Sanderson : Recommended Cash Offer for Sanderson Group Plc

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RECOMMENDED CASH OFFER FOR SANDERSON GROUP PLC

Released 07:00 01-Aug-2019

RNS Number : 5175H Aptean Limited

01 August 2019

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

1 August 2019

RECOMMENDED CASH OFFER

for

SANDERSON GROUP PLC

by

APTEAN LIMITED

to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

• · The boards of directors of Aptean Limited (the "Aptean Bidco") and Sanderson Group Plc ("Sanderson") are pleased to announce they have reached agreement on the terms of a recommended offer pursuant to which Aptean Bidco will acquire the entire issued and to be issued ordinary share capital of Sanderson (the "Acquisition").

• · Aptean Bidco is an English incorporated company formed within the group of (and under common control with) Aptean, Inc. ("Aptean") and ultimately controlled by funds managed and advised by TA Associates and Vista Equity Partners.

• · Under the terms of the Acquisition, each Sanderson Shareholder will be entitled to receive:

  in respect of each Sanderson Share 140 pence in cash (the "Consideration")

• · The Consideration represents:

  • o a premium of 9.8 per cent. to the Closing Price of 127.5 pence per Sanderson Share on 31 July 2019 (being the last Business Day prior to the date of this Announcement);

  • o a premium of 14.8 per cent. to the average Closing Price of 121.9 pence per Sanderson Share for the three month period ending on 31 July 2019 (being the last Business Day prior to the date of this Announcement);

  • o a premium of 42.1 per cent. to the average Closing Price of 98.6 pence per Sanderson Share for the twelve-month period ending on 31 July 2019 (being the last Business Day prior to the date of this Announcement); and

  • o a value of £90.1 million for Sanderson's issued and to be issued share capital.

• · It is intended that the Acquisition will be effected by means of a Court-sanctioned scheme of arrangement of Sanderson pursuant to Part 26 of the Companies Act 2006, further details of which are contained in the full text of this Announcement and which will be set out in the Scheme Document to be dispatched to Sanderson Shareholders in due course. However, Aptean Bidco reserves the right to implement the Acquisition by way of a Takeover Offer (with the consent of the Panel).

• · The Sanderson Directors, who have been so advised by N+1 Singer as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their financial advice to the Sanderson Directors, N+1 Singer has taken into account the commercial assessments of the Sanderson Directors.

• · Accordingly, the Sanderson Directors intend to recommend unanimously that Sanderson Shareholders vote in favour of the Scheme at the Court Meeting and the Sanderson Resolutions at the Sanderson General Meeting, as the Sanderson Directors have irrevocably undertaken to do in respect of their own beneficial holdings (and have undertaken to use reasonable endeavours to procure in respect of the beneficial holdings of their close relatives) being 8,843,750 Sanderson Shares and 2,691,750 Sanderson Shares under option, in total representing approximately 17.9 per cent. of the issued and to be issued share capital of Sanderson as at the Latest Practicable Date.

• · Aptean Bidco has also received irrevocable undertakings from each of David Renshaw and Ross Telford, two senior Sanderson managers, to vote in favour of the Scheme at the Court Meeting and the Sanderson Resolutions to be proposed at the Sanderson General Meeting in respect of their own beneficial holdings (and to use reasonable endeavours to procure the same in respect of the beneficial holdings of close relatives) being 2,810,112 Sanderson Shares in aggregate, representing approximately 4.4 per cent. of the issued and to be issued share capital of Sanderson as at the Latest Practicable Date.

• · In addition, Aptean Bidco has received support for the Acquisition from Sanderson Shareholders (including Gresham House Asset Management Ltd., Downing LLP and Unicorn Asset Management Ltd.) holding 17.0 per cent. of the issued and to be issued share capital of Sanderson (as at the Latest Practicable Date). Such Shareholders have irrevocably undertaken to vote in favour of the Scheme at the Court Meeting and the Sanderson Resolutions to be proposed at the Sanderson General Meeting.

• · Aptean Bidco has therefore received irrevocable undertakings to vote in favour of the Scheme, in respect of a total of 25,268,445 of Sanderson Shares and Sanderson Shares under option representing, in aggregate, approximately 39.3 per cent. of the issued and to be issued share capital of Sanderson as at the Latest Practicable Date.

Further details of these irrevocable undertakings are set out in paragraph 17 of, and Appendix III to, this Announcement.

