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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Shearwater Group Plc | LSE:SWG | London | Ordinary Share | GB00BKT6VH21 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 44.00 | 43.00 | 45.00 | 44.00 | 44.00 | 44.00 | 0.00 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 26.69M | -8.18M | -0.3431 | -1.28 | 10.48M |
From May 2019 to May 2024
TIDMSWG
RNS Number : 8243C
Shearwater Group PLC
20 April 2017
THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED HEREIN) IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, WITHIN, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN, NEW ZEALAND AND SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
This announcement does not constitute an offer of, or a solicitation to subscribe for or purchase, any securities in any jurisdiction including in the United States.
Securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended (the "Securities Act"), or an exemption from, or in a transaction not subject to, registration. The Company has not and does not intend to register any securities under the Securities Act, and does not intend to offer any securities to the public in the United States unless registered under the Securities Act or an exemption from such registration is available. No public offering of securities of the Company is being made in the United States.
No communication or information relating to the issue and offering of securities may be disseminated to the public in jurisdictions other than the UK where prior registration or approval is required for that purpose. No action has been taken that would permit an offer of securities in any jurisdiction where action for that purpose is required, other than in the UK.
20 April 2017
SHEARWATER GROUP PLC
("Shearwater" or the "Company")
Proposed Acquisition of SecurEnvoy Limited
Proposed Placing of up to 200,000,000 Ordinary Shares at GBP0.04 per share
Proposed Open Offer of up to 25,488,108 Ordinary Shares at GBP0.04 per share
Admission of the Enlarged Share Capital to trading on AIM
and
Notice of General Meeting
Shearwater Group plc (AIM: SWG), is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of SecurEnvoy Limited, a leading UK based provider of multifactor authentication software solutions.
Highlights
-- GBP20 million consideration satisfied by the payment of GBP10 million in cash and GBP10 million through the issuance of 200 million Ordinary Shares of the Company at a price of 5 pence per share;
-- Placing to raise gross proceeds of up to GBP8 million to be used to part fund the Acquisition and further near term growth opportunities;
-- Open Offer to permit shareholders to subscribe for up to approximately GBP1 million of New Ordinary Shares;
-- SecurEnvoy is a leading UK based provider of multifactor authentication software solutions used by over 1,000 end users across five continents;
-- Initial acquisition under the Company's transformation strategy, establishing the Company's presence within the large and growing identity and access management sector;
-- For the twelve months ended 31 December 2016, SecurEnvoy recorded sales of GBP3.2 million, generating EBITDA of GBP2.2 million, representing a historic EBITDA acquisition multiple of 9.3x; and
-- SecurEnvoy Founders to remain with the Company on new employment contracts to drive further growth in the business.
The Acquisition will constitute a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies and as such will require the approval of Shareholders. An admission document is being posted today to Shareholders (the "Admission Document"), which sets out in more detail the background to and reasons for the Acquisition, the Placing and the Open Offer and their respective terms and includes the Notice of General Meeting.
The Chairman, David Williams, said: "I am delighted we have reached agreement to acquire SecurEnvoy. It is an example of a great British business with a fantastic history of innovation under Andy and Steve's stewardship and we are thrilled they have agreed to join Shearwater Group. For us, this represents a very important first step in our ambitious growth plans, and is an excellent example of the type of business and team we wish to partner with."
"Companies of all sizes are needing to evaluate their digital resilience capabilities, and authenticating the user is fundamentally important in protecting a company's information assets. The acquisition of SecurEnvoy establishes our presence within the large and growing identity and access management sector, and is the first of what we hope to be many transactions in support of our strategic aim of building a UK based digital resilience group."
Andy Kemshall and Steve Watts, Co-Founders of SecurEnvoy, said: "We are thrilled to be joining David, Mo and the team at Shearwater Group. For us, it was vital that we found a partner that shared our vision for the business and could support us on the next stage of our journey. Their strategy for building a digital resilience group resonated well with us and we are excited about our future as part of Shearwater Group."
The Issue Price represents a discount of approximately 17.95 per cent. compared with the mid-market price of 4.875 pence per share at which the Ordinary Shares were traded on AIM as at close of trading on 19 April 2017, the last trading day prior to this announcement.
The Acquisition, the Placing and the Open Offer are conditional, inter alia, upon the passing of the resolutions proposed at the General Meeting. A General Meeting of the Company is therefore being convened for 10:00 a.m. on 8 May 2017 at the offices of Mayer Brown International LLP, 201 Bishopsgate, London EC2M 3AF. The Admission Document will be posted today to Shareholders. The Admission Document includes the Notice of General Meeting and sets out in more detail the background to and reasons for the Acquisition, the Placing and the Open Offer. The Admission Document will be available on the Company's website: www.theshearwatergroup.co.uk.
