Open Offer

 

TIDMNBI 
 
RNS Number : 7872T 
Northbridge Industrial Services PLC 
12 June 2009 
 

For immediate release 12 June 2009 
 
 
Northbridge Industrial Services Plc. 
("Northbridge", "the Group" or "The Company") 
 
 
 
 
Open Offer of up to 1,889,499 new Ordinary Shares at 110 pence per share 
on the basis of 1 Offer Share for every 4 Existing Shares with Excess 
Application Facility 
 
 
 
 
Northbridge Industrial Services Plc. the industrial services and rental company 
today announces that it proposes to raise up to approximately GBP2 million 
(after expenses) by way of an Open Offer to expand its existing hire fleet in 
line with the Group's strategy to acquire and develop rental assets to 
complement its existing industrial hire equipment activities. 
 
 
 
 
Highlights 
  *  Open Offer of up to 1,889,499 new Ordinary Shares at 110 pence per share raising 
  up to approximately GBP2 million (after expenses). 
  *  The proceeds raised will be used to acquire and develop additional industrial 
  rental equipment. 
  *  The Company has received irrevocable commitments from Western Selection PLC and 
  certain Directors to subscribe for 996,166 Offer Shares being 52.7 percent of 
  the Open Offer Shares. 
 
 
 
 
 
Commenting on the successful fundraising, Peter Harris, Chairman of Northbridge, 
said: 
"We intend to use the proceeds of this fundraising to expand our hire fleet in 
line with our strategy of acquiring and developing our rental assets to further 
complement our existing hire equipment activities. 
 
 
"Following the recent strengthening of our business in the Middle East we are 
confident that there is a significant opportunity to further expand our 
operations and become a key supplier of industrial hire equipment in the Middle 
East. 
 
 
"Additionally, given the current economic market constraints further 
opportunities exist to acquire industrial equipment that would expand its rental 
fleet in the UK. As such the proceeds of the Open Offer will be used to both 
acquire and develop additional industrial rental equipment." 
 
 
 
 
For further information 
Northbridge Industrial Services plc 
Eric Hook, Chief Executive Officer01283 531645 
Ash Mehta, Finance Director 
 
 
Cattaneo LLP (Financial Adviser) 
Charles Cattaneo                                                  07774 276512 
Ian Stanway 07837 179502 
 
 
Buchanan Communications     020 7466 5000 
Charles Ryland / James Strong 
 
 
Charles Stanley Securities (Nominated Adviser)     020 7149 6000 
Mark Taylor / Freddy Crossley 
 
 
 
 
 
 
About Northbridge: 
Northbridge Industrial Services was incorporated for the purpose of acquiring 
companies that hire and sell specialist industrial equipment supplying a 
non-cyclical customer base including utility companies, the public sector and 
the oil and gas industries. In particular it will seek to acquire specialist 
businesses that have the potential for expansion into complete outsourcing 
providers. 
  Introduction 
The Board of Northbridge is announcing today that it proposes to raise up to 
approximately GBP2 million (after expenses) by way of an Open Offer, thus 
allowing the Company's existing Shareholders the opportunity to participate in 
the fundraising. Western Selection PLC, an existing Shareholder and certain of 
the Directors have irrevocably undertaken to subscribe for their basic pro rata 
Open Offer Entitlements amounting to 632,529 shares representing 33.5 percent of 
the Offer Shares. In addition Western Selection PLC has irrevocably 
undertaken to apply for an additional 363,637 Offer Shares under the Excess 
Application Facility if other Qualifying Shareholders (other than those who have 
given Irrevocable Undertakings) do not subscribe for their basic pro rata Open 
Offer Entitlements and do not apply for additional Offer Shares under the Excess 
Application Facility. 
 
 
The terms of the Open Offer are described in this document. Qualifying 
Shareholders may also subscribe for Offer Shares above their basic pro rata Open 
Offer Entitlements if they so wish under the Excess Application Facility. 
 
