TIDMELCO
RNS Number : 4109G
Elecosoft PLC
06 November 2018
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. FURTHER DETAILS
OF THE ACQUISITION AND PLACING ARE SET OUT BELOW.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT
CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN
OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW ORDINARY
SHARES OF ELECOSOFT PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN
ARTICLE 7 OF THE MARKET ABUSE REGULATION NO. 596/2014 ("MAR"). UPON
THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
6 November 2018
Elecosoft Plc
("Elecosoft" or the "Company")
Acquisition of Active Online GmbH ("Active Online")
Placing to raise GBP2.25 million
Elecosoft (AIM: ELCO), a developer of award winning software
applications and related services within the architectural,
engineering, construction and owner/operator sectors, is pleased to
announce that it has signed an agreement for the acquisition of
Active Online GmbH ("Active Online") for an initial consideration
of EUR3.45m (comprising cash and ordinary shares) and a potential
further bonus payment of up to EUR0.4m dependent on the attainment
of specific performance and financial targets in the 3 years
following completion (the "Acquisition").
The Board announces that it has also raised funds via an equity
placing to raise GBP2.25m at 70 pence per new Ordinary Share,
conditional on Admission (as defined and further explained
below).
Further details of the Acquisition and Placing are set out below
and this announcement should be read in its entirety.
Acquisition Highlights:
-- Active Online is headquartered in Wesel, Germany and has
developed a range of software applications for the visualisation of
soft furnishings.
-- Its expert knowledge and expertise include the photorealistic
product digitisation; the development of unique virtual rendering
techniques for internet applications; and efficient data-cloud
management techniques.
-- For the year ended 31 December 2017, Active Online achieved
17% revenue growth to EUR2.5m, of which 21% were recurring revenues
attributable to data management and 32% of revenues are repeatable
from existing customers in digitising material and image editing.
In the same year, EBITDA was EUR0.24m and profit before tax was
EUR0.124m.
-- The Board of Elecosoft has identified significant synergistic
opportunities that they expect to arise as a consequence of close
co-operation between Active Online and Elecosoft's ESIGN GmbH
("ESIGN") subsidiary.
-- ESIGN is a flooring internet visualisation business and
Active Online's soft furnishing visualisation will provide the
opportunity to create a unique online interior platform for
visualising all types and designs of interior coverings and
flooring with the capability to transfer product data related to
products included in the visualisation along the whole supply
chain.
-- In conjunction with this, Active Online has already made
considerable capital investment in areas including scanning
facilities and their database of materials, in addition to virtual
reality and augmented reality ("VR/AR") technologies, elements
which Elecosoft's ESIGN business does not yet have and currently
outsources.
-- The Acquisition is expected to be earnings enhancing within its first full financial year.
The Placing
The Board further announces a placing of 3,214,285 new ordinary
shares of 1 penny each in the capital of the Company ("Ordinary
Shares") at a price of 70 pence per Ordinary Share (the "Placing
Price" and the "Placing Shares") to raise gross proceeds of GBP2.25
million (the "Placing) which will be used, inter alia to expedite
the integration of Active Online with ESIGN, Elecosoft's existing
international online visualisation business.
The Acquisition
Active Online is a visualisation software business which
specialises in soft furnishings and materials, such as curtains and
blinds, fabrics, upholstery, paint and wallpaper, and also provides
visualisation of different materials, colours and styles in
photographic room scenes. Founded in 1999, and based in Wesel,
North-West Germany, Active Online has 29 employees.
The Group has an existing company, ESIGN, that specialises in
visualisation software for flooring and hard surfaces and accounted
for c.10% of the Group's revenue in the full year to 31 December
2017.
Active Online's software focuses on the digitisation of textile
visualisation, and together with ESIGN will enhance the Group's
existing portfolio by adding new products and technical
capabilities as well as cross-selling and upselling opportunities
with the new Active Online products and existing ESIGN product.
