TIDMAD4
RNS Number : 4291O
adept4 plc
02 October 2019
Adept4 plc
("Adept4", the "Group" or the "Company")
Proposed acquisition of CloudCoCo Limited, proposed issue of
218,160,586 new Ordinary Shares, proposed change of Company name,
Accelerated Rule 9 Waiver and Notice of General Meeting
Adept4 (AIM: AD4), the AIM quoted provider of IT as a Service,
announces that, on 1 October 2019, the Company conditionally agreed
to acquire, through its wholly owned subsidiary Adept4 Holdings
Limited, the entire share capital of CloudCoCo Limited, a cloud, IT
hardware, and IT services company. The consideration for the
Acquisition is to be satisfied through the issue to the Sellers of
loan notes in Holdings, such loan notes to be exchangeable
immediately upon Completion for 218,160,586 Ordinary Shares in the
Company.
The Company will shortly be posting a circular ("the Circular")
including a Notice of General Meeting to Shareholders, at which
Shareholders will be asked to approve resolutions for the issue of
the Acquisition Shares and, conditional on Completion, a change of
the name of the Company. The General Meeting will be held at 10.00
a.m. on 21 October 2019 at the offices of DAC Beachcroft LLP, The
Walbrook Building, 25 Walbrook, London EC4N 8AF.
The Circular will also be made available to view on the
Company's website www.adept4.co.uk. Should Shareholder approval not
be obtained at the General Meeting for the resolutions enabling
issue of the Acquisition Shares, the Acquisition will not
proceed.
The Circular includes a letter from Simon Duckworth, the
Company's Non-Executive Chairman, explaining, inter alia, the
reasons for the Acquisition and why the Directors consider the
Acquisition to be in the best interests of the Company and
Shareholders as a whole and recommend that Shareholders vote in
favour of the Resolutions to be proposed at the General
Meeting.
Furthermore, the Circular also contains details of the Debt
Refinancing Agreement, under which, inter alia, BGF has agreed that
GBP1.5 million of the loan notes currently held by it will be
cancelled and the remaining GBP3.5 million loan notes will be
purchased by MXCG (a wholly owned subsidiary of MXC Capital
Limited) and their terms revised. The Company also announces,
subject to satisfactory completion of the relevant regulatory
checks, the proposed appointment on Completion of Andy Mills,
current chairman of CloudCoCo, as Adept4's Chief Executive
Officer.
Simon Duckworth, Non-Executive Chairman of Adept4,
commented:
"We are delighted that, conditional on shareholder approval, we
have agreed to acquire CloudCoCo. We are proposing to acquire a
business which has expanded rapidly since establishment and, by
harnessing CloudCoCo's proven and experienced salesforce with our
existing operations, we believe that there is a clearly defined
opportunity to return Adept4 to growth. We have also reached
agreement, subject to completion of the acquisition, to revise the
terms and reduce the level of the Group's indebtedness. We view
these proposals as positive developments as we seek to recover
value for our shareholders".
Definitions of capitalised terms can be found at the end of this
announcement.
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)
Peter Steel / Ben Farrow 020 7496 3000
MXC Capital Markets LLP
Charlotte Stranner 020 7965 8149
Additional details
1 Introduction
On 1 October 2019, the Company conditionally agreed to acquire,
through its wholly owned subsidiary Adept4 Holdings Limited, the
entire share capital of CloudCoCo Limited, a cloud, IT hardware,
and IT services company. The consideration for the Acquisition, in
accordance with the Acquisition Agreement, is to be satisfied
through the issue to the Sellers of loan notes in Holdings, such
loan notes to be exchangeable immediately upon Completion as
detailed in paragraph 4 below for 218,160,586 Ordinary Shares in
the Company which will represent, in aggregate, approximately 49.0
per cent. of the Enlarged Share Capital. At the mid-market closing
price of 2.8 pence on 1 October 2019, the latest practicable date
prior to the publication of this announcement, the Acquisition
Shares represent a total value of GBP6.1 million.
The Acquisition Shares will rank pari passu in all respects with
the Ordinary Shares in issue prior to Completion, including the
right to receive all dividends and other distributions declared
following Admission.
The Code applies to the Company and as such the Shareholders are
entitled to the protections afforded by the Code, as described in
paragraph 9 below.
Subject to Completion, the Concert Party will hold 64.3 per
cent. of the voting rights of the Company which, without a waiver
of the obligations under Rule 9 of the Takeover Code, would require
the Concert Party to make a general offer for the Company. The
Panel has agreed to approve an Accelerated Panel Waiver, having
received written confirmation from Independent Shareholders
holding, in aggregate, in excess of 50 per cent. of the existing
voting rights in the Company, capable of being voted at a general
meeting, consenting to this waiver without the requirement for the
waiver to be approved by Independent Shareholders at a general
meeting. Further details in relation to the Accelerated Panel
Waiver are set out in paragraph 9.2 below.
Notice of the General Meeting, at which the resolutions to
approve the issue of the Acquisition Shares and a change of the
name of the Company, conditional on Completion, is set out at the
end of the Circular that will shortly be sent to Shareholders.
Should the approval of Independent Shareholders not be obtained
at the General Meeting for the Allotment Resolutions, the
Acquisition will not proceed.
The Circular includes a letter from Simon Duckworth, the
Company's Non-Executive Chairman, explaining the reasons for the
Acquisition and why the Directors consider the Acquisition to be in
the best interests of the Company and Shareholders as a whole and
recommend that Shareholders vote in favour of the Resolutions to be
proposed at the General Meeting.
2 Background to and reasons for the Acquisition
Adept4 delivers IT as a service ("ITaaS") to small and
medium-sized businesses across the UK, providing customers with the
technology and support needed in accordance with their business
requirements, billed on a monthly basis, based on what is consumed.
The Company has pursued a Microsoft-focused, asset light, ITaaS-led
strategy and has developed and expanded its solutions portfolio to
continue to be relevant to its customers.
The Company has been challenged by the general level of economic
uncertainty in the market coupled with the investments made in a
new sales team during the previous financial year not delivering
the results the Board had expected. Continued delays in new sales
in the current financial year led to the Group experiencing monthly
Trading Group EBITDA and cash losses. As a result, and in order to
protect the cash reserves of the Group whilst the Board considered
the strategic options available to the Company, the decision was
taken to focus on the Group's existing customer base with less
emphasis on new business acquisition. Whilst this has led to
reduced revenue and gross profit, it requires a significantly lower
operating cost base and therefore a cost reduction programme was
implemented which completed in March 2019. The performance of the
Group was further affected by the loss, in April 2019, of a
customer contract which generated GBP0.7 million of revenue in the
year ended 30 September 2018. The combined effect of these changes
mean that the Group has returned to modest levels of monthly
Trading Group EBITDA profit generation and the monthly net cash
outflows (after plc costs and debt service costs) have reduced. The
Company has, over recent months, explored several strategic options
including the proposed Acquisition which, the Board has concluded,
represents the best opportunity to return to growth and generate
long-term value for all stakeholders.
