TIDMAPPS
RNS Number : 0392K
appScatter Group PLC
06 April 2018
6 April 2018
appScatter Group plc
("appScatter" or the "Company")
Proposed Acquisition and Fundraise
Trading Update
appScatter Group plc (AIM: APPS), the scalable
business-to-business ("B2B") Software as a Service ("SaaS")
platform that allows users to distribute and manage their apps on
multiple app stores around the world, today announces the proposed
acquisition by the Company of Priori Data GmbH ("Priori"), a B2B
SaaS platform provider of mobile app intelligence (the
"Acquisition").
Highlights
The Board of appScatter believes the proposed acquisition of
Priori will:
-- Create a source of app data intelligence drawing on 299
billion downloads across five million apps in 55 categories as well
as six billion devices across 252 territories.
-- Complete appScatter's existing offering by placing Priori's
app data intelligence capability alongside appScatter's app
management platform encompassing distribution, analytics,
intelligence and the appScatter marketplace.
The Company has entered into a conditional sale and purchase
agreement for the acquisition of 100 per cent. of the share capital
of Priori for a total consideration payable on completion of the
Acquisition of GBP13.5 million, of which GBP9.45 million will be
payable in cash (the "Cash Consideration") and GBP4.05 million will
be satisfied by way of the issue of 5,785,715 new ordinary shares
in the Company (the "Consideration Shares") at an effective issue
price of 70 pence per ordinary share.
To effect the Acquisition, the Company will need to complete an
associated fundraising, to fund the Cash Consideration and to
provide additional working capital resources for the enlarged
group, of not less than GBP15 million, before expenses. As at the
date of this announcement, the Company confirms that it has
received formal indications of interest, with the majority from
existing investors, for direct subscriptions and through a
potential placing in respect of a proposed fundraise by way of the
issue of new ordinary shares in the Company at a price of 70 pence
per ordinary share in respect of an aggregate of GBP15 million.
Further announcements in relation to the proposed fundraise by
way of a placing with institutional and other investors and/or
direct subscriptions (the "Proposed Fundraise") will be made, as
appropriate, in due course.
Completion of the Acquisition is conditional, inter alia, on the
despatch by the Company to its Shareholders of a circular in
substantively agreed form and the passing, at a duly convened
general meeting, of the resolutions in the form set out in the
circular.
The Proposed Fundraise will be, conditional, inter alia, upon
the approval of appScatter Shareholders. A general meeting to
approve the necessary resolutions for the issue and allotment of
the Consideration Shares and the Proposed Fundraise shares (the
"New Ordinary Shares") and to permit disapplication of pre-emption
rights (the "Resolutions") in respect of the Proposed Fundraise
shares (the "General Meeting") will be convened only once legally
binding commitments of GBP15 million in respect of the Proposed
Fundraise are confirmed. A circular providing further details of
the Acquisition and the Proposed Fundraise and convening the
General Meeting, will be posted to appScatter shareholders shortly
after this confirmation has been obtained in due course.
The long stop date for the Acquisition under the Acquisition
Agreement (defined below), and therefore for the completion of the
Proposed Fundraise, is 15 May 2018.
Commenting on the Acquisition, Philip Marcella, Chief Executive
Officer of appScatter Group plc, said:
We believe that this is exciting news for the customers of both
companies. Priori publishers and clients will, on completion of the
Acquisition, benefit from wider distribution of their mobile apps
across 75 app stores and appScatter clients will benefit from new
services including keyword (ASO), app and market intelligence.
The Acquisition would mark a major step forward in our quest to
become the go-to source of information in the app ecosystem, in
particular given the scarcity of companies with the quantity of
data held by Priori."
For further information contact:
appScatter Group plc Tel: 020 7466 5000
Philip Marcella, Chief Executive Officer www.appScatter.com
Jason Hill, Sales Director
FTI Consulting Tel: 020 3727 1000
Financial Public Relations appScatter@fticonsulting.com
Matt Dixon / Adam Davidson / Niamh Fogarty
Smith & Williamson Corporate Finance Limited Tel: +44 (0)20 7131 4000
Nominated Adviser and Joint Broker www.smithandwilliamson.com
Azhic Basirov / Ben Jeynes / David Jones
Stifel Tel: +44 (0)20 7710 7600
Joint Broker www.stifel.com
Fred Walsh / Neil Shah / Ben Maddison
Market abuse regulation (MAR) disclosure
Certain information contained in this announcement would have
been deemed to be inside information for the purposes of article 7
of Regulation (EU) No 596/2014 until the release of this
announcement. This announcement has been issued by and is the sole
responsibility of the Company.
About Priori
Founded in 2013, Priori is a B2B SaaS platform provider of
mobile app intelligence based in Berlin, Germany with proprietary
core data intelligence software and 16 full time employees with
experience in monetising app market data, including data
scientists, engineers and sales.
Priori's data is sourced from more than six billion unique user
devices in 252 territories and Priori's proprietary core machine
learning data intelligence software provides intelligence across
keywords, apps, markets, usage and audience.
Priori's active customers include blue-chip multinational
organisations.
Based on unaudited management information, in the financial year
ended 31 December 2017 Priori had revenues of EUR1,056,000 (on a
cash-receipt basis) and recorded EBITDA losses of EUR410,000 (on a
net cash-receipt/cash-expense basis). On completion of the proposed
Acquisition, following the conversion of existing Priori loan
notes, Priori is expected to have unaudited target net assets of
approximately EUR39,000.
