adept4 plc Share Price Movement and Proposed Acquisition (0486K)
August 23 2019 - 3:06AM
UK Regulatory
TIDMAD4
RNS Number : 0486K
adept4 plc
23 August 2019
Adept4 plc
("Adept4", the "Group" or the "Company")
Share Price Movement and Proposed Acquisition
Adept4 (AIM: AD4), the AIM quoted provider of IT as a Service,
today announces that, further to the announcement on 2 August 2019
and the recent movement in the Company's share price, it has
entered into non-binding heads of terms to acquire the share
capital of Cloudcoco Limited ("CloudCoCo") (the "Proposed
Acquisition").
CloudCoCo was established in September 2017 by former sales
directors of Redcentric plc and offers cloud and related technology
solutions. CloudCoCo's team of cloud and connectivity experts
leverage the capacity of its large supplier ecosystem to provide
unique technology solutions to customers in order to optimise and
transform their businesses. Though only recently established,
CloudCoCo is already trading profitably and has a strong and
growing pipeline. Following completion of the Proposed Acquisition,
it is intended that a member of the management team of CloudCoCo
will join the board of Adept4 (the "Board Change").
The anticipated consideration for the Proposed Acquisition is
218,160,586 ordinary shares of 1 penny each in the capital of
Adept4 (the "Consideration"), which would represent 49% of the
enlarged issued share capital following completion. The Proposed
Acquisition, if completed, would not constitute a reverse takeover
under rule 14 of the AIM Rules for Companies ("AIM Rules"),
however, would be subject, inter alia, to shareholder approval and
the entering into and completion of a share purchase agreement. It
is also likely that the Proposed Acquisition and certain other
matters will constitute related party transactions subject to the
requirements of rule 13 of the AIM Rules.
Furthermore, the Board anticipates that, subject to formal
confirmation from the Panel on Takeovers and Mergers ("Panel"), the
Proposed Acquisition will need to be made conditional on the Panel
granting a waiver of the obligation that would otherwise arise
under Rule 9 of the City Code on Takeovers and Mergers (the "Code")
on the shareholders of CloudCoCo to make a general offer to
Adept4's shareholders (the "Waiver"). The granting of the Waiver by
the Panel will be conditional, inter alia, on Adept4's Independent
Shareholders passing an ordinary resolution voting on a poll at a
general meeting to approve such a Waiver.
Adept4 currently has GBP5 million of unsecured loan notes in
issue which are held by the Business Growth Fund Plc (the "BGF").
Conditional upon completion of the Proposed Acquisition, the BGF
has agreed to sell the loan notes to MXC Capital Limited ("MXC",
which holds 29.9% of Adept4's issued share capital), for GBP3.5
million, thereby reducing the liability of the Company.
Should the Proposed Acquisition proceed, a circular containing
details of, inter alia, the Proposed Acquisition, the Waiver, the
Board Change and the conditional sale of the loan notes by the BGF
to MXC, together with a notice of General Meeting containing
resolutions to approve the Proposed Acquisition and associated
Waiver, will be sent to shareholders in due course.
There can be no guarantee that the Proposed Acquisition will
proceed.
Simon Duckworth, Chairman of Adept4, commented:
"We are delighted to have agreed heads of terms to acquire
CloudCoCo which has a proven salesforce with an enviable growth
track record. Subject to completion of the Proposed Acquisition, we
plan to drive growth from both Adept4's existing customer base and
CloudCoCo's own customers and pipeline. Furthermore, the associated
proposed reduction in the Company's debt would strengthen the
Group's balance sheet and demonstrate the strong support of our
largest shareholder. We see this as a very positive step to return
value to shareholders".
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
For further information please contact:
Adept4 plc
Simon Duckworth, Non-Executive Chairman 01925 398 255
N+1 Singer (Nominated Adviser and
Broker)
Shaun Dobson / Peter Steel 020 7496 3000
MXC Capital Markets LLP
Charlotte Stranner 020 7965 8149
About Adept4
Adept4 delivers IT as a service to small and medium sized
businesses across the UK. IT as a Service (ITaaS) provides you with
exactly the amount of technology and support you need in accordance
with business requirements, billed on a monthly basis, based on
what is consumed.
Critically we underpin this delivery method with a 24 x 7 UK
response team, strategic consulting, professional services and
software development to provide exactly what organisations need
from IT at any given time. Whether an infrastructure is based on
legacy or emerging technologies we will ensure organisations have
the flexibility, agility and cost efficiencies required to run
their business effectively, all through a single trusted
provider.
Adept4 is a public company quoted on the AIM market of the
London Stock Exchange. The Company is headquartered in Warrington,
with offices in Leeds and Aberdeen.
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END
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