Source - RNS
RNS Number : 7713I
Lifeline Scientific, Inc
02 September 2016

2 September 2016 






Lifeline Scientific, Inc.

("LSI" or the "Company")


Recommended Cash Acquisition


Lifeline Scientific, Inc. (AIM: LSIC), a leading international provider of clinical products and services in the field of transplantation, announces it has entered into a definitive merger agreement (the "Merger Agreement") with Shanghai Genext Medical Technology Co., Ltd ("SGM"), and certain of its affiliates. SGM is a medical products company serving the field of transplantation in the Asia region. Pursuant to the Merger Agreement, SGM's affiliate would acquire all of the issued and to be issued shares of common stock of LSI for an aggregate consideration of up to approximately US$87.8 million in cash (the "Acquisition"). The LSI Board of Directors (the "Board"), unanimously approved the Merger Agreement and will recommend that the Company's shareholders vote in favour of the Merger Agreement and Acquisition.  As described in greater detail below, this transaction will require approval of LSI's shareholders at a special shareholder meeting.


Key terms of the Acquisition


LSI is incorporated in the State of Delaware in the USA. The Acquisition is proposed as a merger in accordance with the Delaware General Corporation Law ("DGCL"), as amended.  The Acquisition is not subject to the UK City Code on Takeovers and Mergers.


Under the terms of the Merger Agreement, LSI shareholders would receive the British Pound Sterling equivalent of US$4.083 in cash for each share that they hold at the closing of the Acquisition (the "Closing"). The exact amount per share to be paid in British Pounds Sterling will be determined at the Closing, based on the US Dollar to British Pound Sterling exchange rate reported by the Financial Times at such time. Solely as an example, if such exchange rate is then the same as the exchange rate reported by the Financial Times on 1 September 2016 of 1.310 US Dollars to 1  British Pound Sterling, this would equate to an offer price of approximately 312 pence per share. That would represent a premium of approximately:


·     0.7 per cent. to the mid-market closing price of 309.5 pence per LSI share on 1 September 2016, being the last dealing day prior to the date of this announcement; and

·     51.3 per cent. to the mid-market closing price of 206 pence per LSI share on 18 September 2015, being the last dealing day prior to the date that LSI's Board first announced the Company would launch a comprehensive review of strategic and financial alternatives to enhance shareholder value.


As at the date of this announcement, LSI has 19,530,031 Shares in issue and admitted to trading on AIM and at the Closing there are expected to be up to 1,975,140 in-the-money options over LSI shares. Holders of in-the-money options over LSI shares will receive the British Pound Sterling equivalent of US$4.083 in cash for each option that they hold at the Closing less the exercise price of any such option.


Shanghai Genext Medical Technology Company Ltd

Founded in 2004, SGM is a growing medical technology company specialising in serving the field of transplant medicine in the Asia region. With headquarters in Shanghai, SGM offers a convenient one-stop shopping resource for transplant therapeutics, diagnostics and medical devices designed to help clinicians improve outcomes for end-stage organ disease patients in need of a life saving transplant. SGM has arranged its financing for the Acquisition from a consortium led by the life insurance arm of Sunshine Insurance Group (SIG). SIG is one of the largest and fastest growing diversified insurance and financial services groups in China with total assets reported of over RMB 350 billion (US$55 billion).


Further Details

The Acquisition is subject to certain closing conditions specified in the Merger Agreement, including regulatory and other approvals for SGM and the approval of LSI's shareholders for both the Acquisition and the cancellation of the admission to trading on AIM of the LSI shares (to the extent such approval of cancellation is required). Further details of the Acquisition including the notice of publication of the Offer Document are contained below.


If approved, the transaction is presently expected to close in the fourth calendar quarter of 2016 and by no later than 9 December 2016 (subject to extension under certain circumstances). After the Acquisition, LSI will become a subsidiary of SGM which is controlled and indirectly majority owned by SGM and in which members of the consortium led by SIG also have indirect ownership interests. LSI will continue to operate in its present form under the direction of its current management, providing its market leading products and services to the worldwide transplant community. LSI founder and chief executive officer, David Kravitz will continue as Chief Executive Officer of the Company and serve on its board of directors.