This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
Contacts: Shearwater Group plc www.theshearwatergroup.co.uk David Williams +44 (0) 797 014 8016 Michael Stevens +44 (0) 780 171 2582 WH Ireland Limited - Nominated www.whirelandplc.com Adviser & Broker Mike Coe, Ed Allsopp +44 (0) 117 945 3470 Powerscourt - Financial shearwater@powerscourt-group.com PR Ben Griffiths, Andy Jones +44 (0) 20 7250 1446 1. Introduction
The Company is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of SecurEnvoy, a leading multifactor authentication ("MFA") software company headquartered in the UK with operations in the US, Europe and Australia, for a total consideration of GBP20 million. The Consideration will be satisfied on Completion by the payment of GBP10 million in cash (subject to certain customary adjustments) and the issue of the Consideration Shares which have an aggregate value of GBP10 million.
The Company also announces that it proposes to undertake the Placing and the Open Offer, pursuant to which it proposes to raise, subject to certain conditions (i) up to GBP8 million (before expenses) by the conditional placing of 200,000,000 New Ordinary Shares at a price of 4 pence per Ordinary Share (a discount of 17.95 per cent. to the closing mid-market price of 4.875 pence per share as at 19 April 2017), to certain institutional and other investors; and (ii) up to approximately GBP1 million (before expenses) by way of an Open Offer made to Qualifying Shareholders of up to 25,488,108 New Ordinary Shares at a price of 4 pence per Ordinary Share (a discount of 17.95 per cent. to the closing mid-market price of 4.875 pence per share as at 19 April 2017). The Placing and the Open Offer are conditional, inter alia, upon the passing of certain resolutions in order to ensure that the Directors have the necessary authorities and powers to allot the new Ordinary Shares.
Following the previously announced strategic review of the Company's legacy mining assets, the Directors have been implementing a transformational strategy focused on building a UK based group providing digital resilience solutions to private and public sector organisations. The Company's recently appointed Directors and management team have substantial experience operating within the high technology, cyber, information security, digital and communication sectors, and a track record of delivering shareholder value through accelerated buy and build processes. The Directors believe that there is an opportunity to build a UK based group providing digital resilience solutions through a combination of acquisition and organic growth and, following the review of a number of potential acquisition targets within the digital resilience sector, the Directors believe that SecurEnvoy fits the Company's target profile and will provide for a compelling first acquisition.
The Acquisition will constitute a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies and as such will require the approval of Shareholders which will be sought at the General Meeting convened for 10:00 a.m. on 8 May 2017 at the offices of Mayer Brown International LLP, 201 Bishopsgate, London EC2M 3AF.
Application will be made to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM and trading is expected to commence in the New Ordinary Shares, and recommence in the Existing Ordinary Shares at 8:00 a.m. on 9 May 2017.
2. Summary information on SecurEnvoy
SecurEnvoy is a leading provider of MFA software solutions, which are used by over 1,000 end users across the UK, US, Europe, Asia and Australia.
SecurEnvoy's core product is SecurAccess, which provides mobile phone based tokenless(R) MFA for access to Virtual Private Network ("VPN"), remote desktop, WiFi, web portals and laptop encryption. The business' authentication apparatus enables a user to leverage their existing personal device to authenticate their identity as an incremental layer of security in addition to a traditional password.
The Founders of SecurEnvoy are pioneers in developing SMS authentication and in 2003 commercialised mobile based tokenless(R) two factor authentication technology through the establishment of SecurEnvoy. SecurEnvoy's tokenless(R) authentication software creates and delivers 'soft' tokens to users. The Founders will remain with the business of SecurEnvoy following Completion and have agreed to enter into new service agreements with the Company.
Alongside SecurAccess, SecurEnvoy has a number of other complementary authentication products which can also be implemented as an on-premise software solution, hosted as a managed service or through the cloud.
In 2011 and 2014 the business was awarded the Queen's Award for Innovation and International Trade respectively. SecurEnvoy is also included within Gartner's Magic Quadrant for User Authentication.
The Founders currently hold 87.2 per cent. of the fully diluted share capital of SecurEnvoy with the remaining share capital held by various individual shareholders. Three employees of SecurEnvoy hold options in respect of shares in SecurEnvoy which will be acquired by the Company on Completion.
The table below sets out SecurEnvoy's summary audited financial information for the periods indicated, prepared in accordance with IFRS.
Summary historical financial information of SecurEnvoy
Hot Features
Premium
Year ended Year ended Year ended
31 December 31 December 31 December
2014 2015 2016
GBP'000 GBP'000 GBP'000
--------------------- ------------- ------------- -------------
Revenue 2,766 3,072 3,224
EBITDA(1) 1,757 1,959 2,163
EBITDA margin 63.5% 63.8% 67.1%
Operating
cash flow 1,459 1,602 2,092
Operating
cash conversion(2) 83.0% 81.8% 96.7%
(1)Calculated as operating profit or loss excluding amortisation of intangibles, depreciation and impairment and share-based payments charge
(2)Calculated as operating cash flow divided by EBITDA
3. Background to and reasons for the Acquisition
In line with the Company's previously announced transformation strategy, the Board continues to evaluate investment and / or acquisition opportunities within the information and cyber security sectors which the Directors believe have the potential to deliver enhanced value to Shareholders. Specifically, the Directors are seeking to identify those investment and / or acquisition opportunities where the target company has a leading product, solution, service or consulting capability whose potential can be unlocked through active management and capital investment.
