Schroder UK Public Private | Winterflood Research

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Sale of assets for £52m

On 27 January Schroder UK Public Private Trust* announced that it had agreed to sell a basket of seven assets to Rosetta Capital VI for £49m. This represented a 22% discount to the aggregate valuations as at 30 September 2020 or 19% when adjusted for foreign exchange movements. The basket includes Carrick Therapeutics, Mission Therapeutics, PsiOxus Therapeutics and Mereo BioPharma and partial holdings in Inivata, Immunocore and ReNeuron. They are unquoted, except Mereo BioPharma and ReNeuron, although the IPO of Immunocore is scheduled for February. Rosetta Capital, a UK-based life science venture capital firm, has also agreed to pay £2.9m reflecting follow-on investments made in January. The initial proceeds will therefore total £51.9m.

In addition, an earn-out clause has been agreed that would see an additional payment of up to £5m dependent on certain value thresholds on a future exit of the investment in Immunocore. After its IPO, Rosetta will be bound under the 6-month lock-up agreement as previously agreed by the fund. There is also a potential adjustment to the acquisition price in the event of significant changes in the value of the two listed companies in the basket.

The transaction is expected to close in late February or March, while the valuation will be reflected in the NAV as at 31 December 2020, which should be announced in April. A significant proportion of the proceeds will be used to pay down the outstanding debt under the credit facility, whereby the current term loan will convert to a revolving credit facility. The intention is to use the additional liquidity to support some portfolio companies with follow-on capital and make new investments.

*Denotes a corporate broking client of Winterflood Securities

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