Strategy

Our strategy

Rosebank’s objective is to recreate the same successful ‘Buy, Improve, Sell’ business model which the Rosebank Co-Founders successfully implemented during their time at Melrose. Rosebank proposes to acquire quality industrial or manufacturing businesses whose performance can be enhanced through operational improvement, before being sold and proceeds returned to shareholders, creating significant value over a 3-5 year period.

Rosebank intends to create value in those acquired businesses primarily through:

  • Eliminating unnecessary corporate overhead
  • Changing the focus of management teams and incentivising those management teams well
  • Driving sustainable improvement
  • Focusing on profitability and cash generation
  • Reinvesting heavily to drive long-term performance

Consistent with their track record at Melrose, the Rosebank Co-Founders will aim to double shareholders’ investment in a given acquisition over a three- to five-year investment horizon.

It is the intention of the Directors that, shortly after completing its first major acquisition, Rosebank will seek admission of the Ordinary Shares to the Official List and to trading on the Main Market of the London Stock Exchange.

Business model

Possible acquisition opportunities will be identified through the Rosebank Co-Founders’ own research and from external sources. The Rosebank Co-Founders are highly experienced in sourcing potential acquisition targets, and have an extensive deal sourcing network, having executed public and private deals in the UK, Europe and the US during their time at Melrose.

A clear focus on acquisitions

While the Directors intend to focus upon acquisitions of companies headquartered in the UK, North America and Europe operating in the industrial or manufacturing sectors with an indicative enterprise value of up to approximately $3 billion, there will be no limit as to the number of acquisitions. The Directors intend to pursue more than one acquisition, though propose to ensure improvements are delivered in any existing assets before pursuing subsequent acquisition opportunities.

It is intended that acquisitions will be funded initially using a combination of the issue of further equity on a pre-emptive basis and prudent bank financing, as well as using Ordinary Shares as an acquisition currency.

In the event of a significant increase in the Company’s share price prior to or in connection with an initial acquisition, when ascribing a value to Ordinary Shares being issued to fund such acquisition it may be necessary to have regard not only to the market value of the Ordinary Shares at that time but also to the underlying assets of the Company and it is possible that new Ordinary Shares may be issued at a price significantly lower than the market price of the Company’s Ordinary Shares at that time.

Whilst debt finance is intended to be used as part of the group’s capital base, Rosebank intends to use debt finance in a prudent manner which does not unduly restrict the flexibility of the group.

Prior shareholder approval will be sought for any acquisition which constitutes a reverse takeover under the AIM Rules.

Investing policy

Upon Admission, the Company will be an ‘investing company’ for the purposes of the AIM Rules for Companies. Following completion of its initial acquisition, the Company will cease to be an ‘investing company’ and as such its Investing Policy will cease to apply.

Pending completion of the initial acquisition, the Directors intend to use the initial seed capital, after expenses of the placing, to fund transactional due diligence costs and minor corporate expenses to enable the Company to seek acquisition opportunities and pursue its strategy and, pending such use, intend to invest the net proceeds of the placing in government securities and gilts, money market funds and/or cash on deposit with less than 40% of the total net proceeds held in investment securities such as corporate bonds.

In accordance with the AIM Rules for Companies, if the Company fails to make an acquisition or has not substantially implemented its Investing Policy within 18 months of Admission, the Company will be required to seek shareholder approval for its Investing Policy at its next annual general meeting and on an annual basis thereafter until such time as there has been an acquisition or the Investing Policy has been substantially implemented.

The Directors will, at any subsequent annual general meeting, ask shareholders to consider whether to continue exploring acquisition opportunities or to wind up the Company and return funds (after payment of the expenses and liabilities of the Company) to shareholders.