In SecurEnvoy, the Directors believe they have identified a business which meets these criteria and will provide a compelling first acquisition as part of the Company's growth strategy. In particular, the Directors believe the Acquisition is in the best interests of the Company and Shareholders for the following reasons:
-- SecurEnvoy is a leading UK based provider of award-winning MFA solutions, with a track record of innovation;
-- SecurEnvoy operates within a large, high growth market underpinned by strong macro dynamics;
-- SecurEnvoy has strong relationships with distributors and channel partners, through which it can access multiple end user corporate customers across a variety of industry verticals, whilst maintaining an efficient operating structure;
-- founded in 2003, SecurEnvoy is an established business with strong financial performance year-on-year, high levels of recurring revenue and operating cash flow generation; and
-- alongside SecurEnvoy's core product, SecurAccess, the business has a number of complementary authentication products with low market penetration, which provide opportunities for growth incremental to geographical expansion into the US.
4. Further growth opportunities and strategy of the Enlarged Group
On Completion, SecurEnvoy will represent the Company's first acquisition as part of its growth strategy of building a UK based group providing digital resilience solutions.
As a leading provider of MFA software, SecurEnvoy has a strong, stable base from which the Directors believe they and the Founders can drive further growth opportunities within the identity and access management sector. Specifically, these include the following growth objectives:
-- establishing further international distribution and reseller relationships, particularly within the US to capitalise on significant growth opportunities within this international territory;
-- increasing cloud-based implementations of SecurEnvoy's authentication products and the provision of AaaS;
-- greater SecurEnvoy product penetration across all end user markets, including increasing the sales of additional authentication software products alongside SecurEnvoy's core product, SecurAccess; and
-- evaluation of select, complementary acquisition growth opportunities which could enhance SecurEnvoy's overall user authentication product offering or support the implementation and / or roll out of its authentication products.
The Directors intend to identify further acquisition targets which have a leading product, solution, service or consulting capability whose full potential can be unlocked through active management and capital investment. The Company has identified other acquisition opportunities which the Directors believe fit this profile and provides a broad mix of capabilities across complementary end user markets. However, there is no guarantee that any of these opportunities will progress to a definitive transaction.
The Directors will seek to deploy the Company's "buy, focus, grow" strategy to create an environment through which to drive enhanced value from any acquisition which it makes.
5. Principal terms of the Acquisition
On 20 April 2017, the Company entered into the Acquisition Agreements with the Founders and the Minority Sellers pursuant to which the Company has conditionally agreed to acquire the entire issued share capital of SecurEnvoy.
The Sellers comprise (i) the Founders; (ii) the Minority Sellers (who are individual shareholders); and (iii) the Option Holders (who are certain employees of SecurEnvoy that have been granted options over shares in SecurEnvoy).
The Company entered into the SPA with the Founders on 20 April 2017 and the Minority SPA with the Minority Sellers on 20 April 2017. Pursuant to the terms of the SPA and an undertaking and power of attorney entered into by the Option Holders on 20 April 2017, the options held by the Option Holders will be exercised and the shares issued as a result of that exercise shall be acquired by the Company on Completion pursuant to the Option Holder SPA, which will be entered into by the Company and the Option Holders on Completion.
The total Consideration for the Acquisition is GBP20 million, which will be satisfied on Completion by the payment by the Company of GBP10 million in cash and GBP10 million through the issue of 200,000,000 Ordinary Shares at a price of 5 pence per Ordinary Share, in each case to the Sellers pro rata to their shareholding in SecurEnvoy.
SecurEnvoy is being acquired on a cash free and debt free basis. The Cash Consideration is subject to customary working capital and cash adjustments following Completion.
Completion of the Acquisition Agreements is conditional on the approval of the Resolutions at the General Meeting, Admission occurring and no material adverse change having occurred in respect of SecurEnvoy prior to Completion.
Pursuant to the Acquisition Agreements, the Founders have also agreed to enter into new service agreements with the Company and have entered into the Restrictive Covenants and the Lock-in Deeds.
6. Financing of the Acquisition
The Company will utilise its existing cash resources along with the proceeds of the Placing to fund the Cash Consideration and will issue the Consideration Shares to fund the remainder of the Consideration payable to the Sellers pursuant to the Acquisition Agreements.
7. Details of the Placing
Subject to Admission, WH Ireland has, as agent for the Company, conditionally placed 200,000,000 Placing Shares at the Issue Price with institutional and other investors in accordance with the terms of the Placing Agreement, further details of which are set out at paragraph 15.1(b)(iii) (Placing Agreement) of Part X (Additional Information) of the Admission Document.
The Placing is expected to raise GBP8 million (before expenses). After the expenses of the Placing, the Acquisition and Admission, estimated to be GBP1.6 million (excluding VAT) in total, the Company is expected to received approximately GBP6.4 million from the Placing.
