Recommended cash offer

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 OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 FOR IMMEDIATE RELEASE

22 December 2023

RECOMMENDED CASH OFFER
by
IOPS BUYER INC.
(a wholly-owned subsidiary of Wellspring Worldwide Inc.)
for
SOPHEON PLC
to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

• On 31 October 2023 the board of directors of Sopheon plc (“Sopheon”) (the “Sopheon Directors”) announced an agreement in principle with the board of directors of IOps Buyer Inc. (“Bidco”), a wholly-owned subsidiary of Wellspring Worldwide Inc. (“Wellspring”), on the terms of a possible cash offer for the entire issued and to be issued share capital of Sopheon. That announcement set out that Wellspring were awaiting receipt of a regulatory clearance. 
• On 21 December 2023, this regulatory clearance was received and accordingly Bidco and Sopheon are now pleased to announce the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Sopheon (the “Acquisition”).
• It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (although Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, with the consent of the Takeover Panel and subject to the terms of the Co-operation Agreement).
• Under the terms of the Acquisition, which will be subject to the Conditions, certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document, each Sopheon Shareholder will be entitled to receive:

£10.00 in cash per Sopheon Share

• The Acquisition values the entire issued and to be issued share capital of Sopheon at approximately £115 million.
• The Acquisition Price represents a premium of approximately:
• 104 per cent. to the Closing Price of 490 pence per Sopheon Share on 30 October 2023 (being the last Business Day before the commencement of the Offer Period);
• 80 per cent. to the Volume Weighted Average Price of 555 pence per Sopheon Share during the three-month period ended 30 October 2023 (being the last Business Day before the commencement of the Offer Period); and
• 72 per cent. to the Volume Weighted Average Price of 581 pence per Sopheon Share during the six-month period ended 30 October 2023 (being the last Business Day before the commencement of the Offer Period).
• If any dividend or other distribution in respect of the Sopheon Shares is declared, paid or made on or after the date of this Announcement, Bidco reserves the right to reduce the consideration payable for each Sopheon Share under the terms of the Acquisition by the amount per Sopheon Share of such dividend or distribution, in which case any reference in this Announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. In such circumstances, Sopheon Shareholders would be entitled to retain any such dividend or distribution.

Background to and reasons for the Acquisition

• Sopheon is a leading provider of end-to-end innovation management software solutions, which help customers drive strategy execution by providing accountability, visibility and control across the corporate innovation lifecycle, and represents an attractive opportunity to invest in a market leading enterprise software business across multiple geographies.
• The Acquisition represents an opportunity for Wellspring to continue building a leading global innovation management software and services provider by combining its software solutions and data systems for managing technology transfer, intellectual property (“IP”) and innovation activities, primarily for the academic, government and corporate markets, with Sopheon’s complementary innovation and product development focus, particularly focused on the research and development functions of larger corporate clients. Wellspring and Sopheon are complementary in two main respects:
  • firstly, from a product and service offering standpoint, Wellspring has an established leadership position in the IP management and technology transfer software markets, while Sopheon has a large and established Innovation Management customer base. With this combination, and continued investments in the combined product portfolio, customers will benefit from the ability to purchase an end-to-end Innovation, IP management and technology transfer solution from a single vendor; and
  • secondly, from an end-market perspective, Wellspring has an existing leadership position in the higher education and government markets, with an emerging corporate footprint, while Sopheon has a leadership position in the larger corporate market and an emerging government client footprint. The combined company will benefit from the shared go-to-market and customer service expertise that each business has developed.
• The combination of the two companies should therefore create a compelling product and services portfolio in the market for each business’s respective clients.
• As a result of Sopheon’s relative size compared to Wellspring, and its influence in the US and European markets along with its recent acquisition of a business in Australia, the Acquisition also brings Wellspring materially greater scale. Wellspring believes that Sopheon presents a platform from which to embed and grow its geographic reach globally, a key strategic focus area of both organic and future acquisitive growth for Wellspring.
• Finally, Wellspring believes that in order to maximise its future potential, Sopheon would be better suited to a private company environment, where initiatives to improve the performance of the business can be implemented effectively, working in tandem with Wellspring, free from the requirement to meet the public equity market’s shorter-term reporting requirements and expectations.

Recommendation

• The Sopheon Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Sopheon Directors, Cavendish has taken into account the commercial assessments of the Sopheon Directors. Cavendish is providing independent financial advice to the Sopheon Directors for the purposes of Rule 3 of the Code.
• Accordingly, the Sopheon Directors intend to recommend unanimously that the Sopheon Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, subject to the terms of the Co-operation Agreement and with the consent of the Takeover Panel, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer), as the Sopheon Directors who hold Sopheon Shares (in a personal capacity or through a nominee) have irrevocably undertaken to do in respect of their own (and their connected persons’) beneficial holdings of 2,340,668 Sopheon Shares (representing, in aggregate, approximately 21.89 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement)).

Irrevocable undertakings

• In addition to the irrevocable undertakings from the Sopheon Directors referred to immediately above, Bidco has also received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from Rivomore Limited in respect of 2,074,308 Sopheon Shares (held in a personal capacity or through a nominee) representing, in aggregate, approximately 19.40 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement).
• In total therefore, as at the date of this Announcement, Bidco has received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) with respect to a total of 4,414,976 Sopheon Shares (representing approximately 41.29 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement)).
• Further details of these irrevocable undertakings (including details of the circumstances in which they cease to be binding) are set out in Appendix III to this Announcement.

Information on Bidco, Wellspring and Resurgens

• Bidco has been incorporated under the laws of the State of Delaware, United States of America for the purposes of the Acquisition. It has not traded since its incorporation. Bidco is a wholly-owned subsidiary of Wellspring.
• Founded in 2003 as a spin-off from Carnegie Mellon University, Wellspring is a leading provider of software solutions and data systems for managing technology transfer, IP and innovation activities, primarily for the academic, government and corporate markets. Its suite of solutions cover: (i) invention, IP and contract management, by storing and managing all agreements and critical documentation relating to an organisation’s IP; (ii) technology transfer and IP licensing, managing the purchasing and selling or monetisation of technology and research between corporations, universities and government agencies; (iii) research and development workflow management, delivering visibility of those efforts throughout an organisation; and (iv) ‘technology scouting’ and intelligence, enabling users to view all relevant patents, news, research and other information to identify, evaluate and monitor technological development. Wellspring, headquartered in Chicago with additional offices in London and Tokyo, works with more than 500 organisations worldwide.
• Resurgens is a technology-focused private equity firm investing in North American and select European lower middle-market application and IT infrastructure software businesses. Resurgens’ growing team offers a diversity of investing, operating and talent management experience, applying an active and engaged value creation approach with each portfolio company. Resurgens is headquartered in Atlanta, Georgia, USA with additional professionals located in Austin, London and Silicon Valley.

Timetable and Conditions

• It is intended that the Acquisition be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. The purpose of the Scheme is to provide for Bidco to acquire the whole of the issued and to be issued share capital of Sopheon. The Scheme will be put to Sopheon Shareholders at the Court Meeting and to Sopheon Shareholders at the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of the Sopheon Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted. The Resolution must also be approved by Sopheon Shareholders at the General Meeting. The General Meeting is expected to be held immediately after the Court Meeting.
• The Scheme will also need to be sanctioned by the Court. Finally, a copy of the Court Order must be delivered to the Registrar of Companies for registration, upon which the Scheme will become Effective.
• The Acquisition will be made in accordance with the Code and is subject to the Conditions and certain further terms set out in Appendix I, and to the full terms and conditions which will be set out in the Scheme Document. The Conditions include the receipt of regulatory approvals as further described in this Announcement.
• It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting, together with the associated Forms of Proxy, will be posted to Sopheon Shareholders within 28 days of this Announcement (or such later time as Sopheon, Bidco and the Takeover Panel agree) and the Court Meeting and the General Meeting are each expected to be held as soon as possible thereafter, giving the required notice for such meetings.
• The Acquisition is currently expected to be completed during the first quarter of 2024, subject to the satisfaction or (where applicable) waiver of the Conditions. An expected timetable of key events relating to the Acquisition will be provided in the Scheme Document.

Commenting on the Acquisition, Sean Downs CEO of Wellspring, said:

“We are excited to be announcing the proposed acquisition of Sopheon, which we believe represents a compelling opportunity for all stakeholders, with the full recommendation of its Board.

Sopheon is a clear leader in providing innovation management software solutions, which we have followed for some time. We believe the company aligns closely with Wellspring in terms of both strategy and culture, and the combination of our two businesses represents an opportunity to build a leading global innovation management software and services provider with a compelling product and services portfolio. ”

Commenting on the Acquisition, Andy Michuda, Chairman of Sopheon, said:

“I very much thank our investors, in particular our long-time investors, who have supported Sopheon through our evolution and am pleased that we have secured an acquisition price with such a solid premium. I am also excited for our employees and clients to grow and thrive going forward as part of the enlarged group.

This acquisition is about two companies with a common vision bringing together complimentary products, customers, and employee talent. The combination has a unique opportunity to set a new leadership standard for the Innovation Ops market, supporting the innovation product life cycle from emerging tech transfer, to product commercialization, through end-of-life.”

This summary should be read in conjunction with, and is subject to, the full text of this Announcement and its Appendices. In particular, the Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings referred to in this Announcement. Appendix IV contains definitions of certain terms used in this Announcement.

Enquiries:

King & Spalding International LLP are retained as legal advisers to Resurgens, Wellspring and Bidco.

