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The Board of Alphameric is pleased to announce that it has entered into a conditional agreement with Orbis Holdings, a wholly-owned subsidiary of NDS Group, to dispose of the Group's Solutions business for a cash consideration of £15.475 million, subject to certain adjustments.
The Board intends, following completion of the Disposal, to move the listing of the Company's shares from the Official List to AIM. Both the Disposal and the move to AIM are conditional upon the approval of Alphameric Shareholders.
KEY POINTS
•Proposed sale of Alphameric Solutions Limited for a cash consideration of £15.475 million subject to adjustment to take account of ASL's net asset and net debt position at Completion
•ASL is focused on the provision of end-to-end technology to high street bookmakers, predominantly in the UK and the Republic of Ireland. Customers include William Hill, Ladbrokes, Coral and Tote and many independent bookmaker
•The acquirer, Orbis Holdings, is a wholly-owned subsidiary of NDS Group. Orbis Holdings provides integrated gaming and betting solutions to customers including William Hill, Ladbrokes, Betfair, BlueSquare, Paddy Power, SkyBet, Centrebet and Slot Macau
•A sum of £2.0 million is to be retained from the Consideration and placed into an escrow account to be utilised against any claims made by Orbis Holdings under the Disposal Agreement within 18 months from the date of Completion
•It is anticipated that the net cash proceeds (inclusive of the £2.0 million escrow amount) will be approximately £14.5 million
•It is the Board's intention to return funds to shareholders, either as income or capital, to the extent permissible given the distributable reserves available to the Company now and in the future. The Board intends to continue to invest both intellect and, if required, funding into AMRAC to help maximise its potential. In addition, the Board will maintain a watching brief for other commercial or corporate opportunities that may enable the Company to add further value to its market proposition
•Following Completion the Company intends to move the trading in its shares from the Official List to AIM, change its name to Timeweave plc and change its year end to 31 December
•Completion and the move from the Official List to AIM are subject to Alphameric shareholder approval. The move to AIM is conditional on Completion occurring. A notice convening a General Meeting will be set out in the Circular to be posted shortly to Shareholders. It is anticipated that the General Meeting will be held on 25 May 2010
•The Company has obtained irrevocable undertakings and letters of intent to vote in favour of the Resolutions in respect of 127,210,536 Ordinary Shares in aggregate, representing approximately 56.4 per cent. of the existing issued share capital of the Company
Peter Bertram, Chairman, comments:
"The Board believes the disposal of Alphameric Solutions to be in the best interests of the Group and its shareholders. We wish the management, staff and new owners of the business every success in the future.
"Going forward it is the Board's intention to maximise returns for shareholders and to maintain a progressive dividend policy that sees the majority of profits made by the Company returned to its shareholders, subject to the availability of distributable reserves."
ENQUIRIES:
Alphameric plc Tel: 01483 293971
Peter Bertram, Chairman
Mike McLaren, Group Finance Director
Investec Investment Banking Tel: 020 7597 4000
David Currie / Rowena Murray / Dominic Emery
Weber Shandwick Financial Tel: 020 7067 0700
Nick Oborne / Clare Thomas
Investec, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Alphameric and no one else in connection with the Disposal and this announcement and will not be responsible to anyone other than Alphameric for providing the protections afforded to clients of Investec nor for providing advice in connection with the Disposal or this announcement or any matter referred to herein.
Alphameric plc
("Alphameric", the "Company" or the "Group")
Proposed disposal of Alphameric Solutions Limited,
Delisting and Admission and Notice of General Meeting
1. Introduction
The Board of Alphameric is pleased to announce that it has entered into a conditional agreement with Orbis Holdings, a wholly-owned subsidiary of NDS Group, in relation to the proposed disposal by the Group of Alphameric Solutions Limited (the "Solutions Business" or "ASL").
Alphameric has conditionally agreed to sell the entire issued share capital of ASL for a cash consideration of £15.475 million on a cash free/debt free basis, subject to adjustments to take account of ASL's net asset and net debt position as at Completion.
Conditional on Completion, the Company will transfer dealings in its shares from the Official List to AIM.
Both the Disposal and the move to AIM require the prior approval of Alphameric Shareholders.
