Eden Research plc Sipcam agreements, investment and proposed placing (6692J)

TIDMEDEN

RNS Number : 6692J

Eden Research plc

30 June 2017

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

Eden Research Plc

("Eden" or "Company")

Sipcam commercial agreements, proposed Sipcam investment and proposed institutional placing

Eden Research plc (AIM: EDEN), the AIM-listed company that provides breakthrough biocontrol products and natural microencapsulation technologies to the global agrochemicals, animal health and consumer products industries, announces that it has signed multiple new commercial and development agreements with its partner, Sipcam SpA ("Sipcam"), representing a significant expansion of the Company's existing relationship with them.

In addition to expanding the commercialisation "footprint" for 3AEY to include Australia, the companies are formalising their relationship as collaborators, and Eden is granting Sipcam the right to exclusively distribute Eden products in a range of new countries, including some of the largest markets for agrochemicals in the world. As part of Sipcam's overall commitment to the relationship with Eden (in addition to the Subscription (defined below)), in connection with the signed agreements, financial terms have been agreed which include an upfront cash payment to Eden of EUR0.6m and potential further future fees which are dependent upon which rights, if any, Sipcam decides to take.

The Company also announces that it proposing to raise in aggregate c.GBP2.4m (before expenses) through a subscription of up to 20,494,330 new ordinary shares of 1 pence each in the Company ("Ordinary Shares") (the "Subscription Shares") and an institutional placing of up to 1,915,888 new Ordinary Shares (the "Placing Shares") (the "Placing") both at a price of 10.7 pence per new Ordinary Share. Sipcam is proposing to make a strategic investment of c.GBP2.2m in the Company and to enter into a subscription agreement to subscribe for the Subscription Shares (the "Subscription").

Commercial and Development Agreements with Sipcam

The agreements with Sipcam are summarised as follows:

   --      Collaboration and Evaluation & Option Agreements 

- Provides Sipcam with the first right to negotiate for the distribution rights for new plant protection products that Eden develops in countries where Sipcam has an affiliate, subject to certain ongoing commitments and evaluations.

   -      Grants Eden access to Sipcam-owned technologies and R & D facilities. 

- Grants Sipcam the right to evaluate a number of Sipcam-Oxon Group's active substances encapsulated using Eden's Sustaineä microencapsulation technology. This includes combinations with Eden's own active ingredients.

- Provides a framework agreement for subsequent licence and/or supply agreements under the collaboration.

   --      Distribution Agreements 

- Eden has agreed to appoint Sipcam as Eden's exclusive distributor in Italy, Spain and Australia for 3AEY.

- 3AEY is Eden's first product that targets botrytis on grapes and a range of additional high value fruits and vegetables. It is sold as 3logyâ in Italy and Arawâ in Spain.

- The existing licence agreements with Sipcam (covering Italy and Spain) will be terminated and replaced with the new distribution agreements reflecting the evolution of Eden's business model (from licensing to product sales) and providing Eden with the potential for both additional [future] revenue and improved profits.

Proposed Subscription and Placing

The Company is proposing to raise c.GBP2.4m (before expenses) through the Subscription and the Placing. The net proceeds of the Subscription and Placing would be used to:

   --      Register existing and new products and increase the global reach of existing Eden products 
   --      Commence new R&D trials in both plant protection products and personal care applications 
   --      Pursue commercialisation of animal health products outside of the United States 
   --      Expand business and brand development activities 

Sipcam is proposing to enter into a subscription agreement to subscribe for the Subscription Shares. Under the terms of their proposed subscription, Sipcam would enter into a lock-in agreement which would prevent Sipcam from selling its Subscription Shares for a period of three years. Sipcam would be granted the right to appoint a director to the board of the Company for as long as it retains a minimum interest of seven and a half (7.5) per cent. of the issued share capital of the Company.

The price for the Subscription Shares and the Placing Shares of 10.7 pence reflects the average share price over 60 business days up to 21 June 2017.

Assuming the full amount were issued, the Subscription Shares and the Placing Shares would represent in aggregate approximately 12.1% of the Company's current issued share capital.

Sean Smith, Chief Executive of Eden, said: "We are pleased to increase the breadth and depth of the commercial and collaborative development arrangements that we have with Sipcam. They have proven to be an excellent partner, and will be able to help us commercialise our products and technologies in certain key parts of the world at a much faster pace.

"The move from a licensing relationship to a distribution model in Italy and Spain is in line with management's announced strategy and will allow Eden to generate greater returns for the Company and its shareholders which will, in turn, enable us to build the business at an increased pace. In the short term, we will also be expanding this relationship to include Australia, the world's fifth largest producer of wine. Subject to further commercial and technical evaluations, Sipcam shall also have the right to commercialise 3AEY in additional key countries, subject to existing agreements and evaluations that are already underway.

"Sipcam is a well-established sales, marketing and distribution partner, as well as a formulator, to many of the leaders in the agrochemical industry and, as such, we are confident that they will continue to be excellent partners in this expanded relationship.

"The significant resource and knowledge that Sipcam has at its disposal, as well as the substantial investment they are making in the commercialisation of Eden's products and technology, will also serve us well in developing and, ultimately, distributing Eden's products and technologies in countries in which Sipcam has a presence and will also allow Eden to leverage those capabilities in countries where they do not."

