entered into between Sigma Topco (1), Sigma Midco (2), Sigma Acquisitions (3), Michael Fort and others (4), Lyceum Capital Fund II A L.P. and (5), Lyceum Capital Fund II B L.P. relating to Sigma Topco"LIBOR" the London Inter Bank Offered Rate"London Stock Exchange" London Stock Exchange plc"Lyceum Capital" Lyceum Capital Partners LLP of Burleigh House, 357 The Strand, London, WC2R 0HS"Lyceum II Funds" Lyceum Capital Fund II A L.P. and Lyceum Capital Fund II B L.P."Lyceum Capital Investment Committee" the investment committee of Lyceum Capital, whose members are Jeremy Hand, Daniel Adler, Andrew Aylwin, David Harland and Philip Buscombe"Management Team" the Reinvesting Management, the Rollover Management and Chris Hannigan"Management Arrangements" the management arrangements set out in paragraph 9 of this announcement relating to the Management Team"member account ID" the identification code or number attached to any member account in CREST"Michael Fort Family Settlement" The Michael Fort Family Settlement, a trust established for the benefit of Michael Fort and his family members"Offer Document" the document and any other document containing details of the Offer to be posted to Synexus Shareholders on or around the date of this announcement"Offer Period" the period commencing on 19 October 2007"Offer Price" 78 pence per Synexus Share"Offer" the recommended cash offer by Deloitte Corporate Finance on behalf of Sigma Acquisitions to acquire the entire issued and to be issued share capital of Synexus (other than Synexus Shares already contracted to be acquired by Sigma Acquisitions) on the terms and subject to the conditions set out in the Offer Document and the Form of Acceptance including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer"Panel" the Panel on Takeovers and Mergers"participant ID" the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant"pounds sterling" or "£" the lawful currency of the United Kingdom"principal trader" a person who (i) is registered as a market-maker with the London Stock Exchange, or is accepted by the Panel as a market-maker, or (ii) is a London Stock Exchange member firm dealing as principal in order book securities"Receiving Agent" Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU"Reinvesting Management" Michael Fort, the Michael Fort Family Settlement and Jane Lock"Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)"Regulatory Information Service" or "RIS has the meaning given to the expression "Regulatory Information" Service" in the AIM rules"Resolution" the ordinary resolution to be proposed to the Independent Shareholders at the General Meeting to approve the Management Arrangements pursuant to Rule 16 of the Code"Rollover Management" Paul McCluskey and Alan Boyce"SAYE Scheme" the Synexus Sharesave Scheme"Securities Act" the United States Securities Act of 1933 (as amended)"Share Exchange Agreement" the agreement dated 6 Novemeber 2007 entered into between Sigma Topco (1), Sigma Midco (2), Sigma Acquisitions (3), Paul McCluskey (4), and Alan Boyce (5), pursuant to which certain shares issued to Paul McCluskey and Alan Boyce on the exercise of their options will be exchanged for shares in the Bidder Group"Shares" or "Synexus Shares" the existing unconditionally allotted or issued and fully paid Shares of 10 pence each in Synexus and any further such shares which are unconditionally allotted or issued (including pursuant to the exercise of options granted under the Synexus Share Option Schemes or otherwise) before the date on which the Offer closes or such earlier date as Sigma Acquisitions (subject to the City Code) may determine not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances, but in each case excludes any shares held as treasury shares on such dates as Sigma Acquisitions may determine not being earlier than the date on which the Offer closes"Sigma Acquisitions" Sigma Acquisitions Limited, a company registered in England and Wales under number 6408422"Sigma Midco" Sigma Midco Limited, a company registered in England and Wales under number 6408428"Sigma Topco" Sigma Topco Limited, a company registered in England and Wales under number 6408416"Synexus" or the "Company" Synexus Clinical Research plc, a company incorporated in England and Wales with registered number 05575991"Synexus Annual Report and Accounts" the audited annual consolidated financial statements of the Synexus Group for the financial year ended 31 March 2007"Synexus Directors" Michael Fort, Dr Ian Smith, Paul McCluskey, Alan Boyce, Malcolm Hughes and Ian Miscampbell"Synexus Group" Synexus and its subsidiaries and subsidiary undertakings"Synexus Option Holders" holders of options granted under the Synexus Share Option Schemes"Synexus Share Option Schemes" the EMI Scheme and the SAYE Scheme"Synexus Shareholder(s)" holder(s) of Synexus Shares"Takeovers Directive Regulations" the Takeovers Directive (Interim Implementation) Regulations 2006 (SI 2006/1183)"TFE instruction" a transfer from escrow instruction (as described in the CREST manuel issued by Euroclear)"TTE instruction" a transfer to escrow instruction (as defined by the CREST manual issued by Euroclear) in relation to Synexus Shares in uncertificated form"UK Listing Authority" or "UKLA" the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the FSMA"uncertificated" or "in uncertificated a Synexus Share which is for the time being recorded on theform" relevant register of shareholders as being held in uncertificated form in CREST, and title to which by virtue of the Regulations, may be transferred by means of CREST"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland"United States" or "USA" the United States of America, its international territories and possessions, any state of the United States of America and the District of Columbia For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking", "associated undertaking" have the meanings given by the CompaniesAct 2006. All the times referred to in this announcement are London times. Words importing the singular shall include the plural and vice versa, and wordsimporting the masculine gender shall include the female or neutral gender. This information is provided by RNS The company news service from the London Stock Exchange