2. Background to ASL
ASL is focused on the provision of end-to-end technology to high street bookmakers, predominantly in the UK and the Republic of Ireland. It delivers a comprehensive range of integrated software and hardware to major bookmakers and the independent bookmaking marketplace. Customers include William Hill, Ladbrokes, Coral and Tote together with many of the larger and smaller independent bookmakers.
For the year ended 30 November 2009, ASL had revenues of £13.1 million and operating profit before exceptional costs of £1.3 million. Net tangible liabilities of ASL as at 30 November 2009 were £13.8 million and gross assets were £22.0 million.
3. Reasons for the Disposal
In June 2008, Alphameric disposed of its Hospitality Business for £17.3 million, leaving ASL and Alphameric's investment in AMRAC.
Alphameric, through its wholly owned subsidiary, Alphameric Gaming Limited, is a 50 per cent shareholder in AMRAC, a joint venture company which holds exclusive licences with 31 racecourses to broadcast pictures, audio and data from these courses to licensed betting offices within the UK and the Republic of Ireland. For the year ended 30 November 2009 Alphameric's share of AMRAC revenues was £26.1 million, which produced an operating profit share of £7.1 million after management charges.
While ASL returned to profitability at the operating level for the year ended 30 November 2009 and has recently won significant new contracts, AMRAC is now of sufficient scale that the contribution of ASL to Alphameric is small relative to the contribution from AMRAC.
The Board recognises that there is a potential conflict between ASL and AMRAC arising as a result of the similarities between the existing and potential customer base for both ASL and AMRAC. Consequently, Alphameric has determined either to invest significantly in the growth of ASL or divest of it and focus fully on AMRAC. Following an expression of interest in ASL from Orbis Holdings, the Board concluded that a disposal of ASL would be the most appropriate course of action to maximise shareholder value.
The proposed acquisition of ASL will offer Orbis Holdings a highly complementary fit within its existing business.
Following the divestment of ASL, the Continuing Group will focus principally on the provision and management of media and data content through AMRAC.
Completion of the Disposal will result in the Company no longer satisfying the continuing obligations prescribed by the Listing Rules. Accordingly, conditional on Completion of the Disposal, the Company will transfer the listing of its Ordinary Shares from the Official List and from trading on the London Stock Exchange's Main Market for listed securities to AIM. It is expected that the Delisting and Admission will reduce the regulatory workload and expense to a level more consistent with the new scale and structure of the Group following completion of the Disposal.
4. Information on the Purchaser
Orbis Holdings, the holding company of Orbis Technology, is a wholly-owned subsidiary of NDS Group. Through Orbis Technology, Orbis Holdings provides integrated gaming and betting solutions.
Orbis Holdings develops front-end and back-office solutions, from unique and compelling game concepts to sophisticated management and reporting tools. Orbis Holding's OpenBet software platform with its unique single account, single wallet solution, enables its users to bet and play across multiple products and platforms in all languages and currencies, providing a user friendly management and reporting interface to view all customers' gaming activities.
Customers include William Hill, Ladbrokes, Betfair, BlueSquare, Paddy Power, SkyBet, Centrebet and Slot Macau.
Headquartered in London, Orbis Holdings employs approximately 300 staff across 3 countries.
5. Principal terms of the Disposal
Alphameric has conditionally agreed to sell the entire issued share capital of ASL for a cash consideration of £15.475 million on a cash free/debt free basis, subject to adjustments to take account of ASL's net asset and net debt position as at Completion. Of the Consideration, the sum of £2.0 million will be retained and placed in an escrow account to be utilised against any claims made by Orbis Holdings under the Disposal Agreement within 18 months from the date of Completion. It is anticipated that the net cash proceeds of the Disposal (inclusive of the £2.0 million escrow amount) will be approximately £14.5 million.
The Disposal is conditional only upon passing of the Resolutions. The Disposal Agreement shall terminate if the Resolutions are not passed by 11 June 2010.
6. Management and employees of ASL
The proposed acquisition of ASL by Orbis Holdings will be structured by way of a sale of the entire issued share capital of ASL and therefore the existing employees will continue to be employed by ASL. In addition there will be three employees of Alphameric (including James Soulsby), each of whom currently works predominantly for ASL, who will transfer to Orbis Holdings under the operation of TUPE as part of the Disposal. On Completion, James Soulsby will resign as a director of Alphameric.
