Xps Pensions Share News (XPS)

Shareholders. Such approval is being sought at the General Meeting, which has been convened for 23 July 2010. If the Resolutions are duly passed at the General Meeting, and the other conditions set out in the Placing Agreement and Acquisition Agreements are met, application will be made for the Enlarged Share Capital to be admitted to trading on AIM. It is expected that the Enlarged Share Capital will be admitted to trading on AIM on 26 July 2010. Background to and reasons for the Acquisitions Since eXpansys' flotation in April 2007, the Company has encountered mixed fortunes, with the Company's progress being impacted by unsuccessful acquisitions and investments that were made by the Company's previous management. Despite this, however, eXpansys delivered over 720,000 products to over 150,000 customers in over 130 different countries through its global infrastructure in the year to 30 April 2010. In March 2008, VPS, a company ultimately controlled and owned by Peter Jones, acquired a 22.1 per cent. stake in the Company. This was increased further following a placing to raise approximately GBP2 million in June 2009. Pursuant to subsequent transfers and a further acquisition of Ordinary Shares in January 2010, Peter Jones now has an interest in approximately 75 per cent. of the issued share capital of the Company. Following the completion of the placing in June 2009, Stephen Vincent joined the Board as a Non-Executive Director and, more recently, the business has been substantially re-organised with new executive management having been appointed. These changes commenced in January 2010 with the appointment of Anthony Catterson as Chief Executive Officer and continued with Tim Eltze joining the board in May this year, as Chief Operating Officer and currently also as acting Chief Financial Officer. Following Anthony Catterson's appointment, the Board undertook an internal review of the business with the aim of creating a more focused vision and strategy for the Group. The Board has concluded that, in order for the business to progress, it should pursue strategic acquisitions that are appropriate to create scale, develop the Group's product range and competence, customer base and commercial relationships to support the vision of developing eXpansys into a leading global on-line consumer technology superstore. As a first step to achieving this, the Board has been reviewing potential acquisition opportunities and has identified two target businesses in DSNS and PJ Media as being complimentary to the core eXpansys offering and a compelling strategic fit with the Group. DSNS is a privately owned profitable business with relationships with a large number of the UK's major mobile telecommunication network operators, and MVNOs, and focuses on the sale and distribution of SIM cards and retail solutions. PJ Media is another privately owned profitable business with the principal activities of web design, website implementation and on-line marketing services to enterprises seeking to enhance their web-based offerings. In order to assist the Board in implementing the benefits of the Acquisitions and in preparation for the next phase of the Group's development, Bob Wigley has joined the Board as Non-Executive Chairman, along with Peter Jones who will further strengthen the Board as Non-Executive Deputy Chairman. The Directors believe that the Enlarged Group will have the following attractive properties: · Strong relationships with network operators - the Directors believe that DSNS is one of the UK's leading providers of mobile phone SIM cards and has contracts with the majority of the UK's mobile telecommunication network operators and four MVNOs. The Directors intend to extend DSNS's existing relationships with the operators and to transition the eXpansys business into offering both SIM-only and connected handset propositions through its websites, initially in the UK; · Robust on-line platform - the on-line technology supporting the Enlarged Group will be the existing eXpansys on-line platform which the Directors believe is secure, stable, scaleable and flexible. The Directors believe this platform will be key to the Enlarged Group's success; · Ability to access a wider market - historically, the Group has been unable to supply connected handsets directly and its customers have included the more sophisticated "early adopters" of new equipment, who may acquire additional handsets on a SIM-free basis. The Directors estimate that SIM-free handset sales represent a small proportion of the UK mobile phone market place. Following the Acquisitions, the Enlarged Group will have relationships with a number of network operators and MVNOs and intends to use these relationships to service the wider market and the Directors expect the Enlarged Group to benefit as a result. In addition, the Directors believe that the Enlarged Group will have the platform and technical skills to launch products for OEMs on a global basis simultaneously. As the eXpansys brand develops, the Directors expect this capability to be attractive to manufacturers and for this to be a focus for the Group; · Ability to expand its product offering - the Directors intend to enhance the Enlarged Group's product offering organically or, where appropriate, through acquisition so as to develop credibility in additional product categories such as laptops, tablet computing and other wireless technologies, which are complementary to the Group's existing strengths and provide a more complete solution for customers; · Development of its website - the Directors believe that the integration of PJ Media will enable the Enlarged Group to further develop its website and enhance the eXpansys proposition for the mass consumer retail market and drive more web-traffic to eXpansys.com. By improving the website offering, the Directors also believe that there is an opportunity to extend DSNS's relationships and create further revenue streams through business to business transactions and online retailing from partner websites; · Operating in a market place with favourable characteristics - the Directors believe that (i) the trend for consumers to buy wireless technology on-line will increase, (ii) consumers should increasingly pursue improved value through separating the purchase of handsets from better value SIM cards, and (iii) the penetration of smartphones will increase; and · Experienced board of directors to lead growth - the new Board of eXpansys is to be chaired by Bob Wigley, currently Chairman of Yell Group and a former chairman of Merrill Lynch EMEA. Anthony Catterson, CEO, joined in January 2010 and is the former managing director of the UK retail business of Carphone Warehouse and prior to that was managing director at Phones 4U. Peter Jones, a well known and respected entrepreneur, has owned and managed a number of successful businesses, including having founded Phones International Group and DSNS. The Directors believe that the Enlarged Group will be well placed to benefit from each of these characteristics. Information on DSNS and PJ Media DSNS The DSNS business specialises in the sale of SIM cards from the majority of UK mobile telecommunication network operators and MVNOs. The company's products are sold directly to retailers, via wholesalers and into niche markets such as vending machines, with revenues being generated through the sale of the product and by the receipt of connection commissions from the network operators and MVNOs once an end user activates the SIM card. As a result, DSNS has either established direct relationships with, or access to, a wide range of sales channels, including major retail outlets and national retail chains, as well as other smaller retailers. Primary Business Activity DSNS's main role as an approved partner of the mobile telecommunication network operators and MVNOs is to provide access to customers. The networks create a range of propositions and DSNS provides access to channels, with a sales outlet providing availability and visibility of the product to the eventual customer. DSNS specialises in tailoring the operators' products for specific outlets, taking into account demographics such as affluence, ethnicity and age. For example, for a discount store in an ethnically diverse area, DSNS may tailor an operator's product so as to offer reduced call rates to a limited number of overseas countries. DSNS then works with the retailer so as to maximise sales and returns for the operator. Over the past five years DSNS has sold more than 10 million SIM cards providing network connections for over five million customers. Sales Channels and Partners DSNS operates through four main channels: Major Retail: Over the last few years, DSNS has focused on increasing the number of major retail accounts that sell pre pay SIM cards and currently sells through a range of retailers. In order to achieve sales through this channel the products need to be placed and promoted within the stores and the business has been developing this sales channel by working with the retailers to increase network brand awareness through targeted campaigns. Direct Sales Team: DSNS has a direct sales team enabling promotion of network propositions directly into a large number of independent stores and the ability to target, incentivise and provide rewards at an individual store level. The approach also provides an insight into distribution at store (or location) level in the independent sector, as well as providing the ability to target stores or locations for specific promotions and real time reporting of EPOS data. 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