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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Chelford | LSE:CHR | London | Ordinary Share | GB00B02TW537 | ORD 100P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 207.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:5789P Solarsoft Acquisition Limited 06 March 2008 Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. FOR IMMEDIATE RELEASE 6 March 2008 Recommended Cash Offer for Chelford Group Plc by Solarsoft Acquisition Limited a company formed at the direction of Marlin Equity Partners Summary * The Boards of Solarsoft and Chelford are pleased to announce the terms of a recommended cash offer, to be made by Solarsoft, to acquire the whole of the issued and to be issued share capital of Chelford. * Under the terms of the Offer, Chelford Shareholders will receive, for each Chelford Share held, 215 pence in cash. * The Offer Price of 215 pence per Chelford Share values the entire issued and to be issued share capital of Chelford at approximately £16.1 million. The price of 215 pence per Chelford Share represents a premium of approximately: o 25 per cent. to the Closing Price of 172.5 pence per Chelford Share on 5 March 2008, being the last Business Day prior to this announcement; and o 37 per cent. to the Closing Price of 157 pence per Chelford Share on 9 January 2008, being the Business Day prior to the announcement by Chelford that it had received an approach which may or may not lead to an offer being made for Chelford. * Solarsoft is a newly incorporated company formed at the direction of Marlin for the purpose of implementing the Offer. * The Chelford Directors, who have been so advised by KPMG Corporate Finance, consider the terms of the Offer to be fair and reasonable. In providing advice to the Chelford Directors, KPMG Corporate Finance has taken into account the Chelford Directors' commercial assessments. * The Chelford Directors intend unanimously to recommend the Offer and have irrevocably undertaken to accept the Offer in respect of their own beneficial holdings (and those of their family members and related trusts), which amount, in aggregate, to 2,145,067 Chelford Shares, representing approximately 30.0 per cent. of the existing issued share capital of Chelford. * In addition, irrevocable undertakings have been obtained from certain Chelford Shareholders in respect of a total of 2,333,112 Chelford Shares beneficially held by them, representing approximately a further 32.7 per cent. of the existing issued share capital of Chelford. * Accordingly, Solarsoft has received, in aggregate, irrevocable undertakings to accept the Offer in respect of a total of 4,478,179 Chelford Shares, representing approximately 62.7 per cent. of the existing issued share capital of Chelford. * Chelford provides specialist solutions in the areas of supply chain management, ERP, manufacturing, warehousing and distribution, asset tracking and financials, using products based upon its own intellectual property, SAP, Microsoft and CODA software products. As at 30 June 2007, Chelford employed in excess of 150 people and generated revenues of approximately £9.3 million and operating profit (before amortisation of intangibles and share based payments) of some £0.6 million in the six month period ended 30 June 2007. * Solarsoft intends that Chelford's operations are combined with Marlin's portfolio business, Solarsoft Business Systems. The Chelford Solutions division will allow Solarsoft Business Systems to accelerate the alignment of its business increasingly along industry vertical lines. Chelford's SAP Solutions division will operate independently as a distinct division within Solarsoft Business Systems to preserve the value already created for the Chelford brand in this activity. Solarsoft Business Systems provides ERP software and IT services to manufacturers, distributors and wholesalers. Solarsoft Business Systems has in excess of 1,700 customers in North America, Europe and Asia. * The combination of Chelford and Solarsoft Business Systems will expand the scale of Solarsoft Business Systems' operations, the range of its product offering and vertical market expertise. * Strata Partners is acting as exclusive financial adviser to Solarsoft. KPMG Corporate Finance is acting as exclusive financial adviser to Chelford. Commenting on the Offer, William Birkett, the Chairman of Chelford said: "We believe that it is in the best interest of the Chelford Group to combine with an external partner to support our growth and potential in a consolidating market. A combination with Solarsoft Business Systems will provide additional financial and other resources to support the ongoing development of the Chelford Group for the benefit of customers, suppliers and employees. The Offer Price is a significant premium to the Closing Price at which Chelford Shares have traded in the last 12 months." "Chelford is an excellent fit with Solarsoft Business Systems, and our overall strategy to build significant value by acquiring small to medium-sized, complementary ERP software companies. Solarsoft Business Systems will, with this acquisition, expand the scale of its operations, the range of its product offering and vertical market expertise. Chelford's employees and customers will benefit from being part of a much larger organisation," said Shawn McMorran, Chief Executive of Solarsoft Business Systems. This summary should be read in conjunction with, and is subject to, the full text of the following announcement and the Appendices. Appendix I sets out the conditions and the principal further terms of the Offer, Appendix II contains information on bases and sources used in this announcement, Appendix III provides information in relation to the irrevocable undertakings and Appendix IV contains definitions of certain terms used in this announcement. Enquiries: Solarsoft Tel: +44 (0)1908 295 400 Shawn McMorran, Chief Executive Strata Partners Tel: +44 (0)20 7730 1200 (financial adviser to Solarsoft) Edward Roskill Chelford Tel: +44 (0)1256 685 400 William Birkett, Chairman Trevor C. Lewis, Chief Executive KPMG Corporate Finance Tel: +44 (0)20 7311 1000 (financial adviser to Chelford) Mark Farlow Susan Walker Bankside Consultants Tel: +44 (0)20 7367 8888 (PR adviser to Chelford) Steve Liebmann Charles Stanley Securities Tel: +44 (0)20 7149 6482 (nominated adviser to Chelford) Richard Thompson Mark Taylor Strata Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Solarsoft and no one else in connection with the Offer and will not be responsible to anyone other than Solarsoft for providing the protections afforded to its clients or for providing advice in relation to the Offer or in relation to the matters described in this announcement or any transaction or arrangement referred to herein. KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated by the Financial Services Authority for investment business activities, is acting exclusively for Chelford as financial adviser in relation to the Offer and is not acting for any other person in relation to the Offer. KPMG Corporate Finance will not be responsible to anyone other than Chelford for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement or any transaction or arrangement referred to herein. This announcement is not intended to and does not constitute, or form any part of an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of an offer to purchase or subscribe for any securities pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document and the Form of Acceptance, which will together contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance or other response to the Offer should be made only on the basis of the information contained in the Offer Document and the Form of Acceptance. The release, publication or distribution of this announcement in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable requirements may constitute a violation of the securities laws of any such jurisdiction. This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed herein may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK. The Offer will not be made, directly or indirectly, in or into the United States or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile or other electronic transmission, telex or telephone) of inter-state or foreign commerce of, or any facility of, a national, state or other securities exchange of, the United States, nor will it be made directly or indirectly in or into Canada, Australia or Japan and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Accordingly, copies of this announcement are not being, will not be and must not be mailed or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia or Japan or any other such jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Any persons (including without limitation custodians, nominees or trustees) receiving this announcement must not mail, forward, distribute or send it in, into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Forward-Looking Statements This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" concerning the Offer, Solarsoft, Solarsoft Business Systems and the Chelford Group. These statements are based on the current expectations of the management of Solarsoft and Chelford and are naturally subject to uncertainty and changes in circumstances. