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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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City Of London Group Plc | LSE:CIN | London | Ordinary Share | GB00BD9GS058 | ORD 2P |
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% | 10.00 | 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:0004Q City Of London Group PLC 22 September 2003 September 22, 2003 CITY OF LONDON SELLS EMAIL ARCHIVING BUSINESS TO AMERICANS FOR GUARANTEED US$2.45m PLUS ONWARD SHARE OF ROYALTY STREAM AND EQUITY INTEREST * Buyer's 'Global 2000' Customer Base And Marketing Strengths Influence Decision City of London Group announces the sale of the business and assets of its 91p.c owned email archiving software arm, Rchive-it.com Limited, to American software company Connected Corporation for guaranteed payments of US$2.45m (#1.5m) and an ongoing share of royalties. Additionally, Rchive-it will receive equity of approximately 1p.c. in Connected Corporation, a leading supplier of storage back-up software, which will use the archiving product to spearhead a marketing campaign later this year. The flagged disposal is subject to COLG shareholders' approval because of its size. However COLG has received undertakings to vote in favour representing 59p.c. of the share capital. Connected, which is partly backed by Fidelity Corporation and Baker Capital of New York, has been named as one of the fastest growing companies in Massachusetts averaging sales growth of nearly 30p.c. for each of the past three years, and was ranked as 45th out of America's 500 fastest growing private companies by Inc. magazine last year. It will make an upfront payment of US$700,000 (#428,000) and guaranteed payments from royalties of US$1.75m (#1.07m) over a four-year period. It will also pay the costs of the business from signing. Rchive-it will be entitled to 10p.c. royalty on sales and 5p.c. royalty on rentals for a period of 5.5 years or until a return of US$5m including the guaranteed payments (but excluding the US$700,000 initial payment) has been made from these royalty receipts. Royalties above US$5m remain uncapped at 5p.c. on sales and 2.5p.c. on rentals for the balance of the 5.5 year period. COLG will use initial repayments to reduce bank loans. John Greenhalgh, COLG chairman said: "Markets have made it hard to raise money for a development company even when a product is this good and prospective corporate customers have been keeping pockets zipped up a little too long. Rchive-it's main product, MailStore, requires a high marketing spend and Connected can give it a big kick-start with an established base of 600 of the world's largest corporates (Global 2000) as existing customers, as well as financial clout, in-depth management, and software engineering resources to complement our excellent development team. This is a merger of talents that gives a real possibility of a good royalty stream for us as well as a lift in Connected's stock value before it goes to the public market. Connected's patented data reduction technologies minimise data by an average 80p.c and when combined with the MailStore product make a powerful archiving solution." COLG has an investment of #2.62m in Rchive-it of which #2.29m is by way of loans. The balance is in equity representing 75p.c. of the share capital of Rchive-it on a fully diluted basis following the exercise of options anticipated after COLG has been fully repaid. The options are being allocated to provide further incentive to key management and staff who will be mostly based in the States. Connected is planning a multi-million dollar sales and marketing campaign for North America and Europe and will greatly expand activities for MailStore through its distribution channels. It will also license the MailStore product worldwide. Total market size for secure email archiving is put at US$10.5bn in 2004 growing to US$12.3bn in 2007, according to respected industry market researchers - the Radicati Group. MailStore, which has been designed on open architecture, addresses a good part of this market. Present clients in the UK for MailStore email archiving include London Underground, Northants Police Force, Cotswold District Council, and MacFarlanes, the City solicitors. Mailstore's main resellers are Computercenter and CSF in the U.K. and Intellireach in America. Further Info: John Greenhalgh, M.D, City of London Group Plc. Tel: 020-7628-5518; 070500-39678 (M) Peter Doye, Deputy Chairman, City of London Group Plc. Tel: 0207 628 5518 INFORMATION ON CONNECTED CORPORATION Connected Corporation, based in Framingham, Massachusetts, has become a leading provider of storage software that automatically protects enterprise PC data while driving down storage costs. It owns patented data reduction technologies which minimize data captured, sent and stored by an average 80p.c. It has multiple US and international offices, and the company provides its solution to more than 600 of the world's largest corporations including Boeing, Goodrich, Deloitte & Touche, Hewlett-Packard, SAP, Schlumberger and Toyota. This information is provided by RNS The company news service from the London Stock Exchange END DISZGGZLLMZGFZM
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