RNS Number:3918V
SDL PLC
24 April 2007
NOT FOR DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA, JAPAN AND THE REPUBLIC OF SOUTH AFRICA
News Release
24th April 2007
SDL to acquire Tridion for Euro69 million (#47 million)
Combination creates Global Web Content Management solution
Maidenhead, UK - 24th April, 2007. SDL International, one of the leading
providers of Global Information Management (GIM) solutions, announced today that
it has signed an agreement which is subject to, inter alia, Shareholder approval
to acquire Tridion, one of the leading providers of enterprise class Web
Content Management (WCM) solutions.
Under the terms of the agreement, SDL will pay Euro69million (#47 million), which
includes Euro16m (#11 million) of cash in the Tridion business. The transaction is
expected to close in May 2007.
SDL's acquisition of Tridion will further strengthen SDL's leadership position
in Global Information Management by adding a world class WCM solution to the SDL
solutions portfolio.
* SDL helps corporations to drive global brand consistency and accelerate
time-to-market by providing software and services to manage the delivery of
all corporate information into different languages.
* Tridion provides WCM solutions that enable corporations to deliver
consistent, interactive and highly targeted customer experiences across
multiple Web sites and channels.
* Through the integration of SDL's Translation Management System with
Tridion's WCM system, SDL and Tridion will deliver a Global Web Content
Management solution that allows corporations to communicate and interact
with global audiences in multiple languages in an effective, efficient and
timely manner. This is achieved by integrating Tridion's BluePrinting
technology and SDL's TMS technology to manage the complex translation supply
chain to create and maintain multilingual content for global companies.
"In today's competitive landscape, global trade is an imperative that companies
cannot ignore" says Mark Lancaster, Chairman and Chief Executive of SDL. "The
combination of SDL's translation management system, providing supply chain
management and a virtual centralised multilingual repository, combined with
Tridion's advanced WCM technology will enable corporations to conquer the
significant language barriers that often stifle the globalisation of their
businesses. The combined solution creates a Global Web Content Management
solution which will allow companies to not only create, but specifically
maintain multi-lingual web experience for their customers.
At a time when access to information is the currency of business, information
assets are critical to the current and future competitiveness of any
organisation. Tridion enables organisations to use information efficiently and
effectively in order to achieve their business goals. Tridion's unique
BluePrinting technology enables organisations to address and respond to new
markets using local knowledge while maintaining strong control of their brand."
"We are delighted with today's announcement" says Pieter Varkevisser, CEO of
Tridion. "SDL and Tridion share a joint vision and the combination of our
solutions provides a compelling proposition for anyone using the web to compete
on the global stage. We are convinced that the transaction brings value to all
of our key stakeholders, our investors, our customers and our employees."
For more details on the transaction, please see below:
SDL plc ("SDL")
Proposed Placing and Open Offer
Proposed acquisition of Tridion for Euro69 million (#47 million)
Product offering strengthened with Web Content Management solution
SDL announced today that its wholly owned subsidiary SDL Holdings BV has agreed,
subject inter alia to Shareholder approval, to acquire the entire issued and to
be issued share capital of Tridion Holding BV and its subsidiaries (''Tridion
Group'') for a maximum aggregate cash consideration of Euro69 million
(approximately #47 million) which includes approximately Euro16 million (#11
million) of cash in the business.
The Company is also pleased to announce that, subject, inter alia, to
Shareholder approval, it proposes to raise approximately #38 million (net of
expenses) through the issue of 11,275,684 New Ordinary Shares of SDL at 355
pence each by way of a Placing and Open Offer to fund the Acquisition. The
Placing and Open Offer has been fully underwritten by Investec subject to
certain conditions. The Offer Price of 355 pence per New Ordinary Share
represents a discount of 6.0 per cent to the middle market price for an existing
Ordinary Share of 377.75 pence on 23rd April 2007.
Background to Tridion
Tridion provides Web Content Management (''WCM'') software which enables
organizations to create, manage and deliver content to and lay out their public
web sites, intranets, extranets and other communication channels. Tridion also
provides consulting, professional and technical support services.