Squire Patton Boggs (UK) LLP are retained as legal adviser to Sopheon.

Important Notices

Cavendish Capital Markets Limited (“Cavendish”), which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser to Sopheon and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Sopheon for providing the protections offered to clients of Cavendish or for providing advice in connection with any matter referred to in this Announcement. Neither Cavendish nor any of its affiliates (nor their respective directors, officers, employees or agents) 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 Cavendish in connection with this Announcement, any statement contained herein, the Scheme or otherwise. No representation or warranty, express or implied, is made by Cavendish as to the contents of this Announcement.

Raymond James Financial International Limited (“Raymond James”), which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser to Resurgens, Wellspring and Bidco and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Resurgens, Wellspring or Bidco for providing the protections afforded to clients of Raymond James nor for providing advice in connection with the matters referred to herein. Neither Raymond James nor any of its 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 Announcement, any statement contained herein, the Acquisition or otherwise.

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English law, the AIM Rules and the Code 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 of jurisdictions outside the United Kingdom.

The laws of the relevant jurisdictions may affect the availability of the Acquisition to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom, or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe any applicable requirements. Any person (including, without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this Announcement, the Scheme Document or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. In particular, the ability of persons who are not resident in the United Kingdom to vote their Sopheon Shares at the Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their Sopheon Shares in respect of the Court Meeting or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located.

Any failure to comply with the applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

The Acquisition will not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, telephonic or electronic) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, a Restricted Jurisdiction, and the Acquisition will not be capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded or distributed in, into or from a Restricted Jurisdiction and persons receiving this Announcement (including custodians, nominees and trustees) must not distribute or send it into or from a Restricted Jurisdiction. In the event that the Acquisition is implemented by way of a Takeover Offer and extended into the US, Bidco will do so in satisfaction of the procedural and filing requirements of US securities laws at that time, to the extent applicable thereto. The Acquisition relates to the shares of a company incorporated in England and it is proposed to be made by means of a scheme of arrangement provided for under English law. The Scheme will relate to the shares of a UK company that is a “foreign private issuer” as defined under Rule 3b-4 under the US Exchange Act. A transaction effected by means of a scheme of arrangement is not subject to any shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act.

Accordingly, the Scheme is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation or tender offer rules. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK and may not be comparable to the financial information of, or the accounting standards applicable to, US companies. However, if Bidco were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including section 14(e) of the US Exchange Act and Regulation 14E thereunder, if applicable. Such Takeover Offer would be made in the US by Bidco and no one else. In addition to any such Takeover Offer, Bidco, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Sopheon outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase are made they would be made outside the United States in compliance with applicable law, including the US Exchange Act. It may be difficult for a US-based investor to enforce his or her rights and any claim he or she may have arising under US securities laws, since the Scheme relates to the shares of a company located in the UK, and some or all of its officers and directors may be residents of non-US jurisdictions. A US-based investor may not be able to sue a company located in the UK, or its officers or directors, in a foreign court for alleged violations of US securities laws, and it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court’s judgment.

Forward-looking statements

This Announcement, oral statements made regarding the Acquisition, and other information published by Sopheon, Bidco, Wellspring and Resurgens may contain certain “forward-looking statements” with respect to Sopheon, Bidco, Wellspring and Resurgens. 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”, “will”, “may”, “should”, “would”, “could” or other words or terms of similar meaning or the negative thereof. Forward-looking statements include statements relating to, for example, the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies of Resurgens, Wellspring and/or Bidco and the expansion and growth of Sopheon and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on the business of Sopheon.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or developments to differ materially from those expressed in or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future strategies and environments. None of Resurgens, Wellspring, Bidco or Sopheon, nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. All subsequent oral or written forward-looking statements attributable to Resurgens, Wellspring, Bidco or Sopheon or any person acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement. None of Resurgens, Wellspring, Bidco or Sopheon assume any obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for Resurgens, Wellspring, Bidco or Sopheon in respect of any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per Sopheon Share for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per Sopheon Share.

Right to switch to a Takeover Offer

Subject to the terms of the Co-operation Agreement, Bidco reserves the right to elect, with the consent of the Takeover Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of Sopheon as an alternative to the Scheme. In such an event, the Takeover Offer will be made in accordance with the terms and conditions set out in this Announcement which would apply to the Scheme (with any modifications or amendments to such terms and conditions as may be required by the Takeover Panel or which are necessary as a result of Bidco’s election to implement the Acquisition by way of a Takeover Offer), in accordance with the Co-operation Agreement and subject to the amendments referred to in Part C of Appendix I to this Announcement.

Publication on website

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions), free of charge, on Sopheon’s website at www.sopheon.com/investors and on Bidco’s website at https://offer.wellspring.com/news by no later than 12:00 noon on the Business Day following this Announcement. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.

Requesting hard copies

In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement, free of charge, by contacting Sopheon’s registrar, Link Group on 0371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9:00 a.m. to 5:30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic communications – information for Sopheon Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Sopheon Shareholders, persons with information rights and other relevant persons for the receipt of communications from Sopheon may be provided to 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.

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.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% 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 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3:30 p.m. (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% 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(s), 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) applies must be made by no later than 3:30 p.m. (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 Disclosures 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).

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 Takeover Panel’s website at www.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 contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Announcement not a prospectus

This Announcement does not constitute a prospectus or prospectus equivalent document.

Private purchases

Sopheon Shareholders should be aware that Bidco may purchase Sopheon Shares otherwise than under the Scheme or any Takeover Offer, including pursuant to privately negotiated purchases.

Independent advice

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 or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, Sopheon confirms that, as at the date of this Announcement, it had in issue 10,693,079 ordinary shares of 20 pence each. No shares are held in treasury. The ISIN for the ordinary shares is GB00BSZM1369.

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 OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

22 December 2023 

RECOMMENDED CASH OFFER
by
IOPS BUYER INC.
(a wholly-owned subsidiary of Wellspring Worldwide Inc.)
for
SOPHEON PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006

1. Introduction

On 31 October 2023 the board of directors of Sopheon plc (“Sopheon”) (the “Sopheon Directors”) announced an agreement in principle with the board of directors of IOps Buyer Inc. (“Bidco”), a wholly-owned subsidiary of Wellspring Worldwide Inc. (“Wellspring”), on the terms of a possible cash offer for the entire issued and to be issued share capital of Sopheon. That announcement set out that Wellspring were awaiting receipt of a regulatory clearance. 

On 21 December 2023, this regulatory clearance was received and accordingly the board of directors of Sopheon and the board of directors of Bidco are pleased to announce the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of Sopheon (the “Acquisition”).

It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (although Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, with the consent of the Takeover Panel and subject to the terms of the Co-operation Agreement).

2. The Acquisition

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

£10.00 in cash per Sopheon Share

• The Acquisition values the entire issued and to be issued share capital of Sopheon at approximately £115 million.
• The Acquisition Price represents a premium of approximately:
  • 104 per cent. to the Closing Price of 490 pence per Sopheon Share on 30 October 2023 (being the last Business Day before the commencement of the Offer Period);
  • 80 per cent. to the Volume Weighted Average Price of 555 pence per Sopheon Share during the three-month period ended 30 October 2023 (being the last Business Day before the commencement of the Offer Period); and
  • 72 per cent. to the Volume Weighted Average Price of 581 per Sopheon Share during the six-month period ended 30 October 2023 (being the last Business Day before the commencement of the Offer Period).

The Sopheon Shares will be acquired by Bidco with full title guarantee, fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third party rights or interests whatsoever and together with all rights existing at the date of this Announcement or thereafter attaching thereto, including (without limitation) the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the Effective Date in respect of the Sopheon Shares.

If any dividend or other distribution in respect of the Sopheon Shares is declared, paid or made on or after the date of this Announcement, Bidco reserves the right to reduce the consideration payable for each Sopheon Share under the terms of the Acquisition by the amount per Sopheon Share of such dividend or distribution, in which case any reference in this Announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. In such circumstances, Sopheon Shareholders would be entitled to retain any such dividend or distribution.

3. Background to and reasons for the Acquisition

Sopheon is a leading provider of end-to-end innovation management software solutions, which help customers drive strategy execution by providing accountability, visibility and control across the corporate innovation lifecycle, and represents an attractive opportunity to invest in a market leading enterprise software business across multiple geographies.

The Acquisition represents an opportunity for Wellspring to continue building a leading global innovation management software and services provider by combining its software solutions and data systems for managing technology transfer, intellectual property (“IP”) and innovation activities, primarily for the academic, government and corporate markets, with Sopheon’s complementary innovation and product development focus, particularly focused on the research and development functions of larger corporate clients. Wellspring and Sopheon are complementary in two main respects:

• firstly, from a product and service offering standpoint, Wellspring has an established leadership position in the IP management and technology transfer software markets, while Sopheon has a large and established Innovation Management customer base. With this combination and continued investments in the combined product portfolio, customers will benefit from the ability to purchase an end-to-end Innovation, IP management and technology transfer solution from a single vendor; and
• secondly, from an end-market perspective, Wellspring has an existing leadership position in the higher education and government markets, with an emerging corporate footprint, while Sopheon has a leadership position in the larger corporate market and an emerging government client footprint. The combined company will benefit from the shared go-to-market and customer service expertise that each business has developed.

The combination of the two companies should therefore create a compelling product and services portfolio in the market for each business’s respective clients.

