THE DEAL:

Mediwatch PLC (AIM traded) is a high-tech medical diagnostic equipment manufacturer and supplier who focus on innovative diagnostic solutions.

When the opportunity arose to acquire the stock, equipment and intellectual property of the urology diagnostics business of Medtronic it was an opportunity the Mediwatch board could not ignore Mediwatch has known and been working with Medtronic for the last two years.

However, it required a significant fund raising (relative to Mediwatch’s c£8 million market capitalisation) and when Mediwatch approached their broker/nominated adviser to raise the necessary funds to make the acquisition they found that the costs of a traditional pre-emptive share offer (i.e. offer to all existing shareholders that would have required a prospectus) were prohibitive.

Mediwatch engaged Cattaneo LLP who, working with Mediwatch’s lawyers, structured a non pre-emptive cash placing of shares to raise £2.2 million which was considerably cheaper. Cattaneo worked with Mediwatch to project manage the acquisition and fund raising process, prepare the necessary public shareholder documentation and give the board the necessary formal financial advice to allow them to announce the acquisition and fund raising and convene an extraordinary meeting at which shareholders would vote on the proposals.

There was an added complication in dealing with the reporting of Mediwatch’s final results which were due to be published during the negotiations. The solution was simple, extend the accounting period from 30 April to 31 October and announce a second set of interim results.

In summary the approach adopted was cost effective for Mediwatch – Cattaneo was even paid its fee in shares – and, when combined with the irrevocable undertakings to vote in favour of the proposals which had been received from 43 per cent of the shareholder base, provided the certainty needed to complete the US acquisition.

 WHAT OUR CLIENT SAID:

‘We turned to Charles when it became apparent that the traditional route of raising funds was going to be prohibitive, his decisive advice and leadership throughout both the fund raising and the acquisition were invaluable to us and I don’t think we would have been able to deliver the fundraising and acquisition without his help. We are looking forward to continuing our relationship with Cattaneo LLP.’

Philip Stimpson, CEO of Mediwatch