The Directors have identified sales opportunities within the
combined customer base of Active Online and ESIGN as well as with
other Elecosoft Group companies, along with cost synergies.
The Acquisition is expected to be earnings enhancing within its
first full financial year.
John Ketteley, Executive Chairman of the Company, commented:
"We look forward very much to working with our new colleagues at
Active Online. When we make acquisitions, we look closely at the
quality and flair of the management and people involved, at the
technology and quality of the software, and at the potential
opportunities for collaboration with companies in the Elecosoft
Group. Active Online will bring with it an outstanding team of
software developers; and AR and VR capabilities together with
synergistic opportunities to develop new internet visualisation
tools for the interior market worldwide.
The proceeds of the placing will provide the means to accelerate
the integration of Active Online and ESIGN and the continued
enhancement and development of our software technologies."
Enquiries:
Elecosoft plc +44 (0)20 7422 8000
John Ketteley, Executive Chairman
Jonathan Hunter, Chief Operating
Officer
Ben Moralee, Group Finance Director
finnCap Limited +44 (0)20 7220 0500
Henrik Persson/Kate Bannatyne (Nomad)
Camille Gochez (ECM)
Newgate Communications +44 (0)20 3757 6880
Elisabeth Cowell/Fiona Norman elecosoft@newgatecomms.com
About Elecosoft plc
Elecosoft plc is an AIM-listed (ELCO-GB) software company with
interests based principally in the UK, Sweden, Germany, Benelux,
and the US. Elecosoft develops award winning software applications
and related services to the architectural, engineering,
construction and owner/operator sectors.
Elecosoft delivers a portfolio of software for project
management, estimation, visualisation, Building Information
Modelling (BIM), property management and digital marketing
disciplines.
Elecosoft's software and services are used during early planning
stages through to construction and facilities management, driving
the performance and day-to-day operations of its customers'
businesses.
Elecosoft's broad, and increasingly integrated, product offering
opens up exciting prospects to cross-sell and expand
internationally as it grows its re-seller network
For further information please visit www.elecosoft.com.
Further information on Active Online
Active Online was founded in 1999 and is based in Wesel,
North-West Germany with 29 employees. Active Online also owns 75%
of Active Online SL, a visualisation company, based in Barcelona,
Spain.
Active Online develops and provides visualisation software for
soft furnishings and is a direct competitor of ESIGN. The senior
management of Active Online will be joining the Elecosoft
Group.
For the year ended 31 December 2017, Active Online achieved
revenue of EUR2.5m (c.GBP2.2m), of which 21% were recurring
revenues attributable to data management. A further 32% of revenues
are repeatable from existing customers in digitising material and
image editing. In the same financial year, EBITDA was EUR0.24m
(c.GBP0.21m) and profit before tax was EUR0.124m (c.GBP0.11m).
Active Online achieved 17% revenue growth in 2017 and made
significant capital investment in the business including:
investment in a scanning facility - a scanner for all products and
a database of materials and software development and VR/AR
technologies (technology that ESIGN does not yet have).
Reasons for the Acquisition & Use of Proceeds
Elecosoft intends to deploy the net proceeds of the Placing as a
means to accelerate the integration of Active Online and ESIGN and
the continued enhancement and development of our software
technologies.
The Acquisition will provide significant cross-selling and
upselling opportunities across new product ranges and geographies.
Further justifications for the acquisition include:
-- The deal is expected to be earnings enhancing in its first full financial year.
-- Significant synergies identified between ESIGN and Active
Online's operations, including the additional ability for ESIGN to
begin the in-house scanning of materials, a process which they
currently outsource, with an expected cost saving of around EUR150k
per annum as well as a new joint sales and marketing strategy.
-- Expansion of ESIGN's geographical reach. Active Online's
operational base is in Wesel, North-West Germany, but its
operations span across Europe, including the 75% ownership of
Active Online SL, a Barcelona based visualisation company, also
included in the Acquisition.
