Atlantic Lithium Regulatory News (ALL)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

14 October 2014

RECOMMENDED CASH OFFER

for

Allocate Software Plc ("Allocate")by

Acorn Bidco Limited ("Bidco")

Summary

· The boards of Bidco and Allocate are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco shall acquire the entire issued and to be issued ordinary share capital of Allocate. The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

· The Acquisition values the entire issued and to be issued ordinary share capital of Allocate at approximately £109.6 million.

· Under the terms of the Acquisition, Allocate Shareholders shall be entitled to receive 153.55 pence in cash for each Allocate Share held. In addition, Allocate Shareholders on the register on 14 November 2014 will receive the Final Dividend of 1.45 pence per Allocate Share, assuming this is approved by the Allocate Shareholders at the Annual General Meeting to be held on 27 November 2014.

· This Acquisition Price represents a premium of approximately:

· 35.3 per cent. to the Closing Price per Allocate Share of 113.5 pence on 13 October 2014, being the last Dealing Day prior to the date of this announcement;

· 31.6 per cent. to the average Closing Price per Allocate Share of 116.7 pence for the three months prior to the date of this announcement; and

· 37.3 per cent. to the average Closing Price per Allocate Share of 111.9 pence for the 12 months prior to the date of this announcement,

and exceeds by over 30 per cent. the highest Closing Price of an Allocate Share in over ten years.

· The Acquisition is conditional on, amongst other things, the approval of Allocate Shareholders.

· Bidco has in total received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of 32,190,264 issued Allocate Shares representing, in aggregate, approximately 47.1 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the date of this announcement. These are described in further detail below.

· The Acquisition shall be put to Allocate Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Allocate Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Allocate Shares voted. In addition, a special resolution implementing the Scheme and approving the related Capital Reduction must be passed by Allocate Shareholders representing at least 75 per cent. of votes cast at the General Meeting.

· The Allocate Directors, who have been so advised by William Blair, consider the terms of the Acquisition to be fair and reasonable. In providing advice to Allocate Directors, William Blair has taken into account the commercial assessments of the Allocate Directors.

· The Allocate Directors consider that the price of 153.55 pence per Allocate Share represents full and fair value to shareholders, providing certainty through the opportunity to realise value now for their current holdings in cash. The price also represents an attractive 35.3 per cent. premium to the Closing Price as at 13 October 2014, being the last Dealing Day prior to the date of this announcement, exceeds by over 30 per cent. the highest Closing Price of an Allocate Share in over ten years, and takes appropriate account of the future growth prospects of Allocate on a standalone basis.

· The Allocate Directors consider the Acquisition is in the best interests of the Company as a whole and believe it represents a sound means of securing the long-term strategic potential of Allocate at a time when political change and a peak in product renewal cycles introduce new challenges to growth. Against that backdrop, the Board believes that HgCapital will bring to Allocate the benefits of committed investment in strategic product and market initiatives, alongside a greater willingness to accept medium-term downside risk in order to secure the long-term growth both parties believe is achievable. 

· Accordingly, the Allocate Directors intend to recommend unanimously that Allocate Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting, as the Allocate Directors who hold Allocate Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of 1,604,984 Allocate Shares (representing, in aggregate, approximately 2.3 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the publication of this announcement).

· The irrevocable undertakings from Herald Investment Management Ltd, Kabouter Management LLC, Hargreave Hale, and GVO Investment Management Ltd are in respect of 30,585,280 Allocate Shares representing, in aggregate, approximately 44.8 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the date of this announcement.

· Bidco is a recently incorporated company which has been specifically formed for the purpose of making acquisitions on behalf of the HgCapital Funds. HgCapital LLP, parent of the HgCapital Group, is an independent provider of private equity finance to European companies, with a focus on companies in the TMT, Services, Industrials and Renewable Energy sectors. HgCapital has offices in the UK, Germany and Luxembourg. HgCapital LLP has assets under management of approximately £5.2 billion.

· Allocate is a leading provider of workforce optimisation and assurance software and services, enabling its customers to manage and optimise large multi skilled workforces in complex, fast changing environments.

· The Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting shall be published as soon as practicable and, in any event, within 28 days of this announcement.