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expression identify forward-looking statements. Forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants. Therefore undue reliance should not be placed on such statements. Solarsoft and Chelford assume no obligation and do not intend to update these forward-looking statements whether as a result of new information or otherwise, except as required pursuant to applicable law and regulation. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in one per cent. or more of any class of " relevant securities" of Chelford, all "dealings" in any "relevant securities" of Chelford (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Chelford they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Chelford by Solarsoft or Chelford or by any of their respective " associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to the application of Rule 8 to you, please consult the Panel on telephone number +44 (0)20 7382 9026; fax +44 (0)20 7638 1554. Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. FOR IMMEDIATE RELEASE 6 March 2008 Recommended Cash Offer for Chelford Group Plc by Solarsoft Acquisition Limited a company formed at the direction of Marlin Equity Partners 1. Introduction The Boards of Solarsoft and Chelford are pleased to announce the terms of a recommended cash offer, to be made by Solarsoft, to acquire the whole of the issued and to be issued share capital of Chelford. Solarsoft is a newly incorporated company formed at the direction of Marlin, for the purpose of implementing the Offer. The Offer values each Chelford Share at 215 pence and the entire issued and to be issued share capital of Chelford at approximately £16.1 million. 2. The Offer Under the Offer, which will be subject to the terms and conditions set out below (and in Appendix I) and to be set out in the Offer Document and, in the case of Chelford Shares held in certificated form, the Form of Acceptance, Chelford Shareholders will receive: o 215 pence in cash for each Chelford Share. The Offer values the entire issued and to be issued share capital of Chelford at approximately £16.1 million. The Offer Price represents a premium of approximately: o 25 per cent. to the Closing Price of 172.5 pence per Chelford Share on 5 March 2008, being the last Business Day prior to this announcement; and o 37 per cent. to the Closing Price of 157 pence per Chelford Share on 9 January 2008, being the Business Day prior to the announcement by Chelford that it had received an approach which may or may not lead to an offer being made for Chelford. Chelford Shares will be acquired by Solarsoft fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights or interests and together with all rights now or hereafter attaching thereto, including, without limitation, the right to receive and retain all dividends and other distributions (if any) announced, declared, made or paid hereafter. 3. Conclusion and recommendation The Directors of Chelford, who have been so advised by KPMG Corporate Finance, consider the terms of the Offer to be fair and reasonable. In providing advice to the Directors of Chelford, KPMG Corporate Finance has taken into account the Chelford Directors' commercial assessments. Accordingly, the Chelford Directors intend unanimously to recommend that Chelford Shareholders accept the Offer and have irrevocably undertaken to accept the Offer in respect of their own beneficial holdings (and those of their family members and related trusts), which amount, in aggregate, to 2,145,067 Chelford Shares, representing (as at the date of this announcement) approximately 30.0 per cent. of the existing issued share capital of Chelford. 4. Irrevocable undertakings Solarsoft has received irrevocable undertakings to accept the Offer in respect of a total of 4,478,179 Chelford Shares, representing, in aggregate, approximately 62.7 per cent. of Chelford's existing issued share capital, as set out below: (a) the Chelford Directors have irrevocably undertaken to accept the Offer in respect of their entire beneficial holdings (and those of their family members and related trusts), which amount to, in aggregate 2,145,067 Chelford Shares, representing, in aggregate, approximately 30.0 per cent. of the existing issued share capital of Chelford. These irrevocable undertakings will continue to be binding if a higher competing offer is made for Chelford; (b) Adrian de Ferranti who has a beneficial holding of 1,650,786 Chelford Shares has irrevocably undertaken to accept the Offer in respect of his entire beneficial holding, representing approximately 23.1 per cent. of the existing issued share capital of Chelford. This irrevocable undertaking will continue to be binding if a higher competing offer is made for Chelford; and (c) Certain other Chelford Shareholders have irrevocably undertaken to accept this Offer in respect of their beneficial holdings which amount to, in aggregate 682,326 Chelford Shares, representing, in aggregate, 9.6 per cent. of the existing issued share capital of Chelford. These undertakings will cease to be binding if there is a competing offer for Chelford at a premium of 10 per cent. or more to the value of the Offer. Further details of these irrevocable undertakings are set out in Appendix III. 5. Background to and reasons for the Offer Following completion of the Offer, Solarsoft intends to combine Chelford's operations with the UK operations of Marlin's portfolio business, Solarsoft Business Systems. Chelford's key product suites, the Tropos application for process-oriented manufacturing and the Agility application for warehouse management and automation, will allow Solarsoft Business Systems to accelerate the alignment of its business to focus along industry sectors. Chelford's SAP Solutions business will operate independently as a distinct division within Solarsoft Business Systems in order to preserve the value already created for the Chelford brand in this activity. Solarsoft Business Systems provides ERP software and IT services to manufacturers, distributors and wholesalers in North America, Europe and Asia. Solarsoft Business Systems has in excess of 1,700 customers in North America, Europe and Asia. Solarsoft believes that Chelford is a strong fit with Solarsoft Business Systems and that the combination will have significant advantages for employees and customers of both groups, through the expansion of the range of products and vertical market expertise of Solarsoft Business Systems. Solarsoft believes that Chelford's business will be complemented by the financial resources available to it from its ownership by Marlin and from Marlin's expertise in building value by acquiring small to medium-sized complementary ERP software companies. 