CloudCoCo was established in September 2017 by the former sales
directors of Redcentric plc (a UK managed service provider) and
offers a variety of cloud computing services, IT hardware, managed
IT services, voice and connectivity solutions via its partner
ecosystem, working with a number of entities to provide services
such as Microsoft Citrix, Fortinet, Alibaba Cloud services and
Amazon Web Services. CloudCoCo aims to offer its customers a
simplified approach to IT services. Though only recently
established, CloudCoCo is currently trading profitably and has a
strong and growing pipeline of new business opportunities.
CloudCoCo brings with it a very strong and experienced sales and
business development team. Adept4's top 20 customers represent c.50
per cent. of its revenue and profitability and they will be a focus
for the team at CloudCoCo. The CloudCoCo management team has
already shown its ability to win new business using its agile sales
methodology and believes that the customer base of Adept4 will
respond positively to this modern way of working. It is proposed
that Andy Mills, current chairman of CloudCoCo, will join the board
of Adept4 as Chief Executive Officer and will focus on driving the
growth of the Enlarged Group. Mark Halpin (founder and current
Chief Executive Officer of CloudCoCo) will lead the business
development activities, with Robert Speight and Graham Collinson
(respectively CloudCoCo's Chief Sales Officer and Chief Operating
Officer) concentrating on existing customers of the Enlarged
Group.
3 Information on CloudCoCo
CloudCoCo has established itself as an asset light, talent rich
cloud solutions business. Its management believes that with its
simplified approach and by remaining independent and acting as a
broker across several providers and partners, it can deliver
solutions in a highly responsive and agnostic manner when compared
with traditional IT services companies.
Though the company only began trading in April 2018, CloudCoCo
was included in the Digital Enterprise Top 100 campaign to profile
and celebrate the Leeds City Region's most innovative, digitally
mature, and transformational businesses. It has established itself
on the YPO framework and the recent G-Cloud 11 framework which
comprises a series of framework agreements with suppliers for which
UK public sector organisations can buy cloud-based services
covering hosting, software and cloud support, with 18 listings.
MXCG supported CloudCoCo by an initial investment of GBP100,000
for a 10.6 per cent. shareholding. Shortly before the Company
entered into the Acquisition Agreement, MXCG sold this shareholding
to Andy Mills, who it is proposed will become Chief Executive
Officer of the Enlarged Group on Completion.
For the period 12 April 2018 (the date on which CloudCoCo
commenced trading) to 30 September 2018, CloudCoCo generated
revenue of GBP252,000 and a loss after tax of GBP112,000. As at 30
September 2018, the gross assets of CloudCoCo totalled GBP400,000.
For the 11 months to 31 August 2019, CloudCoCo generated revenue of
GBP1,021,000 and a profit before tax of GBP45,000. All figures in
respect of CloudCoCo are unaudited.
CloudCoCo's strategy is to focus on winning multi-year recurring
revenue contracts with the intention that the profitability of the
business improves across future years. It has already signed
multi-year contracts with respected customers.
4 Details of the Acquisition Agreement
The Company and Holdings have entered into an agreement to
acquire CloudCoCo for loan notes in Holdings, such loan notes being
exchangeable for 218,160,586 new Ordinary Shares at any time within
10 Business Days from Completion. Adept4 will serve notice such
that the Acquisition Shares will be issued to the Sellers
immediately upon Completion.
At the mid-market closing price of 2.8 pence on 1 October 2019,
the latest practicable date prior to the publication of this
announcement, the Acquisition Shares represent a total value of
GBP6.1 million. The Sellers have provided warranties and
indemnities appropriate to a transaction of this nature. The
Directors expect that the Acquisition will complete on 21 October
2019.
Additional information regarding the Acquisition Agreement is
set out in the Appendix to this announcement.
The Acquisition Shares will be subject to a 12 month lock in
followed by a 12 month orderly market agreement as detailed in
paragraph 11 below.
5 Information on current trading
The recent financial performance of Adept4 was set out in the
Company's unaudited interim results announcement released on 28
June 2019. For the six months ended 31 March 2019 revenues totalled
GBP4.2 million with Trading Group EBITDA of GBP15,000 and a loss
after tax of GBP1.1 million. Net debt as at 31 March 2019 totalled
GBP3.4 million. For the year ended 30 September 2018 revenues
totalled GBP10.3 million, with Trading Group EBITDA of GBP0.6
million and a loss after tax of GBP3.8 million.
6 proposed debt refinancing AND WARRANT AND OPTION amendments
Adept4 currently has GBP5 million of unsecured loan notes in
issue which are held by BGF. Conditional upon Completion:
-- Pursuant to the Debt Refinancing Agreement, GBP1.5 million of
the loan notes will be cancelled, thereby reducing the liability of
the Company, and BGF will waive its rights to any redemption of the
cancelled loan notes and any interest accrued thereon in respect of
the period 30 June 2019 to 30 September 2019 (inclusive). BGF will
also, at that time, release the subsidiaries of the Company from a
guarantee and indemnity pursuant to which the subsidiaries provided
credit support to the Company by guaranteeing its obligations under
the loan notes;
-- Also pursuant to the Debt Refinancing Agreement, MXCG (a
wholly owned subsidiary of MXC Capital Limited) will purchase the
remaining GBP3.5 million loan notes currently held by BGF at a
price of GBP3.5 million. These loan notes will then be amended
pursuant to the Deed of Variation. The amended loan notes will have
a term of 5 years, and a coupon of 12 per cent. per annum, which is
to be rolled up, compounded annually and payable at the end of the
term;
-- Furthermore, MXCG has agreed to provide an additional
unsecured working capital facility to the Enlarged Group of up to
GBP0.5 million pursuant to the Facility Agreement, with a term of
24 months and interest charged at a rate of 12 per cent. per annum
on amounts drawn down;
-- In respect of the Options held by BGF to subscribe for
50,000,000 Ordinary Shares of the Company at a price of 6 pence per
Ordinary Share, conditional upon Completion and pursuant to the
Amended and Restated BGF Options, the exercise price of BGF's
current Options over 50 million shares will be rebased to 0.35
pence per share. The terms of these Options will also be amended so
that, save for certain customary exceptions (for example, a
consolidation of the Ordinary Shares in issue), the exercise price
will not be adjusted for any future event; and
-- MXCG will cancel the Warrants it currently holds over 5 per
cent. of the share capital of the Company as well as rights over
new Warrants over 5 per cent. of any future issue of new Ordinary
Shares pursuant to the Deed of Termination of MXC Warrants. On
completion of the Acquisition, MXCG will not therefore hold
Warrants over the share capital of the Company.