Giovanni Affaba, Chief Executive Officer of Sipcam-Oxon Group, said: "We have had significant experience with Eden's products in Italy and Spain beginning in 2016 and resulting in the first product commercialisation in 2016. We recognized immediately the efficacy of the products on key targets and also the innovative technology Eden has developed. The potential of a joint effort focussed on developing new solutions and exploiting new markets became evident when Sipcam-Oxon and Eden put together their know-how and capabilities. The broad collaboration we have agreed upon is a cornerstone for developing and commercialising new and innovative products in the market in the next years."

 
Eden Research plc                                 www.edenresearch.com 
Sean Smith, Chief Executive                         Tel: [phone] 
 Officer 
Alex Abrey, Chief Financial 
 Officer 
 
Shore Capital                                         www.shorecap.com 
Stephane Auton/Patrick                              Tel: [phone] 
 Castle 
 
Walbrook PR Ltd              Tel: [phone] or [e-mail] 
Lianne Cawthorne                                    Mob: [phone] 
 

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

Notes:

Eden Research is a technology development and commercialisation company with intellectual property and expertise in encapsulation, terpenes and environmentally friendly technologies to provide naturally occurring solutions for the global agrochemicals, animal health, and consumer product industries.

Eden's encapsulation technology harnesses the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can also be used with both natural and synthetic compounds to enhance their performance and ease-of-use. The technology uses yeast cells that are a by-product of numerous commercial production processes to deliver a slow release of natural compounds for agricultural and non-agricultural uses. Terpenes are already widely used in the food flavouring, cosmetics and pharmaceutical industries.

Historically, terpenes have had limited commercial use in the agrochemical sector due to their volatility, phytotoxicity and poor solubility. Eden's platform encapsulation technology provides a unique, environmentally friendly solution to these problems and enables terpenes to be used as effective, low-risk agrochemicals.

The Company is developing these technologies through innovative research and a series of commercial production, marketing and distribution partnerships.

The Company has a number of patents and a pipeline of products at differing stages of development targeting specific areas of the global agrochemicals industry. To date, the Company has invested in the region of GBP12m in developing and protecting its intellectual property and seeking regulatory approval for products that rely upon the Company's technologies. Revenues earned by the Company have been modest whilst the Company has concentrated on securing patent protection for its intellectual property, gaining regulatory approvals, identifying suitable industrial partners, and entering into commercial agreements.

In May 2013, the three actives that comprise Eden's first commercial product, 3AEY, were approved as new ingredients for use in plant protection products. This represents a major milestone in the commercialisation of Eden's technology and is a significant accomplishment for any company. To illustrate this point, one should note that in all of 2013, Eden's approvals represented 3 of only 10 new active ingredients approved by the EC.

3AEY has been authorised for sale in Kenya, Malta, Greece, Bulgaria, Spain, Italy and France.

Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN.

For more information about Eden, please visit: www.edenresearch.com

Sipcam was founded in 1946 in Milan, by Dr. Emilio Gagliardini and Prof. Baldo Ciocca, as a company specialized in manufacturing and marketing mainly agrochemicals in Italy, expanding then its presence in key agricultural markets, leveraging on products sourced by its sister company Oxon and thanks to collaboration with Japanese R&D Companies lasting since 1970.

The SIPCAM OXON group is made up of two separate legal entities (Sipcam and Oxon), which refer to one property and to one management, working independently but acting in synergy sharing mission and vision.

Sipcam Oxon is committed to maintain its independence by integration of entrepreneurship and management skills.

The industrial presence consists of one chemical synthesis plant in Italy, three formulation plants in Italy, Spain and Brazil, one seed processing and treatment plant in Italy and two synthesis and formulation plants operated by Chinese Joint Ventures.

For more information about Sipcam, please visit http://www.sipcam-oxon.com/public/

IMPORTANT NOTICE

This announcement and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, Australia, Japan, the Republic of South Africa or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction (the "Restricted Jurisdictions"). This announcement does not constitute or form part of any offer to sell, or any solicitation of an offer to buy, securities in the United States. The Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States absent registration except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. No public offering of the Placing Shares is being made in the United States. The Placing Shares are being offered and sold outside the United States in offshore transactions, as defined in, and in compliance with, Regulation S under the Securities Act. Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing. This announcement does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation is or may be unlawful. This announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

No action has been taken by the Company, Shore Capital and Corporate Limited, Shore Capital Stockbrokers Limited (together with Shore Capital and Corporate Limited, "Shore Capital") or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the Placing Shares or possession or distribution of this announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this announcement are required to inform themselves about and to observe any such restrictions.

This announcement is directed at and is only being distributed to: (A) persons in member states of the European Economic Area who are "qualified investors", as defined in article 2.1(e) of the Prospective Directive (Directive 2003/71/EC) as amended, (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the "FPO") or fall within the definition of "high net worth companies, unincorporated associations etc" in article 49(2)(a) to (d) of the FPO and (ii) are "qualified investors" as defined in section 86 of FSMA or (C) persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act or rely on this announcement and persons distributing this announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this announcement, you represent and agree that you are a Relevant Person.

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement or the Placing relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing set out in this announcement are for information purposes only.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange, the AIM Rules or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Any indication in this announcement of the price at which the Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Shore Capital which is authorised and regulated in the United Kingdom by the FCA, are acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Shore Capital or or for affording advice in relation to the Placing, or any other matters referred to in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by either Shore Capital or by any of their respective affiliates or either Shore Capital or their respective affiliates' agents, directors, officers and employees as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed. Nothing in this Important notice shall be effective to limit or exclude any liability for fraud or which, by law or regulation, cannot otherwise be so limited or excluded.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM.

Members of the public are not eligible to take part in the Placing and no public offering of securities is or will be made.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

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June 30, 2017 02:01 ET (06:01 GMT)