-- The addition of Active Online's large base of customers to
ESIGN's existing customer base, and a large global addressable
market, where visualisation software is not yet widely used.
-- Active Online has already made significant capital investment
in scanning facilities and a database of materials, as well as in
software development and VR/AR technologies.
Current trading
The Company announced its interim financial results for the
period to 30 June 2018 on 12 September 2018. The Company continues
to trade in line with its expectations and its assessment of
outlook and the market remains unchanged.
Principal Terms and Conditions of the Acquisition
The Company has entered into an agreement with the vendors of
Active Online (the "Vendors") pursuant to which it has agreed to
acquire the entire issued share capital of Active Online (the
"Acquisition Agreement"). The initial consideration for the
Acquisition is EUR3.45m (c. GBP3.03m), comprising EUR2.95m (c.
GBP2.59m) initial cash consideration to all vendors together and
approximately EUR0.5m (c. GBP0.44m) via the issue of 597,004 new
Ordinary Shares at 73.55 pence, being the average closing price in
the 5 days from 29 October 2018 to 2 November 2018 (the
"Consideration Shares") to the two founder directors. In addition,
up to a further EUR0.4m bonus will be payable to the two founder
directors equally over 3 years based on financial and commercial
objectives set for 2019, 2020 and 2021. The Consideration Shares
will be locked-in for a period of 3 years following Admission.
Transfer of the shares in Active Online to the Company will take
place immediately upon admission of the Placing Shares and
Consideration Shares to trading on the AIM market ("AIM") of London
Stock Exchange plc (the "London Stock Exchange"), ("Admission")
which is expected to take place on or before 8.00 a.m. on 9
November 2018.
Details of the Placing and Placing Agreement
Subscribers for the Placing Shares have, pursuant to the Placing
Agreement, been procured by finnCap, as agent for the Company,
comprising existing institutional investors.
The Placing Price represents a discount of approximately 3.4 per
cent. to the closing mid-market close price of the Ordinary Shares
on 5 November 2018 (being the last practicable dealing day prior to
the date of this announcement). The Placing Shares will represent
approximately 3.93 per cent. of the ordinary share capital as
enlarged by the Placing and Acquisition and will, when issued, rank
pari passu in all other respects with the Company's existing
Ordinary Shares.
The Placing Shares, when issued, will be fully paid and will
rank pari passu in all respects with the existing ordinary shares
of 1 pence each in the capital of the Company, including the right
to receive all dividends and other distributions declared, made or
paid after the date of issue.
Application has been made for the Placing Shares and the
Consideration Shares to be admitted to trading on the AIM.
Admission is expected to take place on or before 8.00 a.m. on 9
November 2018. The Placing is conditional upon, among other things,
the Acquisition Agreement having been entered into and not having
been terminated in accordance with its terms, Admission becoming
effective and the placing agreement between the Company and the
Bookrunner (the "Placing Agreement") not being terminated in
accordance with its terms. Following Admission, the Company will
have 81,819,407 Ordinary Shares in issue.
Expected Timetable of Principal Events
Trade Date in respect of the Placing 7 November 2018
Payment Date in respect of the Placing 8 November 2018
Settlement Date in respect of the Placing 9 November 2018
Expected date for Admission and commencement 9 November 2018
of dealings in the Placing Shares on AIM
Expected date for Admission and commencement 9 November 2018
of dealings in the Consideration Shares on AIM
Completion of the Acquisition 9 November 2018
Admission Statistics
Number of Existing Ordinary Shares 78,008,118
Number of Placing Shares 3,214,285
Number of Consideration Shares 597,004
Placing Shares and Consideration Shares as a 4.89 per cent.
percentage of Current Issued Share Capital
Placing Shares and Consideration Shares as a 3.93 per cent.
percentage of Enlarged Issued Share Capital
Placing Price 70 pence
Enlarged Issued Share Capital on Admission 81,819,407
Market capitalisation of the Company at Admission GBP59.3 million
at the mid-market close price of the Ordinary
Shares on 5 November 2018 (being the last practicable
dealing day prior to the date of this announcement).