7 Strategy of the enlarged Group
Following completion of the Acquisition, the focus of the
Enlarged Group will be on driving sales growth by leveraging the
sales expertise of the CloudCoCo team alongside the existing
infrastructure within Adept4 in order to build value for all
stakeholders. This sales growth is expected to come from both
harvesting the strong relationships with existing customers of the
Enlarged Group as well as from new customers.
The focus of the Enlarged Group will be on winning multi-year
recurring revenue contracts with the intention that the visibility
and profitability of the business improves across future years.
In addition, the Enlarged Group intends to expand its ecosystem
of partners and supplier relationships in order to provide a range
of flexible IT solutions to its customers via a simplified and
agile approach.
8 Proposed board, Management and COMPANY name changes
Following Completion, it is proposed that Andy Mills, current
Chairman of CloudCoCo will join the board of Adept4 as Chief
Executive Officer. Over the past 25 years, Andy has managed and
helped to grow numerous technology companies. Andy co-founded
Intrinsic Networks, which he sold to a buy and build IT services
company and has held a number of senior leadership positions. He
has worked successfully in the technology industry for many years
as a sales director and managing director and was most recently the
sales director of Tax Systems plc which was a successful public
company until it was recently taken private by a private equity
company.
Upon his proposed appointment as Chief Executive Officer, Andy
Mills will enter into a new service contract with the Company on a
salary of GBP140,000 per annum, with the possibility of a
discretionary bonus to be determined by the Remuneration Committee
in addition. Further details of Mr Mills' service contract are
provided in the Appendix to this announcement. Mr Mills'
appointment to the Board is conditional upon, inter alia,
satisfactory completion of regulatory checks in accordance with
Rule 17 and Schedule 2(g) of the AIM Rules.
It is also proposed that Tom Black, Non-Executive Director, will
step down from the Board once a suitable replacement independent
Non-Executive Director has been found. The Company proposes to
undertake a search for a suitable successor following
Completion.
In addition, Mark Halpin, Chief Executive Officer and founder of
CloudCoCo, will lead the Enlarged Group's business development
activities following Completion. Mark was previously New Business
Sales Director of Redcentric and has over 20 years' experience of
new business acquisition.
Subject to Shareholder approval, it is proposed, in due course,
to change the name of the Enlarged Group to CloudCoCo Group plc.
Should Shareholder approval be granted for the change of name the
Company also intends, following completion of the Acquisition, to
change its ticker to CLCO.L and its website address will be
changed, as part of the rebranding programme to be undertaken after
Completion, to www.cloudcoco.co.uk. A separate timetable for each
of these matters will be announced in due course following
Completion.
9 City Code on Takeovers and Mergers
9.1 Summary
The purpose of the Panel is to supervise and regulate takeovers
and other matters to which the Takeover Code applies. The Takeover
Code is issued and administered by the Panel. The Company is a
company to which the Takeover Code applies and as such its
shareholders are therefore entitled to the protections afforded by
the Takeover Code.
The Acquisition gives rise to certain considerations under the
Code. Brief details of the Code and the protections this affords
Shareholders are described below.
The Code is issued and administered by the Panel. The Code and
the Panel operate to ensure fair and equal treatment of
shareholders in relation to takeovers, and also provide an orderly
framework within which takeovers are conducted. The Code applies to
all takeovers and merger transactions, where the company is, among
others, a listed or unlisted public company with its registered
office in the United Kingdom, the Channel Islands or the Isle of
Man or falls within certain categories of private limited
companies. Adept4 is such a company and accordingly its
Shareholders are entitled to protections afforded by the Code.
Under Rule 9 of the Code, when (a) any person acquires, whether
by a series of transactions over a period of time or not, an
interest in shares which (taken together with shares in which
persons acting in concert with him are interested) carry 30% or
more of the voting rights of a company; or (b) any person, together
with persons acting in concert with him, is interested in shares
which in the aggregate carry not less than 30% of the voting rights
of a company but does not hold shares carrying more than 50% of
such voting rights and such person, or any person acting in concert
with him, acquires an interest in any other shares which increases
the percentage of shares carrying voting rights in which he is
interested, such person shall extend offers, on the basis set out
in Rules 9.3, 9.4 and 9.5, to the holders of any class of equity
share capital whether voting or non-voting and also to the holders
of any other class of transferable securities carrying voting
rights. Under the Code, a 'concert party' arises, inter alia, when
persons who, pursuant to an agreement or understanding (whether
formal or informal), co-operate, to obtain or consolidate control
of that company. Under the Code, control means an interest, or
interests, in shares carrying in aggregate 30 per cent. or more of
the voting rights of a company, irrespective of whether such
interest or interests give de facto control. In this context,
voting rights means all the voting rights attributable to the
capital of the company which are currently exercisable at a general
meeting. Rule 9 further provides, inter alia, that where any person
who, together with persons acting in concert with him, holds over
50 per cent. of the voting rights of a company and acquires an
interest in shares which carry additional voting rights, then they
will not normally be required to make a mandatory general offer to
the other shareholders to acquire their shares.
An offer under Rule 9 of the Takeover Code must be made in cash
and at the highest price paid by the person required to make the
offer, or any person acting in concert with him, for any interest
in shares in the company acquired during the 12 months prior to the
announcement of the offer.
9.2 Accelerated Rule 9 Waiver
The Sellers are not currently interested in any Ordinary Shares,
but if the Resolutions are passed at the General Meeting and
following Completion and on Admission, the Sellers would hold an
aggregate interest in 218,160,586 Ordinary Shares, representing in
aggregate 49.0 per cent. of the Enlarged Share Capital.
The Sellers' aggregate interest would be more than 30 per cent.
of the Enlarged Share Capital, and as such would prompt a mandatory
offer under Rule 9 of the Takeover Code. Under Note 1 of the Notes
on Dispensations from Rule 9 of the Takeover Code, the Panel may
waive the requirement for a general offer to be made in accordance
with Rule 9 of the Takeover Code if, inter alia, those shareholders
of the company who are independent of the person who would
otherwise be required to make an offer, and any person acting in
concert with him ("Independent Shareholders"), pass an ordinary
resolution on a poll at a general meeting or by way of a written
resolution ("Whitewash Resolution") approving such a waiver. Under
Note 5c of the Notes on Dispensations from Rule 9 of the Takeover
Code, the Panel may waive the requirement for a Whitewash
Resolution to be considered at a general meeting (and for a
circular to be prepared in accordance with Section 4 of Appendix 1
to the Takeover Code) if Independent Shareholders holding more than
50 per cent. of the Company's shares capable of being voted on such
a resolution confirm in writing that they would vote in favour of
the Whitewash Resolution were one to be put to Shareholders at a
general meeting.