• · The Acquisition will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement.

• · The Scheme Document will include further details of the Scheme, together with notices of the Court Meeting and the Sanderson General Meeting and the expected timetable, and will specify the action to be taken by Sanderson Shareholders. The Scheme Document will be sent to Sanderson Shareholders as soon as reasonably practicable, and in any event (save with the consent of the Panel), within 28 days of the date of this Announcement. The Scheme is expected to become Effective in the third quarter of 2019, subject to the satisfaction or (where applicable) waiver of the Conditions.

• · The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England. The Scheme will be subject to the applicable requirements of the Code, the Panel, the rules of the London Stock Exchange and the AIM Rules.

Commenting on the Acquisition, Christopher Winn, Chairman of Sanderson, said:

"The Board of Sanderson is unanimously recommending this offer to shareholders, viewing it as an endorsement of the Board's strategy and achievement of its execution to date. Considerable shareholder value has been delivered by a progressive dividend policy over the years and this offer now enables shareholders to realise the rewards for their patience, support and investment over the past few years."

Commenting on the Acquisition, TVN Reddy, Chief Executive Officer of Aptean, said:

"The acquisition of Sanderson is a significant development for our business, it provides us with a critical entry-point into the UK market, building upon our leading position in the US market and granting an opportunity to accelerate our strategy of becoming the leading global provider of mission critical ERP and supply chain management software to the manufacturing, distribution, and other focused industries. We are excited to work with the management team and employees of Sanderson to build upon their strong position in the UK market, leveraging Aptean's complementary experience, capabilities, network and resources."

Commenting on the Acquisition, Hythem El-Nazer, Managing Director at TA Associates, said:

"When we made our investment in Aptean earlier this year, a key tenet of our investment thesis was to leverage TA Associates' global footprint to expand Aptean's reach in the UK and more broadly in Europe. We are excited about the acquisition of Sanderson and believe that the combination is compelling, providing a solid foundation upon which we can build a meaningful and exciting European footprint."

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its appendices).

The Acquisition will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement. Appendix Ill to this Announcement contains details of the irrevocable undertakings received in relation to the Acquisition. Appendix IV to this Announcement contains definitions of certain expressions used in this summary and in this Announcement.

Market Soundings

Market soundings, as defined in the Market Abuse Regulation, were taken in respect of the Transaction with the result that certain persons became aware of inside information, as permitted by the Market Abuse Regulation. That 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 inside information relating to Sanderson and its securities.

Enquiries:

Aptean Bidco / Aptean

(via Raymond James)

TVN Reddy, Chief Executive Officer

Brad Debold, Senior Vice President of Corporate Development

Raymond James (Financial Adviser to Aptean Bidco and Aptean) Dominic Emery / Zishaan Arshad

[phone]

Joe Donnelly / George Watson

Sanderson Group Plc Christopher Winn, Chairman

[phone]

N+1 Singer (Financial Adviser, Nominated Adviser and Corporate Broker to Sanderson)Mark Taylor James White Iqra Amin

[phone]

Orrick, Herrington & Sutcliffe (UK) LLP is retained as legal adviser to Aptean Bidco and Aptean.

Schofield Sweeney LLP is retained as legal adviser to Sanderson.

Important Notices about Financial Advisers

Raymond James Financial International Limited ("Raymond James"), which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively as financial adviser to Aptean and Aptean Bidco and no one else in connection with the Acquisition and the subject matter of this Document, and shall not be responsible to anyone other than Aptean or Aptean Bidco for providing the protections afforded to clients of Raymond James, or for providing advice in connection with the Acquisition and the subject matter of this Document. Neither Raymond James nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Raymond James in connection with this Document, any statement contained herein or otherwise.

Nplus1 Singer Advisory LLP ("N+1 Singer"), which is authorised and regulated by the FCA in the United Kingdom, is acting as financial adviser exclusively for Sanderson and no one else in connection with the Acquisition and the matters set out in this Document, and will not be responsible to any person other than Sanderson for providing the protections afforded to clients of N+1 Singer, nor for providing advice in relation to the Acquisition or any matter referred to herein. Neither N+1 Singer nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of N+1 Singer in connection with this Document, any statement contained herein or otherwise.

Further Information

This Announcement is provided for information purposes only. It is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, exchange, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor will there be any sale, issuance, exchange or transfer of securities of Sanderson pursuant to the Acquisition or otherwise in any jurisdiction in contravention of applicable law.

