The Hg Transaction
Hg will acquire Orion Health’s Rhapsody business, with Orion Health retaining a 24.9% shareholding in that business. Hg will also take a 24.9% stake in Orion Health’s Population Health Management business. Orion Health will continue to own 100% of its Hospitals business. The Hg Transaction enables Orion Health to benefit from Hg’s funding and technology expertise while ensuring that each of Orion Health’s three separate businesses is set up to capitalise on its full potential.
Following completion of the Hg Transaction, Orion Health will undertake a Share Buyback at an estimated price range of $1.16-$1.26 per Share, with the final offer price to be determined by the Board closer to the time. The offer price will be dependent on Orion Health’s available cash immediately following completion of the Hg Transaction, taking into account transaction costs and working capital adjustments in relation to the Rhapsody Sale. Shareholders will have the option to accept the Share Buyback in respect of up to 100% of their Shares.
The Orion Health Board believe that providing the option to cash-out at a substantial premium to the trading price that existed prior to the announcement of the Hg Transaction, as well as the opportunity to elect to maintain an ongoing investment in Orion Health, including its 24.9% stake in Rhapsody, the 75.1% stake in Population Health Management and 100% ownership of Hospitals, is in the best interests of Shareholders.
Frequently Asked Questions
A full FAQ can be found in the Notice of Meeting.
What are Shareholders being asked to consider?
Shareholders are being asked to consider whether they support the Hg Transaction and the Share Buyback. To make this decision, Shareholders should read the Notice of Meeting (including the Independent Report) and seek advice if they have any questions.
What is the Hg Transaction?
The Hg Transaction involves Hg acquiring Orion Health’s Rhapsody business, with Orion Health retaining 24.9% shareholding in that business. Hg will also take a 24.9% stake in Orion Health’s Population Health Management business. See Section 9 "Details of the Hg Transaction" in the Notice of Meeting for more detail.
What is the Share Buyback?
Following completion of the Hg Transaction, Orion Health will undertake the Share Buyback to return surplus proceeds to Shareholders. The offer price is estimated to be $1.16-$1.26 per Share, with the final offer price to be determined by the Board closer to the time. The final offer price will be dependent on Orion Health’s available cash immediately following completion of the Hg Transaction, taking into account transaction costs and working capital adjustments in relation to the Rhapsody Sale. Shareholders will have the option to accept the Share Buyback in respect of up to 100% of their Shares. See Section 10 "Details of the Share Buyback" in the Notice of Meeting for more detail.
Who is Hg?
Hg is a sector expert investor with deep healthcare expertise, committed to helping build ambitious businesses across the technology, services and industrial technology space. Hg has funds under management of approximately £10 billion serving some of the world’s leading institutional and private investors. For further details about Hg, please see www.hgcapital.com.
What does this mean for Shareholders?
When the Share Buyback is implemented, Shareholders will have the option to accept the Share Buyback in respect of up to 100% of their Shares.
What is the Share Buyback price?
The Board will determine the price for the Share Buyback closer to the time. The estimated price range is $1.16-$1.26 per Share.
When will the Share Buyback be implemented?
The Share Buyback will be implemented after the Hg Transaction has closed and the related working capital adjustment process has been completed. As described above, that transaction is subject to a number of conditions that are outside of Orion Health’s control, including Hg receiving approval from the Overseas Investment Office.
We anticipate distributing the materials relating to the Share Buyback (including the final offer price) in November 2018, with completion to take place in December 2018.
What are Shareholders being asked to do now?
In addition to considering whether to vote for or against the Share Buyback, we are asking Shareholders to indicate their current intention regarding the Share Buyback on the enclosed form. This will be an indication of Shareholder interest only and will not be binding on them. That may allow us to provide Shareholders with an aggregated summary of Shareholders’ intentions when we distribute the Share Buyback materials later in the year. Information provided for these purposes will remain confidential and will only be reported on an aggregated basis. Voting/Proxy Forms will accompany the Notice of Meeting.
Can Shareholders sell their Shares now?
Yes. Shareholders can sell their Shares on market at the prevailing market price (which may be more or less than the final offer price for the Share Buyback) at any time.
What are the tax implications of the Share Buyback?
Orion Health is in the process of confirming with the Inland Revenue Department that the Share Buyback should not give rise to a dividend for tax purposes and therefore the proceeds are not taxable to capital account shareholders. However, Shareholders are encouraged to obtain their own tax advice for their personal circumstances.
This website is not an offer of financial products and the provision of this website to any person does not constitute, and may not be used for the purposes of, an offer of financial products or interests of any kind to that person or an invitation to any person to apply for the issue of financial products or interests of any kind. This website does not take into account shareholders’ individual investment objectives, financial situation or needs. You must make your own decisions and seek your own advice in this regard.
The information and recommendations contained on this website do not constitute, and should not be taken as constituting, financial product advice.
If you are in any doubt as to what you should do, you should seek advice from your financial, taxation or legal adviser before making any decision regarding the Hg Transaction and the Share Buyback.