As a result of Sopheon’s relative size compared to Wellspring, and its influence in the US and European markets along with its recent acquisition of a business in Australia, the Acquisition also brings Wellspring materially greater scale. Wellspring believes that Sopheon presents a platform from which to embed and grow its geographic reach globally, a key strategic focus area of both organic and future acquisitive growth for Wellspring.

Finally, Wellspring believes that in order to maximise its future potential, Sopheon would be better suited to a private company environment, where initiatives to improve the performance of the business can be implemented effectively, working in tandem with Wellspring, free from the requirement to meet the public equity market’s shorter-term reporting requirements and expectations.

4. Sopheon trading update

On 24 August 2023, Sopheon announced the interim results of the Sopheon Group for the six months ended 30 June 2023. A copy of that announcement is available on the Sopheon website at www.sopheon.com. The results announcement included the following statements on the outlook for the Sopheon Group:

Sopheon’s Executive Chairman, Andy Michuda said:

“Sopheon continues to deliver on its key growth and transformation objectives, demonstrated in particular by significant and sustained increases in SaaS ARR, supported by continued high retention performance. In parallel we have delivered substantial investment in growth initiatives and M&A that expand our product offering, geographical footprint and market opportunity, while maintaining cashflow discipline and EBITDA performance. Our strong balance sheet continues to support our ability to execute with confidence. We expect the impact of increased investments in both marketing and product to contribute to a stronger sales pipeline in the second half of the year and beyond, in support of our growth objectives.”

Furthermore, in the Prior Announcement, the Sopheon Board noted:

“In addition, as referenced in the interim results the current sales pipeline for the balance of 2023 includes yet-to-be closed opportunities for significant perpetual extension orders from existing military customers, alongside other opportunities. Sales teams are busy and prior experience provides reassurance that Sopheon’s business and teams are well placed to deliver even in challenging markets, particularly in the final quarter, but the Sopheon Board recognises that there is a level of execution risk – including, most immediately, potential delays arising from the current U.S. government budget situation which could impact the timing of orders from existing military customers in particular.”

5. Background to and reasons for the recommendation

The Sopheon Board remain highly confident in Sopheon’s standalone prospects as an independent company and are pleased with the progress made over the last few years in advancing its strategic priorities.

Sopheon is a market leader in end-to-end innovation management software solutions, collectively known as InnovationOps and its software helps customers drive strategy execution by providing accountability, visibility and control across the corporate innovation lifecycle. By operationalising the entire innovation life cycle, Accolade® and Acclaim™ software and expertise enable innovation, product and project professionals to accomplish the full range of InnovationOps tasks to drive innovation at scale. In recent years Sopheon has focused on its transition to a SaaS model, and has complemented organic growth with strategic acquisitions to expand and optimise Sopheon’s platform and improved competitiveness. This has contributed to the broadening of its offerings with three new products under the Acclaim banner, completing the flagship Accolade solution and is catering to a wider pool of customers as well as a larger addressable market. This has only been achieved thanks to the sustained dedication and passion of Sopheon’s employees and management team over many years.

The Sopheon Board is pleased to recommend the Acquisition and believes that the Acquisition presents an attractive valuation for Sopheon, and a compelling liquidity opportunity not currently afforded by the public markets. Sopheon also acknowledges that continued execution of its strategy – both in terms of recognition for its transition momentum towards a multiproduct SaaS business, and the potential dilutive impact of raising capital for execution of transformative M&A - are challenging for a smaller public company in the current environment. These uncertainties are further reinforced by an increasingly uncertain economic backdrop, most immediately evidenced by the risk of shutdown of the US congress and consequential delays in approval of US government budgets.

In particular, the Sopheon Board notes that the Acquisition Price represents:

• a premium of 104 per cent. to the Closing Price of 490 pence per Sopheon Share on 30 October 2023 (being the last Business Day before the commencement of the Offer Period);
• a premium of 80 per cent. to the Volume Weighted Average Price of 555 pence per Sopheon Share for the three-month period ended 30 October 2023 (being the last Business Day before the commencement of the Offer Period); and
• a compelling liquidity opportunity for Sopheon Shareholders, given the average daily trading volume as a percentage of Sopheon’s issued share capital was approximately 0.03 and 0.04 per cent. respectively over the preceding six and twelve months prior to the commencement of the Offer Period, and that there was zero trading in Sopheon Shares in approximately 27 per cent. of trading days over the 12 months preceding the commencement of the Offer Period.

In assessing the financial terms of the Acquisition, the Sopheon Board has noted the support for the Acquisition by certain of Sopheon’s key shareholders representing, in aggregate, 41.29 per cent. of the issued share capital. The Acquisition on the terms proposed also represent the conclusion of a lengthy engagement between Sopheon, Wellspring and Resurgens, and the Sopheon Board entering into these discussions with the benefit of having previously explored a number of indicative or speculative expressions of interest from other potentially interested parties.

The Sopheon Board share Wellspring’s excitement regarding the strategic and operational benefits that come from combining complementary product portfolios across complementary customer footprints, where Sopheon holds a strong position in the corporate market, consisting of well-known global leading corporate customers, whilst Wellspring has focused on education and government sectors; and where Sopheon has a large and established Innovation Management business, Wellspring has an established leadership position in the IP management and technology transfer markets. The Sopheon Directors believe that the combined company will be unique in its collective offerings bridging the intellectual property invention communities (universities and government labs) with the consumers of IP, the corporate enterprises. Sopheon is also excited about the complementary geographical footprint, the ability to scale Wellspring solutions in Europe, and the clear benefits in the unique complimentary skill sets inherent in the combined employee bases across all functions.

Resurgens has a proven track record of providing scale, operational support and financial resources to the companies it partners with, such as Wellspring. The Sopheon Board welcomes the importance that Wellspring attributes to the skills and experience of the Sopheon employees and management team, and the statements made by Wellspring with regard to the employment and places of business in paragraph 11 of this Announcement. The Sopheon Board also welcomes that Wellspring has stated that the Acquisition will offer continuing opportunities for Sopheon staff as part of the Enlarged Group.

Following careful consideration of the above factors, the Sopheon Board believes that the Acquisition Price of £10.00 per Sopheon Share in cash provides attractive value and certainty for Sopheon Shareholders, recognising Sopheon’s market position, its future growth prospects and the risks and potential future funding requirements associated with those prospects.

6. Recommendation

The Sopheon Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Sopheon Directors, Cavendish has taken into account the commercial assessments of the Sopheon Directors. Cavendish is providing independent financial advice to the Sopheon Directors for the purposes of Rule 3 of the Code.

Accordingly, the Sopheon Directors intend to recommend unanimously that the Sopheon Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, subject to the terms of the Co-operation Agreement and with the consent of the Takeover Panel, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer), as the Sopheon Directors who hold Sopheon Shares (in a personal capacity or through a nominee) have irrevocably undertaken to do in respect of their own (and their connected persons’) beneficial holdings of 2,340,668 Sopheon Shares (representing, in aggregate, approximately 21.89 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement)).

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

7. Conditions

The Acquisition is conditional, amongst other things, upon:

1. the approval of the Scheme by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders entitled to vote and present and voting, either in person or by proxy, at the Court Meeting (or at any adjournment, postponement or reconvention of such meeting) on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed between Bidco and Sopheon and the Court may allow);
2. the passing of the Resolution necessary to implement the Scheme by the requisite majority at the General Meeting to be held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Sopheon may agree and the Court may allow); and
3. satisfaction of the NSIA Condition.

The attention of Sopheon Shareholders is drawn to the fact that the Acquisition is also conditional on other Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document.

The Scheme Document, along with the notice of the Court Meeting and the General Meeting and the Forms of Proxy will be despatched to Sopheon Shareholders within 28 days of the date of this Announcement, unless Bidco and Sopheon otherwise agree, and the Takeover Panel consents, to a later date.

8. Irrevocable undertakings

Bidco has received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from those of the Sopheon Directors who hold Sopheon Shares (in a personal capacity or through a nominee) in respect of their (and their connected persons’) entire beneficial holdings of Sopheon Shares, amounting, in aggregate, to 2,340,668 Sopheon Shares (representing, in aggregate, approximately 21.89 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement)).

In addition to the irrevocable undertakings from the Sopheon Directors, Bidco has also received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from Rivomore Limited, in respect of 2,074,308 Sopheon Shares (held in a personal capacity or through a nominee) representing, in aggregate, approximately 19.40 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement).

In total therefore, as at the date of this Announcement, Bidco has received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) with respect to a total of 4,414,976 Sopheon Shares (representing approximately 41.29 per cent. of the Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement)).

Further details of these irrevocable undertakings (including details of the circumstances in which they cease to be binding) are set out in Appendix III to this Announcement.

9. Information on Bidco, Wellspring and Resurgens

Bidco

Bidco has been incorporated under the laws of the State of Delaware, United States of America for the purposes of the Acquisition. It has not traded since its incorporation. Bidco is a wholly-owned subsidiary of Wellspring.

Wellspring

Founded in 2003 as a spin-off from Carnegie Mellon University, Wellspring is a leading provider of software solutions and data systems for managing technology transfer, IP and innovation activities, primarily for the academic, government and corporate markets.

Its suite of solutions cover: (i) invention, IP and contract management, by storing and managing all agreements and critical documentation relating to an organisation’s IP; (ii) technology transfer and IP licensing, managing the purchasing and selling or monetisation of technology and research between corporations, universities and government agencies; (iii) research and development workflow management, delivering visibility of those efforts throughout an organisation; and (iv) ‘technology scouting’ and intelligence, enabling users to view all relevant patents, news, research and other information to identify, evaluate and monitor technological development.