6. Background to and reasons for recommending the Offer Chelford provides specialist solutions in the areas of supply chain management, ERP, manufacturing, warehousing and distribution, asset tracking and financials, using products based upon its own intellectual property, SAP, Microsoft and CODA software products. Having established Chelford as a provider of enterprise solutions within its chosen vertical markets, the Chelford Directors now believe that in order for the Chelford Group to continue to grow, it needs to increase the scale of its operations, particularly with regard to product development, support and sales and marketing, and needs a broader product offering and expanded geographic coverage. Further, the Chelford Directors believe that Chelford's key attributes have not been adequately reflected in the average share price over the last 12 months. In light of these factors, the Board of Chelford entered into a number of discussions with potential acquirers of the business during the latter part of 2007. While a number of parties expressed interest in the business, their proposals were not as attractive as the Offer. The Chelford Directors believe that there can be no certainty that the Chelford Shares will trade at a price equivalent to the price of the Offer in the foreseeable future and, accordingly, believe that the Offer provides the best available opportunity for Chelford Shareholders to realise their investment in full without incurring dealing costs and to do so at a significant premium over the average Closing Price for Chelford Shares in the last 12 months. In considering whether the Offer is fair and reasonable, the Chelford Directors have considered that the Offer represents a premium of approximately: (a) 37 per cent. to the Closing Price of 157 pence per Chelford Share on 9 January 2008, being the Business Day prior to the announcement that Chelford had received an approach which may or may not lead to an offer; (b) 25 per cent. to the Closing Price of 172.5 pence per Chelford Share on 5 March 2008, being the last Business Day prior to this announcement; and (c) 43 per cent. to the average Closing Price of approximately 150.3 pence per Chelford Share for the 12 month period up to and including 5 March 2008. Having taken into account all material factors, including those mentioned above, the Chelford Directors believe that the Offer is fair and reasonable and will unanimously recommend it to all Chelford Shareholders. 7. Information on Chelford Chelford provides specialist enterprise solutions for manufacturing, warehousing and distribution, asset tracking, supply chain management and financials, using its own intellectual property and SAP, Microsoft and CODA software products. Chelford operates two divisions comprising four businesses: SAP Solutions and Chelford Solutions which comprises SSI (its own ERP business), Agility and Microsoft Solutions. As at 30 June 2007, Chelford employed in excess of 150 people and generated revenues of approximately £9.3 million in the six month period ended 30 June 2007. The overall operating profit before amortisation and share based payments for the first six months of 2007 increased by 44 per cent. to £630,000 (H1 2006: £438,000). The SAP Solutions division moved firmly into profit in the six months ended 30 June 2007. During the six months ended 31 December 2007, SAP Solutions performance was ahead of that of the first six months of 2007 in terms of both revenue and operating profit before amortisation and share based payments. Revenue for the Chelford Solutions division in the six months ended 30 June 2007 was slightly down on the same period in 2006. Performance during the six months ended 31 December 2007 was ahead of that for the first six months of 2007 in terms of both revenue and operating profit before amortisation and share based payments. Profitability in this division during 2007 was held back by investment made in the Microsoft Solutions business. Chelford continues to generate cash and its net cash balance as at 30 June 2007 was £1.76 million. Trading during the second six months of 2007 and in the current year to date is in accordance with management expectations. 8. Information on Solarsoft and Marlin Solarsoft is a newly incorporated company formed at the direction of Marlin for the purpose of implementing the Offer. Marlin Equity Partners, LLC and Marlin Equity Partners II, L.P. are the general partners of the limited partnerships constituting the Marlin Equity, L.P. and Marlin Equity II, L.P. funds respectively. The general partner of Marlin Equity Partners II, L.P. is Marlin Equity Partners II, LLC and it, together with Marlin Equity Partners, LLC, have the same managing member. They are run as independent investment companies which provide, on behalf of the limited partners, equity financing across multiple industries primarily for businesses that are in the process of undergoing varying degrees of operational, financial or market-driven change. Typically, Marlin invest in businesses where Marlin's capital base, network of operational resources and industry relationships are expected to strengthen the investee business's operational and financial performance and long term competitive positioning. In November 2007, Marlin announced a first and final closing of a new $300 million institutional private equity fund (Marlin Equity II, L.P.) which is yet to be invested. Marlin's first private equity fund (Marlin Equity, L.P.) was raised in August 2005 and there is approximately $26 million remaining to be invested from this fund. Investors in the funds include certain endowment funds and foundations, public and private sector pension funds, family offices, financial institutions, and insurance companies. 9. Information on Solarsoft Business Systems In April 2007, CMS Software Inc. (now called CMS Software Canada Inc.) of Toronto and UK-based XKO Software Limited (now called Solarsoft Business Systems Limited) were combined and now trade under the name Solarsoft Business Systems, a supplier of ERP software and IT services to manufacturers, distributors and wholesalers in North America, Europe and Asia. CMS Software Inc. was founded in 1985 with the aim of developing ERP systems for manufacturers in the automotive supply chain. In 2005, CMS Software Inc. established CMS Software Asia Pacific Co. Ltd. with offices in Shanghai and Hong Kong to serve the growing market for its manufacturing software systems in China. Since formation, CMS Software Inc. and its subsidiaries have grown organically and through the acquisition of Mattec Corporation, a manufacturer of manufacturing execution systems based in Loveland, Ohio. CMS Software Inc. was acquired by Marlin in 2006. XKO Software Limited was formed in 1999 from the merger of two established UK businesses developing ERP software for the distribution, wholesale and merchant sectors. Before its divestment by XKO Group plc to Marlin, its product range was expanded to include managed IT services for mid-market customers thereby seeking to become a single source supplier for customers' technology needs. XKO Software Limited was acquired by Marlin in 2006. In December 2007, Solarsoft Business Systems acquired VantagePoint Systems, Inc., a leading supplier of software for manufacturers of corrugated and folding carton packaging. VantagePoint applications are used to manage operations in over 700 packaging plants across North America. Solarsoft Business Systems is organised as four operating divisions reporting into the group's management. The operating divisions focus on the needs of customers in specific industries and markets; group management is responsible for finance, marketing and performance management across the operating divisions. Solarsoft Business Systems now has a customer base of over 1,700 companies and employs in the order of 350 staff in Europe, North America and Asia. 10. Financing for the Offer Full implementation of the Offer would result in cash consideration of approximately £16.1 million being payable to Chelford Shareholders and participants in the Chelford Share Schemes. This will, in part, be financed through Marlin's bank facilities with Silicon Valley Bank and through drawings on two irrevocable standby letters of credit issued on 5 March 2008 by Silicon Valley Bank and Wells Fargo N.A. in favour of Solarsoft. The cash consideration payable under the Offer will also be financed by cash balances held by XKO Acquisition LLC (a holding company for Solarsoft Business Systems) with Silicon Valley Bank. Strata, financial adviser to Solarsoft, has confirmed that it is satisfied that sufficient financial resources are available to Solarsoft to enable it to satisfy, in full, the consideration payable under the terms of the Offer. 11. Management and employees Solarsoft attaches great importance to the skills and experience of the existing management and employees of Chelford, and intends (subject to the changes described below) that Chelford's current management team will continue to be involved in the ongoing business of Chelford. Solarsoft has given assurances to the Board of Chelford that the existing employment rights of the management and employees of Chelford will be fully safeguarded following the completion of the Offer and that Chelford's pension obligations will be fully complied with. At the present time, Solarsoft does not have any immediate plans to change the conditions of employment of Chelford's or Solarsoft Business Systems' management and employees, however, in due course it will seek to integrate the management and employees of Chelford and Solarsoft Business Systems. Upon the Offer becoming or being declared wholly unconditional each of the non-executive directors of Chelford will resign from their office as Chelford Directors and of all the Chelford Group companies and the directors of Solarsoft and Anne McGoldrick (the Chief Financial Officer of Solarsoft Business Systems) will join the Chelford Board. Following the Offer becoming or being declared wholly unconditional, Trevor Lewis will continue in his existing role for a transitional period of up to three months. During this period, Solarsoft reserves the right to require Mr Lewis to cease to hold the position of Chief Executive Officer of Chelford. In the event he ceases to hold this position, Solarsoft will determine a new role for Mr Lewis going forward. 