Proposed cancellation of AIM admission

 
TIDMINNO 
 
7 June 2011 
 
                                 Innovise plc 
 
 
 
        Proposed cancellation of admission of Shares to trading on AIM 
 
                                      and 
 
                           Notice of General Meeting 
 
 
 
Innovise plc (the "Company"), the AIM-quoted software solutions and IT services 
provider, announces its intention to seek Shareholder approval for the 
cancellation of admission of Shares to trading on AIM. 
 
 
 
An explanatory circular will be posted to Shareholders setting out the 
background to and reasons for the Cancellation, why the Directors believe the 
Cancellation is in the best interests of the Company and its Shareholders and 
why they recommend that Shareholders vote in favour of the Cancellation 
Resolution as they intend to do in respect of their own current beneficial 
holdings of, in aggregate, 31,819,601 Shares, representing 79.64 cent. of the 
current issued ordinary share capital of the Company with voting rights. 
 
 
 
A General Meeting of the Company will be held at Keypoint, 17-23 High Street, 
Slough SL1 1DY at 2.30 pm on Wednesday 29 June 2011 at which Cancellation 
Resolution will be proposed to approve the Cancellation.  A notice convening 
the General Meeting is set out in the circular. 
 
 
 
For further information contact: 
 
Mike Taylor, Chief Executive    Innovise plc                     087 0626 0400 
 
Tony Edwards, Finance Director  Innovise plc                     087 0626 0400 
 
Edward Hutton, Nominated        Northland Capital Partners       020 7796 8800 
Advisor                         Limited 
 
Ian Foster, Shareholder         Wordsworth Communication Limited 077 3918 5050 
Relations 
 
The Cancellation 
 
Reasons for the Cancellation 
 
The principal reason for the admission of the Shares to trading on AIM was to 
provide the Company with the ability to access capital in order to fund its 
strategy for growth and to use its Shares as consideration for acquisitions. 
Having kept the matter under review over the last 12 months, the Directors 
believe that the Cancellation is in the best interests of the Company and 
Shareholders. In reaching this conclusion, the Directors have taken the 
following factors into account: 
 
  * The Board believes that the costs associated with maintaining the AIM 
    listing can be better deployed as additional working capital in the 
    business. The Directors estimate that, in the year ended 30 September 2010, 
    the direct and indirect costs of the Company's AIM listing amounted to at 
    least GBP100,000. This estimate includes listing expenses and advisory, legal 
    and audit fees but excludes the considerable amount of senior executive 
    time which is also spent dealing with the issues related to the AIM 
    listing. This compares with the audited consolidated profit before tax of 
    the Company for the same period of some GBP583,000; 
 
  * the AIM listing of the Shares does not, in itself, currently offer 
    investors increased liquidity or marketability and there is no opportunity 
    to trade in meaningful volumes or with frequency. With little trading 
    volume, the share price can move up or down significantly following trades 
    of small numbers of Shares. The Directors do not consider that the 
    liquidity situation would be materially affected by the Cancellation; and 
 
  * the relative lack of liquidity in the Shares means that opportunities for 
    the Company to issue Shares as consideration for acquisitions are very 
    limited. Since its admission to AIM in 2001, the Company has issued some 
    35,897,740 Shares as consideration for acquisitions. The last time the 
    Company used its Shares as consideration for an acquisition, however, was 
    in 2009. Subsequent acquisitions which have been made have all been for 
    cash, funded out of the Company's internal resources, as the Directors 
    considered debt finance was more in the Company's interests than equity 
    finance. 
 
Despite the solid first half trading performance of the Company's business as 
set out in the Interim Results, the Directors do not anticipate an improvement 
in stockmarket conditions in the short to medium term sufficient for the 
benefits of the AIM listing to outweigh the associated costs. 
 
For these reasons, the Directors propose that Innovise remains a public company 
at this time but cancels its AIM admission. 
 
Principal effects of the Cancellation 
 
The principal effects of the Cancellation include the following:- 
 
 a. there will be no public stock market on which Shareholders can trade their 
    Shares; 
 
 b. Shareholders will lose certain protections and rights afforded to them by 
    the AIM Rules including, inter alia, the disclosure of information relating 
    to material developments in the Group's business and the publication of 
    interim reports; and 
 
 c. the Company will no longer be required to comply with the specific 
    corporate governance requirements for companies admitted to trading on AIM. 
 
Even if the Cancellation becomes effective, the Company will remain subject to 
the City Code. Accordingly, Shareholders will continue to be entitled to the 
minority and other protections afforded by the City Code, for example in the 
event that an offer is made to Shareholders to acquire their Shares. 
 
As the Shares are currently admitted to trading on AIM, the Company is not 
required to comply with the provisions of the UK Corporate Governance Code. 
Nevertheless, the Directors are committed to proper standards of corporate 
governance and will continue to keep procedures under review. If the 
Cancellation becomes effective, this will not affect the Company's position as 
a public company for the purposes of the Companies Act 2006. 
 
The Board intends to continue to provide an investor relations website and to 
post information in relation to the Company on that website. 
 
Upon the Cancellation becoming effective, Northland Capital Partners Limited 
will cease to act as nominated adviser and broker to the Company. 
 