 
Northbridge is proposing to use the funds raised from the Open Offer to expand 
its existing hire fleet in line with the Group's strategy to acquire and develop 
rental assets to complement its existing industrial hire equipment activities. 
 
 
The Company is able to undertake the Open Offer within the authorities that were 
approved by shareholders at the annual general meeting of the Company held on 19 
May 2009. 
 
 
 
 
Details of the Open Offer 
Qualifying Shareholders are invited to apply for Offer Shares under the Open 
Offer at a price of 110 pence per Offer Share, payable in full on application 
and free of all expenses, pro rata to their existing shareholdings on the basis 
of: 
 
 
1 Offer Share for every 4 Existing Ordinary Shares 
 
 
held at the Open Offer Record Date. Entitlements of Qualifying Shareholders will 
be rounded down to the nearest whole number of Offer Shares. Fractional 
entitlements which would have otherwise arisen will not be issued. 
 
 
The Open Offer is subject to, Admission becoming effective by 8.00 a.m. on 29 
June 2009 (or such later date being not later than 13 July 2009, as the Company 
may decide). 
 
 
The Offer Shares will, when issued and fully paid, rank pari passu in all 
respects with the Existing Ordinary Shares, including the right to receive all 
dividends and other distributions declared, made or paid after the date of 
Admission. 
 
 
The Open Offer has been structured so as to allow Qualifying Shareholders to 
subscribe for Ordinary Shares at the Offer Price pro rata to their existing 
holdings. Qualifying Shareholders may, in addition, make applications in excess 
of their basic pro rata Open Offer Entitlements. Once subscriptions under the 
basic pro rata Open Offer Entitlements have been satisfied, the Company shall 
scale back any excess applications on a pro rata basis in proportion to the 
total number of additional Offer Shares applied for under the Excess 
Application Facility. To the extent that Offer Shares are not subscribed by 
Qualifying Shareholders, Open Offer entitlements will lapse. 
 
 
PLEASE NOTE: Qualifying Shareholders can apply for as few or as many Offer 
Shares as they wish but will only be guaranteed to receive their basic pro rata 
Open Offer Entitlement. Excess applications may be fulfilled entirely or may be 
scaled back depending on Qualifying Shareholder demand. 
 
 
Irrevocable Undertakings 
Western Selection PLC, a Qualifying shareholder owning 19.8 percent of the 
voting share capital of the Company, has irrevocably undertaken to subscribe for 
its full basic pro rata Open Offer Entitlements amounting to 375,000 Offer 
Shares. Western Selection PLC has also irrevocably undertaken to subscribe for 
a maximum of a further 363,637 Offer Shares amounting to GBP0.4 million under 
the Excess Application Facility if other Qualifying Shareholders (other than 
those who have given Irrevocable Undertakings) do not subscribe for their Open 
Offer Entitlements. To the extent that Qualifying Shareholders, other than those 
who have given Irrevocable Undertakings, subscribe for their basic pro rata Open 
Offer Entitlements and additional Offer Shares under the Excess Application 
Facility, Western Selection PLC's commitment will be reduced on a share for 
share basis. The irrevocable undertaking given by Western Selection PLC does not 
prevent it from applying for additional Offer Shares under the Excess 
Application Facility independently of its commitment to subscribe for additional 
Offer Shares in accordance with its irrevocable undertaking. If Western 
Selection PLC is allocated its full application it will have a resultant 
shareholding of 2,238,637 shares representing 26.2 percent of the voting share 
capital of the Company on the basis of the Open Offer only being taken up by 
persons giving Irrevocable Undertakings. 
 
 
Certain of the Directors of the Company have irrevocably undertaken to subscribe 
for their entitlements under the Open Offer amounting to 257,529 Offer Shares, 
representing 13.6 percent of the Open Offer. 
 
 
 
The Company will, as a result of the irrevocable commitments by Western 
Selection PLC and the Directors to subscribe for in aggregate 996,166 Offer 
Shares, receive a minimum of GBP1.0 million from the Open Offer after expenses. 
 