12. Chelford Share Schemes The Offer will extend to any Chelford Shares unconditionally allotted or issued or unconditionally allotted and fully paid (or credited as fully paid) pursuant to the exercise of options under the Chelford Share Schemes before the date on which the Offer closes (or, subject to the City Code, by such earlier date as Solarsoft may decide). Appropriate proposals will be made to participants in the Chelford Share Schemes in due course. 13. Disclosure of interests in Chelford Shares As at the close of business on 5 March 2008 (being the latest Business Day prior to the date of this announcement) neither Solarsoft nor any of its directors, nor, so far as Solarsoft is aware, any person acting in concert with Solarsoft (i) has any interest in or right to subscribe for any relevant Chelford Shares, nor (ii) has any short positions in respect of relevant Chelford Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, nor (iii) has borrowed or lent any relevant Chelford Shares (save for any borrowed shares which have been on-lent or sold). 14. Compulsory acquisition, cancellation of trading and re-registration as a private company If Solarsoft receives acceptances of the Offer in respect of, and/or otherwise acquires, 90 per cent. or more in value of the Chelford Shares to which the Offer relates and 90 per cent. or more of the voting rights carried by all the Chelford Shares to which the Offer relates and assuming all other conditions of the Offer have been satisfied or waived (if they are capable of being waived), Solarsoft intends to exercise its rights pursuant to the provisions of sections 979 to 982 (inclusive) of the Companies Act 2006 to acquire compulsorily on the same terms as the Offer the remaining Chelford Shares not already acquired or agreed to be acquired by Solarsoft pursuant to the Offer. Assuming the Offer becomes or is declared unconditional in all respects, Solarsoft also intends to procure the making of an application by Chelford to the London Stock Exchange for the cancellation of admission to trading of Chelford Shares on AIM. If this cancellation occurs, it will significantly reduce the liquidity and marketability of any Chelford Shares not assented to the Offer. It is anticipated that the cancellation of admission to trading on AIM will take effect no earlier than 20 Business Days after either (i) the date on which Solarsoft has, by virtue of its shareholdings and acceptances of the Offer, acquired or agreed to acquire issued share capital carrying at least 75 per cent. of the voting rights of Chelford, or (ii) the first date of issue of compulsory acquisition notices under section 979 of the Companies Act 2006. It is currently intended that, following the Offer becoming or being declared unconditional in all respects and after the cancellation of admission to trading of Chelford Shares on AIM, Chelford will be re-registered as a private company under the relevant provisions of the Companies Act. 15. Inducement fee and exclusivity agreement Marlin and Chelford have entered into an exclusivity and inducement fee arrangement which contains, amongst other things, certain rights and obligations on the part of Chelford. The exclusivity period in respect of the inducement fee arrangement expired at midnight on 27 February 2008. Certain key terms of such agreement are summarised below. Chelford has agreed to pay Solarsoft an inducement fee in cash equal to one per cent. of the value of the fully diluted share capital of Chelford (inclusive of value added tax, if any, but excluding any value added tax which is recoverable by Chelford) or such lower amount as Chelford is permitted to pay under the City Code, AIM Rules or general law, if any of the following events occurred before midnight on 27 February 2008: (a) Chelford commences discussions with or supplies any information to a third party in relation to an Alternative Offer, other than information which it is required to provide pursuant to Rule 20.2 of the City Code; or (b) the Chelford Board recommends an Alternative Offer or the Chelford Board or any Director of Chelford withdraws, alters or adversely modifies its recommendation of the Offer; or (c) provided that Solarsoft has not acted unreasonably, the Offer, once made, lapses or is withdrawn; or (d) an Alternative Offer is announced and is declared wholly unconditional; or (e) Chelford enters into any agreement or arrangement in relation to any offer from a third party which implements, or is made with a view to implementing the same; or (f) Chelford takes any action which is within Rule 21.1 of the City Code and is material in the context of the Offer; or (g) Chelford enters into a binding agreement to dispose of any of its key assets. Nothing in the inducement fee agreement obliges Chelford to pay any amount which the Panel determines would not be permitted by Rule 21.2 of the City Code. Chelford undertook during the exclusivity period (which has now expired): (a) not, directly or indirectly, to solicit any offer by any party or parties for the issued share capital of Chelford or a substantial part thereof or for the whole or any part of the undertaking, businesses or assets of Chelford; and (b) to notify Marlin if it receives a bona fide and formal approach from any third party which is likely to lead to an Alternative Offer. 16. Other The availability of the Offer to persons not resident in the UK may be affected by the laws of the relevant jurisdiction in which they are resident. Any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about and observe any applicable requirements. The Offer will be governed by English law and will be subject to the jurisdiction of the English courts. The Offer will be subject to the applicable requirements of the City Code. Appendix I sets out the conditions and the principal further terms of the Offer. Appendix II contains source notes relating to certain information contained in this announcement. Appendix III contains further details of the irrevocable undertakings obtained by Solarsoft. Certain terms used in this announcement are defined in Appendix IV. The full terms of the Offer will be set out in the Offer Document, which will include a letter of recommendation from the Chairman of Chelford and, in respect of Chelford Shares held in certificated form, the Form of Acceptance, which will be posted to Chelford Shareholders as soon as reasonably practicable and in any event within 28 days of the date of this announcement. Enquiries: Solarsoft Tel: +44 (0)1908 295 400 Shawn McMorran, Chief Executive Strata Partners Tel: +44 (0)20 7730 1200 (financial adviser to Solarsoft) Edward Roskill Chelford Tel: +44 (0)1256 685 400 William Birkett, Chairman Trevor C. Lewis, Chief Executive KPMG Corporate Finance Tel: +44 (0)20 7311 1000 (financial adviser to Chelford) Mark Farlow Susan Walker Bankside Consultants Tel: +44 (0)20 7367 8888 (PR adviser to Chelford) Steve Liebmann Charles Stanley Securities Tel: +44 (0)20 7149 6482 (nominated adviser to Chelford) Richard Thompson Mark Taylor Strata Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Solarsoft and no one else in connection with the Offer and will not be responsible to anyone other than Solarsoft for providing the protections afforded to its customers or for providing advice in relation to the Offer or in relation to the matters described in this announcement or any transaction or arrangement referred to herein. KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated by the Financial Services Authority for investment business activities, is acting exclusively for Chelford as financial adviser in relation to the Offer and is not acting for any other person in relation to the Offer. KPMG Corporate Finance will not be responsible to anyone