EVOL Evolve Capital

 

TIDMEVOL 
 
RNS Number : 8458A 
Evolve Capital PLC 
15 October 2009 
 
15 October 2009 
 
 
Evolve Capital PLC ("Evolve" or the "Company") 
 
 
Strategic Investment in Bluehone Holdings PLC and Issue of Equity 
 
 
Evolve is pleased to announce that it has entered into a conditional strategic 
mutual cooperation agreement and whereby it has agreed to take a 19.9 per cent 
shareholding in Bluehone Holdings PLC in return for the issue of new ordinary 
shares in Evolve. 
 
 
It was announced today that Investment West Midlands PLC ("IWM"), an investment 
company listed on the PLUS market, has entered into a conditional agreement to 
acquire the entire issued share capital of Bluehone Limited ("Bluehone"), a fund 
management company focussed on small company investment funds. Should the 
shareholders of IWM approve, inter alia, the acquisition, IWM is expected to be 
re-admitted to trading on the PLUS market and re-named Bluehone Holdings PLC 
("Bluehone Holdings"). 
 
 
Bluehone was incorporated on 30 July 2004 and acquired Bluehone Investors LLP on 
21 August 2009. Bluehone Investors LLP is a fund management company focussed on 
managing small company investment funds. Through Bluehone Investors LLP, 
Bluehone currently manages two closed end investment companies, Active Capital 
Trust plc and Bluehone AIM VCT2 plc, which are listed on the AIM market. As at 
30 September 2009, Bluehone had approximately GBP59 million of funds under 
management. These funds are predominately invested in companies listed on AIM. 
Bluehone Investors LLP is authorised and regulated by the FSA. Bluehone intends 
to expand the size, scale and areas of its operation through launching new funds 
of its own, acquiring fund management mandates and through strategic 
acquisitions. 
 
 
Evolve has entered into a strategic mutual cooperation agreement with IWM and 
Bluehone conditional on, inter alia, approval by IWM shareholders and completion 
of the acquisition by IWM of Bluehone and its re-admission to the PLUS market. 
Completion and re-admission to PLUS are expected to take place on or around 11 
November 2009. Under the agreement, Evolve will issue to Bluehone Holdings 
9,148,037 ordinary shares of 1p each at 5p per share in return for 22,870,093 
ordinary shares of 2p each in Bluehone Holdings. On completion of these 
transactions Evolve will hold approximately 19.9 per cent. of Bluehone Holdings' 
issued share capital and Bluehone Holdings will hold approximately 5.1 per cent 
of Evolve's issued share capital. 
 
 
The Directors believe that the strategic cross holding with Bluehone Holdings 
will encourage mutual business development and enhance the opportunities for 
each company in their respective areas of interest in the quoted company arena. 
 
 
Edward Vandyk, Chief Executive of Evolve Capital plc, commented: 
 
 
"This agreement fits our strategic objective of investing in attractive 
financial services companies. It complements the range of financial services 
that the Evolve group provides to small companies and provides potential access 
to capital for smaller quoted companies as well as being an additional source of 
potential new IPO prospects." 
 
 
On completion of the transaction, Michael Jackson, a non-executive director of 
Evolve, has agreed to join the board of Bluehone Holdings as a non-executive 
director. Michael Jackson is also an owner and director of Elderstreet 
Investments Limited ("Elderstreet"), which proposes to acquire an initial 2.6 
per cent holding in Bluehone Holdings in return for 9.9 per cent of Elderstreet 
and, subject to Bluehone Holdings obtaining FSA controller approval in respect 
of Elderstreet, will subsequently increase its holding in Bluehone Holdings to 
5.1 per cent in return for a further 10 per cent of Elderstreet. Elderstreet 
provides funding for management buy-outs and development capital in most 
industry sectors and has a specialist technology practice investing in the 
software and computer services market. 
 
 
On completion of the second tranche of Elderstreet's investment, Evolve will 
issue a further 298,127 ordinary shares at 5p each to Bluehone Holdings in 
return for a further 745,318 ordinary shares in Bluehone Holdings such that 
Evolve maintains its shareholding in Bluehone Holdings at 19.9 per cent of its 
issued share capital. Bluehone Holdings would then hold approximately 5.3 per 
cent of Evolve's issued share capital (assuming no further shares in Evolve are 
issued between now and then). 
 
 
If further ordinary shares are issued by Bluehone Holdings in the two years 
following completion of Evolve's investment (a "New Issue"), then Evolve will 
have the right to subscribe for further ordinary shares at the same price as the 
New Issue in order to maintain its interest in Bluehone Holdings at 19.9 per 
cent. 
 
 
Pursuant to a lock-in agreement, Evolve has agreed not to sell its 
22,870,093 ordinary shares in Bluehone Holdings (which may be held by any Evolve 
group company) for two years from the date of completion. 
 
 
Application will be made for admission to trading on AIM of the 9,148,037 new 
ordinary shares of 1p each in Evolve to be issued to Bluehone Holdings. 
Admission to AIM is expected to take place on 11 November 2009. 
 
 
St Helen's Capital Partners LLP, a wholly owned subsidiary of Evolve, is the 
PLUS Corporate Adviser to IWM. As a result of the conflict of interest created 
by Evolve taking a 19.9 per cent interest in Bluehone Holdings, St Helen's 
Capital Partners LLP will resign as PLUS Corporate Adviser to IWM at completion 
and an alternative adviser will be appointed in their place. 
 
 
Further information on IWM and the proposals can be found on the PLUS Markets 
website, www.plusmarketsgroup.com. 
 
 
Enquiries: 
 
 
+------------------------------------+------------------------------------+ 
| Evolve Capital PLC                 |                 Tel: 020 7937 4445 | 
| Edward Vandyk                      |            www.evolvecapital.co.uk | 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Fairfax I.S. PLC                   |                 Tel: 020 7598 5368 | 
| Jeremy Porter                      |                                    | 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Maitland                           |                 Tel: 020 7379 5151 | 
| Neil Bennett / George Hudson       |                                    | 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
 
 
Notes to Editors 
 
 
Evolve is quoted on AIM and owns St Helen's Capital Partners LLP, a PLUS adviser 
and broker, and approximately 54 per cent of Astaire Group plc, which is the 
holding company of a number of regulated financial services businesses, 
including: 
 
 
- Astaire Securities plc - provides research and stockbroking services to 
institutional investors for UK quoted companies (with particular expertise in 
the Oil and Gas, Mining, Leisure, Telecoms, Technology, Life Sciences, Transport 
and Support Services sectors) and, through its corporate finance business, fund 
raising and corporate advisory services to quoted companies; and 
 
 
- Rowan Dartington & Co. Limited - provides private client stockbroking and 
wealth management services through a network of branch offices in the southwest 
and southeast of England. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 IOEBBBDGXSBGGCU 
 

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