Wellspring, headquartered in Chicago with additional offices in London and Tokyo, works with more than 500 organisations worldwide.

Mergers and acquisitions are central to Wellspring’s strategy, having acquired IP Pragmatics, a London-based consulting firm offering technology assessments and patent renewal services, in February 2023, MyIP, a UK based provider of tech transfer software in August 2021, and Covalent Data, a Denver-based provider of technology scouting solutions in July 2017.

Resurgens

Resurgens is a technology-focused private equity firm investing in North American and select European lower middle-market application and IT infrastructure software businesses. Resurgens’ growing team offers a diversity of investing, operating and talent management experience, applying an active and engaged value creation approach with each portfolio company. Resurgens is headquartered in Atlanta, Georgia, USA with additional professionals located in Austin, London and Silicon Valley.

10. Information on Sopheon

Sopheon is a market leader of end-to-end innovation management software solutions, addressing a range of needs collectively known as InnovationOps. Sopheon’s software solutions help customers drive strategy execution by providing accountability, visibility and control across the corporate innovation lifecycle within medium to large enterprises, and certain government bodies. By operationalising the entire innovation life cycle, Accolade® and Acclaim™ software and expertise enable innovation, product and project professionals to accomplish the full range of InnovationOps tasks to drive innovation at scale. Sopheon’s solutions provide accountability, visibility and control across the corporate innovation lifecycle. In recent years Sopheon has focused on its transition to a SaaS model, and has complemented organic growth with strategic acquisitions to expand and optimise Sopheon’s platform and improved competitiveness. This has contributed to the broadening of its offerings with three new products under the Acclaim banner, completing the flagship Accolade solution and is catering to a wider pool of customers as well as a larger addressable market.

Sopheon’s solutions have been implemented by hundreds of blue-chip customers with over 137,000 users in 50 countries. Typical customers include mid-size and large enterprises such as Honeywell, 3M, Mondelez, LG, Merck, Pall Corporation, Christian Dior, Hershey as well as the US Navy. Sopheon has offices in the United Kingdom, United States, Germany, the Netherlands and Australia, and has approximately 170 employees.

11. Management, employees, pension scheme, research and development and locations of the Sopheon Group

Prior to the date of this Announcement, Wellspring has been granted access to Sopheon’s senior management team for the purpose of undertaking confirmatory due diligence. As a result of that diligence process, Wellspring has been able to develop a preliminary strategy that it anticipates delivering for the Sopheon business. Upon the Acquisition becoming Effective, Wellspring will benefit from having greater access to the business, employees and customers of Sopheon and will be able to formulate more detailed long-term strategic and operational plans for the Enlarged Group.

It is intended that more detailed long-term strategic and operational planning will be completed within six months of the Effective Date (the “Review”), focusing on all aspects of the Enlarged Group’s business and opportunities available, including:

• reviewing in more detail the Enlarged Group’s markets, customers, software and services offerings, and support operations;
• assessing the growth opportunity across each aspect of the business and its strategic positioning;
• evaluation of product roadmaps and accelerating development of primary software platforms for growth in existing and new markets; and
• deepening engagement with the key stakeholders of the business, including customers, suppliers and broader business partners.

Wellspring intends to invest in the enlarged business, both organically and potentially via acquisitions. Wellspring has a track record of making acquisitions and at any point in time is typically evaluating several potential opportunities across North America, the UK and Europe, and Asia Pacific, each at varying stages of engagement. With the backing of Resurgens, the Enlarged Group has the capability to execute these if it wishes.

Research and development

The Review will include an assessment of the Enlarged Group’s existing offerings, research and development functions and product development readings. This may lead to the identification of areas where spending can be increased or focused in order to develop new, highly valued functionality or accelerate the existing roadmaps and/or it may lead to the identification of certain areas of surplus research and development activity, where operational efficiencies can be achieved across the Enlarged Group’s existing research and development functions and resourcing. Further analysis is needed to ascertain which products and modules have the potential to be leveraged more broadly across the Enlarged Group. Any such products or modules will have their product roadmap prioritised.

Employees and management

Wellspring attaches great importance to the skills and experience of Sopheon’s employees including its management team. Wellspring believes that the Acquisition will result in greater opportunities for Sopheon’s staff as part of the Enlarged Group, particularly in terms of activities that pertain to developing and expanding its market position internationally. Wellspring confirms that, following the Scheme becoming Effective, the existing contractual and statutory employment rights of the Sopheon Group’s management and employees will be fully safeguarded in accordance with applicable law.

Following the Scheme becoming Effective, as part of the Review, Wellspring intends to evaluate the management, governance and incentive structure of Sopheon.

Subject to compliance with applicable local law, as part of the Review, Wellspring may consolidate terms and conditions of employment in each geography. This could mean that in a particular country Wellspring may migrate Sopheon employees onto Wellspring’s terms and conditions of employment, consistent with the terms and conditions of employment of Wellspring employees of a substantially equivalent level.

Wellspring will look to run the Enlarged Group efficiently and sustainably, and so following the Effective Date, a number of corporate, technical, research and development, and support functions, including PLC-related functions, may cease to be necessary and therefore potentially require headcount reductions in the foregoing areas. Except as described in the prior sentence, at this stage, Wellspring does not expect material headcount reductions in the Enlarged Group. Any such proposals for change would be developed during the Review referenced above. Wellspring has not yet developed proposals as to how any such headcount reductions would be implemented and any individuals impacted across the Enlarged Group will be treated in a manner consistent with Wellspring’s high standard culture and practices and efforts will be made to mitigate headcount reductions, via natural attrition and the elimination of vacant roles where appropriate.

The Enlarged Group will be led by Sean Downs, CEO of Wellspring. It is further intended that the broader executive leadership team will be constructed from both businesses following completion of the Acquisition.

The Non-Executive Directors will cease to be directors of Sopheon with effect from the Scheme becoming Effective.

Other than as noted immediately above, Wellspring does not expect or intend the Review to have a material impact on the balance of skills and functions at Sopheon.

Existing rights and pensions

Wellspring does not currently intend to make any changes to the eligibility rules or contribution rates that currently apply under Sopheon’s defined contribution pension plans and intends to comply with all applicable law in this regard. Sopheon does not operate a defined benefit pension scheme.

Incentive arrangements

Wellspring believes that the ongoing participation of senior management of the Sopheon Group is very important to the future success of the Sopheon Group. Wellspring has not entered into, has not had discussions on proposals to enter into, and will not do so prior to the Scheme becoming Effective, any form of incentivisation arrangements with members of Sopheon’s management. Wellspring intends to put in place incentive arrangements for certain members of the Sopheon management team following completion of the Acquisition.

Headquarters, locations, fixed assets

Wellspring intends to maintain Sopheon’s existing network of offices, whilst the Review is undertaken. Only following the Review will any need for additions, adjustments or rationalisations to Sopheon’s headquarters and office network be known. Wellspring has no intentions to redeploy the fixed assets of Sopheon at this time.

Trading Facilities

Sopheon Shares are currently admitted to trading on AIM. As set out in paragraph 16 of this Announcement, a request will be made to the London Stock Exchange to cancel the admission to trading of the Sopheon Shares on AIM on or shortly after the Effective Date. Wellspring intends to re-register Sopheon as a private company after the Effective Date.

Statements

No statements in this paragraph 11 constitute “post-offer undertakings” for the purposes of Rule 19.5 of the Takeover Code.

12. Financing

The cash consideration payable to the Sopheon Shareholders under the terms of the Acquisition is intended to be financed by a combination of equity funding to be invested indirectly by the Resurgens Funds and committed debt funding to be provided under the Facilities Agreement. The Resurgens Funds includes a co-investment fund in which the sole limited partner is a fund managed and advised by MS AIP.

Raymond James, in its capacity as financial adviser to Bidco, is satisfied that sufficient cash resources are available to Bidco to enable it to satisfy in full the cash consideration payable to Sopheon Shareholders under the terms of the Acquisition.

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

13. Offer-related arrangements

Confidentiality Agreement

Resurgens Technology Partners and Sopheon entered into a confidentiality agreement dated 19 May 2023 (the “Confidentiality Agreement”) pursuant to which Resurgens Technology Partners has undertaken to: (a) keep confidential information relating to, inter alia, the Acquisition and Sopheon and not to disclose it to third parties (other than to certain permitted parties), unless required by law or regulation; and (b) use the confidential information only in connection with evaluation of the Acquisition, unless required by law or regulation.

These confidentiality obligations shall remain in force for a period of two years from the date of the Confidentiality Agreement.

The Confidentiality Agreement also includes customary non-solicitation obligations on Resurgens Technology Partners, subject to customary carve-outs, for a period of 12 months from the date of the Confidentiality Agreement and a standstill provision in favour of Sopheon, subject to customary carve-outs, for a period of 12 months from the date of the Confidentiality Agreement.

Co-operation Agreement

Pursuant to a co-operation agreement dated 22 December 2023 (the “Co-operation Agreement”): (a) Sopheon has agreed to co-operate with Bidco and Wellspring to assist with the obtaining of regulatory clearances and the making of all filings as may be necessary, from or under the law, regulations or practices applied by any applicable regulatory authority in connection with the Acquisition; (b) Bidco and Wellspring have agreed to provide Sopheon with certain information for the purposes of the Scheme Document and to otherwise assist with the preparation of the Scheme Document; (c) Bidco has agreed to certain provisions if the Scheme should switch to a Takeover Offer; and (d) Sopheon, Wellspring and Bidco have agreed to certain arrangements in respect of the Sopheon Share Plans.