other than Chelford for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement or any transaction or arrangement referred to herein. This announcement is not intended to and does not constitute or form any part of an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of an offer to purchase or subscribe for any securities pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document and the Form of Acceptance, which will together contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance or other response to the Offer should be made only on the basis of the information contained in the Offer Document and the Form of Acceptance. The release, publication or distribution of this announcement in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable requirements may constitute a violation of the securities laws of any such jurisdiction. This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed herein may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK. The Offer will not be made, directly or indirectly, in or into the United States or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile or other electronic transmission, telex or telephone) of inter-state or foreign commerce of, or any facility of, a national, state or other securities exchange of, the United States, nor will it be made directly or indirectly in or into Canada, Australia or Japan and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Accordingly, copies of this announcement are not being, will not be and must not be mailed or otherwise forwarded, distributed or sent in, into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Any persons (including without limitation custodians, nominees or trustees) receiving this announcement must not mail, forward, distribute or send it in, into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Forward-Looking Statements This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" concerning the Offer, Solarsoft and the Chelford Group. These statements are based on the current expectations of the management of Solarsoft, Solarsoft Business Systems and Chelford and are naturally subject to uncertainty and changes in circumstances. Generally the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expression identify forward-looking statements. Forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants. Therefore, undue reliance should not be placed on such statements. Solarsoft and Chelford assume no obligation and do not intend to update these forward-looking statements whether as a result of new information or otherwise, except as required pursuant to applicable law and regulation. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in one per cent. or more of any class of " relevant securities" of Chelford, all "dealings" in any "relevant securities" of Chelford (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Chelford they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Chelford by Solarsoft or Chelford or by any of their respective " associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to the application of Rule 8 to you, please consult the Panel on telephone number +44 (0)20 7382 9026; fax +44 (0)20 7638 1554. APPENDIX I CONDITIONS AND PRINCIPAL FURTHER TERMS OF THE OFFER The Offer will be subject to the following conditions: a. valid acceptances being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as Solarsoft may, subject to the rules of the City Code, decide) in respect of not less than 90 per cent. (or such lesser percentage as Solarsoft may decide) in nominal value of the Chelford Shares to which the Offer relates and not less than 90 per cent. (or such lesser percentage as Solarsoft may decide) of the voting rights carried by the Chelford Shares to which the Offer relates, provided that, unless agreed by the Panel, this condition will not be satisfied unless Solarsoft shall have acquired or agreed to acquire (pursuant to the Offer or otherwise), directly or indirectly, Chelford Shares carrying, in aggregate, over 50 per cent. of the voting rights then normally exercisable at a general meeting of Chelford on such basis as may be required by the Panel (including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of conversion or subscription rights or otherwise); and for this purpose (i) the expression " Chelford Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 of the Companies Act 2006; (ii) Chelford Shares which have been unconditionally allotted shall be deemed to carry the voting rights which they will carry on issue and; (iii) shares that cease to be held in treasury are Chelford Shares to which the Offer relates; b. no government or governmental, quasi-governmental authority (whether supranational, national, regional, local or otherwise) or statutory or regulatory body, or other authority (including any anti-trust or merger control authority) court, tribunal, arbitrary body, institution, investigative body, association, trade agency or professional or environmental body or (without prejudice to the generality of the foregoing) any other person or body in any jurisdiction (each, a "Relevant Authority") having decided to take, institute, implement or threaten any action, proceedings, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, regulation, decision, judgement or order or otherwise taken any other step or done any thing, and there not being outstanding any statute, legislation or order, that would or might reasonably be expected to: i. make the Offer, or its implementation, or the proposed acquisition of Chelford or any member of the Chelford Group or any Chelford Shares or any other shares or securities in, or wider control of, Chelford by Solarsoft or any member of the Wider Solarsoft Group or the subscription by, or allotment to, any member of the Wider Solarsoft Group of Chelford Shares or any matter arising therefrom or relating thereto, void, illegal or unenforceable under the laws of any relevant jurisdiction or otherwise, directly or indirectly, restrict, restrain, prohibit, delay, impose additional conditions or obligations with respect to, or otherwise interfere with the implementation of, the Offer or the acquisition of any Chelford Shares by Solarsoft or any matters arising therefrom; ii. result in a material delay in the ability of Solarsoft, or render Solarsoft unable, to acquire a material portion of the Chelford Shares; iii. require, prevent, materially delay or adversely affect the divestiture by any member of the Wider Solarsoft Group or any member of the Wider Chelford Group of all or any portion of their businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective businesses or own their respective assets or properties or any part thereof; iv. impose any material limitation on the ability of any member of the Wider Solarsoft Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of all or any of the Chelford Shares (whether acquired pursuant to the Offer or otherwise) or to exercise voting or management control over Chelford or any member of the Wider Chelford Group in each case to an extent which is material in the context of the Offer; v. require any member of the Wider Solarsoft Group or the Wider Chelford Group to acquire, or offer to acquire any Chelford Shares or other securities or rights thereover in any member of the Wider Chelford Group (other than in Chelford) owned by any third party; vi. impose any material limitation on the ability of any member of the Wider Solarsoft Group or the Wider Chelford Group to integrate or co-ordinate its business, or any part of it, with the business of any other member of the Wider Solarsoft Group or the Wider Chelford Group in each case, in any respect which is material in the context of the Wider Chelford Group or the Wider Solarsoft Group; vii. result in any member of the Wider Solarsoft Group or Wider Chelford Group ceasing to be able to carry on business in a manner in which it presently does so; or viii. otherwise adversely affect any or all of the business, assets, prospects, profits or financial or trading position of any member of the Wider Solarsoft Group or the Wider Chelford Group or the exercise of rights over shares of any company in the Chelford Group, to an extent material in the context of the Offer or to the Wider Chelford Group taken as a whole; and all applicable waiting and other time periods during which such Relevant Authority could decide, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been terminated; c. all necessary material filings and applications in connection with the Offer or its