With these exceptions there are no other key individuals in the Group transferring to Orbis Holdings.
7. Financial effects of the Disposal and Use of Proceeds
The net cash proceeds at Completion arising from the Disposal are expected to be approximately £14.5 million, after adjustments including transaction costs of approximately £0.85 million and a £1.2 million payment from Alphameric to Orbis Holdings in respect of restructuring costs. £2.0 million of the net cash proceeds will be held in escrow, as described above.
Alphameric plc has a robust balance sheet; at 30 November 2009 net assets of the Company were £24.6 million of which £11.3 million was cash and cash equivalents (these figures are derived from the unconsolidated balance sheet of the Company at 30 November 2009 and exclude balances relating to ASL and AMRAC). At 30 November 2009 the Company had no bank borrowings. Whilst your Board believes that carrying cash and cash equivalents on the balance sheet helps to promote confidence in the long term future for customers, staff and shareholders it believes that the existing balances are sufficient for this purpose. Consequently it is your Board's intention to return funds to shareholders, either as income or capital, to the extent permissible given the distributable reserves available to the Company now and in the future. The Board believes that AMRAC's initial success can be maintained and potentially enhanced and thus intends to continue to invest both intellect and, if required, funding into AMRAC to help maximise its potential. In addition, the Board will maintain a watching brief for other commercial or corporate opportunities that may enable the Company to add further value to its market proposition. This policy will be reviewed on an ongoing basis to ensure that it meets the requirements of the Group and its stakeholders.
Following Completion, the Group's central overheads will be allocated to a smaller operating base. It is noted that the Disposal will have a negative impact on the future earnings of the Continuing Group.
8. Background to and reasons for the Name Change
Following Completion, the Company proposes to change its name to Timeweave plc. The Name Change is required pursuant to the Disposal as Alphameric will licence to Orbis Holdings the use of the names and brands currently used in the Solutions Business including, but not limited to, the name 'Alphameric' and its associated brands.
9. Background to and reasons for the Delisting and Admission
Completion of the Disposal will result in the Company no longer satisfying the continuing obligations prescribed by the Listing Rules. Accordingly, conditional on the Completion of the Disposal, the Company will transfer the listing of its Ordinary Shares from the Official List and from trading on the London Stock Exchange's Main Market for listed securities to AIM. It is expected the Delisting and Admission will reduce the regulatory workload and expense to a level more consistent with the new scale and structure of the Group following completion of the Disposal. Under the Listing Rules, the cancellation of admission to the Official List and to trading on the London Stock Exchange's Main Market for listed securities requires the prior approval of Shareholders by the passing of a special resolution. In order to ensure that the Disposal does not result in the Company breaching the continuing obligations prescribed by the Listing Rules, the Disposal Resolution and the AIM Resolution are interconditional. Accordingly, in the event that either Resolution is not passed by shareholders, neither the Disposal nor the Delisting and Admission will occur. The Delisting and Admission will occur not less than 20 business days from the passing of the AIM Resolution.
Following the Delisting and Admission, Ordinary Shares that are held in uncertificated form will continue to be held and dealt through CREST. Share certificates representing those Ordinary Shares held in certificated form will continue to be valid and no new Ordinary Share certificates will be issued.
10. Group strategy post Disposal, Delisting and Admission
Following the disposal of ASL, it is the Board's intention to maximise returns for shareholders and to maintain a progressive dividend policy that sees the majority of profits made by the Company returned to its shareholders, subject always to the availability of distributable reserves. Going forwards it is the Board's intention to continue to maximise the returns that the Group received from its investment in AMRAC and the Board will maintain a watching brief for other commercial or corporate opportunities that may enable the Group to add further value to its market proposition.
11. General Meeting and Irrevocable Undertakings
A circular will be sent to Shareholders containing more details of the Disposal and notice of a General Meeting of the Company to approve the Disposal and the move to AIM.
The Company has obtained irrevocable undertakings to vote in favour of the Resolutions from the Directors and their connected persons in respect of 231,912 Ordinary Shares, representing approximately 0.1 per cent. of the existing issued share capital of Alphameric.