The Co-operation Agreement will terminate, amongst other things:

• if the Acquisition is withdrawn or lapses;
• if prior to the Long Stop Date any Condition becomes incapable of satisfaction;
• at Bidco or Wellspring’s election if:
  • the Sopheon Directors withdraw, modify or qualify their recommendation of the Acquisition;
  • the Sopheon Directors recommend a competing proposal or one is effected;
  • Sopheon announces an intention not to convene the Court Meeting or the General Meeting, or not to publish the Scheme Document; or
  • a Condition is invoked by Bidco prior to the Long Stop Date;
• if the Scheme does not become Effective in accordance with its terms by the Long Stop Date; or
• otherwise as agreed in writing between Bidco, Wellspring and Sopheon.

14. Structure of the Acquisition

Scheme

It is intended that the Acquisition will be effected by a Court-sanctioned scheme of arrangement between Sopheon and the Scheme Shareholders under Part 26 of the Companies Act. The purpose of the Scheme is to provide for Bidco to become the owner of the whole of the issued and to be issued share capital of Sopheon. Under the Scheme, the Acquisition is to be achieved by the transfer of the Scheme Shares held by Scheme Shareholders to Bidco in consideration for which the Scheme Shareholders will receive cash consideration pursuant to the Scheme.

Approval by Court Meeting and General Meeting

To become Effective, the Scheme requires, amongst other things, the:

1. approval of a majority in number of the Scheme Shareholders who vote, representing not less than 75 per cent. in value of the Scheme Shares voted, either in person or by proxy, at the Court Meeting; and
2. approval by the requisite majority of the Resolution at the General Meeting (to be held directly after the Court Meeting) necessary in order to implement the Scheme.

Application to Court to sanction the Scheme

Once the approvals have been obtained at the Court Meeting and the General Meeting and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be sanctioned by the Court at the Sanction Hearing before it can become Effective.

The Scheme will become Effective in accordance with its terms on delivery of the Court Order to the Registrar of Companies. Upon the Scheme becoming Effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or General Meeting, or whether they voted in favour of or against the Scheme.

The Scheme will contain a provision for Bidco and Sopheon to jointly consent, on behalf of all persons concerned, to any modification of or addition to the Scheme or to any condition that the Court may approve or impose. Sopheon has been advised that the Court would be unlikely to approve any modification of, or addition to, or impose a condition to the Scheme which might be material to the interests of Scheme Shareholders unless Scheme Shareholders were informed of such modification, addition or condition. It would be a matter for the Court to decide, in its discretion, whether or not a further meeting of the Sopheon Shareholders should be held in these circumstances.

Full details of the Scheme to be set out in the Scheme Document

Scheme Document will include full details of the Scheme, including the expected timetable and the action to be taken by Scheme Shareholders. The Scheme will be governed by English law. The Scheme will be subject to the applicable requirements of the Code, the Takeover Panel, the AIM Rules, the London Stock Exchange and the FCA.

The Scheme Document, along with the notice of the Court Meeting and the General Meeting and the Forms of Proxy will be despatched to Sopheon Shareholders within 28 days of the date of this Announcement, unless Bidco and Sopheon otherwise agree, and the Takeover Panel consents, to a later date. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on Sopheon’s website at www.sopheon.com/investors and Wellspring’s website at https://offer.wellspring.com/news .

At this stage, subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix I, Bidco and Sopheon expect the Acquisition to become Effective during the first quarter of 2024.

If the Scheme does not become Effective on or before the Long Stop Date (or such later date as Bidco and Sopheon may, with the consent of the Takeover Panel and, if required, the Court, agree) it will lapse and the Acquisition will not proceed (unless the Takeover Panel otherwise consents).

Right to switch to a Takeover Offer

Subject to the terms of the Co-operation Agreement, Bidco reserves the right to elect, with the consent of the Takeover Panel, to implement the Acquisition by way of a Takeover Offer for the issued and to be issued share capital of Sopheon as an alternative to the Scheme. In such an event, the Takeover Offer will be made in accordance with the terms and conditions set out in this Announcement which would apply to the Scheme (with any modifications or amendments to such terms and conditions as may be required by the Takeover Panel or which are necessary as a result of Bidco’s election to implement the Acquisition by way of a Takeover Offer), in accordance with the Co-operation Agreement and subject to the amendments referred to in Part C of Appendix I to this Announcement.

15. Sopheon Share Plans

Participants in the Sopheon Share Plans will be contacted regarding the effect of the Acquisition on their rights under the Sopheon Share Plans and, where relevant, an appropriate proposal will be made to such participants pursuant to Rule 15 of the Code in due course. Further details of the impact of the Acquisition on the Sopheon Share Plans will be set out in the Scheme Document.

16. De-listing and re-registration

It is intended that the London Stock Exchange will be requested to cancel trading of Sopheon Shares on AIM on or shortly after the Effective Date. It is expected that the last day of dealings in Sopheon Shares on AIM will be the Business Day immediately prior to the Effective Date and that no transfers will be registered after 6.00 p.m. on that date. Upon the Scheme becoming Effective, share certificates in respect of the Sopheon Shares will cease to be valid and should be destroyed. In addition, entitlements to Sopheon Shares held within the CREST system will be cancelled on the Effective Date.

As soon as practicable after the Effective Date, it is intended that Sopheon will be re-registered as a private limited company under the relevant provisions of the Companies Act.

17. Disclosure of interests in Sopheon

As at the close of business on 21 December 2023, being the last Business Day prior to the date of this Announcement, save for the irrevocable undertakings referred to in paragraph 8 above, neither Bidco nor, so far as Bidco is aware, any person acting, or deemed to be acting, in concert with Bidco:

1. had an interest in, or right to subscribe for, relevant securities of Sopheon;
2. had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of Sopheon;
3. had procured an irrevocable commitment or letter of intent to accept the terms of the Acquisition in respect of relevant securities of Sopheon;
4. had borrowed or lent any Sopheon Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code) save for any borrowed shares which have been either on-lent or resold; or
5. is a party to any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Code.

18. Documents on display

Copies of this Announcement and the following documents will, by no later than 12 noon on the Business Day following the date of this Announcement, be made available on Sopheon’s website at www.sopheon.com/investors and on Wellspring’s website https://offer.wellspring.com/news until the end of the Offer Period:

• this Announcement;
• the irrevocable undertakings referred to in paragraph 8;
• the Confidentiality Agreement;
• the Co-operation Agreement;
• the documents entered into in relation to the financing of the Acquisition referred to in paragraph 12; and
• consent letters from each of Raymond James and Cavendish.

None of the contents of any website referred to in this Announcement, or the content of any other website accessible from hyperlinks on either such website, is incorporated into or forms part of, this Announcement.

19. General

The Acquisition will be subject to the Conditions, certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. The Scheme Document, along with the notice of the Court Meeting and the General Meeting and the Forms of Proxy will be despatched to Sopheon Shareholders within 28 days of the date of this Announcement, (or by such later date as Bidco and Sopheon may agree, with the consent of the Takeover Panel).

In deciding whether or not to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting, Sopheon Shareholders should rely on the information contained, and follow the procedures described, in the Scheme Document.

Raymond James and Cavendish have each given and not withdrawn their consent to the inclusion in this Announcement of the references to their names in the form and context in which they appear.

Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings referred to in this Announcement. Appendix IV contains definitions of certain terms used in this Announcement.

This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

The implications of the Acquisition for persons resident in, or citizens of, jurisdictions outside the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements.

Enquiries:

King & Spalding International LLP are retained as legal advisers to Resurgens, Wellspring and Bidco.

Squire Patton Boggs (UK) LLP are retained as legal adviser to Sopheon.

Important Notices

Cavendish, which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser to Sopheon and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Sopheon for providing the protections offered to clients of Cavendish or for providing advice in connection with any matter referred to in this Announcement. Neither Cavendish nor any of its affiliates (nor their respective directors, officers, employees or agents) 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 Cavendish in connection with this Announcement, any statement contained herein, the Scheme or otherwise. No representation or warranty, express or implied, is made by Cavendish as to the contents of this Announcement.

Raymond James, which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser to Resurgens, Wellspring and Bidco and no-one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Resurgens, Wellspring or Bidco for providing the protections afforded to clients of Raymond James nor for providing advice in connection with the matters referred to herein. Neither Raymond James nor any of its 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 Announcement, any statement contained herein, the Acquisition or otherwise.

Further Information

This Announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely through and on the terms set out in the Scheme Document (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the offer document) and the accompanying Forms of Proxy, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document. Scheme Shareholders are strongly advised to read the formal documentation in relation to the Acquisition once it has been despatched.

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and service of this Announcement shall not give rise to any implication that there has been no change in the facts set forth in this Announcement since such date.

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English law, the AIM Rules and the Code 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 of jurisdictions outside the United Kingdom.

The laws of the relevant jurisdictions may affect the availability of the Acquisition to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom, or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe any applicable requirements. Any person (including, without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this Announcement, the Scheme Document or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. In particular, the ability of persons who are not resident in the United Kingdom to vote their Sopheon Shares at the Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their Sopheon Shares in respect of the Court Meeting or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located.