implementation having been made and all necessary material authorisations, orders, grants, consents, clearances, licences, confirmations, permissions and approvals ("Authorisations"), in any jurisdiction, for or in respect of the Offer, the proposed acquisition of any shares or securities in, or control of, Chelford or any member of the Wider Chelford Group by any member of the Wider Solarsoft Group being obtained in terms and in a form reasonably satisfactory to Solarsoft from all appropriate Relevant Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any members of the Wider Chelford Group or the Wider Solarsoft Group has entered into contractual arrangements and such Authorisations remaining in full force and effect and there being no intimation of any intention to revoke or not to renew the same and all necessary filings having been made, all appropriate waiting and other time periods (including extensions thereto) in respect of the Offer or its implementation under any applicable legislation and regulations in any jurisdiction having expired, lapsed or been terminated and all necessary statutory or regulatory obligations in any jurisdiction in respect of the Offer or the proposed acquisition of Chelford by Solarsoft or of the Chelford Shares or any matters arising therefrom having been complied with; d. save as disclosed in Disclosed Information or as otherwise Publicly Announced, there being no provision of any agreement, instrument, permit, franchise, licence or other arrangement to which any member of the Wider Chelford Group is a party or by or to which it or any of its assets may be bound or subject or any circumstance which, as a consequence of the Offer or the acquisition of Chelford or proposed acquisition by any member of the Wider Solarsoft Group of some or all of the Shares or other Securities in Chelford or because of a change in the control or management of Chelford or any member of the Chelford Group could or might reasonably be expected to result in: i. a material amount of any monies borrowed by, or of other indebtedness (actual or contingent) of, or grant available to, any member of the Wider Chelford Group becomes or is capable of being declared repayable immediately or earlier than the repayment date stated in such agreement, instrument or other arrangement or the ability of any member of the Wider Chelford Group to incur a material amount of indebtedness is withdrawn, inhibited or adversely affected; ii. any mortgage, charge or other security interest is created over the whole or any part of the business, property or assets of any member of the Wider Chelford Group otherwise than solely by operation of law in the ordinary course of business or any such security (whenever arising) being enforced; iii. any such agreement, instrument, permit, franchise, licence or other arrangement, or any right, interest, liability or obligation of any member of the Wider Chelford Group therein, is terminated or adversely modified or affected to an extent material to the Wider Chelford Group taken as a whole or any action is taken or obligation or liability arises thereunder to an extent material to the Wider Chelford Group taken as a whole; iv. the value of any member of the Wider Chelford Group or its financial or trading position or prospects being prejudiced or adversely affected in a manner which is material in the context of the Wider Chelford Group taken as a whole; v. any material asset or, other than in the ordinary course of business, any asset of the Wider Chelford Group being charged or disposed of; vi. the rights, liabilities, obligations or interests or business of any member of the Wider Chelford Group in or with any other person, firm or company (or any arrangement relating to such interest or business) being terminated, modified or adversely affected in a manner which is material in the context of the Wider Chelford Group taken as a whole; vii. any liability (actual or contingent) which is material to the Wider Chelford Group taken as a whole is created or accelerated; e. since 31 December 2006 and save as Publicly Announced or as disclosed in Disclosed Information, no member of the Chelford Group having: i. issued or agreed to issue or authorised or proposed the issue of additional shares of any class or issued or authorised or proposed the issue of or granted securities convertible into or rights, warrants or options to subscribe for or acquire such shares or convertible securities or redeemed, purchased or reduced or announced any intention to do so or made any other change to any part of its share capital, save for options granted or awards made pursuant to the Chelford Share Schemes and Chelford Shares allotted upon exercise of options, and save as between Chelford and its wholly owned subsidiaries; ii. sold or transferred or agreed to sell or transfer any treasury shares; iii. recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution other than dividends lawfully paid to Chelford or wholly-owned subsidiaries of Chelford; iv. authorised or proposed or announced its intention to propose any acquisition or disposal or transfer of assets or shares or any change in its share or loan capital other than between Chelford and its wholly owned subsidiaries; v. issued or authorised or proposed the issue of any debentures or incurred or increased any financial indebtedness or contingent financial liability other than between Chelford and its wholly owned subsidiaries and in each such case which is material in the context of the Wider Chelford Group; vi. disposed of or transferred, mortgaged or encumbered any material asset or any right, title or interest in any material asset or entered into or varied any contract, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or which involves or could involve an obligation of a nature or magnitude which is material or authorised, proposed other than between Chelford and its wholly owned subsidiaries and in each such case which is material in the context of the Wider Chelford Group; vii. entered into or varied or proposed to enter into or vary any contract, reconstruction, amalgamation, arrangement or other transaction which is of a long term or unusual or onerous nature or is otherwise than in the ordinary course of business other than between Chelford and its wholly owned subsidiaries and in each such case which is material in the context of the Wider Chelford Group; viii. entered into, or varied materially the terms of, any contract or agreement with any of the directors or senior executives of Chelford; ix. taken or proposed any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets and revenues; x. waived or compromised any claim which is material in the context of the Wider Chelford Group taken as a whole other than in the ordinary course of business; xi. in any respect which is material in the context of the Wider Chelford Group taken as a whole: (i) taken any action with respect to, adopt, enter into, terminate or amend any severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) increased in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (iii) amended or accelerated the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) granted any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder; xii. made any amendment to its memorandum or articles of association or other incorporation documents; xiii. made or agreed or consented to: 1. any significant change to: a. the terms of the trust deeds constituting the pension scheme (s) established for its directors, employees or their dependants; or b. the pensions or the benefits which accrue or are payable thereunder; or c. the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined; or d. the basis upon which the liabilities (including pensions) or such pension schemes are funded or made; or 2. any change to the trustees including the appointment of a trust corporation; xiv. entered into any contract, transaction or arrangement which is or is likely to be restrictive to any significant extent on the business of any member of the Wider Chelford Group or the Wider Solarsoft Group; xv. otherwise than in the ordinary course of business, entered into or joined any group, organisation or consortium whereby the Company is obligated to provide intellectual property; xvi. entered into any contract, commitment or agreement with respect to any of the transactions or events referred to in this condition (e); or xvii. been unable or admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; f. since 31 December 2006 and save as Publicly Announced or as