 
Related Party Transaction 
Western Selection PLC is a substantial shareholder directly or indirectly 
holding more than 10 percent of the Issued Share Capital and entering into an 
agreement to irrevocably undertake to subscribe for Open Offer Shares in excess 
of its basic pro rata Open Offer Entitlements, for which the Company has agreed 
to pay Western Selection PLC a fee of GBP14,000, constitutes a related party 
transaction for the purposes of AIM Rule 13. 
 
 
Where a company whose shares are quoted on AIM enters into a related party 
transaction, the Directors, with the exception of the related party, are 
required to consider, having consulted with the Company's nominated adviser, 
that the terms of the transaction are fair and reasonable insofar as its 
shareholders are concerned. 
 
 
The Directors, with the exception of Mr David Marshall, who is a director of 
Western Selection PLC, having consulted with the Company's nominated adviser, 
consider the terms of the related party transaction with Western Selection PLC 
to be fair and reasonable insofar as the Shareholders are concerned. 
 
 
 
 
Use of proceeds 
Since being admitted onto AIM in March 2006, the Group has made a number of 
acquisitions which have been funded from operating cash flows. 
 
 
The group has also grown organically and formed Northbridge Middle East FZE 
("NME") in 2007. NME promotes the sales and rental of Crestchic's products in 
that region as well as acting as an outlet for generators from RDS (Technical) 
Limited ("RDS\") and seeking new opportunities in its own right.  NME acquired 
new premises in June 2008 which markedly accelerated the potential for growth of 
the business.  On 20 April 2009 Northbridge announced the acquisition of 66.67 
percent of Tyne Technical Equipment Rental Services LLS ("TTERS"). TTERS is a 
Dubai registered company whose principal business is the rental of generators 
and the sale of associated services to the infrastructure and the oil & gas 
industries in the United Arab Emirates. Furthermore on 16 April 2009 Northbridge 
announced that RDS, a wholly owned subsidiary of Northbridge Middle East FZE, 
has been awarded a rental contract to supply generators, transformers 
and associated equipment together with a maintenance agreement to the Jabali 
Zinc Project in Yemen. 
 
 
These transactions have strengthened the Group's presence in the Middle East, 
and the Directors believe that a significant opportunity exists to expand the 
Group's operations, in line with its strategy of becoming a key supplier of 
industrial hire equipment, in this region. Additionally, the Directors believe 
that, as a result of the current economic environment, further opportunities 
exist to acquire industrial equipment that would expand its rental fleet in the 
UK. As such the proceeds of the Open Offer will be used to both acquire 
and develop additional industrial rental equipment. 
 
 
 
 
Current trading and prospects 
Northbridge reported consolidated revenue for the year ended 31 December 2008 
which increased by 40 percent to GBP15.7 million (2007: GBP11.2 million). Profit 
before taxation increased by 82 percent to GBP2.97 million (2007: GBP1.63 
million). Net assets at 31 December 2008 were GBP9.97 million (2007: GBP8.14 
million). 
 
 
As we indicated at the time of our preliminary results in March, trading for the 
year has started well. Although sales volumes of manufactured units are down 
from the record start we experienced in 2008, our rental revenues remain at a 
high level in all our operations. Rental is the most profitable and cash 
generative of our activities and we are now beginning to see the benefit of the 
investments into this area over the last few years. Recent acquisitions and 
contract wins have strengthened our position in the market, and we remain ready 
to capitalise on any opportunities that arise. 
 
 
Our customers in the UK and overseas are largely involved in power generation 
and the oil & gas sector and demand for our products and services from these 
industries has been resilient. Our current volume of rental quotes and enquiries 
for future sales remains encouraging. 
 
 
 
 
Change of Adviser 
The Board of Northbridge, recognising that the Company has performed well since 
flotation and is about to enter a further phase of growth, is seeking to appoint 
a suitable new nominated adviser and also a broker to support the continued 
development of the Group. Charles Stanley Securities, the Company's present 
nominated adviser and broker, has given notice of its resignation and the 
Company expects to make an announcement of the appointment of a new nominated 
adviser shortly.  The Board would like to thank Charles Stanley Securities for 
its support and advice in the three years since the IPO in 2006. 
 