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

The Acquisition will be implemented solely pursuant to the terms of the Scheme Document (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the 'Offer Document'), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any decision in respect of the Scheme or other response in relation to the Acquisition by Sanderson Shareholders should be made only on the basis of the information contained in the Scheme Document. Sanderson Shareholders are advised to read the Scheme Document (including the related Forms of Proxy) carefully once these become available because they will contain important information in relation to the Acquisition.

Aptean Bidco reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. In such event, the Takeover Offer will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect, among other things, the change in structure by which the Acquisition is to be implemented and compliance with all applicable laws, including US securities laws.

Restricted Jurisdictions

The release, publication or distribution of this Announcement in, into or from jurisdictions other than the United Kingdom may be restricted by law and therefore any persons into whose possession this Announcement comes who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Sanderson Shares with respect to the Scheme at the Court Meeting, to execute and deliver forms of proxy appointing another to vote at the Court Meeting on their behalf may be affected by the laws of the relevant jurisdiction in which they are located. Any failure to comply with such requirements or restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and other persons involved in the Acquisition disclaim any responsibility or liability for any violation of such restrictions by any person.

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

Unless otherwise determined by Aptean Bidco or required by the Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction. No person may vote in favour of the Acquisition by any use, means, instrumentality or form, and the Acquisition will not be capable of acceptance, from or within a Restricted Jurisdiction, if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction, where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from Restricted Jurisdictions, where to do so would violate the laws in that jurisdiction. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation) the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Further details in relation to Sanderson Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom will be contained in the Scheme Document.

Additional information for US investors

The Acquisition relates to the shares of a UK company and is being made by means of a scheme of arrangement provided for under the Companies Act. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. The Acquisition and the Scheme is subject to the disclosure requirements and practices applicable to UK schemes of arrangement, which differ from the disclosure requirements of US Exchange Act tender offer and proxy solicitation rules and the US Securities Act. If, in the future, Aptean Bidco exercises the right to implement the Acquisition by way of a Takeover Offer and determines to extend the offer into the United States, the Acquisition will be made in compliance with applicable US federal laws and regulations, including any applicable exemptions under the US Exchange Act.

Financial information included in this Announcement and the Scheme Document has been or will have been prepared in accordance with accounting standards applicable in the UK that may not be comparable to the accounting standards applicable to the financial statements of US companies preparing financial statements in accordance with US GAAP.

The receipt of cash consideration by a US holder for the transfer of its Sanderson Shares pursuant to the Scheme will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other tax laws. Each such Sanderson Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him, including under applicable United States state and local, as well as foreign and other tax laws.

No registration statement will be filed with the SEC or any US state securities commission in connection with the Acquisition. Neither the SEC nor any US state securities commission has recommended, or approved or disapproved of, the Acquisition, or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the U.S. It may be difficult or impossible for a US holder of Sanderson Shares to enforce their rights and claims, if any, arising out of the US federal securities laws, since Aptean Bidco and Sanderson and some or all their officers and directors may be located in countries outside of the United States and a US holder of Sanderson Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Furthermore, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Cautionary Note Regarding Forward-Looking Statements

This Announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of Sanderson and certain plans and objectives of Aptean Bidco and Aptean with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.

Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "shall", or other words of similar meaning (or the negative thereof). These statements are based on assumptions and assessments made by Sanderson, and/or Aptean Bidco, and/or Aptean, as relevant, in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Neither Aptean Bidco nor Sanderson assumes or undertakes any obligation to update, revise or correct any of the information contained in this Announcement including without limitation any forward-looking statements (whether as a result of new information, future events or otherwise), except as required by applicable law.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in demand for Sanderson's products; industry competition; changes in trading conditions; currency fluctuations and changes in general economic, business and political conditions. All forward-looking statements attributable to Aptean Bidco or Sanderson or the Enlarged Aptean Group or any person acting on either company's behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Actual results may differ naturally from those stated, implied or inferred from the forward-looking statements in this Announcement.

No Profit Forecast, Estimate or Qualified Benefit Statements

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

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3:30 pm

(London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3:30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3:30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosure must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities, Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website atwww.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should consult the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Electronic Communications

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

Publication on Website and Availability of Hard Copies

A copy of this Announcement will be available on Sanderson's website athttps://www.sanderson.com by no later than 12.00 p.m. on the Business Day following the date of publication of this Announcement (subject to any applicable restrictions relating to persons resident in Restricted Jurisdictions) and Aptean Bidco's website athttp://www.aptean.com by no later than 12 noon (London time) on the Business Day following this Announcement. For the avoidance of doubt, neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks is incorporated into or forms part of this Announcement.