Schroder Investment Management Limited ("Schroders") has subscribed for 30,000,000 Placing Shares. Under the AIM Rules for Companies, Schroders' participation constitutes a related party transaction as it currently holds more than ten per cent. of the Existing Ordinary Shares and is therefore a "substantial shareholder". Chris Eadie is an independent Director for the purposes of this transaction, and considers, having consulted with WH Ireland, that the terms of Schroders' subscription are fair and reasonable insofar as the Shareholders are concerned.
The Directors (other than Chris Eadie) intend to subscribe for up to 15,000,000 New Ordinary Shares (a total aggregate amount of GBP600,000 at the Issue Price), as part of the Placing. This intention is not legally binding and any subscriptions by Directors pursuant to the Placing will be announced through a Regulatory Information Service.
The Placing Shares to be issued pursuant to the Placing will to represent approximately 20.82 per cent. of the Enlarged Share Capital (assuming full take up under the Open Offer). The Placing Shares will, following Admission, rank in full for all dividends and pari passu in all other respects with the Existing Ordinary Shares and will have the right to receive all dividends and distributions declared, made or paid in respect of the issued Ordinary Share capital of the Company after Admission.
The Ordinary Shares have not been, and will not be registered under the Securities Act or with any regulatory authority of any state or other jurisdiction of the US and may not be offered or sold within the US.
8. Details of the Open Offer
The Company considers it important that, where reasonably practicable, Shareholders have an opportunity to participate in its equity fundraisings. Accordingly, the Company is proposing to raise up to approximately GBP1 million (before expenses) by way of the Open Offer. This will provide Qualifying Shareholders with an opportunity to participate in the proposed issue of Open Offer Shares on a pre-emptive basis whilst providing the Company with additional capital to invest in its business.
Subject to the terms and conditions of the Open Offer, the Company is inviting Qualifying Shareholders, being only Shareholders who are resident in the United Kingdom on the Ex-Entitlement Date, to apply for their Basic Entitlement of Open Offer Shares at the Issue Price. Each Qualifying Shareholder's Basic Entitlement has been calculated on the basis of:
1 Open Offer Share for every 21 Existing Ordinary Shares held at the Record Date.
Qualifying Shareholders are also invited to apply for additional Open Offer Shares in accordance with the Excess Entitlement. Any Open Offer Shares not issued to a Qualifying Shareholder pursuant to their Basic Entitlement will be apportioned between those Qualifying Shareholders who have applied for the Excess Entitlement at the sole discretion of the Board, provided that no Qualifying Shareholder shall be required to subscribe for more Open Offer Shares than he or she has specified on the Application Form or through CREST.
Entitlements to apply to acquire Open Offer Shares will be rounded down to the nearest whole number and any fractional entitlement to Open Offer Shares will be disregarded in calculating the Basic Entitlement.
The Directors who intend to participate in the Placing do not intend to subscribe for their Basic Entitlement pursuant to the Open Offer, which in aggregate amounts to 6,599,236 Open Shares, representing 25.89 per cent. of the aggregate Open Offer Shares and which will therefore be available for Shareholders who wish to subscribe for Open Offer Shares pursuant to their Excess Entitlements.
9. Current trading and future prospects (a) The Existing Group
The Company is currently undergoing its transformation strategy through which it will focus on building a UK based group providing digital resilience solutions. At the date of the Admission Document, the Existing Group is not revenue generating. The Company's interim results for the six months ended 30 September 2016, which were announced on 28 December 2016, showed that the Company had net assets of GBP1,115,000. Since 30 September 2016, the Company has completed two placings raising gross proceeds totalling approximately GBP7 million, and has incurred expenditure in line with the Directors' expectations.
(b) SecurEnvoy
Since 31 December 2016, being the financial year end for SecurEnvoy and the date of the latest financial information included in the Admission Document, SecurEnvoy has continued to trade in line with the Founders' expectations.
(c) The Enlarged Group
The Directors believe that the Acquisition will provide the Enlarged Group with considerable growth opportunities and that it initiates the broader growth strategy of the Company. The Directors look forward to focusing on delivery of the Company's strategy of building a UK based group providing digital resilience solutions.
10. Lock-in and orderly market arrangements (a) Sellers
The Company, WH Ireland and the Sellers have entered into the Lock-in Deeds, pursuant to which the Sellers have agreed that subject to certain customary exceptions, (i) for a period of 12 months from the date of Completion, neither they nor their connected persons shall transfer or dispose of the Consideration Shares or shares which they hold upon exercise of any options over Ordinary Shares granted to them; and (ii) for a further period of 12 months, the Sellers shall only be able to transfer or dispose of Ordinary Shares in which they have a beneficial interest through the Company's broker in order to maintain an orderly market in the Ordinary Shares. The Founders are permitted to dispose of their Consideration Shares in order to satisfy certain claims under the SPA provided that the Founders must first settle their liability relating to such claims from their own cash resources up to certain agreed levels.
(b) Directors
The Directors have entered into the Orderly Market Deeds, pursuant to which the Directors have agreed that subject to certain customary exceptions, for a period of 12 months from the date of Admission, the Directors shall only be able to transfer or dispose of Ordinary Shares in which they have a beneficial interest through the Company's broker in order to maintain an orderly market in the Ordinary Shares.