At least twenty business days prior to completion of the Acquisition, LSI intends to make an application to the London Stock Exchange plc for the cancellation of the admission to trading of the LSI shares on AIM, to take effect on the first business day after Closing. In accordance with the AIM Rules for Companies, such cancellation is expected to require the consent of not less than 75% of votes cast by the Company's shareholders given at our shareholder meeting. Subject to receipt of the requisite consent, the last day of dealings in, and registration of transfers of, the LSI shares on AIM is expected to be the business day immediately prior to the date of Closing.  Such approval would be in addition to the LSI shareholder approval of the Merger Agreement, which would require approval by the holders of a majority of the LSI shares outstanding on the record date for such vote.


Four of LSI's significant shareholders have executed and delivered irrevocable agreements with SGM pursuant to which such holders agree to vote in favour of the merger and the related matters at our shareholder meeting.  The material terms of such agreements, including certain other ancillary covenants of such holders, will be described in the proxy materials provided to our shareholders entitled to vote on the merger. Such four shareholders together beneficially own 7,990,647 Shares, representing approximately 40.9% of LSI's common stock -- and, as such, their commitments may have a material effect on the likelihood of LSI obtaining shareholder approval for the merger. The execution and delivery of such support agreements by such holders was a requirement imposed by SGM as a condition to entering into the Merger Agreement.


Commenting on the Acquisition, David Kravitz, Chief Executive Officer of LSI, said:

"Subject to shareholder approval, the agreement with SGM represents an all cash offer and provides full liquidity for all LSI shareholders at Closing. Following the merger, we believe the combined group will be one of the largest and fastest growing global medical technology companies dedicated to serving the clinical transplant sector. The merger also represents an excellent opportunity for both SGM and LSI to broaden their respective products and services portfolios to better address the needs of their respective transplant programme clients. Since announcing its Strategic Review in September of 2015, the LSI board had been actively reviewing a number of options to enhance shareholder value, including possible strategic mergers, strategic acquisitions, a potential sale of the Company, and a potential listing of the Company's shares on the NASDAQ market. The Acquisition of LSI by SGM represents the culmination of the Company's strategic review process."


Piper Jaffray & Co. and its affiliate, Piper Jaffray Ltd. (together, "Piper Jaffray") served as exclusive financial advisor to LSI and provided a fairness opinion to the Company's Board of Directors. Perkins Coie LLP and Latham Watkins (London) LLP served as counsel to LSI.


CITIC Securities Co., Ltd served as exclusive financial advisor to SGM.  BFC Group Ltd served as the financing advisor to SGM.  Polsinelli PC and King & Wood Mallesons served as counsel to SGM


For further information:


Lifeline Scientific, Inc.

David Kravitz, CEO

Tel: +1 847 824 2300

Lisa Kieres, CFO

Tel: +1 847 824 2300

Piper Jaffray Ltd. (Financial Adviser to LSI)

Tel: +44 (0)20 7796 8400

Neil Mackison / Graeme Smethurst

Panmure Gordon (UK) Limited (NOMAD and Broker to LSI)

Tel: +44 (0)20 7886 2500

Freddy Crossley / Duncan Montieth (Corporate Finance)


Tom Salvesen  (Corporate Broking)




Walbrook PR Limited (PR Adviser to LSI)

Tel: +44 (0)20 7933 8780 or [email protected]

Paul McManus

Mob: +44 (0)7980 541 893

Lianne Cawthorne

Mob: +44 (0)7584 391 303



CITIC Securities Co., Ltd (Financial Adviser to SGM)

Tel: +86 (0)10 6083 6888

Michael Buckley / Madjid Messad




About Lifeline Scientific Inc.