 
 
 
Directors' intentions 
The Directors consider the Open Offer to be in the best interests of the Company 
and its Shareholders as a whole. Directors have irrevocably undertaken to take 
up their Open Offer Entitlements amounting to in aggregate, 257,529 Offer Shares 
with a subscription value of GBP0.3 million. 
 
 
 
 
OPEN OFFER STATISTICS 
+------------------------------------------------------------------+----------------+ 
| Offer Price                                                      |           110p | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
| Number of Ordinary Shares in issue at the date of this document  |      7,710,149 | 
| |                                                                |                | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
| Number of Offer Shares to be offered for subscription by the     |      1,889,499 | 
| Company                                                          |                | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
| Estimated maximum net proceeds of the Open Offer 1               | GBP2.0 million | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
| Estimated minimum net proceeds of the Open Offer 2               | GBP1.0 million | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
| Percentage of the Enlarged Issued Share capital represented by   |          19.7% | 
| the Offer Shares 1 |                                             |                | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
| Number of Ordinary Shares in issue at Admission 1 |              |      9,599,648 | 
|                                                                  |                | 
+------------------------------------------------------------------+----------------+ 
 
 
1 assuming maximum take up under the Open Offer 
2 assuming take up under the Open Offer by those giving irrevocable Undertakings 
only 
| including 152,510 Ordinary Shares held in Treasury and not participating in 
the Open Offer 
 
 
 
 
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 
+---------------------------------------------------------+--------------------------------+ 
|                                                         |                           2009 | 
+---------------------------------------------------------+--------------------------------+ 
| Open Offer Record Date                                  |  Close of business on Thursday | 
|                                                         |                        11 June | 
+---------------------------------------------------------+--------------------------------+ 
| Despatch of this document                               |                 Friday 12 June | 
|                                                         |                                | 
+---------------------------------------------------------+--------------------------------+ 
| Latest time and date for splitting Application Forms    |    3.00 p.m. Wednesday 24 June | 
| (to satisfy bona fide market claims only)               |                                | 
|                                                         |                                | 
+---------------------------------------------------------+--------------------------------+ 
| Latest time and date for receipt of completed           |      11.00 a.m. Friday 26 June | 
| Application Forms and payment in full under the Open    |                                | 
| Offer or settlement of relevant CREST instruction (as   |                                | 
| appropriate)                                            |                                | 
|                                                         |                                | 
+---------------------------------------------------------+--------------------------------+ 
| Admission effective and dealings commence on AIM        |                 Monday 29 June | 
|                                                         |                                | 
+---------------------------------------------------------+--------------------------------+ 
| CREST accounts credited                                 |                 Monday 29 June | 
|                                                         |                                | 
+---------------------------------------------------------+--------------------------------+ 
| Share certificates despatched                           |              by Friday 10 July | 
|                                                         |                                | 
+---------------------------------------------------------+--------------------------------+ 
 
 
Unless otherwise stated, terms defined in the circular dated 12 June 2009 have 
the same meaning in this announcement. 
 
 
This announcement does not constitute an offer for sale or an invitation to 
subscribe for, or the solicitation of an offer to buy or subscribe for, Offer 
Shares in any jurisdiction where such an offer or solicitation is unlawful and, 
subject to certain exceptions is not for distribution in or into the United 
States, Canada, Japan, Australia or South Africa. The Offer Shares will not be 
registered under the United States Securities Act of 1933 (as amended) or under 
the securities laws of any state of the United States or qualify for 
distribution under any of the relevant securities laws of Canada, Australia or 
Japan, nor has any prospectus in relation to the Offer Shares been lodged with 
or registered by the Australian Securities and Investments Commission or the 
Japanese Ministry of Finance. Overseas Shareholders and any person (including, 
without limitation, custodians, nominees and trustees) who has a contractual or 
other legal obligation to forward this document to a jurisdiction outside the UK 
should seek appropriate advice before taking any action. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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