11. Share incentives
The Directors believe that the success of the Company will depend to a high degree on the future performance of key employees in executing the Company's growth strategy. The Company has therefore established equity-based incentive arrangements which are, and will continue to be, an important means of retaining, attracting and motivating key employees and contractors, and also for aligning the interests of the management team with those of Shareholders.
(a) New Option Schemes
On 19 April 2017, the Company established the New Option Schemes which comprise the Employee Option Plan and the Non-Employee Option Plan.
The Employee Option Plan, which is an option scheme for directors and employees of the Company through which it will entitle option scheme participants the right to acquire Ordinary Shares. The exercise price of any options granted under the Employee Option Plan will be at the market price of the Ordinary Shares at the time of grant, and will be subject to certain and time and performance vesting criteria over a five year period. It is anticipated that certain employees of SecurEnvoy, including the Founders, will be granted options on Completion pursuant to the Employee Option Plan.
The Non-Employee Option Plan, which is an option scheme for consultants to the Company through which it will entitle option scheme participants the right to acquire Ordinary Shares. The exercise price of any options granted under the Non-Employee Option Plan will be at the market price of the Ordinary Shares at the time of grant, and will be subject to certain and time and performance vesting criteria over a three year period.
(b) Subsidiary Incentive Scheme
On 18 January 2017, the Subsidiary established the Subsidiary Incentive Scheme for certain employees and consultants to the Company in order to align the interest of the scheme participants directly with those of Shareholders. Under the Subsidiary Incentive Scheme, participants are only rewarded if shareholder value is created over a three to five-year period, which is calculated by reference to the growth in market capitalisation of the Company, adjusted for the issue of new Ordinary Shares, and taking into account dividends and capital returns. Participants will be entitled to 16 per cent. of the shareholder value created, only in the event that the Company's market capitalisation has grown at 12.5 per cent. per annum compounded over a period of between three and five years. The Subsidiary Incentive Scheme is now closed, and the Directors do not anticipate making any further grants under the Subsidiary Incentive Scheme.
(c) Existing Option Deeds
Between 3 October 2016 and 27 February 2017, the Company entered into the Existing Option Deeds with various current and former Directors and the Chairman of the Advisory Panel. The exercise price of the options granted under three of the Existing Option Deeds is GBP0.01, while the options granted under the other two are exercisable at nil cost. The Directors do not intend to grant any further options under the Existing Option Deeds.
12. Dividend policy
As the Company is in the early stages of executing its growth plan, the Directors intend to retain any future earnings for the foreseeable future to finance the growth of the Enlarged Group and to provide capital growth for Shareholders. The Directors will however consider the payment of dividends when it becomes commercially prudent to do so in accordance with applicable laws and subject always to the Enlarged Group having sufficient cash and distributable reserves for this purpose.
13. General Meeting and Resolutions
The Admission Document will contain a notice convening a General Meeting of the Company to be held at 10:00 a.m. on 8 May 2017 at the offices of Mayer Brown International LLP, 201 Bishopsgate, London EC2M 3AF, at which resolutions will be proposed to, inter alia, approve the authorities required in order to effect the Acquisition, Admission, the Placing and the Open Offer and certain other shareholder authorities.
14. Recommendation
The Directors consider that the Acquisition, Admission, the Placing and the Open Offer are in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend that all Shareholders vote in favour of the Resolutions, as the Directors intend to do, or procure, in respect of their own legal and/or beneficial shareholdings, which comprise a total of 143,708,995 Ordinary Shares, representing approximately 26.85 per cent. of the Existing Issued Share Capital.
ADMISSION AND PLACING AND OPEN OFFER STATISTICS
Number of Existing Ordinary Shares
in issue at the date of the Admission
Document 535,250,286
Number of Placing Shares 200,000,000
Maximum number of Open Offer Shares
to be offered by the Company 25,488,108
Number of Consideration Shares 200,000,000
Open Offer Entitlement under the 1 Open Offer
Open Offer Share for every
21 Existing Ordinary
Shares
Issue Price GBP0.04
Enlarged Share Capital following 960,738,394 Ordinary
issue of the Consideration Shares, Shares
the Placing Shares and the Open
Offer Shares*
Placing Shares as a percentage 20.82 per cent.
of the Enlarged Share Capital*
Consideration Shares as a percentage 20.82 per cent.
of the Enlarged Share Capital*
Open Offer Shares as a percentage 2.65 per cent.
of the Enlarged Share Capital*
Gross proceeds of the Placing GBP8.0 million
Proceeds of the Placing (net of GBP6.4 million
expenses)
Gross proceeds of the Open Offer** GBP1,019,524
Anticipated market capitalisation Approximately
of the Company on Admission* GBP38.4 million
TIDM SWG
ISIN of the Ordinary Shares GB00B00T3528
ISIN of the Basic Entitlements GB00BDD97259
ISIN of the Excess Entitlements GB00BDD97473
SEDOL B00T352
* Assuming full take up under the Open Offer and the Placing
**Assuming full take up under the Open Offer and at the Issue Price
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the Acquisition, 7:00 a.m. on
the Placing and the Open Offer 20 April 2017
Record Date for entitlements under 6:00 p.m. on
the Open Offer 19 April 2017
Publication and posting of the Admission 20 April 2017
Document (including Notice of General
Meeting), Application Form (if applicable)
and Form of Proxy
Ex-Entitlement Date for the Open 8:00 a.m. on
Offer 20 April 2017
Open Offer Entitlements credited as soon as practicable
to stock accounts in CREST of Qualifying from 8:00 a.m.