The company was founded in 1999 through a spin-off from a web design agency and
has benefited from venture capital funding, enabling the Tridion Group to expand
in Europe and more recently in the USA. Tridion currently has over 325 customers
across all major industry verticals, including manufacturing & industrial,
financial services, government and non-profit organisations. Enterprise
customers include Toyota, Honda, Ricoh, Canon, Goodyear, KLM, Virgin Atlantic,
Emirates Airlines, VisitBritain, Unilever, Renault, Sodexho Alliance, DNV,
France Telecom and TDC.
Reasons for the Acquisition and the Placing and Open Offer
* Global Information Management ("GIM") helps companies successfully manage
multi-lingual digital content;
* Content management solutions are established, well understood and
relatively simple compared to GIM;
* Both GIM and content management are equally important to global
organisations seeking to deliver multilingual content and supply products to
market faster, more cost effectively and with greater brand consistency;
* The Group has seen an increased number of proposals where the customer is
looking to procure at the same time a content management and translation
management system in order to ensure it fully addresses these issues;
* The Board believes that the combination of Tridion's WCM and SDL's GIM
solutions will give the Enlarged Group significant advantages against the
competition in both of the companies' respective markets;
* The Directors believe that very few of the Enlarged Group's competitors
provide both comprehensive GIM and WCM solutions;
* The rationale of the Placing and Open Offer is to enable the Company to
fund the acquisition of Tridion as set out in the Prospectus which will be
sent to shareholders as soon as is practicably possible;
* The Directors believe that, taking into account the impact of the Placing
and Open Offer, the Acquisition will be accretive to earnings per share
before amortisation of the Enlarged Group in the first full financial year
following completion of the Acquisition; and
* Tridion Management fully committed to joining the SDL group.
Mark Lancaster, Chairman and Chief Executive of SDL, said,
"In today's competitive landscape, global trade is an imperative which companies
cannot ignore. The combination of SDL's translation management system,
providing supply chain management and a virtual centralized multilingual
repository, and Tridion's advanced web-content management technology enables
corporations to control their multi-lingual content processes from start to
finish. The combined solution will allow companies to not only create and
manage content, but specifically maintain multi-lingual web experiences for
their customers."
For more information, contact:
SDL plc Tel: 01628 410 127
Mark Lancaster, Chief Executive
Financial Dynamics Tel: 020 7831 3113
Edward Bridges / Haya Chelhot / Juliet Clarke
Investec Tel: 020 7597 5000
Erik Anderson / Andrew Pinder
This announcement has been issued by, and is the sole responsibility of SDL.
Investec is authorised and regulated in the United Kingdom by the FSA and is
acting exclusively for SDL plc in relation to the matters described in this
document. Investec is not acting for, nor will it be responsible to, any person
other than SDL plc for providing the protections afforded to their customers or
for advising any other person on the contents of this Prospectus or any
transaction or arrangement referred to herein.
This announcement is for information only and does not constitute an offer or
invitation to acquire or dispose of any securities or investment advice in any
jurisdiction.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial advisor.
The information contained in this announcement is not for release, publication
or distribution, directly or indirectly, to persons in the United States,
Canada, Australia, Japan or the Republic of South Africa. This announcement is
not an offer of securities for sale into the United States. The Placing Shares
have not and will not be registered under the US Securities Act of 1933, as
amended and may not be offered or sold directly or indirectly, in the United
States absent registration or an exemption from registration. There will be no
public offering of securities in the United States. The Placing Shares have not
and will not be registered with any regulatory authority of any State within the
United States.
Appendix 1 contains the definitions of certain terms used in this announcement.
DETAILED BACKGROUND
Information on the Tridion Group
Tridion provides Web Content Management (''WCM'') software which enables
organizations to create, manage and deliver content to and lay out their public
web sites, intranets, extranets and other communication channels. Tridion also
provides consulting, professional and technical support services.