If you have received this Announcement electronically, you may request a hard copy of this Announcement, free of charge, by calling Neville Registrars on [phone]. Lines are open between 8.30 a.m. and 5.30 p.m. Monday to Friday (excluding English and Welsh public holidays). Alternatively, you can write to Neville Registrars at Neville House, Steelpark Road, Halesowen, B62 8HD stating your name, and the address to which the hard copy should be sent. You may also request that all future documents, announcements and information be sent to you in relation to the Acquisition should be in hard copy form.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser.

Rounding

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

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Takeover Code, Sanderson confirms that, as at the date of this Announcement, it has in issue and admitted to trading on AIM 60,472,484 Sanderson Shares. Sanderson does not hold any shares in treasury. The International Securities Identification Number (ISIN) of the Sanderson Shares is GB00B04X1Q77.

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

1 August 2019

RECOMMENDED CASH OFFER

for

SANDERSON GROUP PLC

by

APTEAN LIMITED to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

• 1. Introduction

  The boards of directors of Aptean Bidco and Sanderson are pleased to announce that they have reached agreement on the terms of a recommended offer pursuant to which Aptean Bidco will acquire the entire issued and to be issued ordinary share capital of Sanderson. It is intended that the Acquisition will be effected by means of a scheme of arrangement of Sanderson to be made pursuant to Part 26 of the Companies Act 2006 (the "Scheme").

  Aptean Bidco is an English incorporated company within the corporate group of (and under common control with) Aptean and ultimately controlled by funds managed and advised by TA Associates and Vista.

• 2. The Acquisition

  Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out below and in Appendix I and the full terms and conditions to be set out in the Scheme Document, each Sanderson Shareholder will be entitled to receive:

in respect of each Sanderson Share

140 pence in cash (the "Consideration")

If any dividend and/or other form of capital return or distribution is announced, declared, made or paid by Sanderson in respect of Sanderson Shares on or after the date of this Announcement and prior to the Effective Date, the Consideration payable in respect of each Sanderson Share under the Acquisition will be reduced by the amount of all or part of any such dividend and/or other form of capital return or distribution (and Sanderson Shareholders shall be entitled to receive and retain that dividend or other distributions).

The Consideration represents:

• · a premium of 9.8 per cent. to the Closing Price of 127.5 pence per Sanderson Share on 31 July 2019 (being the last Business Day prior to the date of this

  Announcement);

• · a premium of 14.8 per cent. to the average Closing Price of 121.9 pence per Sanderson Share for the three month period ending on 31 July 2019 (being the last Business Day prior to the date of this Announcement);

• · a premium of 42.1 per cent. to the average Closing Price of 98.6 pence per Sanderson Share for the twelve-month period ending on 31 July 2019 (being the last Business Day prior to the date of this Announcement); and

• · a value of £90.1 million for Sanderson's issued and to be issued share capital.

• 3. Background to and reasons for the Acquisition

  Aptean Bidco believes the Acquisition represents an attractive opportunity to invest in a well-established business with expertise in Enterprise Resource Planning ("ERP"), supply chain and multi-channel retail software. Sanderson is very well-positioned as a vertically-focused vendor to the UK's manufacturing market, as evidenced by the high customer satisfaction and retention rates seen across its customer base. Aptean Bidco believes that there is considerable strategic overlap between the respective businesses of Aptean and Sanderson and clear opportunities to further develop the combined business across the UK and Europe. However, Aptean Bidco also believes that in order to maximise its future potential, Sanderson would be better suited to a private company environment, where initiatives to improve the performance of the business can be implemented effectively, with appropriate support, capital and assistance from Aptean, free from the requirement to meet the public equity market's shorter-term reporting requirements and expectations, and the costs, constraints and distractions associated with being a listed company.

  Aptean Bidco believes that Sanderson, with investment from Aptean and access to the Aptean Group's array of services and expertise, has the right platform to take advantage of shifts in its industry which will require providers to develop fully cloud-based offerings, best-in-class product user interfaces ("UI") and digital transformation capabilities. Furthermore, with investment, the Acquisition represents an opportunity to achieve greater client penetration in the end markets that Sanderson currently serves. Further development of the cloud capabilities and UI of Sanderson's products, coupled with greater scale, will allow Sanderson to compete even more effectively with its current competitors and provide the best offering to its customers.