Headquartered in Chicago, Illinois, LSI is a global medical technology company with regional offices in Brussels and Sao Paulo. The Company's focus is the development of innovative products and services that improve transplant outcomes and lower the overall costs of transplantation. Its lead product, LifePort Kidney Transporter, is the global market-leading medical device for hypothermic machine preservation of donor kidneys. LifePorts and novel solutions designed for preservation of other organs are in development, with LifePort Liver Transporter next in line for commercial launch. For more information please visit


LSI Current Trading


LSI has today also announced separately a trading update for the half year ended 30 June 2016. In summary, for the six months ended 30 June 2016, Lifeline expects to report revenues of US$18.2 million (H1 2015: US$15.0 million), gross profit of US$11.4 million (H1 2015: US$8.9 million), and operating profit of US$2.0 million (H1 2015: US$0.1 million). The Company's cash balance at 30 June 2016 was US$7.5 million (31 December 2015: US$6.9 million). The Company's half-yearly results for the six months ended 30 June 2016 are expected to be published on 26 September 2016 and will be included in the Offer Document (as defined below).


Offer Document (or Proxy Statement)


LSI plans to send to its shareholders an Offer Document, known as a Proxy Statement, in connection with its proposed merger with an affiliate of SGM, pursuant to which LSI would be acquired by such affiliate of SGM. The Proxy Statement will contain important information about the proposed merger and related matters. SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE AND PROMPTLY RESPOND AS PROVIDED IN SUCH DOCUMENT. Such Proxy Statement will be mailed to all record holders of LSI shares as of the record date, and we expect that additional copies will be made available to nominee holders to share with their underlying beneficial holders. Shareholders will also be able to obtain free copies of the Proxy Statement (when it is available) and other documents notified by LSI in accordance with the AIM Rules for Companies through the web site maintained by LSI at In addition, shareholders will be able to obtain free copies of the Proxy Statement from LSI by contacting investor relations by telephone at +44 20 7933 8780, by email at [email protected], Attn: Investor Relations, or by going to LSI's Investor Relations page on its corporate website at


LSI and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of LSI in connection with the proposed merger. Information regarding the interests of these directors and executive officers in the transaction described herein will be included in the proxy statement described above.


Additional Information

This announcement is for information only and does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction, including without limitation, the United Kingdom, the United States, Australia, Canada or Japan. Persons needing advice should consult an independent financial adviser.


The distribution of this announcement in certain jurisdictions may be restricted by law. Persons into whose possession this announcement comes are required by LSI and Piper Jaffray to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.


Piper Jaffray Ltd., which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"), is acting exclusively for LSI and no one else in connection with the Acquisition and will not be responsible to anyone other than LSI for providing protections afforded to clients of LSI.   


CITIC Securities Co., Ltd, which is authorised and regulated in the People's Republic of China by the China Securities Regulatory Commission ("CSRC"), and its affiliates, are acting exclusively for SGM and no one else in connection with the Acquisition and will not be responsible to anyone other than SGM for providing protections afforded to clients of SGM.


Forward-Looking Statements


This announcement contains (or may contain) certain forward-looking statements with respect to LSI plans and its current goals and expectations relating to future events and its future financial condition and performance and which involve a number of risks and uncertainties. LSI caution readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.


Forward-looking statements sometimes use words such as 'aim', 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', or other words of similar meaning. Examples of forward looking statements include, among others, statements regarding LSI's future financial position, income growth, impairment charges, business strategy, projected levels of growth in its markets, projected costs, estimates of capital expenditure, and plans and objectives for future operations of LSI and other statements that are not historical fact.


By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, UK and US domestic and global economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under US Generally Accepted Accounting Principles ("US GAAP") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under US GAAP, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of which factors are beyond LSI's control. As a result, LSI's actual future results may differ materially from the plans, goals, and expectations set forth in LSI's forward-looking statements. Any forward-looking statements made herein by or on behalf of LSI speak only as of the date they are made.


Except as required by the FCA, AIM or applicable law, LSI expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in LSI's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.


The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.


Neither the content of LSI's websites (or any other website) nor the content of any website accessible from hyperlinks on LSI's websites (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