The company was founded in 1999 through a spin-off from a web design agency and
has benefited from venture capital funding, enabling the Tridion Group to expand
in Europe and more recently in the USA. Tridion currently has over 325 customers
across all major industry verticals, including manufacturing & industrial,
financial services, government and non-profit organisations. Enterprise
customers include Toyota, Honda, Ricoh, Canon, Goodyear, KLM, Virgin Atlantic,
Emirates Airlines, VisitBritain, Unilever, Renault, Sodexho Alliance, DNV,
France Telecom and TDC.
The table below summarises, and has been extracted without material adjustment
from, the audited financial information of the Tridion Group for the three
financial years ended 31 December 2004, 2005 and 2006.
Year ended 31 December (IFRS, audited)
2004 2005 2006
Euro000 Euro000 Euro000
Revenue 17,116 18,575 21,084
Gross Profit 12,733 14,578 16,779
Profit (loss) on ordinary activities before tax (293) 3,664 4,172
Gross assets at 31 December 13,173 17,325 23,472
Summary of the terms of the Acquisition
SDL has conditionally agreed under the terms of the Acquisition Agreement to
purchase for a maximum aggregate cash consideration of Euro69 million
(approximately #47 million) all of the issued and to be issued share capital of
Tridion including approximately Euro16 million (#11 million) cash in the business.
The cash consideration is to be funded from the proceeds of the Placing and Open
Offer which will raise approximately #38 million (net of expenses), with the
balance of the consideration to be funded from the Group's own existing
financial resources and bank facilities. The Acquisition Agreement contains
certain warranties in favour of SDL relating to the affairs of the Tridion Group
of a nature usual for a transaction of this type.
An amount of Euro3 million (approximately #2 million) will be held in escrow for up
to two years from
Completion to satisfy any settled or determined claims under the warranties and
certain other provisions of the Acquisition Agreement.
Reasons for the Acquisition and the Placing and Open Offer
The globalisation of commerce has led to rapid growth for enterprises, but has
brought with it an ad hoc deployment of disjointed and incompatible information
systems and related business processes. These global enterprises are
increasingly faced with the challenge of optimising their global operations to
deliver on their priorities of cost reduction, performance improvement, brand
consistency and time to market.
The rapid convergence of data to digital format and central storage coupled with
the overlap of the various data sources within companies is currently being
acknowledged as both a major cost issue and an opportunity for businesses to
significantly grow market share through effective management of digital content.
Management of single language content is a complex systems problem and is
exacerbated where it requires translation into, and management of, multiple
language versions. The Directors believe that GIM is therefore considered to be
an emerging key business requirement.
There has been considerable growth in the content management market with a
forecast compound annual growth rate of 12.8% through to 2010 (Source: Gartner
Group - ECM Magic Quadrant 2006). Content management solutions are established,
well understood and relatively simple compared to GIM. However, both are equally
important to global organisations seeking to deliver multilingual content and
supply products to market faster, more cost effectively and with greater brand
consistency. The Group has seen an increased number of proposals where the
customer is looking to procure at the same time a content management and
translation management system in order to ensure it fully addresses these
issues.
The amalgamation of Tridion's WCM and SDL's GIM solutions under the proposed
Acquisition is expected by the Board to give the Enlarged Group significant
advantages against the competition in both of the companies' respective markets.
The Directors believe that very few of the Enlarged Group's competitors provide
both comprehensive GIM and WCM solutions.
The rationale of the Placing and Open Offer is to enable the Company to fund the
acquisition of Tridion as set out in the Prospectus, which is expected to be
posted to shareholders as soon as is practicably possible.
Financial effects of the Acquisition
The Directors believe that, taking into account the impact of the Placing and
Open Offer, the Acquisition will be accretive to earnings per share before
amortisation of the Enlarged Group in the first full financial year following
completion of the Acquisition. This should not be taken to mean that the future
earnings of the Enlarged Group will necessarily match or exceed the Group's
historical published earnings.
