FOR IMMEDIATE RELEASE

THE FOLLOWING ANNOUNCEMENT IS BEING MADE PURSUANT TO THE REQUIREMENTS OF RULES 19.6(B) AND 19.6(C) OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") WHICH, AMONG OTHER THINGS, REQUIRES A PARTY TO AN OFFER TO MAKE AN ANNOUNCEMENT AT THE END OF A PERIOD OF 12 MONTHS FROM THE DATE ON WHICH THE OFFER PERIOD ENDED CONFIRMING WHETHER IT HAS TAKEN, OR NOT TAKEN, THE COURSE OF ACTION SET OUT IN ITS STATED INTENTIONS

20 November 2024

ICHOR MANAGEMENT LIMITED

(a company controlled by funds managed by ARCHIMED SAS)

Rule 19.6(b) update and Rule 19.6(c) confirmation with respect to stated post-offer intention statements for Instem Limited (formerly Instem plc) ("Instem")

Ichor Management Limited ("Bidco"), announces that, further to the completion of its recommended cash acquisition of Instem, which was effected by way of a scheme of arrangement under Part 26 of the Companies Act 2006, and which became effective on 20 November 2023, it has taken certain courses of action which differ from its statements of intention (the "Stated Intentions") made pursuant to Rules 2.7(c)(viii) and 24.2 of the Code which were set out in its announcement of 30 August 2023 and the scheme document published on 25 September 2023.

In the Stated Intentions, Bidco referred to, among other things, possible headcount reductions in relation to a limited number of public company-related functions that may be reduced in scope or become unnecessary.

Despite the strategic measures already implemented by Instem and announced by Bidco on 27 June 2024 to navigate a challenging market environment, the situation has continued to evolve, requiring further action to strengthen the company's position.

Since the end of April, Instem has suffered from the combination of the continuation of difficult market conditions and the impact of an extraordinary cyber event impacting clients in key regions and product lines. This cyber attack, which Instem suffered in early 2024, led to the deactivation of certain customer-facing products and internal systems.  Only 81% of expected renewals had been completed by July, resulting in a £2.3 million shortfall for the first half of the year, and customer churn has been significant, with 43 cancellations by the end of July, 17 of which occurred between April and July.

As a result of this topline underperformance, Instem forecasted EBITDA for the year is now expected to be 43% below budget.   

Instem has therefore taken the difficult decision to propose to reduce its workforce by approximately 30%, primarily in the Delivery, Product, and Technology divisions. This has affected 116 positions in India and the US, with the relevant headcount reductions being implemented during October 2024.  In addition, there are 40 to 50 positions at risk in the UK and France, where consultation processes are currently ongoing that are expected to complete in November or December 2024.  The outcome in those countries is subject to the relevant consultation processes.

Bidco has duly confirmed in writing to the Panel on Takeovers and Mergers in accordance with the requirements of Rule 19.6(c) of the Code that, save as stated in this announcement and in the announcement made by Bidco on 27 June 2024, it has complied with its post-offer statements of intent made pursuant to Rules 2.7(c)(viii) and 24.2 of the Code, which were set out in its announcement of 30 August 2023 and the scheme document published on 25 September 2023.

Enquiries:

Vincent Guillaumot                                                                 Tel: +33 4 81 11 35 33

Brian Sheridan