Any failure to comply with the applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

The Acquisition will not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, telephonic or electronic) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, a Restricted Jurisdiction, and the Acquisition will not be capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded or distributed in, into or from a Restricted Jurisdiction and persons receiving this Announcement (including custodians, nominees and trustees) must not distribute or send it into or from a Restricted Jurisdiction. In the event that the Acquisition is implemented by way of a Takeover Offer and extended into the US, Bidco will do so in satisfaction of the procedural and filing requirements of US securities laws at that time, to the extent applicable thereto. The Acquisition relates to the shares of a company incorporated in England and it is proposed to be made by means of a scheme of arrangement provided for under English law. The Scheme will relate to the shares of a UK company that is a “foreign private issuer” as defined under Rule 3b-4 under the US Exchange Act. A transaction effected by means of a scheme of arrangement is not subject to any shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act.

Accordingly, the Scheme is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation or tender offer rules. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK and may not be comparable to the financial information of, or the accounting standards applicable to, US companies. However, if Bidco were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including section 14(e) of the US Exchange Act and Regulation 14E thereunder, if applicable. Such Takeover Offer would be made in the US by Bidco and no one else. In addition to any such Takeover Offer, Bidco, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Sopheon outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase are made they would be made outside the United States in compliance with applicable law, including the US Exchange Act. It may be difficult for a US-based investor to enforce his or her rights and any claim he or she may have arising under US securities laws, since the Scheme relates to the shares of a company located in the UK, and some or all of its officers and directors may be residents of non-US jurisdictions. A US-based investor may not be able to sue a company located in the UK, or its officers or directors, in a foreign court for alleged violations of US securities laws, and it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court’s judgment.

Forward-looking statements

This Announcement, oral statements made regarding the Acquisition, and other information published by Sopheon, Bidco, Wellspring and Resurgens may contain certain “forward-looking statements” with respect to Sopheon, Bidco, Wellspring and Resurgens. 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”, “will”, “may”, “should”, “would”, “could” or other words or terms of similar meaning or the negative thereof. Forward-looking statements include statements relating to, for example, the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies of Resurgens, Wellspring and/or Bidco and the expansion and growth of Sopheon and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on the business of Sopheon.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or developments to differ materially from those expressed in or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future strategies and environments. None of Resurgens, Wellspring, Bidco or Sopheon, nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. All subsequent oral or written forward-looking statements attributable to Resurgens, Wellspring, Bidco or Sopheon or any person acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement. None of Resurgens, Wellspring, Bidco or Sopheon assume any obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for Resurgens, Wellspring, Bidco or Sopheon in respect of any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per Sopheon Share for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per Sopheon Share.

Right to switch to a Takeover Offer

Subject to the terms of the Co-operation Agreement, Bidco reserves the right to elect, with the consent of the Takeover Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of Sopheon as an alternative to the Scheme. In such an event, the Takeover Offer will be made in accordance with the terms and conditions set out in this Announcement which would apply to the Scheme (with any modifications or amendments to such terms and conditions as may be required by the Takeover Panel or which are necessary as a result of Bidco’s election to implement the Acquisition by way of a Takeover Offer), in accordance with the Co-operation Agreement and subject to the amendments referred to in Part C of Appendix I to this Announcement.

Publication on website

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions), free of charge, on Sopheon’s website at www.sopheon.com/investors and on Bidco’s website at https://offer.wellspring.com/news by no later than 12:00 noon on the Business Day following this Announcement. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.

Requesting hard copies

In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement, free of charge, by contacting Sopheon’s registrar, Link Group on 0371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9:00 a.m. to 5:30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic communications – information for Sopheon Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Sopheon Shareholders, persons with information rights and other relevant persons for the receipt of communications from Sopheon may be provided to 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.

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.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% 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 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3:30 p.m. (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% 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(s), 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) applies must be made by no later than 3:30 p.m. (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 Disclosures 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).

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 Takeover Panel’s website at www.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 contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Announcement not a prospectus

This Announcement does not constitute a prospectus or prospectus equivalent document.

Private purchases

Sopheon Shareholders should be aware that Bidco may purchase Sopheon Shares otherwise than under the Scheme or any Takeover Offer, including pursuant to privately negotiated purchases.

Independent advice

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 or independent financial adviser duly authorized under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorized independent financial adviser.

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, Sopheon confirms that, as at the date of this Announcement, it had in issue 10,693,079 ordinary shares of 20 pence each. No shares are held in treasury. The ISIN for the ordinary shares is GB00BSZM1369.

APPENDIX I

CONDITIONS OF THE ACQUISITION AND CERTAIN FURTHER TERMS

Part A: Conditions of the Scheme and the Acquisition

1. The Acquisition is conditional upon the Scheme becoming unconditional and effective, subject to the Code, by not later than 11:59 p.m. on the Long Stop Date.
2. The Scheme shall be subject to the following conditions:
   1. (i) its approval by a majority in number of Scheme Shareholders who are on the register of members of Sopheon at the Voting Record Time and who are present and vote, whether in person or by proxy, at the Court Meeting (and at any separate class meeting which may be required by the Court) and who represent 75 per cent. in value of the Sopheon Shares voted by those Sopheon Shareholders, and (ii) such Court Meeting (and any separate class meeting which may be required) being held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Sopheon may agree and the Court may allow);
   2. (i) the passing of the Resolution necessary in order to implement the Scheme by the requisite majority at the General Meeting (or any adjournment thereof), and (ii) such General Meeting being held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Sopheon may agree and the Court may allow);
   3. (i) the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Bidco and Sopheon), and (ii) the Sanction Hearing being held on or before the 22nd day after the expected date of the Sanction Hearing to be set out in the Scheme Document (or such later date, if any, as Bidco and Sopheon may agree and the Court may allow); and
   4. delivery of a copy of the Court Order to the Registrar of Companies.
3. In addition, subject as stated in Part B below and to the requirements of the Takeover Panel, the Acquisition shall be conditional upon the following Conditions and, accordingly, the Court Order shall not be delivered to the Registrar of Companies unless such Conditions (as amended, if appropriate) have been satisfied (and continue to be satisfied pending the commencement of the Sanction Hearing) or, where relevant, waived in writing prior to the Scheme being sanctioned by the Court:

NSIA Condition

1. the Secretary of State confirming before the end of the review period that no further action will be taken in relation to the Acquisition;
2. if the Secretary of State issues a call-in notice in relation to the Acquisition, the parties receiving a final notification pursuant to section 26(1)(b) of the NSIA containing confirmation that the Secretary of State will take no further action in relation to the call-in notice and the Acquisition under the NSIA; or
3. the Secretary of State making a final order pursuant to Section 26(1)(a) of the NSIA allowing the Acquisition to proceed unconditionally or on terms satisfactory to Bidco.

1. no Third Party having decided, threatened or given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to (in any case to an extent or in a manner which is material in the context of the Acquisition, the Wider Target Group or the Wider Bidco Group, as the case may be, in each case, taken as a whole):
   1. require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider Bidco Group or by any member of the Wider Target Group of all or any material part of their respective businesses, assets, property or any shares or other securities (or the equivalent) in any member of the Wider Target Group or any member of the Wider Bidco Group or impose any material limitation on the ability of all or any of them to conduct their respective businesses (or any part thereof) or to own, control or manage any of their respective assets or properties (or any part thereof);
   2. except pursuant to Chapter 3 of Part 28 of the Companies Act, in the event that Bidco elects to implement the Acquisition by way of a Takeover Offer, require any member of the Wider Bidco Group or the Wider Target Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider Target Group or any asset owned by any Third Party (other than in connection with the implementation of the Acquisition);
   3. impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Bidco Group, directly or indirectly, to acquire, hold or exercise effectively all or any rights of ownership in respect of shares or loans or securities convertible into shares or other securities (or the equivalent) in Sopheon or on the ability of any member of the Wider Target Group or any member of the Wider Bidco Group, directly or indirectly, to hold or exercise effectively all or any rights of ownership in respect of shares or loans or any other securities (or the equivalent) in, or to exercise voting or management control over, any other member of the Wider Target Group;
   4. except as Disclosed, result in any member of the Wider Target Group or any member of the Wider Bidco Group ceasing to be able to carry on business under any names under which it currently carries on business;
   5. make the Acquisition, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Sopheon by any member of the Wider Bidco Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, prevent or prohibit, restrict, restrain or delay or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, impede, interfere or require material amendment to the terms of the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control or management of Sopheon by any member of the Wider Bidco Group;
   6. impose any material limitation on, or result in material delay in, the ability of any member of the Wider Bidco Group or any member of the Wider Target Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Bidco Group and/or the Wider Target Group; or
   7. otherwise materially adversely affect all or any of the business, value, assets, liabilities, profits, operational performance, financial or trading position or prospects of any member of the Wider Target Group or any member of the Wider Bidco Group,
   and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Acquisition having expired, lapsed or been terminated;
   
   Other regulatory approvals
2. each Governmental Entity, which regulates or licences any member of the Sopheon Group or any other body corporate in which any member of the Sopheon Group has an interest in shares, and whose prior approval, consent or non-objection to any change in control, or acquisition of (or increase in) control in respect of that or any other member of the Sopheon Group is required, or any Governmental Entity, whose prior approval, consent or non-objection of the Acquisition is otherwise required, or from whom one or more material licences or permissions are required in order to complete the Acquisition, having given its approval, non-objection or legitimate deemed consent or consent in writing thereto and, as the case may be, having granted such licences and permissions (in each case where required and on terms reasonably satisfactory to Bidco), and in each case the impact of which would materially adversely affect the Wider Target Group or the Wider Bidco Group, taken as a whole;
   