The Company has obtained confirmation in writing (in the form
set out in paragraph 9.4 of this announcement below) from Gresham
House, Darren Weston, Andrew Barnes, Michelle Weston, Simon
Duckworth and Dr Tom Black, who in aggregate hold 86,311,089
shares, representing 54.3 per cent. of the independent share
capital, that they would vote in favour of the Whitewash Resolution
were such a resolution to be put to Shareholders at a general
meeting. The Company has subsequently approached the Panel and, in
accordance with Note 5c of the Dispensations from Rule 9 of the
Takeover Code, successfully obtained its permission to waive the
requirement for a Whitewash Resolution to be considered at a
general meeting and has also now received the Panel's confirmation
that the Panel has granted a waiver of the obligation on the
Concert Party to make a general offer under Rule 9 of the Takeover
Code to the extent that such obligation would otherwise arise as a
result of the issue of the Acquisition Shares.
9.3 Concert Party interests in the Enlarged Share Capital
following completion of the Acquisition
Together with MXC Capital's interests in 15.3 per cent. of the
Enlarged Share Capital, you should note that if the Acquisition
completes, the Concert Party will hold 64.3 per cent. of the voting
rights of the Company, as set out in table in paragraph 9.4 of this
letter. For so long as the Concert Party holds more than 50 per
cent. of the voting rights, the Concert Party may accordingly
increase its interest in shares without incurring any obligation
under Rule 9 to make a mandatory general offer, although other
individual members of the Concert Party (i.e. Mark and Caroline
Halpin who together will hold 31.6 per cent. of the total voting
rights if the Acquisition completes) will not be able to increase
their percentage interests in shares through or between a Rule 9
threshold without Takeover Panel consent. In the event that the
Whitewash Resolution is approved at the General Meeting, the
Concert Party will not be restricted from making an offer for the
Company.
You should also note that, if the Acquisition proceeds, the
Concert Party's interest in the voting rights of the Company
combined will result in an increase in the percentage of the
Ordinary Shares that are not in public hands (as defined in the AIM
Rules). This may in turn have the effect of reducing the liquidity
of trading in the Ordinary Shares on AIM. The Concert Party's stake
in the voting rights of the Company will also mean that the Concert
Party will be able, if it so wishes, to exert significant influence
over resolutions proposed at future general meetings of the
Company.
9.4 Letter in relation to the Accelerated Rule 9 Waiver
Shareholders who, in aggregate, represented more than 50 per
cent of the independent voting rights in the Company have signed
the following declaration with respect to approving the Accelerated
Rule 9 Waiver:
Introduction
I confirm that I have been made aware of the proposed
transaction whereby the Company has conditionally agreed to
acquire, through its wholly owned subsidiary Adept4 Holdings
Limited ("Holdings"), the entire share capital of CloudCoCo Limited
("the Acquisition"). The consideration for the Acquisition is to be
satisfied through the issue to the Sellers of loan notes in
Holdings, which will be exchanged immediately upon completion of
the Acquisition for 218,160,586 ordinary shares of one penny each
("Ordinary Shares") in the Company ("the Proposed
Transaction").
Rule 9 of the Takeover Code
I understand that, under Rule 9 of the Takeover Code ("the
Code"), if any person acquires an interest in shares which, when
taken together with shares in which he and persons acting in
concert with him are already interested, carry 30% or more of the
voting rights of a company which is subject to the Code, that
person is normally required to make a general offer in cash to all
shareholders in the company at the highest price paid by him or any
person acting in concert with him for an interest in such shares
within the preceding 12 months.
I also understand that Rule 9 also provides that if any person,
together with persons acting in concert with him, is interested in
shares which in the aggregate carry not less than 30% of the voting
rights of a company which is subject to the Code but does not hold
shares carrying more than 50% of such voting rights, and such
person, or any person acting in concert with him, acquires an
interest in any other shares which increases the percentage of
shares carrying voting rights in such company in which he is
interested, that person is normally required to make a general
offer in cash to all shareholders in the company at the highest
price paid by him or any person acting in concert with him for an
interest in such shares within the preceding 12 months.
Proposed transaction
I understand that, in connection with the Proposed
Transaction:
(i) each of the vendors of ordinary shares in CloudCoCo Limited,
being Mark Halpin, Caroline Halpin, Andy Mills, Graham Collinson,
Robert Speight, Chris Ormandy, Anton Murphy, Alexander Tovey,
Laurence Lewis and Adam Fossett (together "the Vendors"), will be
issued with loan notes in Holdings, to be exchanged immediately
upon completion of the Proposed Transaction for a total of
218,160,586 Ordinary Shares, representing 49.0 per cent. of the
Company's issued share capital and voting rights, as enlarged by
the Proposed Transaction;
(ii) as the Vendors do not currently hold Ordinary Shares, this
would represent their maximum aggregate interest in the Company's
issued share capital and voting rights, as enlarged by the Proposed
Transaction. The Takeover Panel has also determined that the
Vendors and MXC Capital Limited ("MXC Capital", together with the
Vendors, "the Concert Party") are acting 'in concert' with each
other. MXC Guernsey Limited, a wholly owned subsidiary of MXC
Capital, was, until recently, a shareholder in CloudCoCo Limited
before selling its shareholding to Andy Mills (one of the
Vendors).
MXC Capital currently holds 68,066,275 Ordinary Shares,
representing 29.98 per cent. of the Company's current issued share
capital and voting rights. The Concert Party will therefore hold
286,226,861 Ordinary Shares, representing 64.3 per cent. of the
Company's issued share capital and voting rights, as enlarged by
the Proposed Transaction.
A table, which sets out the interests of each member of the
Concert Party in the Company's issued share capital and voting
rights, as enlarged by the Proposed Transaction, is set out
below:
Concert Party member Number of Ordinary % of issued share
Shares capital and voting
rights
Mark and Caroline
Halpin 140,713,578 31.6%
Andy Mills 32,724,088 7.4%
Graham Collinson 17,452,847 3.9%
Robert Speight 10,908,029 2.5%
Chris Ormandy 6,544,818 1.5%
Anton Murphy 3,272,409 0.7%
Alexander Tovey 2,727,007 0.6%
Laurence Lewis 2,727,007 0.6%
Adam Fossett 1,090,803 0.3%
-------------- --------
Sub-total: the Vendors 218,160,586 49.0%
MXC Capital 68,066,275 15.3%
Total: Concert Party
interests 286,226,861 64.3%
; and
(iii) the Proposed Transaction is subject to, inter alia, the
passing of resolutions at a general meeting of shareholders to
provide the directors of the Company with authorities under the
Companies Act 2006 to allot securities.