Exchange rate of 1:0.8782 EUR to GBP used throughout
Forward-looking statements
This announcement contains statements about Elecosoft that are
or may be deemed to be "forward-looking statements".
All statements, other than statements of historical facts,
included in this announcement may be forward-looking statements.
Without limitation, any statements preceded or followed by, or that
include, the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "should", "anticipates",
"estimates", "projects", "would", "could", "continue" or words or
terms of similar substance or the negative thereof, are
forward-looking statements. Forward-looking statements include,
without limitation, statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects and (ii) business and
management strategies and the expansion and growth of the
operations of Elecosoft.
These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Investors should not place undue
reliance on such forward-looking statements and, save as is
required by law or regulation (including to meet the requirements
of the AIM Rules, the Prospectus Rules and/or the FSMA), Elecosoft
does not undertake any obligation to update publicly or revise any
forward-looking statements (including to reflect any change in
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to Elecosoft or any persons acting on their behalf are
expressly qualified in their entirety by the cautionary statement
above. All forward-looking statements contained in this
announcement are based on information available to the Directors of
Elecosoft at the date of this announcement, unless some other time
is specified in relation to them, and the posting or receipt of
this announcement shall not give rise to any implication that there
has been no change in the facts set forth herein since such
date.
Important Information
This Announcement or any part of it does not constitute or form
part of any offer to issue or sell, or the solicitation of an offer
to acquire, purchase or subscribe for, any securities in the United
States (including its territories and possessions, any state of the
United States and the District of Columbia), Canada, Australia, the
Republic of South Africa, Japan or any other jurisdiction in which
the same would be unlawful. No public offering of the Placing
Shares is being made in any such jurisdiction.
All offers of the Placing Shares will be made pursuant to an
exemption under the Prospectus Directive from the requirement to
produce a prospectus. In the United Kingdom, this Announcement is
being directed solely at persons in circumstances in which section
21(1) of the Financial Services and Markets Act 2000 (as amended)
(the "FSMA") does not apply.
The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any state securities
commission or other regulatory authority in the United States, nor
have any of the foregoing authorities passed upon or endorsed the
merits of the Placing or the accuracy or adequacy of this
Announcement. Any representation to the contrary is a criminal
offence in the United States. The relevant clearances have not
been, nor will they be, obtained from the securities commission of
any province or territory of Canada, no prospectus has been lodged
with, or registered by, the Australian Securities and Investments
Commission or the Japanese Ministry of Finance; the relevant
clearances have not been, and will not be, obtained for the South
Africa Reserve Bank or any other applicable body in the Republic of
South Africa in relation to the Placing Shares and the Placing
Shares have not been, nor will they be, registered under or
offering in compliance with the securities laws of any state,
province or territory of Australia, Canada, Japan or the Republic
of South Africa. Accordingly, the Placing Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, Canada, Japan or the Republic of South Africa or
any other jurisdiction outside the United Kingdom.
finnCap Ltd is authorised and regulated by the Financial Conduct
Authority (the "FCA") in the United Kingdom and is acting
exclusively for the Company and no one else in connection with the
Placing, and finnCap Ltd will not be responsible to anyone
(including any placees) other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the Placing or any other matters referred to in this
Announcement.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by finnCap Ltd or by any of its affiliates
or agents as to, or in relation to, the accuracy or completeness of
this Announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefor is expressly disclaimed.
No statement in this Announcement is intended to be a profit
forecast or estimate, and no statement in this Announcement should
be interpreted to mean that earnings per share of the Company for
the current or future financial years would necessarily match or
exceed the historical published earnings per share of the
Company.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
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
IOEBIBDBDXGBGIU
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