Key Highlights:
Envirosuite Limited (ASX: EVS) (“Envirosuite” or the “Company”) has entered into a Scheme Implementation Deed (“SID”) with Ideagen Limited (“Ideagen”), to acquire 100% of the fully diluted share capital in Envirosuite by way of a Scheme of Arrangement (“Scheme”).
Headquartered in the UK, Ideagen is a global software company specialising in providing innovative solutions to enhance governance, health and safety, risk management and compliance practices for organisations across various industries.
Under the terms of the Scheme, Envirosuite shareholders will be entitled to receive cash consideration of A$0.090(1) per share, which implies a fully diluted equity valuation of A$132.2 million and represents a premium of 109.3% to the last closing price of A$0.043 per share on 24 February 2025, being the last trading day before the announcement of Ideagen’s non-binding, conditional and indicative proposal.
The Scheme represents the culmination of an extensive and meaningful period of engagement between Envirosuite and Ideagen, as well as discussions with other parties who expressed an interest in Envirosuite.
The Envirosuite Board unanimously recommend that Envirosuite shareholders vote in favour of the Scheme, in the absence of a Superior Proposal (as defined in the SID), and subject to the Independent Expert concluding and continuing to conclude that the Scheme is in the best interests of Envirosuite shareholders.
Envirosuite confirms that significant shareholder Perennial Value Management who holds or controls approximately 15% of Envirosuite’s ordinary shares has indicated it intends to vote all the shares held or controlled by it at the time of the Scheme meeting in favour of the Scheme, subject to no Superior Proposal emerging and the Independent Expert concluding and continuing to conclude that the Scheme is in the best interests of shareholders.
Envirosuite further notes that, under the terms of the previously disclosed Subscription Agreement between Envirosuite and significant shareholder Hitachi Construction Machinery (“HCM”), HCM who holds approximately 11% of Envirosuite’s ordinary shares, must vote its shares in favour of the Scheme, subject to a favourable Independent Expert’s report and a majority of directors recommending the Scheme, subject to limited exceptions.(2)
Implementation of the Scheme is subject to Foreign Investment Review Board (“FIRB”) approval and other customary conditions, including Envirosuite shareholder and Court approvals, and there being no Material Adverse Change as defined in the Scheme Implementation Deed.
Envirosuite shareholders do not need to take any action at the present time.
Transaction Overview
Envirosuite is pleased to announce that it has entered into a binding SID with Ideagen, which provides for the acquisition of 100% of the shares in Envirosuite for A$0.090 cash per share pursuant to a Scheme under Part 5.1 of the Corporations Act 2001 (Cth). The Scheme Consideration implies a fully diluted equity valuation of approximately A$132.2 million(3) for Envirosuite and represents:
a premium of 109.3% to the last closing price of A$0.043 per share on 24 February 2025, being the last trading day before the announcement of Ideagen’s non-binding, conditional and indicative proposal;
a premium of 101.9% to the 5-day Volume Weighted Average Price (“VWAP”)(4);
a premium of 82.2% to the 3-month VWAP(5); and
a premium of 52.9% to the 6-month VWAP(6)
The Envirosuite Board unanimously recommends the Scheme
The Envirosuite Board unanimously recommends that shareholders vote in favour of the Scheme, in the absence of a Superior Proposal (as defined in the SID) and subject to the Independent Expert concluding in its report (and continuing to conclude) that the Scheme is in the best interests of Envirosuite shareholders. Subject to the same qualifications, each Envirosuite Board member intends to vote, or will cause to be voted, any shares held or controlled by them or held on their behalf at the time of the Scheme meeting in favour of the Scheme. The Envirosuite Board believes that the Scheme is an attractive offer for Envirosuite shareholders for the following reasons:
Attractive premium: the Scheme represents a premium of 109.3% to the undisturbed Envirosuite share price(7);
Certainty of value: the consideration is payable in cash, with the Scheme not being conditional on funding approvals; and
Limited conditionality: the Scheme is subject to FIRB approval and other conditions customary for transactions of this nature and is not conditional on financing or diligence.
Non-Executive Chair of Envirosuite, Mr. Colby Manwaring, said:
“The Envirosuite Board has carefully considered the proposed Scheme and evaluated a range of factors and potential alternatives in arriving at its unanimous recommendation to vote in favour of the Scheme, subject to the customary qualifications.
While the Envirosuite Board is highly confident in the long-term fundamentals and growth prospects of the Company, we believe the Scheme offers a compelling opportunity for shareholders to realise the immediate value of their investment in Envirosuite, for 100% cash at an attractive premium to where Envirosuite has recently traded.”
Shareholder support
Major shareholder Perennial Value Management which as at the date of this announcement, holds or controls in aggregate approximately 15% of the Company’s ordinary shares on an undiluted basis, has separately confirmed to Envirosuite that it intends to vote, or will cause to be voted, all Envirosuite shares held or controlled by it at the time of the Scheme meeting in favour of the Scheme in the absence of a Superior Proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of Envirosuite shareholders.
Under the terms of the previously disclosed Subscription Agreement between Envirosuite and HCM, HCM (which as at the date of this announcement, holds approximately 11% of the Company’s ordinary shares) must vote its shares in favour of the Scheme, subject to a favourable Independent Expert’s report and a majority of directors recommending the Scheme, subject to limited exceptions.(8)
Call Options from Significant Shareholders
As disclosed in Ideagen's notice of initial substantial holder (released to the ASX on 4 March 2025) and Ideagen's notice of change of interests of substantial holder (released to the ASX on 5 March 2025), entities associated with significant Envirosuite shareholders have each separately agreed to grant Ideagen call options to acquire in aggregate a total of 18% of the issued Envirosuite shares on the terms of the relevant Call Option Deed annexed to the notice of initial substantial holder and the notice of change of interests of substantial holder (as applicable).
