TIDMSWC
RNS Number : 7382I
Summerway Capital PLC
15 December 2020
15 December 2020
Summerway Capital Plc
("Summerway" or the "Company")
Proposed Amendment to Investing Policy
Proposed Appointment of New Directors
Proposed Placing and Issue of Warrants
The Board of Directors of Summerway Capital Plc (AIM: SWC) today
set out a summary of proposed amendments to its investing policy,
the proposed appointment of new Directors, including Vinodka (Vin)
Murria OBE as Chairman and a proposed placing and issue of
warrants.
Background to proposed investing policy amendments
Since the Company's listing in October 2018, the Founder
Directors have continued to explore investment and acquisition
opportunities in line with the Company's initial investing
strategy. The Directors have also had discussions with exceptional
management teams and transaction opportunities in sectors outside
of the Company's current investing policy.
As a result of one or more of these opportunities arising, the
Founder Directors and Independent Non-Executive Director of
Summerway consider it in the best interests of the Company's
Shareholders to change the strategic direction of the Company
through amending its investing policy, and to bring in additional
management with the relevant and proven expertise to implement that
revised investing policy.
Proposed new investing policy
The Company's revised investing policy will focus on investment
and acquisition opportunities across the software,
Software-as-a-Service ("SaaS") and digital technologies and
services sectors. The Directors believe there are numerous
opportunities to invest in or acquire businesses that can be
organically or acquisitively grown to become leading providers of
enterprise software, solutions and services.
Under its new strategy and with the enhanced board's expertise,
respective reach and relationships, the Company will identify
target companies within the software, SaaS and digital technologies
and services sectors, where the Directors believe there are
tangible opportunities to drive strategic, operational and
performance improvement, either as standalone entities or as a part
of an enlarged group. This process will include a review of
opportunities where the Directors have existing relationships
together with a methodical review of small cap opportunities across
the UK and EU markets.
The Company will seek to maintain flexibility in the deployment
of capital when making investments or acquisitions. This could
include the use of debt, cash and / or share consideration in order
to consummate full acquisitions, or majority and minority stakes in
target companies, where the Directors believe it is in the best
interests of Shareholders to do so.
It is anticipated that returns to Shareholders will be delivered
through a combination of an appreciation in the Company's share
price and, if appropriate, annual dividends paid out of retained
earnings (following completion of an investment) as well as return
of cash to Shareholders, following any disposal of assets or
investments.
Following the proposed amendment to the Company's investing
policy, it is anticipated that the Company will continue with its
"investing company" status for the purposes of the AIM Rules.
Following substantial implementation of its investing policy the
Company may cease to be an investing company and be eligible for an
alternative classification, or may choose to continue to focus on
acquiring businesses and manage its portfolio in line with a stated
investment policy.
Proposed directorate changes
In line with the proposed amendments to its investing policy and
change in strategy, the Company also announces the proposed
appointments of Vinodka (Vin) Murria OBE as Chairman, and Paul
Gibson and Anthony (Tony) Morris as Directors, and the proposed
resignations of Alexander Anton and Mark Farmiloe.
Ms Murria is presently a non-executive director of Softcat plc,
a leading provider of technology solutions and services, Bunzl plc,
the international distribution and services group, and DWF Group
plc, the global law firm. She was awarded an OBE in 2018 for
services to the digital economy and was previously a non-executive
director of finnCap plc, Sophos Group plc, Zoopla Group plc,
Greenko Group plc and Chime Communications plc as well as a Senior
Advisor at NM Rothschild and an Operating Partner at HG Capital. Ms
Murria was named Asian Woman of the Year (2010), CISCO's Woman of
the Year (2012) and Tech Entrepreneur of the Year (2012).
During her executive career, she was the founder and Chief
Executive Officer of Advanced Computer Software Group plc from 2008
until 2015 where she built the business organically and through
acquisition from an initial cash shell to its eventual GBP725
million sale to Vista Equity Partners, generating significant
double-digit returns for its shareholders. The business was named
Tech Company of the Year (2014) having grown to be the 3(rd)
largest UK headquartered software business. Prior to Advanced
Computer Software, Ms Murria was Chief Executive Officer of
Computer Software Group plc from 2002 until 2007, completing a
number of acquisitions, including a merger with IRIS Software, and
subsequently exiting the business to Hellman and Friedman at a
GBP500 million valuation. Prior to this, Ms Murria was at Kewill
Systems plc (1986-2001) where she was Group Chief Operating
Officer.