Therefore, following the Proposed Transaction, the Vendors and
persons acting in concert with them will together hold more than
50% of the Company's voting share capital and as a result would
then be able, subject to Note 4 on Rule 9.1, to acquire further
shares in the Company without incurring any obligation under Rule 9
to make a general offer, although Mark and Caroline Halpin, who
together will hold 31.6% of the total voting right if the
Acquisition completes), will not be able to increase their
percentage interests in shares without Takeover Panel consent.
Waiver of Rule 9 obligation
I understand that, under Note 1 on the Notes on the
Dispensations from Rule 9, the Takeover Panel ("the Panel") will
normally waive the requirement for a general offer to be made in
accordance with Rule 9 (a "Rule 9 offer") if, inter alia, those
shareholders of the company who are independent of the person who
would otherwise be required to make an offer and any person acting
in concert with him and do not have any interest in the proposed
transaction which may compromise their independence ("the
Independent Shareholders") pass an ordinary resolution on a poll at
a general meeting ("a Whitewash Resolution") approving such a
waiver. I also understand that the Panel may waive the requirement
for a Whitewash Resolution to be considered at a general meeting
(and for a circular to be prepared in accordance with Section 4 of
Appendix 1 to the Code) if Independent Shareholders holding more
than 50% of the company's shares capable of being voted on such a
resolution confirm in writing that they would vote in favour of the
Whitewash Resolution were one to be put to the shareholders of the
company at a general meeting.
Confirmations and Acknowledgements
I hereby confirm the following:
1. that I am the beneficial owner of [X] ordinary shares in the
issued share capital of the Company, representing [X]% of the
Company's issued share capital carrying voting rights, and I have
absolute discretion over the manner in which these shares are
voted. These shares are held free of all liens, pledges, charges
and encumbrances;
2. that (a) save for the fact that we are both shareholders in
the Company, there is no connection between me, the Vendors and/or
MXC Capital, (b) I do not have any interest or potential interest,
whether commercial, financial or personal, in the outcome of the
Proposed Transaction, and (c) I am an Independent Shareholder of
the Company as defined above; and
3. that, in connection with the Proposed Transaction:
(a) I consent to the Panel granting a waiver from the obligation
for the Vendors to make a Rule 9 offer to the shareholders of the
Company;
(b) subject to Independent Shareholders of the Company holding
more than 50% of the shares capable of being voted on a Whitewash
Resolution to approve the waiver from the obligation for the
Vendors to make a Rule 9 offer giving confirmations in writing in a
similar form to this letter, I consent to the Panel dispensing with
the requirement that the waiver from such obligation be conditional
on a Whitewash Resolution being approved by Independent
Shareholders of the Company at a general meeting; and
(c) I would vote in favour of a Whitewash Resolution to waive
the obligation for the Vendors to make a Rule 9 offer were one to
be put to the Independent Shareholders of the Company at a general
meeting.
In giving the confirmations referred to above, I
acknowledge:
1. that, if the Panel receives such confirmations from
Independent Shareholders of the Company holding more than 50% of
the shares capable of being voted on a Whitewash Resolution, the
Panel will approve the waiver from the obligation for the Vendors
to make a Rule 9 offer without the requirement for the waiver
having to be approved by Independent Shareholders of the Company at
a general meeting;
2. that if no general meeting is held to approve the Whitewash
Resolution to waive the obligation for the Vendors to make a Rule 9
offer:
(a) there will not be an opportunity for any other person to
make any alternative proposal to the Company conditional on such
Whitewash Resolution not being approved by Independent Shareholders
of the Company;
(b) there will not be an opportunity for other shareholders in
the Company to make known their views on the Proposed Transaction;
and
(c) there will be no requirement for the Company either (i) to
obtain and make known to its shareholders competent independent
advice under Rule 3 of the Code on the Proposed Transaction and the
waiver of the obligation for the Vendors to make a Rule 9 offer or
(ii) to publish a circular to shareholders of the Company in
compliance with Appendix 1 of the Code in connection with this
matter.
I consider myself to be a sophisticated investor in relation to
equity investments. I confirm that I have had the opportunity to
take independent financial advice before signing this letter.
I confirm that I will not sell, transfer, pledge, charge, or
grant any option or other right over, or create any encumbrance
over, or otherwise dispose of my shares in the Company until after
the conclusion of the proposed general meeting to approve the
Proposed Transaction.
I, the signee, have full power and authority to sign this letter
on behalf of myself which is a binding obligation upon me.
10 relationship agreement
With a view to preserving the independence of the Company from
certain Sellers who, on Completion, will hold 31.6 per cent. of the
voting rights of the Company, the Company and Mark and Caroline
Halpin, have agreed (conditional on Completion) to enter into the
Relationship Agreement with N+1 Singer pursuant to which they will
ensure that the Company is capable of carrying on its business
independently of them and their associates.
Under the terms of the Relationship Agreement, Mark and Caroline
Halpin undertake, inter alia, that they shall use all their rights
and powers (including, without limitation, voting rights) ("Voting
Rights") attaching to the Acquisition Shares in which they are
interested from time to time, and shall procure that their
associates shall use their Voting Rights, to procure that the
Enlarged Group and its business shall be managed for the benefit of
the Shareholders as a whole.
The Relationship Agreement shall be immediately terminated if
Mark and Caroline Halpin and/or any of their associates cease to be
Shareholders together holding directly or indirectly 25 per cent.
or more of the issued ordinary voting capital of the Company.
Further details of the Relationship Agreement are set out in the
Appendix to this announcement.
11 lock in and orderly market agreement
The Sellers have agreed to enter into lock-in deeds on
Completion whereby they undertake not, for a period of 12 months
from Completion, to sell, charge or grant any interest over any
Acquisition Shares held by them; and to not, for a further period
of 12 months thereafter, make any disposal of any Acquisition
Shares otherwise than through N+1 Singer subject in each instance
to customary carve-outs.
Further details of the Lock In Agreement are set out in the
Appendix to this announcement.
12 proposed management inCeNtivisation arrangement
The Directors and the Proposed Director believe that the success
of the Enlarged Group will depend, to a high degree, on management
and other members of staff being appropriately motivated and
rewarded. It is therefore currently proposed that, shortly
following Completion, a new incentive scheme will be put in place
over new Ordinary Shares, in an amount equal to up to 15 per cent.
of the Enlarged Share Capital. The new incentive scheme will be
designed to assist in the recruitment, motivation and retention of
staff and will carry performance conditions which align the
interests of the management team with those of Shareholders.