Background to, and reasons for, the Acquisition and the Proposed
Fundraise
The Board of appScatter believes the Acquisition will allow the
enlarged group to provide significantly enhanced, market leading,
data-led app insights. The Directors believe that these insights,
when combined with Priori's data intelligence software, will
enhance the Group's ability to meet the increasing data demands of
existing and prospective customers.
The combined range of the appScatter and Priori datasets will be
available to the Company's targeted customers such as brands, app
publishers, advertising agencies and mobile networks to conduct
more targeted demographic campaigns.
The Proposed Fundraise will be required to enable the Company to
fund the Cash Consideration and to provide additional working
capital resources for the enlarged group.
The Acquisition
The Company has entered into a conditional sale and purchase
agreement to acquire Priori, pursuant to which appScatter has
agreed to purchase 100 per cent. of the issued share capital of
Priori.
The total consideration for the Acquisition is GBP13.5 million,
to be satisfied by the payment of the Cash Consideration and the
issue of the Consideration Shares.
A minimum of 16.9 per cent. of the Consideration Shares, which
will be issued to Priori management, will be subject to a lock-in
agreement for an initial period of 12 months and an orderly market
arrangement for a further period of 12 months following the expiry
of the initial lock-in period. The remaining Consideration Shares
not subject to an initial lock-in period shall be subject to an
orderly market arrangement for a period of 12 months.
The Acquisition Agreement
Pursuant to an acquisition agreement dated 5 April 2018 (the
"Acquisition Agreement") between (1) the Company and (2) Quixote
Holdings UG, Lakestar I LP, Martin Rajcan, Priori Trust UG,
Seedcamp III LP and Calceus GmbH (together the "Sellers"), the
Company has agreed to acquire all the issued and to be issued
shares in Priori Data GmbH. The consideration under the Acquisition
Agreement is GBP13.5 million to be satisfied on completion through
the payment of the Cash Consideration and the issue and allotment
of the Consideration Shares.
Completion of the Acquisition is conditional on the despatch by
the Company to its Shareholders of a circular in substantively
agreed form and the passing, at a duly convened general meeting, of
the Resolutions in the form set out in the circular.
The parties have agreed that no circular will be despatched to
appScatter Shareholders until such time as legally-binding
commitments under the Proposed Fundraise are received and that,
therefore, the necessary GBP15 million of funding to effect the
Acquisition and to provide additional working capital resources for
the enlarged group are in place.
The parties have agreed a long stop date for completion of the
Acquisition of 15 May 2018.
Under the terms of the Acquisition Agreement, the Sellers have
agreed to indemnify the Company for:
(i) all claims, liabilities, costs and reasonable expenses
arising in connection with any legal dispute regarding the usage of
certain images on Priori's website in the past;
(ii) all claims, liabilities, costs and reasonable expenses
arising in connection from any violations of the laws with respect
to (i) bogus self-employment and (ii) minimum wage laws by Priori
(in each case, including but not limited to social security
contributions, taxes, fines and penalties and external costs with
respect to such matter);
(iii) all claims, liabilities, costs and reasonable expenses
arising in connection from any violations of the Protection Against
Unfair Dismissal Act by the Priori in respect of its employees;
(iv) all claims, liabilities, costs and reasonable expenses
arising in connection with any convertible loan agreements made
between the Priori and certain lenders in 2013 and 2016; and
(v) all claims, liabilities, costs and reasonable expenses
arising in connection with any claim made by any employee of Priori
(whether current or former) or other person with respect to the
Intellectual Property Rights or with respect Priori's proprietary
software.
Each of the Sellers are giving warranties in favour of the
Company as to title only. The management Sellers are giving a suite
of warranties in favour of the Company that are usual for this type
of transaction.
The management Sellers have agreed not to carry on or be
engaged, concerned or interested (whether directly or indirectly)
with the business of any other app analytics platform for a period
of 2 years following completion of the Acquisition.
Current Trading and Prospects
2017 was a prominent year for the Company, with appScatter
reporting maiden revenues in the first half of 2017, being admitted
to AIM in September 2017 and launching the appScatter platform in
November 2017.
As at 23 March 2018, the Company had 14,954 registered users, of
which 1,059 were licensed users of the appScatter platform
(comprising free users, trial users and paying users).
The Company was pleased to announce its first major partnership
agreement, with Airpush, Inc, a leading mobile advertising network,
in March 2018. The Company currently expects the marketing campaign
which is to accompany this partnership, and is designed to promote
the appScatter platform to Airpush users, to commence in Q2
2018.
The Board reports that trading for the year to 31 December 2017
remains in line with market expectations and the Company's current
expectations, based on unaudited unreviewed financials, are that
the Company will report 2017 revenues of approximately GBP1.9
million and a loss before interest and tax of approximately GBP6.5
million. 2018 has started well and trading in the year to date is
in line with management expectations. The Company has a number of
potential partnerships under discussion and progressing and, should
any of these potential partnerships be concluded, the Board would
expect these partnerships to be accretive to revenues in future
periods.
The Company expects to announce its audited full year results to
31 December 2017 in Q2 2018.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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