   Notifications, waiting periods and authorisations
3. all material notifications, filings or applications which are necessary or considered appropriate or desirable by Bidco having been made in connection with the Acquisition and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with, in each case, in respect of the Scheme and the Acquisition and all Authorisations deemed reasonably necessary or appropriate by Bidco in any jurisdiction for or in respect of the Acquisition and, except pursuant to section 160 of the Companies Act and Chapter 3 of Part 28 of the Companies Act, or control or management of, Sopheon or any other member of the Wider Target Group by any member of the Wider Bidco Group having been obtained in terms and in a form reasonably satisfactory to Bidco from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Target Group or the Wider Bidco Group has entered into contractual arrangements and all such Authorisations necessary, appropriate or desirable to carry on the business of any member of the Wider Target Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Acquisition becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;
   
   Sopheon Shareholder resolution
4. except with the consent or the agreement of Bidco, no action having been taken or proposed by any member of the Sopheon Group, or having been approved by a resolution of Sopheon Shareholders, or consented to by the Takeover Panel, which falls within or under Rule 21.1 of the Code;
   
   Certain matters arising as a result of any arrangement, agreement, etc.
5. except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider Target Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject, or any event or circumstance which, as a consequence of the Acquisition or because of a change in the control of any member of the Wider Target Group as a result of the Acquisition, would or might reasonably be expected to result in (in each case to an extent or in a manner which is material in the context of the Wider Target Group taken as a whole):
   1. any monies borrowed by, or any other indebtedness or liabilities, actual or contingent, of, or any grant available to, any such member being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
   2. the creation, save in the ordinary and usual course of business, or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of such member or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;
   3. any such arrangement, agreement, lease, licence, franchise, permit or other instrument or the rights, liabilities, obligations or interests of any such member in or with any other person (or any arrangement or arrangements relating to any such interests or business) being adversely modified or adversely affected or any onerous obligation or liability arising or any adverse action being terminated, taken or arising thereunder;
   4. any liability of any such member to make any severance, termination, bonus or other payment to any of its directors or other officers;
   5. the rights, liabilities, obligations, interests or business of any such member under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any such member or any member of the Wider Target Group in or with any other person or body or firm or company (or any arrangement relating to any such interests or business) being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;
   6. any such member ceasing to be able to carry on business under any name under which it presently carries on business;
   7. any material assets or material interests of, or any material asset the use of which is enjoyed by, any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any such member otherwise than in the ordinary course of business;
   8. the financial or trading position or prospects of, any such member being prejudiced or adversely affected; or
   9. the creation or acceleration of any material liability (actual or contingent) by any such member other than trade creditors or other liabilities incurred in the ordinary course of business,
   and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Target Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions 3(f)(i) to (ix) above, in each case which is or would be material in the context of the Wider Target Group taken as a whole;
   
   Certain events occurring since 31 December 2022
   1. issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of Sopheon Shares out of treasury (except, where relevant, as between Sopheon and wholly-owned subsidiaries of Sopheon or between the wholly-owned subsidiaries of Sopheon and except for the issue or transfer of Sopheon Shares out of treasury or otherwise on the vesting of awards or exercise of options, in the ordinary course under the Sopheon Share Plans);
   2. recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of Sopheon to Sopheon or any of its wholly-owned subsidiaries;
   3. other than pursuant to the Acquisition (and except for transactions between Sopheon and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Sopheon and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings in any such case to an extent which is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   4. except for transactions between Sopheon and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Sopheon and transactions in the ordinary course of business, disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any material asset or authorised, proposed or announced any intention to do so;
   5. except for transactions between Sopheon and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Sopheon issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness which in any such case is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   6. entered into or varied or authorised, proposed or announced its intention to enter into or vary any material contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which is or which involves or could involve an obligation of an onerous nature or magnitude, otherwise than in the ordinary course of business and in each case to an extent which is material in the context of the Wider Target Group taken as a whole;
   7. entered into, materially varied, authorised or proposed entry into or variation of, or announced its intention to enter into or materially vary the terms of, or made any offer (which remains open for acceptance) to enter into or vary to a material extent the terms of any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the Wider Target Group, otherwise than in the ordinary course of business in each case to an extent which is material in the context of the Wider Target Group taken as a whole;
   8. establish any share option scheme, incentive scheme or other benefit in respect of the Wider Target Group;
   9. purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or made any other change to any part of its share capital (except, in each case, where relevant, as between Sopheon and wholly-owned subsidiaries of Sopheon or between the wholly-owned subsidiaries of Sopheon);
   10. waived, compromised or settled any claim other than in the ordinary course of business and which is material in the context of the Wider Target Group as a whole;
   11. terminated or varied the terms of any agreement or arrangement between any member of the Wider Target Group and any other person in a manner which would or might have a material adverse effect on the financial position of the Wider Target Group taken as a whole;
   12. save as required in connection with the Acquisition, made any material alteration to its memorandum, articles of association or other incorporation documents or any material alteration to the memorandum, articles of association or other incorporation documents of any other member of the Wider Target Group which is material in the context of the Scheme or the Acquisition;
   13. establish any pension scheme(s) in respect of the Wider Target Group;
   14. been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business which is material in the context of the Wider Target Group taken as a whole;
   15. (other than in respect of a member of the Wider Target Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;
   16. (except for transactions between Sopheon and its wholly-owned subsidiaries or between the wholly-owned subsidiaries) made, authorised, proposed or announced an intention to propose any change in its loan capital;
   17. entered into, implemented or authorised the entry into, any joint venture, asset or profit-sharing arrangement, partnership or merger of business or corporate entities, which in any such case is material in the context of the Wider Target Group as a whole or in the context of the Acquisition; or
   18. otherwise than in the ordinary course of business, entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 3(g) and which is material in the context of the Wider Target Group taken as a whole;except as Disclosed, no member of the Wider Target Group having since 31 December 2022:
6. except as Disclosed, since 31 December 2022 there having been:
   1. no adverse change and no circumstance having arisen which would reasonably be expected to result in any adverse change in, the business, value, assets, liabilities, shareholders’ equity, financial or trading position or profits, operational performance or prospects of any member of the Wider Target Group which is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   2. no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Target Group is or may become a party (whether as a claimant, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of, any member of the Wider Target Group, in each case which would reasonably be expected to have a material adverse effect on the Wider Target Group taken as a whole or in the context of the Acquisition;
   3. no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Target Group (or any person in respect of which any such member has or may have responsibility or liability) having been threatened, announced, implemented or instituted or remaining outstanding by, against or in respect of any member of the Wider Target Group, in each case, which would reasonably be expected to have a material adverse effect on the Wider Target Group taken as a whole or in the context of the Acquisition;
   4. no contingent or other liability having arisen or become apparent to Bidco or increased other than in the ordinary course of business which is reasonably likely to affect adversely the business, assets, financial or trading position, profits or operational performance of any member of the Wider Target Group to an extent which is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   5. no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Target Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which would reasonably be expected to have a material adverse effect on the Wider Target Group taken as a whole or in the context of the Acquisition; and
   6. no member of the Wider Target Group having conducted its business in material breach of any applicable laws and regulations which in any case is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   
   No discovery of certain matters regarding information and liabilities, corruption, intellectual property and environmental liabilities
7. except as Disclosed, Bidco not having discovered that:
   1. any financial, business or other information concerning the Wider Target Group announced publicly and delivered by or on behalf of Sopheon through a RIS prior to the date of this Announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading, in any such case which is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   2. any member of the Wider Target Group or any partnership, company or other entity in which any member of the Wider Target Group has a significant economic interest and which is not a subsidiary undertaking of Sopheon, otherwise than in the ordinary course of business, is subject to any liability, contingent or otherwise, and which is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition;
   3. any past or present member, director, officer or employee of the Wider Target Group, or any other person for whom any such person may be liable or responsible, has not complied with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and any laws implementing the same, the UK Bribery Act 2010 and/or the US Foreign Corrupt Practices Act of 1977;
   4. any member of the Wider Target Group is ineligible to be awarded any contract or business under section 23 of the Public Contracts Regulations 2006 or section 26 of the Utilities Contracts Regulations 2006 (each as amended);
   5. any director, officer or employee of the Wider Target Group, or any other person for whom any such person may be liable or responsible, has engaged in any business with or made any investment in, or made any payments to: (A) any government, entity or individual with which US or EU persons are prohibited from engaging in activities or doing business by US or EU laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs, or (B) any government, entity or individual targeted by any of the economic sanctions of the United Nations or the European Union or any of their respective member states;
   6. any asset of any member of the Wider Target Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition);
   7. no circumstance having arisen or event having occurred in relation to any intellectual property owned, used or licensed by the Wider Target Group or to any third parties, including: (A) any member of the Wider Target Group losing its title to any intellectual property or any intellectual property owned by the Wider Target Group being revoked, cancelled or declared invalid, (B) any agreement regarding the use of any intellectual property licensed to or by any member of the Wider Target Group being terminated or varied, or (C) any claim being filed suggesting that any member of the Wider Target Group infringed the intellectual property rights of a third party or any member of the Wider Target Group being found to have infringed the intellectual property rights of a third party, in each case which is material in the context of the Wider Target Group taken as a whole or in the context of the Acquisition; or
   8. in relation to any release, emission, accumulation, discharge, disposal or other similar circumstance which has impaired or is likely to impair the environment (including property) or harmed or is likely to harm the health of humans, animals or other living organisms or eco-systems, any past or present member of the Wider Target Group, in a manner or to an extent which is material in the context of the Wider Target Group, (i) has committed any violation of any applicable laws, statutes, regulations, Authorisations, notices or other requirements of any Third Party giving rise to a material liability; and/or (ii) has incurred any material liability (whether actual or contingent) to any Third Party; and/or (iii) is likely to incur any material liability (whether actual or contingent), or is required, to make good, remediate, repair, re-instate or clean up the environment (including any property) in each case of (i), (ii) or (iii) which such liability or requirement would be material to the Wider Target Group taken as a whole.