Under these Call Option Deeds, Ideagen will be entitled to exercise each call option at an exercise price of A$0.10 per Envirosuite share if there is a public announcement of either a Competing Proposal or an intention to undertake or propose a Competing Proposal (as defined in the relevant Call Option Deed annexed to the notice of initial substantial holder and notice of change of interests of substantial (as applicable)by either the Company, or one or more third parties. The exercise of certain call options is conditional on FIRB approval.
Envirosuite’s Chief Executive Officer, Mr. Jason Cooper, said:
“Envirosuite has been at the forefront of defining the environmental intelligence market category, building a business and brand now recognised as one of the global leaders in environmental intelligence technology that empowers industry, people and planet to prosper in partnership.
The proposed transaction represents strong validation of the unique value Envirosuite has built and aligns with Ideagen’s vision to support sustainable and disciplined business practices. As we move into this next phase, Envirosuite remains focused on delivering value to our customers, maintaining the integrity of our solutions and continuing to lead in environmental intelligence.”
Ideagen’s Chief Executive Officer, Mr. Ben Dorks, said:
“Ideagen’s purpose is to deliver world-class solutions that address the most pressing, complex challenges in health, safety, risk, and quality for high-compliance industries. The addition of Envirosuite’s cutting-edge environmental management capabilities provides a significant opportunity to strengthen our existing EHS portfolio, enabling us to provide targeted solutions for environmental compliance and risk management.
“This strengthens our support for critical industries, particularly aviation, mining and industrial, empowering our customers to mitigate environmental impacts with greater accuracy and confidence on a global scale.”
Key terms of the Scheme Implementation Deed
The implementation of the Scheme is subject to conditions customary for a transaction of this nature, including:
FIRB approval;
Envirosuite shareholder approval;
Court approval;
the Independent Expert concluding, and continuing to conclude, that the Scheme is in the best interests of Envirosuite shareholders;
no material adverse change to Envirosuite; and
no prescribed events occurring
It is also a condition to implementation of the Scheme that existing Envirosuite convertible securities and other incentive arrangements are dealt with in accordance with the SID.
Ideagen has advised Envirosuite that it intends to fund the consideration for the Scheme through a combination of existing committed debt facilities and funds available to Ideagen. The Scheme is not conditional on Ideagen obtaining external financing to fund the acquisition.
The SID contains customary exclusivity provisions including “no shop”, “no talk” and “no due diligence” obligations (subject to the Envirosuite directors’ fiduciary and statutory obligations), “notification” obligations and “matching” rights.
The SID also includes certain circumstances in which a break fee of A$1,322,000 will be payable by Envirosuite to Ideagen, and a reverse break fee of A$1,322,000 will be payable by Ideagen to Envirosuite.
In connection with the Scheme, Envirosuite has reached agreement with Partners for Growth VII, L.P and Partners for Growth VI, L.P (collectively “PFG”) in relation to the repayment of its debt facility and the termination of warrants held by PFG for an aggregate amount equal to approximately $16.5m (including all costs and fees associated with the repayment of the facility and termination of the warrants)(9). The repayment obligation is conditional on implementation of the Scheme, and assumes a repayment date of 6 August 2025 (beyond which time an additional daily charge will apply to the repayment amount).
Full details of the terms and conditions of the Scheme are set out in the SID, a copy of which is attached to this announcement.
Indicative timetable and next steps
Envirosuite shareholders do not need to take any action in relation to the Scheme at the present time.
A Scheme Booklet containing information relating to the Scheme, including the reasons for the Envirosuite Board’s recommendation, an Independent Experts’ report opining on whether the Scheme is in the best interests of Envirosuite shareholders and details of the Scheme meeting is expected to be sent to shareholders in late June or early July 2025. Envirosuite shareholders will be given the opportunity to vote on the Scheme at a court convened Scheme meeting, which is anticipated to be held in late July or early August 2025, and if approved and all conditions are satisfied or waived, the Scheme is expected to be implemented shortly thereafter.
These dates are all indicative and subject to change.
Envirosuite will continue to keep its shareholders and the market information of developments in accordance with its continuous disclosure requirements.
Advisers
Envirosuite has engaged MA Moelis Australia as its financial adviser and King & Wood Mallesons as legal adviser.
Ideagen has engaged Morgan Stanley Australia Limited as its financial adviser and MinterEllison as legal adviser.
Footnotes:
Based on 1,468,769,870 shares on a fully diluted basis, comprised of 1,448,703,688 ordinary shares and 20,066,182 performance rights. It is expected that all outstanding options will be cancelled, terminated and/or otherwise lapsed for nil consideration.
See clause 11.2(b) of the Subscription Agreement annexed to Form 603 lodged on 5 September 2024.
Based on 1,468,769,870 shares on a fully diluted basis, comprised of 1,448,703,688 ordinary shares and 20,066,182 performance rights. It is expected that all outstanding options will be cancelled, terminated and/or otherwise lapsed for nil consideration.
VWAP based on cumulative trading volume from 18 February 2025 up to and including 24 February 2025.
VWAP based on cumulative trading volume from 25 November 2024 up to and including 24 February 2025.
VWAP based on cumulative trading volume from 26 August 2024 up to and including 24 February 2025.
The last undisturbed trading day being 24 February 2025.
See clause 11.2(b) of the Subscription Agreement annexed to Form 603 lodged on 5 September 2024.
The amount of $16.5 million includes a proposed extension to the loan facility, however this remains subject to binding documents being executed with PFG.