Shareholders who are in any doubt about their tax position should consult their 
own professional independent adviser immediately. 
 
If Shareholders wish to buy or sell Shares on AIM, they must do so prior to the 
Cancellation becoming effective. As noted above, in the event that the 
Cancellation Resolution is passed, it is anticipated that the final day of 
dealings in the Shares on AIM will be Wednesday 6 July 2011 and that the 
Cancellation will be effective from 7.00 am on Thursday 7 July 2011. 
 
Share dealing following the Cancellation 
 
Whilst the Board believes that the Cancellation is in the best interests of 
Shareholders and the Company, it recognises that the Cancellation will make it 
more difficult for Shareholders to buy and sell Shares should they wish to do 
so. The Company therefore intends to put in place a matched share trading 
service to assist shareholders to trade in the Company's shares. Full details 
of this process will be made available to Shareholders on the Company's website 
at www.innovise.com 
 
CREST 
 
The Shares will remain eligible for settlement in CREST. Accordingly, 
Shareholders will continue to be able to hold their Shares in CREST after the 
Cancellation. 
 
Current trading 
 
The Company`s Interim Results were announced today and can be found on the 
Company's website, www.innovise.com 
 
General Meeting 
 
Set out at the end of the circular is a Notice convening a General Meeting of 
the Company to be held at 2.30pm on Wednesday 29 June 2011 for the purpose of 
considering, and if thought fit, passing the Cancellation Resolution. 
 
The Cancellation Resolution requires the approval of not less than 75 per cent. 
of the votes cast by Shareholders at the General Meeting. 
 
If the Cancellation Resolution is passed, the Cancellation would take place 
with effect from 7.00 am on Thursday 7 July 2011. 
 
Recommendation 
 
The Directors believe that the Cancellation is in the best interests of the 
Company and Shareholders. Accordingly, they unanimously recommend that 
Shareholders vote in favour of the Cancellation as they have undertaken so to 
do in respect of their own current beneficial holdings of, in aggregate, 
31,819,601 Shares, representing 79.64 cent. of the current issued ordinary 
share capital of the Company with voting rights. 
 
                    EXPECTED TIMETABLE OF PRINCIPAL EVENTS 
 
Latest time and date for receipt of Forms of     2.30 pm on Monday 27 June 2011 
Proxy 
 
General Meeting of the Company                     2.30 pm on Wednesday 29 June 
                                                                           2011 
 
Final day of dealing in Shares on AIM                     Wednesday 6 July 2011 
 
Cancellation of admission of Shares to trading  7.00 am on Thursday 7 July 2011 
on AIM* 
 
All of the times and dates are subject to change at the Company's discretion. 
In the event of any change, the revised times and dates will be notified to 
Shareholders through a Regulatory Information Service. 
 
*the Cancellation requires the approval of not less than 75 per cent. of the 
votes cast by Shareholders at the General Meeting. 
 
                                 DEFINITIONS 
 
"AIM"                          the market of that name operated by London 
                               Stock Exchange plc 
 
"AIM Rules"                    the AIM Rules for Companies 
 
"Cancellation"                 the cancellation of the admission to trading 
                               on AIM of the Shares 
 
"Cancellation Resolution"      the resolution set out in the Notice relating 
                               to the Cancellation 
 
"City Code"                    the City Code on Takeovers and Mergers 
 
"Company"                      Innovise plc 
 
"Directors" or the "Board"     the directors of the Company whose names 
                               appear on page 4 of the circular 
 
"General Meeting"              the General Meeting of the Company, convened 
                               for 2.30 pm on Wednesday 29 June 2011, and any 
                               adjournment thereof, notice of which is set 
                               out at the end of the circular 
 
"Form of Proxy"                the form of proxy enclosed with the circular 
                               for use by holders of Shares in connection 
                               with the General Meeting (or any adjournment 
                               thereof) 
 
"Group"                        the Company and its subsidiaries 
 
"London Stock Exchange"        London Stock Exchange plc 
 
"Notice"                       the notice of General Meeting set out at the 
                               end of the circular 
 
"Registrars"                   Share Registrars Limited, Suite E, First 
                               Floor, 9 Lion and Lamb Yard, Farnham, Surrey 
                               GU9 7LL 
 
"Shareholder(s)"               holder(s) of Shares 
 
"Shares"                       the ordinary shares of 1p each in the capital 
                               of the Company 
 
Note to editors: 
 
Innovise plc is a fast growing IT solutions company with two divisions, each of 
which has its own management team and focused growth strategy. 
 
Innovise ESM enables major organisations to transform complex IT environments, 
resulting in improved performance and service. The division partners with the 
leading global vendors to deliver best-in-class solutions to Fortune 500 
businesses across a range of industries. 
 
The Innovise Software & Solutions division consists of two complementary units: 
Innovise Software's products are extensively used to improve efficiency within 
the facilities management, support services and public sectors, while Innovise 
Solutions provides customised and highly cost-effective managed services 
including remote database administration, infrastructure management and 
Microsoft solutions. 
 
Innovise has offices in Brierley Hill, Slough, Southampton, London and Mumbai. 
 
For more information, please visit www.innovise.com 
 
 
 
END