On a pro forma basis and assuming the Acquisition had completed on 1 January
2006, the Enlarged Group's adjusted profit (before taking into account
transaction costs and accounting for fair value adjustments) for the year ended
31 December 2006 would have increased compared to SDL's equivalent reported
result for that year.
Summary of the Placing and Open Offer
The Company is proposing to raise approximately #38 million (net of expenses)
through the Placing and Open Offer. The Placing and Open Offer is in respect of
11,275,684 New Ordinary Shares, of which 7,554,708 New Ordinary Shares (the
Placing Shares) will be issued under the Placing and 3,720,976 New Ordinary
Shares (the Open Offer Shares) have been placed conditionally, subject to
clawback by Qualifying Shareholders under the Open Offer at the Offer Price. The
Offer Price of 355 pence per New Ordinary Share represents a discount of 6.0 per
cent to the middle market price for an existing Ordinary Share of 377.75 pence
on 23 April 2007.
Under the terms of the Placing Agreement, Investec acting as agent for and on
behalf of the Company, has placed the Placing Shares and Open Offer Shares at
the Offer Price with institutions and certain other investors. The Open Offer
Shares have been conditionally placed with institutional investors, subject only
to clawback in respect of valid applications for Open Offer Shares by Qualifying
Shareholders at the Offer Price. The Placing Shares are not subject to this
clawback. Investec has fully underwritten the Placing and Open Offer subject to
certain conditions set out in the Placing Agreement which include, inter alia,
the passing of the Resolutions at the EGM or any adjournment thereof.
Investec, acting as agent for and on behalf of the Company, is inviting
Qualifying Shareholders to subscribe for Open Offer Shares at the Offer Price,
free of all expenses, payable in full on application on the following basis:
1 Open Offer Share for every 16.878787 Existing Ordinary Shares
registered in their names at the close of business on the Record Date, and so in
proportion for any greater or lesser number of Existing Ordinary Shares then
held. Qualifying Shareholders may apply for any number of New Ordinary Shares
up to their maximum pro rata allocation. Valid applications will be satisfied in
full.
Any fractional entitlements of Qualifying Shareholders arising under the Open
Offer will not be allocated but will be aggregated and placed by Investec
pursuant to the Placing Agreement for the benefit of the Company,
Application has been made to the UK Listing Authority and the London Stock
Exchange for the New Ordinary Shares to be admitted to the Official List and to
trade on the London Stock Exchange's market for listed securities.
Qualifying Shareholders who take up their Open Offer Entitlement in full will be
diluted by 1.0 per cent by the Placing. Qualifying Shareholders who do not
participate at all in the Open Offer, will be diluted by approximately 1.5 per
cent.
Current trading and prospects for SDL
During the first quarter of 2007, the markets for both the Group's translation
software, services and GIM solutions have remained consistent with the trends
seen in the second half of 2006, as have the exchange rates of the major
currencies that the Group trades in other than the US dollar which has weakened
circa 4 percent period on period.
Gross margin remains in line with 2006, with the mix in the business segments
tracking the immediately preceding months. This is also reflected in the levels
of overhead costs and development expenditure as the headcount in these cost
centres has not changed materially though the Group has started to increase its
marketing expenditure in line with previously announced intentions.
The Directors are confident in the underlying financial and trading prospects of
the Group for the current financial year, and have confidence in the financial
and trading prospects of the Enlarged Group for the same period.
Working Capital
The Company is of the opinion having that, taking into account available bank
facilities and the net proceeds of the Placing and Open Offer, the working
capital available to the Group and the Enlarged Group is sufficient for its
present requirements, that is, for at least the next 12 months from the date of
publication of the Prospectus.
Significant Change
There has been no significant change in the financial or trading position of the
Group since 31 December 2006, the date to which the Group's last audited
accounts for the year ended 31 December 2006 were published.
There has been no significant change in the financial or trading position of the
Tridion Group since 31 December 2006, being the date in respect of which the
last published audited accounts and financial information on the Tridion Group
as set out in the Prospectus have been prepared.