The Company has also obtained irrevocable undertakings and letters of intent to vote in favour of the Resolutions from a number of institutional shareholders in respect of 126,978,624 Ordinary Shares in aggregate, representing approximately 56.3 per cent. of the existing issued share capital of Alphameric. Of this aggregate amount, irrevocable undertakings to vote in favour of the Resolutions have been received from institutional shareholders in respect of 102,112,969 Ordinary Shares.
Shareholders should read the whole of the circular to be sent to them and not just rely on the summarised information set out in this announcement.
12. Definitions
"Admission" admission of the Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AIM" AIM, a market operated by the London Stock Exchange
"AIM Resolution" the resolution to be proposed at the General Meeting relating to the Delisting and Admission
"AIM Rules" the AIM Rules issued by the London Stock Exchange in relation to AIM traded securities
"Alphameric" or "Company" Alphameric plc (a company incorporated in England and Wales under registered number 957155 and having its registered office at Bishopsgate House, Broadford Park, Shalford, Surrey GU4 8ED)
"Alphameric Hospitality" Alphameric Hospitality Limited (a company incorporated in England and Wales under registered number 01662440)
"AMRAC" Amalgamated Racing Limited (a company incorporated in England and Wales under registered number 5849833) and having its registered office is at 10th Floor, The Met Building, 22 Percy Street, London W1T 2BU
"ASL" Alphameric Solutions Limited (a company incorporated in England and Wales with registered number 2730742 and having its registered office at Bishopsgate House, Broadford Park, Shalford, Surrey GU4 8ED)
"Board" or "Directors" the directors of the Company as at the date of this announcement
"Completion"
"Consideration" completion of the Disposal
the consideration payable to Alphameric under the Disposal Agreement
"Delisting" the cancellation of the listing of the Ordinary Shares on the Official List and from trading on the London Stock Exchange's main market for listed securities
"Disposal" the proposed sale of the entire issued share capital of ASL pursuant to the Disposal Agreement
"Disposal Agreement" the conditional agreement between the Company and Orbis Holdings dated 7 May 2010 relating to the sale and purchase of ASL
"Disposal Resolution" the resolution to be proposed at the General Meeting relating to the Disposal
"Financial Services Authority" or "FSA" the Financial Services Authority of the UK in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List otherwise than in accordance with Part VI of FSMA
"FSMA" the Financial Services and Markets Act 2000, as amended
"General Meeting" the general meeting of the Company (or any adjournment of it), notice of which will be set out in the Circular or any reconvened meeting following any adjournment thereof
"Group" the Company and its Subsidiaries
"Hospitality Business" certain business and assets comprising the hospitality business of Alphameric Solutions and Alphameric Hospitality sold pursuant to the Torex Disposal Agreement
"Investec" Investec Investment Banking, a division of Investec Bank plc, whose registered office is at 2 Gresham Street, London EC2V 7QP
"Listing Rules" the Listing Rules of the UK Listing Authority
"London Stock Exchange" London Stock Exchange plc
"Name Change" the proposed change of the Company's name to Timeweave plc following completion of the Disposal
"NDS Group" NDS Group Limited (a company incorporated in England and Wales with registered number 01950497) whose registered office is at One London Road, Staines, Middlesex TW18 4EX
"Official List" the Official List of the Financial Services Authority
"Orbis Holdings" or "Purchaser" Orbis Holdings Limited (a company incorporated in England and Wales with registered number 6712030 whose registered office is at One London Road, Staines, Middlesex TW18 4EX)
"Orbis Technology" Orbis Technology Limited (a company incorporated in England and Wales with registered number 3134634 whose registered office is at One London Road, Staines, Middlesex TW18 4EX)
"Ordinary Shares" ordinary shares of 2.5 pence each in the capital of the Company
"Resolutions" the Disposal Resolution and the AIM Resolution
"Shareholders" the holders of Ordinary Shares
"Solutions Business" Alphameric Solutions Limited
"Subsidiaries" the subsidiaries of the Company
"TUPE" the Transfer of Undertakings (Protection of Employment) Regulations 2006
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"UKLA" or "UK Listing Authority" the FSA acting in its capacity as the competent authority for listing under Part VI of the Financial Services and Markets Act 2000
This information is provided by RNS
The company news service from the London Stock Exchange
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