  Finally, the Acquisition also brings Aptean greater scale in the European market, and Aptean Bidco believes that Sanderson presents a platform from which to grow Aptean's geographic reach, with the European market being a key strategic focus of both organic and acquisitive growth for Aptean.

• 4. Financing of the Acquisition

  Aptean Bidco intends to finance the Consideration payable to Sanderson Shareholders pursuant to the terms of the Acquisition with third party debt incurred by Aptean and on-lent to Aptean Bidco through intercompany loan arrangements. Such third-party debt is to be provided under incremental term facilities to existing credit facilities and arranged by Golub Capital Markets LLC.

  Raymond James, in its capacity as lead financial adviser to Aptean Bidco, is satisfied that sufficient cash resources will be available to Aptean Bidco to enable it to satisfy in full the Consideration payable to Sanderson Shareholders under the terms of the Acquisition.

  Further information on the financing of the Acquisition will be set out in the Scheme Document.

• 5. Recommendations

  The Sanderson Directors, who are being advised by N+1 Singer as to the financial terms of the Acquisition for the purposes of Rule 3 of the Code, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Sanderson Directors, N+1 Singer has taken into account the commercial assessments of the Sanderson Directors.

  The Sanderson Directors intend to recommend unanimously that Sanderson Shareholders vote in favour of the Scheme at the Court Meeting and the Sanderson Resolutions at the Sanderson General Meeting, as they have irrevocably undertaken to do in respect of their entire beneficial holdings of Sanderson Shares (and as they have undertaken to use reasonable endeavours to procure in respect of the beneficial holdings of their close relatives), amounting in aggregate to 11,535,500 Sanderson Shares and Sanderson Shares under option, representing approximately 17.9 per cent. of the issued and to be issued ordinary share capital of Sanderson as at the Latest Practicable Date.

• 6. Background to and reasons for the recommendation

  Sanderson was admitted to trading on AIM in December 2004. Over the last decade, Sanderson has developed a robust track record of delivering consistent growth, in parallel with strengthening the balance sheet and ensuring progressive dividend returns to shareholders. The Board of Sanderson believes that the current equity valuation of Sanderson reflects the Group's track record over the last decade and notes that the offer represents a 14-fold increase, excluding dividend returns, from the share price low of 10 pence per share in 2009.

  The Board of Sanderson recognises the scale, global reach and financial resources which Aptean will provide as a partner to the businesses within the Sanderson Group. The Sanderson Board believes that the Acquisition will provide Sanderson with enhanced operational and financial flexibility enabling it to offer a more attractive proposition to its existing customers and to enable an increase in its scale and international presence.

  The Sanderson Board notes that Aptean considers that there is an opportunity to accelerate UK growth and to develop a strategy for growth in European accounts, with opportunities to further invest in expanding local sales teams and to leverage existing Sanderson infrastructure to drive pan-European growth. The Board of Sanderson also notes the comments that Aptean Bidco attaches importance to the skills and experience of the Sanderson employees and management team. Aptean has also stated that the Acquisition will offer greater opportunities for Sanderson staff as part of the larger Aptean group, particularly in terms of activities that pertain to developing and expanding UK and European market positions.

  The Sanderson Board has considered the opportunity which the Acquisition provides for Sanderson Shareholders to realise the value of their holdings in cash at an attractive premium, especially in the context of a relative lack of liquidity in Sanderson Shares in the current market environment.

  Following careful consideration of the above factors and the bid premia outlined in paragraph 2 of this Announcement, the Sanderson Board believes that the offer price of 140 pence per Sanderson Share in cash provides attractive value and certainty for Sanderson Shareholders.

• 7. Information on Aptean Bidco and Aptean

  Information on Aptean Bidco

  Aptean Bidco was incorporated on 7 July 1997 in England and is a sister subsidiary of (and under common control with) Aptean, the main operating company of the Aptean Group.

  Information on Aptean

  Aptean is a global provider of mission-critical, industry-specific software solutions. Aptean's purpose-built ERP and supply chain management solutions help address the unique challenges facing process and discrete manufacturers, distributors and other similarly focused organisations. Aptean's compliance solutions are built for companies