CREST Shareholders on 21 April
2017
Recommended latest time and date 4:30 p.m. on
for requesting withdrawal of Open 28 April 2017
Offer Entitlements from CREST
Latest time and date for depositing 3:00 p.m. on
Open Offer Entitlements into CREST 2 May 2017
Latest time and date for splitting 3:00 p.m. on
of Application Forms (to satisfy 2 May 2017
bona fide market claims only)
Latest time and date for receipt 11:00 a.m. on
of completed Application Forms and 5 May 2017
payment in full under the Open Offer
and settlement of relevant CREST
instructions (as appropriate)
Latest time and date for receipt 10:00 a.m. on
of Forms of Proxy and receipt of 6 May 2017
electronic proxy appointments via
the CREST system
Announcement of the results of the 8 May 2017
Open Offer
General Meeting 10:00 a.m. on
8 May 2017
Admission effective and trading 8:00 a.m. on
in the Enlarged Share Capital expected 9 May 2017
to commence on AIM
Completion of the Acquisition expected 8:00 a.m. on
9 May 2017
Expected date for CREST accounts 8:00 a.m. on
to be credited (where applicable) 9 May 2017
Despatch on definitive share certificates within ten business
(where applicable) in respect of days of Admission
Consideration Shares, Placing Shares
and Open Offer Shares to be held
in certificated form
Notes:
Each of the dates and times in the above timetable are subject to change at the absolute discretion of the Company and WH Ireland. In the Admission Document all references to times and dates are in reference to those observed in London, United Kingdom.
DEFINITIONS
"GBP" or "UK pounds the lawful currency of the United
sterling" Kingdom
"Acquisition" the proposed acquisition by the
Company of the entire issued
share capital of SecurEnvoy pursuant
to the Acquisition Agreements
"Acquisition Agreements" the SPA and the Minority SPA,
the terms of which are summarised
in paragraphs 15.1(b)(vi) (SPA)
and (vii) (Minority SPA) of Part
X (Additional Information) of
the Admission Document
"Admission" the admission of all the Existing
Ordinary Shares, the Consideration
Shares, the Placing Shares and
the Open Offer Shares to trading
on AIM and that admission becoming
effective in accordance with
the AIM Rules for Companies
"Advisory Panel" the advisory panel of the Company,
as described in paragraph 2 (Advisory
Panel) of Part IV (Directors)
of the Admission Document
"AIM" AIM, the market of that name
operated by the London Stock
Exchange
"AIM Rules for the rules and guidance for companies
Companies" whose shares are admitted to
trading on AIM entitled "AIM
Rules for Companies" published
by the London Stock Exchange
as amended from time to time
"Application Form" the personalised application
form accompanying the Admission
Document on which Qualifying
Non-CREST Shareholders may apply
for Open Offer Shares under the
Open Offer
"Basic Entitlement" entitlement to subscribe for
Open Offer Shares, allocated
to a Qualifying Shareholder pursuant
to the Open Offer as described
in Part IX (Terms and conditions
of the Open Offer) of the Admission
Document
"Board" the board of directors of the
Company
"Cash Consideration" the cash element of the Consideration
payable by the Company to the
Sellers pursuant to the Acquisition
Agreements, being GBP10,000,000
as adjusted pursuant to the terms
of the Acquisition Agreements
"certificated" Ordinary Shares which are evidenced
or "in certificated by the issue of share certificates
form" and are recorded on the register
as being held in certificated
form
"Company" Shearwater Group plc, a public
limited company incorporated
in England and Wales with registered
number 05059457 and with its
registered office at 22 Great
James Street, London WC1N 3ES
"Completion" completion of the Acquisition
in accordance with the Acquisition
Agreements and the Option Holder
SPA
"Consideration" the Cash Consideration and the
Consideration Shares
"Consideration the 200,000,000 New Ordinary
Shares" Shares to be allotted and issued
to the Sellers pursuant to the
Acquisition Agreements
"CREST" the electronic system for the
holding and transferring of shares
and other securities in paperless
form operated by Euroclear UK
& Ireland Limited
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001 No.