13 related party transactions
The Debt Refinancing Agreement, the Deed of Variation, the
Facility Agreement and the Deed of Termination of MXC Warrants (as
described more fully in paragraph 6 of this announcement) are being
entered into by MXCG and the Company. MXCG is a wholly owned
subsidiary of MXC Capital, which in turn is classified as a
substantial shareholder in the Company under the AIM Rules as it
currently holds 29.98 per cent. of the current issued share capital
in Adept4. As such, the Debt Refinancing Agreement, the Deed of
Variation, the Facility Agreement and the Deed of Termination of
MXC Warrants constitute related party transactions pursuant to Rule
13 of the AIM Rules. The Company's Independent Directors (Simon
Duckworth and Tom Black, Non-Executive Chairman and Non-Executive
Director respectively) consider, having consulted with N+1 Singer,
the Group's Nominated Adviser, that the terms of the Debt
Refinancing Agreement, the Deed of Variation, the Facility
Agreement and the Deed of Termination of MXC Warrants are fair and
reasonable insofar as the Company's Shareholders are concerned.
Jill Collighan, Executive Director of Adept4, is also group Finance
Director of MXC Capital. Ms Collighan did not take part in the
Independent Directors' consideration of these matters.
14 General Meeting
For the reasons set out above, Completion is conditional upon,
inter alia, the approval of Shareholders at the General
Meeting.
Set out at the end of the Circular is a notice convening the
General Meeting which is to be held at 10.00 a.m. at the offices of
DAC Beachcroft LLP, The Walbrook Building, 25 Walbrook, London EC4N
8AF on 21 October 2019, for the purpose of considering, and if
thought fit, passing the following Resolutions set out in the
Notice of General Meeting.
Resolution 1 - an ordinary resolution to allow the Directors of
the Company to allot shares in the Company, and grant rights to
subscribe for or to convert any security into shares of the Company
(such shares, and rights to subscribe for or to convert any
security into shares of the Company being "relevant
securities").
Resolution 2 - a special resolution which is subject to the
passing of Resolution 1 above, to authorise the Directors to allot
equity securities (as defined by Section 560 of the Act) for cash,
pursuant to the authority conferred by Resolution 1, on a non
pre-emptive basis.
The authority granted by the Allotment Resolutions is required
to facilitate the Acquisition.
Resolution 3 - a special resolution to, subject to and
conditional upon the passing of the Allotment Resolutions and
Completion, change the registered name of the Company to CloudCoCo
Group plc.
Shareholders should read the full text of the Notice of General
Meeting before returning their Forms of Proxy.
15 Actions to be taken
Shareholders will find enclosed with the Circular a form of
proxy for use at the General Meeting. Whether or not you propose to
attend the General Meeting in person, you are strongly encouraged
to complete, sign and return your Form of Proxy in accordance with
the instructions printed thereon. If you hold your shares in the
Company in uncertificated form (that is, in CREST) you may vote
using the CREST Proxy Voting service in accordance with the
procedures set out in the CREST Manual (please refer to the
accompanying notes to the Notice of the General Meeting set out at
the end of the Circular).
16 APPLICATION FOR ADMISSION OF THE ACQUISITION SHARES
Application will be made to the London Stock Exchange for the
Acquisition Shares to be admitted to trading on AIM and it is
expected that trading in the Acquisition Shares will commence on
AIM at 08.00 a.m. on or around 22 October 2019. Admission of the
Acquisition Shares is subject to, inter alia, approval of the
Allotment Resolutions at the General Meeting.
17 Recommendation
Shareholders should be aware that if the Allotment Resolutions
are not passed, the Acquisition will not proceed.
The Directors consider the Acquisition to be in the best
interests of the Company and the Shareholders as a whole.
Accordingly the Directors recommend that the Shareholders vote in
favour of the Resolutions to be proposed at the General
Meeting.
Each of the Independent Directors has undertaken to vote in
favour of the Resolutions in respect of their holdings of Ordinary
Shares comprising, in aggregate, 14,542,199 Ordinary Shares,
representing approximately 6.4 per cent. of the Company's issued
share capital.
APPIX
Adept4 material contracts
The following contracts are material contracts (not being
contracts entered into in the ordinary course of business) which
have been entered into by the Company in connection with the
Acquisition.
Acquisition Agreement
The Acquisition Agreement was entered into on 1 October 2019
between the Company, Holdings and the Sellers. Pursuant to the
terms of the Acquisition Agreement, Holdings has conditionally
agreed to purchase and the Sellers have conditionally agreed to
sell the entire issued share capital of CloudCoCo. The Acquisition
Agreement provides that the consideration payable for the shares in
CloudCoCo will be the issue to the Sellers of consideration loan
notes in Holdings (the "Loan Notes"). On the same date, the Company
and the Sellers entered into a put and call option agreement (the
"Option Agreement") pursuant to which the Sellers and the Company
granted to each other, with effect from Completion, an option in
respect of the Loan Notes. On the exercise of either option, the
Sellers will transfer the Loan Notes to the Company in exchange for
the issue to them by the Company of the Acquisition Shares.
The Acquisition has been structured in this way at the request
of the Sellers with a view to deferring, as provided for by the
relevant legislation, their liability to pay capital gains tax on
the gain arising on the disposal of their shares in CloudCoCo by
making the transaction in respect of the sale of their shares in
CloudCoCo one which, for these purposes, qualifies for hold-over
relief. As the consideration received by them is not cash, the
Sellers may not have sufficient funds available immediately after
Completion to meet that liability and they are not permitted, under
the terms of the Lock In Agreements, to dispose of Acquisition
Shares to meet that liability.
This situation is catered for and relieved in the Taxation of
Chargeable Gains Act 1992, which permits the tax charge to be
deferred, in certain circumstances, until the newly held securities
are disposed of. In this instance, the Acquisition Shares are the
relevant "newly held securities". The legislation requires the
exchange to be for "buyer" securities. The terms of the Acquisition
provide for relevant shares in the capital of the Company, not
Holdings, to be allotted to the CloudCoCo shareholders. To address
this, the Acquisition has been structured in such a way as to
provide for the shares in CloudCoCo to be exchanged for a
"marketable security" (the Loan Notes) issued by Holdings, which
are exchanged in turn for the Acquisition Shares, creating a chain
of exchanges which qualifies for hold over relief.
The Loan Notes qualify as marketable securities as, inter alia,
they bear commercial interest and are transferrable.
At Completion, the Company will exercise its call option under
the Option Agreement, and will thereby acquire all the Loan Notes
held by the Sellers, and will then forthwith issue the Acquisition
Shares to the Sellers. The Acquisition Agreement states that the
Company shall not be obliged to complete the purchase of any of the
Sellers' shares in CloudCoCo unless the purchase of all of the
Sellers' shares is completed simultaneously, so the call option
will be exercised immediately upon Completion in respect of all of
the Loan Notes, thereby ensuring that all are acquired
simultaneously.
