RNS Number : 4300G
Twenty PLC
01 February 2010
TWENTY plc
AIM: TWE
Acquisition of The Moving Service Limited
Issue of 2,408,368 ordinary shares of 0.1p
Twenty plc ("Twenty"), the AIM quoted integrated marketing solutions provider, today announces the acquisition of The Moving Service Limited ("Moveme") (the "Acquisition").
The initial consideration is £1 in cash payable on completion of the Acquisition. Twenty has purchased the entire issued share capital of the Company subject to the exercise of subsisting options (representing approximately 0.1 per cent of the issued share capital of Moveme) which must be exercised within 30 days of purchase at a price of £4 per share.
It is a condition of the Acquisition of Moveme Services Limited that Advent Private Equity and Local Globe III Limited ("The Vendors") will subscribe for 2,408,368 new ordinary shares of 0.1p in Twenty ("New Ordinary Shares") at a subscription price of 7.2p per share for a total consideration of £175,000.
As a result of such share subscription Advent Private Equity Fund IV will hold 1,975,748 New Ordinary Shares (representing 3.44% of the issued share capital of the Company), Advent Management IV Limited Partnership will hold 19,757 New Ordinary Shares (representing 0.03% of the issued share capital of the Company) and Local Globe III Limited will hold 412,863 New Ordinary Shares (representing 0.72% of the issued share capital of the Company).
Twenty is also obliged to issue additional shares in Twenty to the Vendors for a subscription price equal to nominal value, subject to the achievement of certain revenue targets by Moveme within a five year period up to 31 December 2015.
The additional shares would only be issued if Moveme achieves:
a revenue of £2m in a financial year, in which case a further 1% of equity is earned by the Vendors,
a revenue of £3m in a financial year, in which case a further 2.5% of equity is earned by the Vendors,
a revenue of £4m in a financial year, in which case a further 2.31% of equity is earned by the Vendors.
The issue of further shares in Twenty is capped at 5.81% of equity in Twenty plc within the period to December 2015.
In the event that the revenues of Moveme exceed £5m in a financial year within the period to December 2015, Twenty may at its option:
issue a further 1% of equity for each £1m of revenue in excess of £5m at a subscription price of 7.2p per share. The revenue target is incremental in that following the achievement of the £5m revenue target in a financial year, further shares would only be issued in relation to subsequent financial years if the revenue exceeds £5m and the highest amount of revenue in the prior financial years in the period from Completion to December 2015. The number of further shares in Twenty that can be issued is capped at 10% of the issued share capital of Twenty plc at the time of issue and is subject to the revenues of Moveme reaching £15m in a financial year within the period to December 2015; or
pay a cash sum to the Vendors of £150,000 for each £1m of revenues in excess of £5m. Again, the revenue target is incremental in that following the achievement of the £5m revenue target in a financial year, further cash would only be payable in relation to subsequent financial years if the revenue exceeds £5m and the highest amount of revenue in the prior financial years in the period from Completion to December 2015.
Application has been made today for the admission of the issued New Ordinary Shares to trading on AIM. Admission is expected to be effective on 5 February 2010. Twenty has also, pursuant to the terms of the Acquisition, agreed to invest £125,000 in cash or services into the business of Moveme in the twelve month period immediately following completion and to make the subscription monies of £175,000 for the issued New Ordinary Shares available to support the working capital requirements of the Moveme business from time to time.
In the year to 31 January 2009 Moveme made a loss of £2.1m on turnover of £250,000.
Twenty plc regards this as an important strategic acquisition for the group in securing a valuable data asset, providing valuable consumer prospect data on consumers at the point they move house. This data has considerable value to utilities, telecoms providers, media and financial services organisations where the house move is a trigger to purchase.
The Moveme business is enabled by the combination of client relationships held by Twenty plc group companies, specifically through Twenty's strategic relationship with the Royal Mail, which will allow the business to grow quickly.
The Moveme cost base has been reduced significantly over the past three months by the vendors and this factor combined with the subscription funds injected into Twenty plc as part of this transaction by the vendors providing the working capital required to allow Moveme to become cash neutral to the group within a short period from acquisition.
Ian Lancaster, CEO of Twenty, commented:
"The acquisition of Moveme represents a step change for the group and is consistent with our strategy of developing our business model around providing data and customer intelligence solutions. The addition of Advent Private Equity as an investor in Twenty plc is welcomed as we have gained a strategic investment partner who shares our vision.".
Enquiries:
Twenty Plc Tel:01908 829300
Ian Lancaster, Chief Executive
Grant Newton, Finance Director
Daniel Stewart & Company plc Tel: 020 7776 6550
Graham Webster/Stewart Dickson
This information is provided by RNS
The company news service from the London Stock Exchange
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