3755) (as amended)
"Directors" the directors of the Company,
whose names are set out on page
8 of the Admission Document and
"Director" shall mean any one
of them
"Employee Option the share option scheme (incorporating
Plan" enterprise management incentive
options) as governed by the rules
to the scheme dated 19 April
2017, as more fully described
in paragraph 11.4 (Employee Share
Option Plan) of Part X (Additional
Information)) of the Admission
Document
"Enlarged Group" the Existing Group and, subject
to Completion, SecurEnvoy
"Enlarged Share the issued share capital of the
Capital" Company on Admission, comprising
the Existing Ordinary Shares
and the New Ordinary Shares
"Excess Entitlement" Open Offer Shares in excess of
the Basic Entitlement, but not
in excess of the total number
of Open Offer Shares, allocated
to a Qualifying Shareholder pursuant
to the Open Offer as described
in Part IX (Terms and conditions
of the Open Offer) of the Admission
Document
"Ex-Entitlement the date on which the Ordinary
Date" Shares are marked 'ex' for entitlement
by the London Stock Exchange
under the Open Offer, being 20
April 2017
"Existing Issued the Ordinary Shares in issue
Share Capital" as at the date of the Admission
or "Existing Ordinary Document being 535,250,286 Ordinary
Shares" Shares
"Existing Option the option deeds entered into
Deeds" between the Company and various
current and former Directors
and Lord Reid, as more fully
described in paragraph 11.2 (Existing
Option Deeds) of Part X (Additional
Information) of the Admission
Document
"Existing Group" the Company and the Subsidiary
"Founders" Andrew Kemshall and Stephen Watts
"FCA" the Financial Conduct Authority
"Form of Proxy" the form of proxy accompanying
the Admission Document for use
in connection with the General
Meeting
"FSMA" the Financial Services and Markets
Act 2000 (as amended)
"General Meeting" the general meeting of the Company
to be held at the offices of
Mayer Brown International LLP,
201 Bishopsgate, London EC2M
3AF on 8 May 2017 at 10:00 a.m.,
notice of which is set out at
the end of the Admission Document
"IFRS" International Financial Reporting
Standards, as adopted by the
European Union
"Issue Price" GBP0.04 per Ordinary Share issued
pursuant to the Placing and the
Open Offer
"Lock-in Deeds" the lock-in deeds entered into
between the Company, WH Ireland
and each of the Sellers, the
terms of which are summarised
in paragraph 15.1(b)(v) (Lock-in
Deeds) of Part X (Additional
Information) of the Admission
Document
"London Stock London Stock Exchange plc
Exchange"
"Market Abuse Market Abuse Regulation (Regulation
Regulation" 596/2014), which repealed and
replaced the Market Abuse Directive
(2003/6/EC) and its implementing
legislation with effect from
3 July 2016
"Minority Sellers" various individual minority shareholders
in SecurEnvoy who have entered
into the Minority SPA
"Minority SPA" the conditional agreement dated
19 April between (1) the Minority
Sellers; and (2) the Company,
the terms of which are summarised
in paragraph 15.1(b)(viii) (Minority
SPA) of Part X (Additional Information)
of the Admission Document
"New Articles" the new articles of association
to be adopted by the Company
pursuant to Resolution 6 of the
General Meeting, as described
in paragraph 5.4 of Part X (Additional
Information) of the Admission
Document
"New Option Schemes" the Employee Option Plan and
the Non-Employee Option Plan
"New Ordinary the Placing Shares, the Open
Shares" Offer Shares and the Consideration
Shares
"Non-Employee the share option scheme as governed
Option Plan" by the rules to the scheme dated
19 April 2017, as more fully
described in paragraph 11.5 (Non-Employee
Option Plan) of Part X (Additional
Information) of the Admission
Document
"Notice of General the notice convening the General
Meeting" Meeting, set out on pages 142
to 145 of the Admission Document
"Open Offer" the conditional offer made by
the Company to Qualifying Shareholders
inviting them to apply for the
Open Offer Shares at the Issue
Price on the terms and subject
to the conditions set out in
the Admission Document and, in
the case of Qualifying Non-CREST
Shareholders, in the Application
Form
"Open Offer Entitlements" entitlements to subscribe for
shares pursuant to the Basic
Entitlement and Excess Entitlement
"Open Offer Shares" up to 25,488,108 new Ordinary
Shares to be issued pursuant
to the Open Offer
"Option Holder the agreement to be entered into
SPA" on Completion between (1) the
Option Holders and (2) the Company
"Option Holders" certain employees of SecurEnvoy
who hold options over shares
in the capital of SecurEnvoy
"Orderly Market the orderly market deeds entered
Deeds" into between the Company, WH
Ireland and the Directors, the
terms of which are summarised
in paragraph 15.1(b)(vi) (Orderly
Market Deeds) of Part X (Additional
Information) of the Admission
Document
"Ordinary Shares" the ordinary shares of GBP0.01
each in the capital of the Company
"Ormonde" Ormonde Mining plc
"Placing" the conditional placing by WH
Ireland of the Placing Shares
with investors at the Issue Price
pursuant to the Placing Agreement
"Placing Agreement" the agreement dated 20 April
between (1) the Company and (2)
WH Ireland relating to the Placing,
the terms of which are summarised
in paragraph 15.1(b)(iv) (Placing
Agreement) of Part X (Additional
Information) of the Admission
Document
"Placing Shares" 200,000,000 new Ordinary Shares
to be issued pursuant to the
Placing at the Issue Price
"Qualifying CREST Qualifying Shareholders whose
Shareholders" Existing Ordinary Shares are
held in uncertificated form
"Qualifying Non-CREST Qualifying Shareholders whose
Shareholders" Existing Ordinary Shares are
held in certificated form