Completion of the Acquisition Agreement is conditional upon the
passing of the Resolutions at the General Meeting. If this
condition is not satisfied by 30 November 2019 (or such other date
as the parties may agree), either the Sellers or Holdings may
terminate the Acquisition Agreement by notice.
At all times during the period from (and including) the date of
the Acquisition Agreement up to (and including) the date of
Completion or, if earlier, the termination of the Acquisition
Agreement in accordance with its terms, the Sellers have agreed
(amongst other things): to procure that CloudCoCo carries on its
business in the normal course of business and in the manner
provided in the Acquisition Agreement; and that except with the
prior written consent of the Company, CloudCoCo shall not (nor
shall it agree to) undertake certain actions including, for
example, disposing of any material assets used or required for the
operation of CloudCoCo, appointing any person as a director,
incurring any capital expenditure on any item in excess of
GBP10,000 (or GBP50,000 in aggregate), making any loan, declaring
or paying any dividend or other distribution or granting any
security over its assets.
The Acquisition Agreement may be terminated prior to Completion:
(i) by Holdings on the occurrence of any matter or circumstance
which has a material adverse impact on the business, operations,
assets, trading or financial position or prospects of CloudCoCo or
its business following the date of the Acquisition Agreement; and
(ii) by the Sellers on the occurrence of any matter or circumstance
which has a material adverse impact on the business, operations,
assets, trading or financial position or prospects of the Group
following the date of the Acquisition Agreement.
The Acquisition Agreement contains restrictive covenants given
by the Sellers to CloudCoCo and Holdings.
The Acquisition Agreement contains warranties in the usual form
given by the Sellers jointly and severally to Holdings on the date
of the Acquisition Agreement and repeated on Completion (subject to
any disclosures made). In the absence of fraud or wilful
concealment, the Sellers' aggregate liability for any breach of the
Acquisition Agreement (including any breach of warranty and for
breach of the tax covenant of which the Company is the beneficiary)
is limited to GBP1,000,000 (exclusive of costs and interest).
The Acquisition Agreement also contains limited-scope warranties
given by the Company to the Sellers on the date of the Acquisition
Agreement and repeated on Completion (subject to any disclosures
made). In the absence of fraud or wilful concealment, the Company's
liability for a breach of the terms of the Acquisition Agreement
including, for example, any breach of warranty is limited to
GBP1,000,000 (exclusive of costs and interest).
Lock In Agreements
On Completion, the Company will enter into the Lock In
Agreements. Under the terms of the Lock In Agreements each Seller
undertakes, not, for a period of 12 months from Completion, to
sell, charge or grant any interest over any Acquisition Shares held
by them; and not, for a further period of 12 months thereafter, to
make any disposal of any Acquisition Shares otherwise than through
N+1 Singer (subject to execution of the same on a best price and
execution basis), subject in each instance to customary carve-outs
including to the effect that a sale to satisfy a warranty or tax
covenant claim under the Acquisition Agreement shall be permitted,
subject to compliance by the Seller in question with the AIM Rules
and relevant insider dealing legislation.
Relationship Agreement
On Completion, the Company will enter into the Relationship
Agreement. Under the terms of the Relationship Agreement, Mark and
Caroline Halpin will undertake, inter alia, that they shall use all
their Voting Rights attaching to the Acquisition Shares in which
they are interested from time to time, and shall procure that their
associates shall use their Voting Rights, to procure that the
Enlarged Group and its business shall be managed for the benefit of
the Shareholders as a whole.
It further requires them, inter alia, to use their Voting Rights
to procure that all transactions, agreements and arrangements
between them or any of their associates and any member of the
Enlarged Group shall be on an arm's length basis and on normal
commercial terms.
The Relationship Agreement shall be immediately terminated if
Mark and Caroline Halpin and/or any of their associates cease to be
Shareholders together holding directly or indirectly 25 per cent.
or more of the issued ordinary voting capital of the Company.
Debt Refinancing Agreement
On 1 October 2019, the Company entered into the following
material contracts (each taking effect conditional on Completion)
in relation to the Debt Refinancing and amendment of the Options
and Warrants:
(1) Debt Refinancing Agreement;
(2) Deed of Variation;
(3) Deed of Termination of MXC Warrants;
(4) Amended and Restated BGF Options; and
(5) Facility Agreement.
Further details are set out as above in Paragraph 6 of this
announcement.
Andy Mills (Proposed Director and Chief Executive Officer):
service contract
It is proposed that Andy Mills will, at Completion, enter into a
service agreement with the Company, pursuant to which he will be
appointed as Chief Executive Officer of the Enlarged Group upon
Completion. The service agreement provides for the payment to Mr
Mills of a salary of GBP140,000 per annum with the possibility of a
discretionary bonus determined by the Remuneration Committee in
addition. The agreement places upon Mr Mills certain standard form
restrictive covenants which have effect for a period of between 6
and 12 months after termination. The agreement is terminable by
either party on not less than six months' prior notice and
immediately by the Company, inter alia, if Mr Mills commits any
serious or repeated breach or non-observance of any material
provisions of the agreement. The agreement further provides for Mr
Mills to benefit from the Company's life and health insurance
schemes.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of the Circular and Form 2 October 2019
of Proxy
Latest time and date for receipt of Forms 10.00 a.m. on 19 October
of Proxy 2019
General Meeting 10.00 a.m. on 21 October
2019
Completion of the Acquisition 21 October 2019
Admission of Acquisition Shares 08:00 a.m. on 22 October
2019
Each of the times and dates above are indicative only and are
subject to change. If any of the above times and/or dates change,
the revised times and/or dates will be notified by the Company to
Shareholders by announcement through a regulatory information
service. All of the above times refer to London time unless
otherwise stated. The admission of the Acquisition Shares on AIM is
conditional on, inter alia, the passing of the Allotment
Resolutions at the General Meeting.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
Accelerated Panel the approval by the Takeover Panel of a waiver
Waiver from the obligations that would otherwise
apply to the Concert Party to make a general
offer for the Company pursuant to Rule 9 of
the Code as a result of the issue of the Acquisition
Shares to the Sellers pursuant to the Acquisition,
the Takeover Panel having received written
confirmation from Independent Shareholders
holding, in aggregate, in excess of 50 per
cent. of the existing voting rights in the
Company, capable of being voted at a general
meeting, consenting to this waiver without
the requirement for the waiver to be approved
by Independent Shareholders at a general meeting
Acquisition the proposed acquisition by Holdings of the
entire issued share capital of CloudCoCo Limited,
in accordance with the terms and conditions
of the Acquisition Agreement
Acquisition Agreement the conditional agreement for the Acquisition
dated 1 October 2019, further details of which
are set out as above in paragraph 4 of this
announcement
Acquisition Shares the 218,160,586 new Ordinary Shares to be
issued to the Sellers pursuant to the Acquisition
Admission the admission of the Acquisition Shares to
trading on AIM becoming effective in accordance
with the AIM Rules
AIM AIM, a market operated by the London Stock
Exchange
AIM Rules the AIM Rules for Companies published by the
London Stock Exchange from time to time
Allotment Resolutions resolution 1 and resolution 2 as set out in
the Notice, to be voted on by the Shareholders
at the General Meeting to authorise the Board,
inter alia, to allot the Acquisition Shares
on a non pre-emptive basis
Amended and Restated the agreement between the Company and BGF
BGF Option amending the terms of the Option held by BGF
in 50,000,000 Ordinary Shares
BGF BGF Investments L.P.