Part B: Waiver and invocation of the Conditions

1. Subject to the requirements of the Takeover Panel, Bidco reserves the right in its sole discretion to waive all or any of the Conditions set out in Part A of this Appendix I except Conditions 2(a)(i), 2(b)(i), 2(c)(i) and 2(d) which cannot be waived. The deadlines in any of Conditions 1, 2(a)(ii), 2(b)(ii) and 2(c)(ii) may be extended to such later date as maybe agreed in writing by Bidco and Sopheon (with the consent of the Takeover Panel and/or approval of the Court, if such consent and/or approval is required). If any of the Conditions set out at 1, 2(a)(ii), 2(b)(ii) and 2(c)(ii) is not satisfied by the deadline specified in the relevant Condition, Bidco shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked the relevant Condition, waived the relevant deadline or agreed with Sopheon to extend the relevant deadline.
2. Subject to paragraph 3(g) of Appendix 7 to the Code, Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or treat as fulfilled any of Conditions 3(a) to 3(i) of Part A of this Appendix I by a date earlier than the Long Stop Date, notwithstanding that the other Conditions may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any Condition may not be capable of fulfilment.
3. Subject to paragraph 4 below, under Rule 13.5(a) of the Code, Bidco may only invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn with the consent of the Takeover Panel. The Takeover Panel will normally only give its consent if the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. This will be judged by reference to the facts of each case at the time that the relevant circumstances arise.
4. Conditions 1 and 2 of Part A of this Appendix I (and any Takeover Offer acceptance condition adopted on the basis specified in Part C of this Appendix I) will not be subject to Rule 13.5(a) of the Code.
5. Any Condition that is subject to Rule 13.5(a) of the Code may be waived by Bidco.
6. The Scheme will not become effective unless the Conditions have been fulfilled or (to the extent capable of waiver) waived or, where appropriate, have been determined by Bidco to be or remain satisfied by no later than the Long Stop Date.
7. If the Takeover Panel requires Bidco to make an offer or offers for any Sopheon Shares under the provisions of Rule 9 of the Code, Bidco may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule.
8. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

Part C: Implementation by way of a Takeover Offer

Bidco reserves the right to elect (with the consent of the Takeover Panel and subject to the terms of the Co-operation Agreement) to implement the Acquisition by making, directly or indirectly through a subsidiary or nominee of Bidco, a Takeover Offer as an alternative to the Scheme. In such event, the Takeover Offer will be implemented on the same terms or, unless Bidco otherwise determines and subject to the consent of the Takeover Panel, on such other terms being no less favourable, subject to appropriate amendments, as far as applicable, as those which would apply to the Scheme. The acceptance condition would be set at 90 per cent. of the shares to which such Takeover Offer relates (or such lesser percentage, being more than 50 per cent., as Bidco may decide with the consent of the Takeover Panel where applicable). Further, if sufficient acceptances to the Takeover Offer are received and/or sufficient Sopheon Shares are otherwise acquired, it is the intention of Bidco to apply the provisions of the Companies Act to compulsorily acquire any outstanding Sopheon Shares to which such Takeover Offer relates.

Part D: Certain further terms of the Acquisition

1. The Sopheon Shares shall be acquired by Bidco with full title guarantee, fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third party rights and interests whatsoever and together with all rights existing at the date of this Announcement or thereafter attaching thereto, including (without limitation) the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the Effective Date in respect of the Sopheon Shares.
2. If, on or after the date of this Announcement and prior to or on the Effective Date, any dividend, distribution or other return of value is declared, paid or made or becomes payable by Sopheon and with a record date on or prior to the Effective Date, Bidco reserves the right (without prejudice to any right of Bidco, with the consent of the Takeover Panel, to invoke Condition 3(g)(ii) of Part A of this Appendix I) to reduce the consideration payable under the Acquisition to reflect the aggregate amount of such dividend, distribution or other return of value or excess. If and to the extent that any such dividend, distribution or other return of value is paid or made on or prior to the Effective Date and Bidco exercises its rights under this paragraph 2 to reduce the consideration payable under the Acquisition, any reference in this Announcement to the consideration payable under the terms of the Acquisition shall be deemed to be a reference to the consideration as so reduced. Any exercise by Bidco of its rights referred to in this paragraph 2 shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Acquisition.
3. The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom and any Sopheon Shareholders who are not resident in the United Kingdom will need to inform themselves about and observe any applicable requirements.
4. Unless otherwise determined by Bidco or required by the Code and permitted by applicable law and regulations, the Acquisition is not being, and will not be, made, directly or indirectly, in, into or by the use of the mails of, or by any other means or instrumentality (including, but not limited to, facsimile, email 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 will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.
5. The Acquisition will be subject, amongst other things, to the Conditions and certain further terms which are set out in this Appendix I and those terms which will be set out in the Scheme Document and such further terms as may be required to comply with the AIM Rules and the provisions of the Code.
6. This Announcement and any rights or liabilities arising hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed by English law and will be subject to the jurisdiction of the English courts. The Acquisition shall be subject to the applicable requirements of the Code, the Takeover Panel, the London Stock Exchange and the FCA.

APPENDIX II 

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement, unless otherwise stated or the context otherwise requires, the following sources and bases have been used:

1. The value attributed to the fully diluted share capital of Sopheon of £115 million is based on a value of £10.00 per Sopheon Share and:
   1. 10,693,079 Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to the date of this Announcement); and
   2. 808,571 Sopheon Shares which as at 21 December 2023 (being the last Business Day prior to the date of this Announcement) may be issued on or after the date of this Announcement on the exercise of options or vesting of awards under the Sopheon Share Plans.
2. Unless stated otherwise, financial information relating to Sopheon has been extracted from the audited consolidated financial statements of Sopheon for the financial year ended 31 December 2022 and half-year financial information has been extracted from Sopheon’s interim results for the six-month period ended 30 June 2023.
3. Unless otherwise stated, all prices for Sopheon Shares are the Closing Price for the relevant date.
4. The Closing Prices of Sopheon Shares are taken from the AIM appendix to the Daily Official List.
5. The three month and six-month Volume Weighted Average Price are derived from Bloomberg data and have been rounded to the nearest one penny.
6. Certain figures included in this Announcement have been subject to rounding adjustments.
   
   

APPENDIX III 

DETAILS OF IRREVOCABLE UNDERTAKINGS

Directors’ Irrevocable Undertakings

The following Sopheon Directors have given irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, subject to the terms of the Co-operation Agreement and with the consent of the Takeover Panel, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) in respect of their own (and their connected persons’) beneficial holdings of a total of 2,340,668 Sopheon Shares (held in a personal capacity or through a nominee) representing, in aggregate, approximately 21.89 per cent. of Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to this Announcement), comprised as follows:

The irrevocable undertakings remain binding in the event a higher competing offer is made for Sopheon and will only cease to be binding if:

• the Scheme Document is not published within 28 days of this Announcement, or in circumstances where Bidco elects to implement the Acquisition by way of a Takeover Offer, an offer document is not published within 28 days of the date on which the switch to a Takeover Offer is announced;
• the Scheme or Takeover Offer in respect of the Acquisition is withdrawn or lapses;
• a competing offer for the entire issued and to be issued share capital of Sopheon becomes or is declared unconditional (if implemented by way of a takeover offer), or becomes effective (if proceeding by way of a scheme of arrangement); or
• the Scheme (or the Takeover Offer) in connection with the Acquisition does not become effective by the Long Stop Date.

Shareholder Irrevocable Undertakings

The following Sopheon Shareholders have given irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or, subject to the terms of the Co-operation Agreement and with the consent of the Takeover Panel, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) in respect of a total of 2,074,308 Sopheon Shares (held in a personal capacity or through a nominee) representing, in aggregate, approximately 19.40 per cent. of Sopheon Shares in issue on 21 December 2023 (being the last Business Day prior to this Announcement), comprised as follows:

The irrevocable undertaking given by Rivomore Limited remains binding in the event a higher competing offer is made for Sopheon and will only cease to be binding if:

• the Scheme Document is not published within 28 days of this Announcement, or in circumstances where Bidco elects to implement the Acquisition by way of a Takeover Offer, an offer document is not published within 28 days of the date on which the switch to a Takeover Offer is announced;
• the Scheme or Takeover Offer in respect of the Acquisition is withdrawn or lapses;
• a competing offer for the entire issued and to be issued share capital of Sopheon becomes or is declared unconditional (if implemented by way of a takeover offer), or becomes effective (if proceeding by way of a scheme of arrangement); or
• the Scheme (or the Takeover Offer) in connection with the Acquisition does not become effective by 4 March 2024.

APPENDIX IV

DEFINITIONS

In this Announcement, the following words and expressions have the following meanings, unless the context requires otherwise:

In this Announcement:

1. all times referred to are to London time unless otherwise stated;
2. references to the singular include the plural and vice versa, unless the context otherwise requires;
3. “subsidiary”, “subsidiary undertaking” and “undertaking” have the meanings given by the Companies Act and “associated undertaking” has the meaning given to it by paragraph 19 of Schedule 6 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, other than paragraph 1(b) thereof which shall be excluded for this purpose; and
4. all references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.