Expected timetable of principal events
Record Date for Open Offer Entitlement close of business on 20 April 2007
Open Offer Entitlements credited to CREST stock accounts of
Qualifying CREST Shareholders 25 April 2007
Recommended latest time for requesting withdrawal of Open Offer
Entitlements from CREST 4.30 pm 8 May 2007
Latest time for depositing Open Offer Entitlements in CREST 3.00 pm 11 May 2007
Latest time and date for splitting of Application Forms (to satisfy
bona fide market claims only) 3.00 pm on 14 May 2007
Latest time and date for receipt of Forms of Proxy 9.00 am on 15 May 2007
Latest time and date for receipt of Application Forms and payment
in full under the Open Offer or settlement of the relevant CREST
instruction 11.00 am on 16 May 2007
Extraordinary General Meeting 9.00 am on 17 May 2007
Admission and dealings in New Ordinary Shares expected to
commence 8.00 am on 18 May 2007
CREST members' accounts expected to be credited by 18 May 2007
Definitive share certificates for New Ordinary Shares in certificated
form (where applicable) expected to be despatched by 25 May 2007
Risk Factors
The Prospectus will set out the risk factors relating to the Group which in
summary are:
Industry specific risks:
* Consolidation in the content management industry
* Content management industry encompassing GIM
* Partnerships
* Understanding of and demand for GIM
* Extension of the sales cycle
* Adverse reaction as a result of inferences by competitors in the
service element of the
* localisation industry
Group, Tridion Group and/or the Enlarged Group specific risks:
* Management and growth
* Competition
* Technological advancements/innovation
* New product and technology development
* Dependence on senior management
* The possible need for additional capital in the future
* System failures, capacity constraints and breaches of security
* Importance of intellectual property rights
* Copyright, database rights and rights in confidential information
* Contractual safeguards
* Litigation
* Foreign currency exchange rate risk
Risk factors relating to the Acquisition:
* Integration risks
* The protections for the Company in the Acquisition Agreement may be
inadequate
* The Company may not be able to complete the Acquisition Agreement.
Security specific risks:
* Suitability of Ordinary Shares as an investment
* Fluctuation of share price
* Possible issue of additional shares
* Dilution of ownership of Ordinary Shares
* Limitation on the Company's ability to pay future dividends
Appendix 1 - Definitions
''#'' UK pounds sterling
''Euro'' or ''EUR'' Euro
''Act'' the Companies Act 1985 (as amended from time to time)
''Acquisition'' the proposed acquisition of the entire issued share capital of Tridion;
''Acquisition Agreement'' the conditional sale and purchase agreement dated 24 April 2007 relating
to the Acquisition further details of which are set out in the
Prospectus;
''Admission'' the admission of the New Ordinary Shares to listing on the Official List
of the United Kingdom Listing Authority and to trading on the main market
of the London Stock Exchange;
''Board'' or ''Directors'' the Executive Directors and the Non-Executive Directors;
''certificated'' or ''certificated not in an uncertificated form;
form''
''Company'' or ''SDL'' SDL plc;
''Completion'' completion of the Acquisition in accordance with the terms of the
Acquisition Agreement;
''Enlarged Group'' the Group as enlarged immediately following the Acquisition;
''Executive Directors'' Mark Jonathan Lancaster, Alastair Neil Gordon, Cristina Maria Elisa
Lancaster and Keith Thomas Mills;
''Existing Ordinary Shares'' 62,805,560 Ordinary Shares of 1p each in issue as at the date of the
Prospectus;
''Extraordinary General Meeting'' or the extraordinary general meeting of the Company to be held at 9:00 am at
''EGM'' the offices of DLA Piper UK LLP, 3 Noble Street, London EC2V 7EE on 17
May 2007, notice of which is set out at the end of the Prospectus and,
including any adjournment thereof;
''FSA'' the Financial Services Authority of the United Kingdom;
''FSMA'' the Financial Services and Markets Act 2000 (as amended);
''Group'' the Company and its subsidiaries at the date of the Prospectus;