Board or Directors the directors of the Company, being Simon
Duckworth (Non-Executive Chairman), Jill Collighan
(Chief Financial Officer) and Tom Black (Non-Executive
Director)
Business Day any day on which banks are usually open in
England and Wales for the transaction of sterling
business, other than a Saturday, Sunday or
public holiday
certificated or in a share or other security not held in uncertificated
certificated form form (that is, not in CREST)
CloudCoCo Limited Cloudcoco Limited, a company incorporated
or CloudCoCo in England and Wales with registered number
10989039
Code or Takeover Code the City Code on Takeovers and Mergers
Company or Adept4 Adept4 plc, a company incorporated in England
and Wales with registered number 05259846
Completion completion of the Acquisition
Concert Party each of Mark Halpin, Caroline Halpin, Andy
Mills, Chris Ormandy, Graham Collinson, Alexander
Tovey, Lawrence Lewis, Robert Speight, Adam
Fossett, Anton Murphy (all shareholders of
CloudCoCo), and MXC Capital Limited
CREST a relevant system (as defined in the CREST
Regulations) in respect of which Euroclear
is the Operator (as defined in the CREST Regulations)
CREST Regulations the Uncertificated Securities Regulations
2001 (SI 2001/3755) as amended from time to
time
Debt Refinancing the refinancing by MXCG of GBP5 million of
unsecured loan notes in issue in the Company,
which are currently held by BGF, further details
of which are set out as above in paragraph
6 of this announcement
Debt Refinancing Agreement the loan note transfer agreement between the
Company, BGF and MXCG pursuant to which the
Debt Refinancing is effected
Deed of Termination the deed of termination of the Warrants in
of MXC Warrants the Company held by MXCG, taking effect at
Completion
Deed of Variation the deed of variation entered into between
the Company and MXCG amending, with effect
from Completion, the terms of the unsecured
loan notes in issue in the Company
Enlarged Group the Group as enlarged by the Acquisition
Enlarged Share Capital the issued share capital of the Company at
the date of this announcement as enlarged
by the issue and allotment of the Acquisition
Shares
Existing Ordinary the 227,065,100 Ordinary Shares in issue at
Shares the date of this announcement, prior to the
Acquisition
Facility Agreement the agreement between the Company and MXCG
in relation to the GBP0.5m working capital
facility to be provided to the Company by
MXCG at Completion
Financial Conduct the Financial Conduct Authority in its capacity
Authority as the competent authority for the purposes
of Part VI of FSMA
Form of Proxy the form of proxy enclosed with the Circular
for use by Shareholders in connection with
the General Meeting
FSMA the Financial Services and Markets Act 2000
(as amended)
General Meeting the general meeting of the Company to be held
at 10.00 a.m. on 21 October 2019 (or any reconvened
meeting following any adjournment of the general
meeting) at the offices of DAC Beachcroft
LLP, The Walbrook Building, 25 Walbrook, London
EC4N 8AF, notice of which is set out at the
end of the Circular
Group the Company and its subsidiaries
Holdings Adept4 Holdings Limited, a company incorporated
in Scotland with registered number SC102302
Independent Directors Simon Duckworth and Tom Black
Independent Shareholders shareholders who are independent of a person
who would otherwise be required to make a
Rule 9 Offer and any person acting in concert
with him or her (as defined by the Code) which,
for the purposes of the Accelerated Panel
Waiver, excludes all members of the Concert
Party
Lock In Agreements the agreements between (i) N+1 Singer, (ii)
the Company and (iii) each of the Sellers,
further details of which are set out as above
in paragraph 11 of this announcement
London Stock Exchange London Stock Exchange plc
MXC Capital Limited MXC Capital Limited, a company incorporated
or MXC Capital in Guernsey with registered number 58895
MXCG MXC Guernsey Limited, a company incorporated
in Guernsey with registered number 59361 and
a wholly owned subsidiary of MXC Capital
N+1 Singer Nplus1 Singer Advisory LLP, the Company's
Nominated Adviser and Broker for the purposes
of the AIM Rules, which is incorporated as
a limited liability partnership in England
and Wales with registered number OC364131
Notice or Notice of the notice of the General Meeting set out
General Meeting at the end of the Circular
Options options granted by the Company over new Ordinary
Shares
Ordinary Shares the ordinary shares of 1 penny each in the
share capital of the Company
Panel the Panel on Takeovers and Mergers
Proposed Director Andy Mills, who it is proposed will be appointed
as Chief Executive Officer of the Company
on completion of the Acquisition
Registrar Computershare Investor Services PLC, registrars
to the Company
Relationship Agreement the agreement between (i) the Company, (ii)
N+1 Singer and (iii) Mark Halpin and Caroline
Halpin, further details of which are set out
as above in paragraph 10 of this announcement
Resolutions the resolutions to be proposed at the General
Meeting as set out in the Notice of General
Meeting
Rule 9 Offer a general offer under Rule 9 of the Code
Sellers the sellers of ordinary shares in CloudCoCo,
being Mark Halpin, Caroline Halpin, Andy Mills,
Chris Ormandy, Graham Collinson, Alexander
Tovey, Lawrence Lewis, Robert Speight, Adam
Fossett and Anton Murphy
Shareholders holders of Ordinary Shares
Trading Group EBITDA represents earnings before interest, tax,
depreciation and amortisation, share-based
costs, separately identifiable costs and plc
costs
uncertificated or recorded on the register of members of the
in uncertificated Company as being held in uncertificated form
form in CREST and title to which, by virtue of
the CREST Regulations, may be transferred
by means of CREST
United Kingdom or the United Kingdom of Great Britain and Northern
UK Ireland
United States or US the United States of America
Warrants warrants granted by the Company over new Ordinary
Shares
GBP, pounds sterling, UK pounds sterling, the lawful currency of
penny or pence the United Kingdom
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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