Mr Gibson has had a highly successful career in the TMT sector,
most recently as the Operating Partner responsible for software
investments at MXC Capital. He held non-executive director and
advisory roles at Castleton Technology plc and Tax Systems plc
until their respective take private transactions to private equity
backed vehicles in 2020 and 2019 respectively. Previously, Mr
Gibson held the board position of Chief Operating Officer of
Advanced Computer Software Group plc prior to its acquisition by
Vista Equity Partners. Prior to this, Mr Gibson held a number of
senior roles in both financial and operational capacities, latterly
as Finance Director of Redac Limited, the Alchemy backed turnaround
that was subsequently sold to Advanced Computer Software for GBP100
million. The foundations of Mr Gibson's career were built at
Unigate, GrandMet (now Diageo) and Oracle.
Mr Morris is a co-founder and director of Tessera Investment
Management, a strategic advisory firm which provides specialist
transaction support to organisations undertaking corporate
development activity. Prior to co-founding Tessera in 2012, Mr
Morris spent four years in the investment team at Marwyn Capital,
an investment firm, having previously started his career within
Leveraged Finance at Barclays Bank. He has over 15 years'
transacting experience as principal and advisor in M&A and
equity capital markets, and has previously worked with Ms Murria on
M&A and capital raising activities for Advanced Computer
Software plc. Mr Morris also currently serves as a non-executive
director of Michelmersh Brick Holdings Plc, the AIM-listed
specialist brick manufacturer.
Proposed placing and acquisition of shares
Concurrently with Ms Murria's proposed appointment, Ms Murria
has agreed to acquire 500,000 Existing Ordinary Shares at 85 pence
per share from a selling shareholder and subscribe for 1,903,409
New Ordinary Shares at 88 pence per share by way of a direct
subscription (collectively, the "Transactions"). Following
completion of the Transactions, Ms Murria's beneficial interest in
Ordinary Shares of the Company will be 2,403,409 Ordinary Shares,
representing 29.9 per cent. of the enlarged issued share capital of
the Company. At the same time, the Company has conditionally agreed
to issue warrants to Ms Murria which provide for a right to
subscribe for an additional 3,246,062 New Ordinary Shares at 88
pence per share (the "Warrant"). The Warrant may be exercised
during an exercise period commencing on the date of issue of the
Warrants, being the date of completion of the Transactions, and
terminating on the first anniversary of issue or, if earlier, the
date of completion of the Company's inaugural investment or
acquisition.
Completion of the Transactions and the issue of the Warrant
remain subject to the satisfaction of various conditions including,
inter alia, the grant of a waiver, if required, from the Takeover
Panel from any obligation that would otherwise arise pursuant to
Rule 9 of the Takeover Code, and the satisfaction of all conditions
to which any such grant may be subject. In addition, the issuance
of New Ordinary Shares under the Transactions and Warrant remain
subject to the passing of shareholder resolutions contained in a
Circular and Notice of General Meeting to be made available in due
course, to include a resolution waiving pre-emption rights pursuant
to section 561(1) of the Companies Act 2006 in relation to the New
Ordinary Shares to be issued pursuant to the Transactions and the
Warrant.
In the event that the Transactions are completed, the Warrant
issued and the Warrant is exercised in full, Ms Murria's beneficial
interest in the Ordinary Shares of the Company will be 5,649,471
Ordinary Shares, representing 50.1 per cent. of the enlarged issued
share capital of the Company as at the date of this
announcement.
A further announcement confirming the posting of a Circular and
the Notice of General Meeting to Shareholders will be made in due
course, and shortly thereafter, available to view on the Company's
website at www.summerwaycapital.co.uk.
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
Enquiries:
Summerway Capital
Mark Farmiloe 020 7440 7520
N+1 Singer (Nominated Adviser and Broker)
Sandy Fraser 020 7496 3000
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