disclosed in Disclosed Information: i. no litigation, arbitration, prosecution or other legal proceedings having been instituted, announced or threatened or remained outstanding by or against any member of the Wider Chelford Group or to which any member of the Wider Chelford Group is or may become a party (whether as plaintiff, defendant or otherwise in each such case which is material in the context of the Wider Chelford Group); ii. no adverse change having occurred in the business, assets, financial or trading position, profits or prospects of any member of the Wider Chelford Group which is material in the context of the Wider Chelford Group taken as a whole; iii. no steps having been taken which would or are reasonably likely to result in the withdrawal, cancellation, termination or modification of any material licence held by any member of the Wider Chelford Group which is necessary for the proper carrying on of its business; iv. no investigation by any Relevant Authority having been threatened, announced, implemented or instituted or remaining outstanding which is material in the context of the Wider Chelford Group taken as a whole; or v. otherwise than in the ordinary course and in the context of the Offer, no material liability (actual, contingent or otherwise) having arisen which is material in the context of the Wider Chelford Group taken as a whole. g. save as disclosed in the Disclosed Information, Solarsoft not having discovered that: i. any business, financial or other information concerning any member of the Chelford Group disclosed, publicly by or on behalf of any member of the Chelford Group, either contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which in either such case, is material in the context of the Wider Chelford Group taken as a whole; or ii. any member of the Wider Chelford Group is subject to any liability, actual or contingent, which is not disclosed in the annual report and accounts of Chelford for the financial year ended 31 December 2006 or which has been Publicly Announced and which is material in the context of the Wider Chelford Group taken as a whole; or iii. any member of the Wider Chelford Group is subject to any liability, actual or contingent, which is improperly disclosed in the annual report and accounts of Chelford for the financial year ended 31 December 2006 or which has been Publicly Announced, which is material in the context of the Wider Chelford Group taken as a whole and which requires a restatement of such annual report and accounts and any annual reports and accounts of Chelford in any previous financial years; h. save as disclosed in Disclosed Information, Solarsoft not having discovered that: i. any past or present member of the Wider Chelford Group has not complied with all applicable legislation or regulations of any jurisdiction with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or to harm human health or otherwise relating to environmental matters (which non-compliance might give rise to any liability (whether actual or contingent) on the part of any member of the Wider Chelford Group) or that there has otherwise been any such disposal, discharge, spillage, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations and wherever the same may have taken place) which in any such case might give rise to any liability (whether actual or contingent) on the part of any member of the Wider Chelford Group; ii. there is or is likely to be any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider Chelford Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or third party or otherwise; iii. that circumstances exist (whether as a result of the making of the Offer or otherwise) which might lead to any Relevant Authority instituting or any member of the Wider Chelford Group or the Wider Solarsoft Group might be required to institute, an environmental audit or take any other steps which in any such case might result in any actual or contingent liability to improve or install new plant or equipment or make good, repair, re-instate or clean up any land or other asset now or previously owned, occupied or made use of by any member of the Wider Chelford Group; iv. the Wider Chelford Group has not complied with any applicable law or regulation governing the conduct of its business in any respect which is material in the context of the Wider Chelford Group taken as a whole; v. any contract, agreement or other arrangement which is or may be restrictive to a material extent on the business of any member of the Wider Chelford Group or the Wider Solarsoft Group; or vi. the conduct of the business of the Wider Chelford Group infringes the intellectual property rights of any third party and in each case which has an effect which is material and adverse in the context of the Wider Chelford Group taken as a whole. Subject to the requirements of the Panel, Solarsoft reserves the right to waive, in whole or in part, all or any of conditions (b) to (h) (inclusive) above. Conditions (b) to (h) (inclusive) must be fulfilled or (if capable of waiver) waived or, where appropriate, have been determined by Solarsoft to be or to remain satisfied no later than midnight on the twenty-first day after the later of the first closing date of the Offer and the date on which condition (a) is fulfilled (or in each case such later date as the Panel may agree) provided that Solarsoft shall be under no obligation to waive or treat as satisfied any of conditions (b) to (h) (inclusive) by a date earlier than the latest date specified above for the satisfaction thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment. The Offer will be on the terms and subject, inter alia, to the conditions which are set out in this Appendix and those terms which will be set out in the formal Offer Document and Form of Acceptance. If Solarsoft is required by the Panel to make an offer for Chelford Shares under the provisions of Rule 9 of the City Code, Solarsoft may make such alterations to the conditions as are necessary to comply with the provisions of that Rule. Although it is not considered that the Offer will come within the statutory provisions for reference to the Competition Commission, the Offer will lapse if it is referred to the Competition Commission in the United Kingdom before 3.00 p.m. on the first closing date of the Offer or the time and date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later. If the Offer lapses, the Offer will cease to be capable of further acceptance and accepting Chelford Shareholders and Solarsoft will thereupon cease to be bound by any Form of Acceptance or electronic acceptance submitted before the time when the Offer lapses. Solarsoft reserves the right to elect to implement the acquisition of Chelford, with the consent of Chelford, by way of scheme of arrangement under section 425 of the Companies Act. In such event, such scheme will be implemented on the same terms (subject to appropriate amendment) as the Offer. The availability of the Offer to persons not resident in the United Kingdom may be affected by laws of the relevant jurisdiction in which they are resident. The attention of holders of Chelford Shares who are not resident in the United Kingdom is drawn to the relevant provisions of the formal Offer Document which will be distributed on behalf of Solarsoft. APPENDIX II BASES AND SOURCES OF INFORMATION (a) The maximum value of the Offer attributable to the entire issued and to be issued ordinary share capital of Chelford (and other statements made by reference to the issued share capital of Chelford) is based on there being 7,141,323 Chelford Shares now in issue together with options and conversion rights over a further 437,621 ordinary shares which are all currently exercisable. 