"Qualifying Shareholders" Shareholders on the Record Date
that are not resident in a Restricted
Jurisdiction
"Record Date" 6:00 p.m. on 19 April 2017 being
the latest time by which transfers
of Existing Ordinary Shares must
be received for registration
by the Company in order to allow
transferees to be recognised
as Qualifying Shareholders
"Resolutions" the resolutions to be proposed
at the General Meeting, each
a "Resolution", as described
in paragraph 17 (General Meeting
and Resolutions) of Part I (Letter
from the Chairman) of the Admission
Document
"Restrictive Covenant" the restrictive covenant entered
into between the Company and
the Founders, the terms of which
are summarised in paragraph 15.1(b)(ix)
(Restrictive Covenant) of Part
X (Additional Information) of
the Admission Document
"Restricted Jurisdiction" any jurisdiction except the United
Kingdom. Jurisdictions outside
the United Kingdom include, but
are not limited, to the United
States, Australia, New Zealand,
the Republic of South Africa
and Japan
"SecurEnvoy" SecurEnvoy Limited, a company
incorporated in England and Wales
with registered number 04866711
and with its registered office
at 1 Commerce Park, Brunel Road,
Theale, Reading, Berkshire RG7
4AB
"Sellers" the Founders, the Minority Sellers
and the Option Holders
"Shareholders" holders of Ordinary Shares, each
individually being a "Shareholder"
"SPA" the conditional agreement dated
20 April 2017 between (1) the
Founders and (2) the Company,
as more fully described in paragraph
15.1(b)(vii) (SPA) of Part X
(Additional Information) of the
Admission Document
"Subsidiary" Shearwater Subco Limited, a company
incorporated in England and Wales
with registered number 10353003
"Subsidiary Incentive the incentive scheme operated
Scheme" by the Subsidiary, as more fully
described in paragraph 11.3 (Subsidiary
Incentive Scheme) of Part X (Additional
Information) of the Admission
Document
"uncertificated" recorded on a register of securities
or "in uncertificated maintained by Euroclear UK &
form" Ireland Limited in accordance
with the CREST Regulations as
being in uncertificated form
in CREST and title to which,
by virtue of the CREST Regulations,
may be transferred by means of
CREST
"Uncertificated the Uncertificated Securities
Securities Regulations" Regulations 2001 (as amended)
"United Kingdom" the United Kingdom of Great Britain
or "UK" and Northern Ireland
"US Securities the United States Securities
Act" Act of 1933 (as amended)
"WH Ireland" WH Ireland Limited, a company
incorporated in England and Wales
with registered number 02002044
and with its registered office
at 24 Martin Lane, London EC4R
0DR
GLOSSARY
"Authentication as a Service" delivery of authentication
or "AaaS" services to any application,
from any device, anywhere
------------------------------ ----------------------------------
"Cyber security" preventative methods used
to protect information
from being stolen, compromised
or attacked
------------------------------ ----------------------------------
"Multifactor authentication" a method of computer access
or "MFA" control in which a user
is granted access only
after successfully presenting
several separate pieces
of evidence to an authentication
mechanism
------------------------------ ----------------------------------
"Soft tokens" software-based security
tokens that generate a
single-use login PIN
------------------------------ ----------------------------------
"SMS" a text messaging service
which uses standardised
communication protocols
to enable mobile phone
devices to exchange short
text messages
------------------------------ ----------------------------------
"Virtual Private Network" a virtualised extension
or "VPN" of a private network across
a public network enabling
safe access anywhere in
the world
------------------------------ ----------------------------------
FORWARD LOOKING STATEMENTS
This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Company's and the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Enlarged Group's prospects, growth and strategy.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Enlarged Group's actual performance, achievements and financial condition may differ materially from those expressed or implied by the forward-looking statements in this announcement. In addition, even if the Enlarged Group's results of operations, performance, achievements and financial condition are consistent with the forward-looking statements in this announcement, those results or development may not be indicative of results or developments in subsequent periods.
Any forward-looking statements that the Company makes in this announcement speak only as of the date of such statement, and none of the Company, the Directors or WH Ireland undertakes any obligation to update such statements unless required to do so by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
IMPORTANT INFORMATION
WH Ireland Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company in relation to the Fundraising and will not be responsible to any person other than the Company under the Financial Services and Markets Act 2000, the rules of the Financial Conduct Authority or otherwise for providing the protections afforded to its clients or for advising any other person in relation to the contents of this announcement, the Placing or any matter, transaction or arrangement referred to in this announcement. WH Ireland Limited is not making any representation or warranty, express or implied, as to the contents of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEBLBLDZFXBBL
(END) Dow Jones Newswires
April 20, 2017 02:01 ET (06:01 GMT)
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