''International Financial Reporting the International Financial Reporting Standards maintained by the
Standards'' or ''IFRS'' International Accounting Standards Board (IASB) and which are in force
from time to time, as adopted by the European Union;
''Investec'' Investec Investment Banking, a trading division of Investec Bank (UK)
Limited, which is authorised and regulated by the Financial Services
Authority in the United Kingdom;
''London Stock Exchange'' London Stock Exchange plc;
''New Ordinary Shares'' 11,275,684 new Ordinary Shares to be issued pursuant to the Placing and
the Open Offer;
''Non-Executive Directors'' Christopher Michael Batterham, John Waylett Matthews and Joseph Campbell;
''Offer Price'' 355 pence per New Ordinary Share;
''Official List'' the Official List of the UKLA;
''Open Offer'' the conditional offer, being made by Investec acting as agent on behalf
of the Company, inviting Qualifying Shareholders to subscribe for the
Open Offer Shares at the Offer Price on the terms and subject to the
conditions set out in the Prospectus and in the application form;
''Open Offer Entitlement'' an entitlement to apply to acquire Open Offer Shares, allocated to a
Qualifying Shareholder pursuant to the Open Offer;
''Open Offer Shares'' 3,720,976 new Ordinary Shares which are being made available to
Qualifying Shareholders at the Offer Price pursuant to the Open Offer all
of which have been conditionally placed (subject to clawback to satisfy
valid applications by Qualifying Shareholders under the Open Offer) by
Investec pursuant to the Placing;
''Ordinary Shares'' ordinary shares of 1p each in the capital of the Company;
''Overseas Shareholders'' holders of Ordinary Shares with registered addresses outside the United
Kingdom or who are citizens of, incorporated in, registered in or
otherwise resident in, countries outside the United Kingdom;
''Placing'' the placing of the Placing Shares and the Open Offer Shares by Investec
on behalf of the Company at the Offer Price pursuant to the Placing
Agreement;
''Placing Agreement'' the conditional agreement dated 24 April 2007 between the Company and
Investec relating to the Placing and Open Offer, details of which are
set out in the Prospectus;
''Placing Shares'' the 7,554,708 new Ordinary Shares which have been placed by Investec on
the terms and subject to the conditions contained in the Placing
Agreement, which shares are not being offered to the Qualifying
Shareholders under the Open Offer;
''Prospectus'' the Prospectus dealing with, inter alia, the Acquisition and the terms of
the Placing and Open Offer;
''Qualifying Shareholders'' holders of Existing Ordinary Shares on the register of members of the
Company at the close of business on the Record Date (and others with bona
fide market claims) other than certain Overseas Shareholders who are not
entitled to participate in the Open Offer, as described in the
Prospectus, other than the Company in its capacity as the holder of
Ordinary Shares as Treasury Shares within the meaning of Section 162A of
the Act;
''Record Date'' the record date for the Open Offer, being the close of business on 20
April 2007;
''Resolutions'' the resolutions to be proposed at the EGM set out in the Notice of the
EGM;
''Shareholder'' a holder of Existing Ordinary Shares;
''Shares'' the entire issued shares of Tridion;
''SDL Holdings'' SDL Holdings B.V., a company incorporated in the Netherlands which is a
wholly-owned subsidiary of the Company;
''Tridion'' Tridion Holding B.V.;
''Tridion Group'' Tridion and its subsidiaries at the date of the Prospectus;
''UK'' or ''United Kingdom'' the United Kingdom of Great Britain and Northern Ireland, its territories
and dependencies
''UK Listing Authority'' or ''UKLA'' the FSA acting in its capacity as the competent authority for the
purposes of Part VI of the FSMA
''US'' or ''United States'' the United States of America, its territories and possessions, any state
of the United States and the District of Columbia;
''Vendors'' the vendors under the Acquisition Agreement as more particularly set out
in the Prospectus;
This information is provided by RNS
The company news service from the London Stock Exchange
END
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