92,004 Chelford Shares are held by EB Trustees Limited to satisfy the exercise of outstanding options granted under the Unapproved Scheme. The shares held in the Unapproved Scheme are included in the figure given for the issued share capital above. Once all share options are exercised the total number of ordinary shares in issue in Chelford will be 7,486,940. (b) The Offer made is based on there being no declaration or payment of any further dividends on any Chelford Shares, including any interim dividend. (c) Unless otherwise stated, the financial information relating to Chelford is extracted from Chelford's interim financial results for the six month period ended 30 June 2007. (d) The Closing Prices of Chelford Shares represent the closing middle market prices for Chelford Shares on the relevant dates taken as derived from the Daily Official List. (e) The 12 month average share price for Chelford Shares has been calculated using the closing middle market prices for Chelford Shares on the relevant dates taken as derived from Datastream. APPENDIX III DETAILS OF IRREVOCABLE UNDERTAKINGS Irrevocable undertakings have been given by the Chelford Directors and certain Chelford Shareholders in respect of Chelford Shares as detailed below. Together these Chelford Shares in aggregate amount to 4,478,179, representing approximately 62.7 per cent. of the existing issued share capital of Chelford. Number of Chelford Shares % of the existing issued share capital of Chelford 1. Trevor Cameron Lewis (Chelford Director) 774,171 10.84% 2. Joseph William Birkett (Chelford Director) 578,725 8.10% 3. Stephen Richard Lord (Chelford Director) 792,171 11.09% 4. Adrian de Ferranti 1,650,786 23.12% 5. Kevin J. McDaid 427,326 5.98% 6. David M. Urquhart 255,000 3.57% The irrevocable undertakings given by the Chelford Directors and Adrian Ferranti will continue to be binding if any higher competing offer is made for Chelford. The irrevocable undertakings given by Kevin McDaid and David Urquhart will cease to be binding in the event that within seven days after posting of the Offer Document, a third party announces a competing cash offer for Chelford that is made at a premium of at least 10 per cent. above the Offer Price and Solarsoft does not within 14 days of the announcement of such competing cash offer match such offer. Each of the undertakings will also cease to be binding in the event that the Offer lapses or is withdrawn. APPENDIX IV DEFINITIONS The following definitions apply throughout this announcement, unless the context requires otherwise: "AIM" a market operated by the London Stock Exchange "AIM Rules" AIM Rules for companies as published by the London Stock Exchange "Alternative Offer" any offer by a third party (other than Solarsoft) for the entire issued share capital of Chelford or a substantial part thereof or for the whole or any part of the undertaking, business or other assets of Chelford or any of its subsidiaries or any offer or proposal from a third party involving a reorganisation or scheme of arrangement involving Chelford or any of its subsidiaries "Australia" the commonwealth of Australia, its territories and possessions and all areas subject to its jurisdiction and all political sub-divisions thereof "Authorisations" has the meaning given in sub-paragraph (c) of Appendix I of this announcement "Board of Solarsoft" the board of directors of Solarsoft "Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks in London are open for normal business "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and all political sub-divisions thereof "Chelford Directors" or "Directors the board of directors of Chelford of Chelford" or "Board of Chelford " or "Chelford Board" "Chelford Group" Chelford and its subsidiaries and subsidiary undertakings "Chelford Optionholder" or " a holder of options or awards under a Chelford Share Scheme Optionholder" "Chelford Share Scheme(s)" the Chelford Group plc 2002 Enterprise Management Incentive Plan under which Chelford Group employees (including executive directors) are issued with options to acquire Chelford Shares and the Unapproved Scheme "Chelford Share(s)" the fully paid ordinary shares of 100 pence each in the capital of Chelford "Chelford Shareholders" the holders of Chelford Shares "Chelford" or the "Company" Chelford Group plc "City Code" the City Code on Takeovers and Mergers "Closing Price" the closing middle market quotation of a Chelford Share as derived from the Daily Official List "Companies Act" the Companies Act 1985, as amended "Competition Commission" the UK Competition Commission "Daily Official List" the daily official list of the London Stock Exchange "Datastream" the financial statistical database operated by Thomson Financial "Disclosed Information" any information which has been disclosed (in writing) by or on behalf of the Chelford Group or any of its advisers to Solarsoft or any of its advisers in each case prior to the date of this announcement "ERP" or "ERP Software" enterprise resource planning (software) "Form of Acceptance" the form of acceptance, election and authority which will be distributed with the Offer Document "Holder" a registered holder of Chelford Shares "Japan" Japan, its cities and prefectures, territories and possessions "KPMG Corporate Finance" KPMG Corporate Finance, a division of KPMG LLP, financial adviser to Chelford "Listing Rules" the rules and regulations made by the Financial Services Authority in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000, and contained in the UK Listing Authority's publication of the same name "London Stock Exchange" London Stock Exchange plc "Marlin Equity Partners" or " Marlin Equity Partners, LLC and/or Marlin Equity Partners II, LLC Marlin" "Offer" the proposed recommended cash offer to be made by Solarsoft for Chelford on the terms and subject to the conditions to be set out in the Offer Document, to acquire the issued and to be issued share capital of Chelford and, where the context admits, any subsequent revision, variation, extension or renewal thereof "Offer Document" the formal document to be sent to holders of Chelford Shares and for information only to participants in the Chelford Share Schemes, containing, amongst other things, the terms and conditions of the Offer "Offer Price" 215 pence per Chelford Share "Panel" the Panel on Takeovers and Mergers "Pound Sterling" or "£" UK pound sterling (and references to "pence" shall be construed accordingly) "Publicly Announced" announced publicly and delivered to a Regulatory Information Service "Regulatory Information Service" any of the services set out in Appendix 3 to the Listing Rules "Relevant Authority" has the meaning given in sub-paragraph (b) of Appendix 1 of this announcement "SAP" SAP AG "Silicon Valley Bank" SVB Silicon Valley Bank, a wholly owned subsidiary of SVB Financial Group "Solarsoft" Solarsoft Acquisition Limited, a company registered in England and Wales with number 6506420 "Solarsoft Business Systems" or " the business formed by the combination of CMS Software Inc and XKO SBS" Software Limited together with their respective subsidiaries and associated undertakings "Solarsoft Directors" the members of the board of directors of Solarsoft "Strata Partners " or "Strata" Strata Technology Partners LLP, financial adviser to Solarsoft "subsidiary", "subsidiary shall be construed in accordance with the Companies Act undertaking", "associated undertaking" or "undertaking" "Substantial Interest" a direct or indirect interest in 20 per cent. or more of the voting or equity capital (or equivalent) of an undertaking "Unapproved Scheme" the SSI Holdings Limited Employee Share Option Scheme, an unapproved share option scheme held by EB Trustees Limited "United Kingdom" or the "UK" United Kingdom of Great Britain and Northern Ireland and its dependent territories "United States", "US" or "USA" the United States of America, its territories and possessions, any state of the United States and the District of Columbia "US dollar" or "$" US dollar "Wider Chelford Group" Chelford and the subsidiaries and subsidiary undertakings of Chelford and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Chelford Group is interested or any undertaking in which Chelford and such undertakings (aggregating their interests) have a Substantial Interest) "Wider Solarsoft Group" Solarsoft and the subsidiaries and subsidiary undertakings of Solarsoft and associated undertakings (including any joint venture, partnership, firm or company in which any of Solarsoft (or its subsidiary and subsidiary undertakings) is interested or any undertaking in which Solarsoft and such undertakings (aggregating their interests) have a Substantial Interest) In this announcement: (a) all times referred to are London time unless otherwise stated. (b) all references to legislation in this announcement are to English legislation unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. (c) words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender. (d) for the purposes of this document, subsidiary undertaking and parent undertaking have the respective meanings given to them by the Companies Act (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the Companies Act). This information is provided by RNS The company news service from the London Stock Exchange END OFFVQLFBVXBLBBX
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