Commenting on the Acquisition, Terry Osborne, Chairman of Allocate, said:

"Last year was a strong year for Allocate, during which we made good strategic progress, delivering both increased revenue and improved profitability in a record year for the Company. Whilst we remain confident of our prospects for the next financial year, and in the fundamental strength of the business, we firmly believe that this transaction is today in the best interests of all Allocate stakeholders, including shareholders, employees and customers. HgCapital's financial flexibility and software industry expertise would bring significant benefits to our business and provide a strong platform from which to invest in the real opportunities we see ahead, thereby helping in the execution of our long-term strategy. The offer price also represents a very attractive premium to the recent and longer-term share price performance and appropriately takes into account the future prospects of the business"

This summary should be read in conjunction with the full text of this announcement. The Acquisition shall be subject to the Conditions and further terms set out in Appendix I to this announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix II to this announcement contains the sources of information and bases of calculations of certain information contained in this announcement. Appendix III contains a summary of the irrevocable undertakings received in relation to this Acquisition and Appendix IV contains definitions of certain expressions used in this summary and in this announcement.

Important Notices

Investec, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting for Bidco and HgCapital and no-one else in connection with the Acquisition and will not be responsible to anyone other than Bidco and HgCapital for providing the protections afforded to clients of Investec or for providing advice in relation to the Acquisition, the contents of this announcement or any other matters referred to in this announcement.

William Blair, which is regulated by the FCA in the United Kingdom, is acting as lead financial adviser to Allocate and no-one else in relation to the subject matter of this announcement and will not be responsible to anyone other than Allocate for providing the protections afforded to clients of William Blair nor for providing advice in relation to the subject matter of this announcement.

Numis, which is authorised and regulated by the FCA in the United Kingdom, is acting as joint financial adviser, nominated adviser and corporate broker to Allocate and no-one else in relation to the subject matter of this announcement and will not regard any other person as its client in relation to the subject matter of this announcement and will not be responsible to anyone other than Allocate for providing the protections afforded to clients of Numis nor for providing advice in relation to the subject matter of this announcement.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise. The Acquisition shall be made solely by means of the Scheme Document or any document by which the Acquisition is made which shall contain the full terms and Conditions of the Acquisition, including details of how to vote in respect of the acquisition.

This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Allocate shall prepare the Scheme Document to be distributed to Allocate Shareholders. Allocate and Bidco urge Allocate Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Acquisition.

The Acquisition shall be subject to the applicable requirements of the Code, the AIM Rules, the Panel, the London Stock Exchange and the Financial Conduct Authority.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this announcement in or into any jurisdiction other than the United Kingdom may be restricted by law and the availability of the Acquisition to Allocate Shareholders who are not resident in the United Kingdom may be restricted by the laws of the relevant jurisdiction in which they are located. Such persons should inform themselves of, and observe, all applicable legal and regulatory requirements of their jurisdictions. Any failure to comply with the requirements of such jurisdictions may constitute a violation of the securities laws of such jurisdictions. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purposes of complying with English law, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions other than England and Wales.

This announcement is not intended to and does not constitute, or form part of, any offer to sell or issue or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful.

The Acquisition will not be made, directly or indirectly, in or into, any Restricted Jurisdiction. Accordingly, copies of this announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, transmitted, distributed, sent or accessed in or into or from any Restricted Jurisdiction. Persons receiving this announcement (including without limitation custodians, nominees and trustees) should observe these restrictions and must not mail or otherwise forward, transmit, distribute or send it in or into or from any Restricted Jurisdiction.

Notice to US Holders

US Holders should note that the Acquisition relates to the securities of an English company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act and the proxy solicitation rules under the US Exchange Act will not apply to the Acquisition. Accordingly, the Scheme will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules.

The information contained in this document has neither been approved or disapproved by the US Securities and Exchange Commission (the "SEC") or any US state securities commission. Neither the SEC, nor any state securities commission, has passed upon the fairness or merits of the proposal described in, nor upon the accuracy or adequacy of the information contained in, this document.

The financial information included in this announcement has been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. US generally accepted accounting principles (or "GAAP") differ in certain respects from International Financial Reporting Standards used in the United Kingdom. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Accounting Oversights Board (United States).

The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the cancellation of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Allocate Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him or her.

It may be difficult for US Holders to enforce claims arising out of US laws, since Bidco and Allocate are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US. US Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of certain US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

If Bidco were to exercise its right to implement the acquisition of the Allocate Shares by way of a takeover offer, Bidco or its nominees, or its brokers (acting as agents), could make certain purchases of, or arrangements to purchase, Allocate Shares outside of the US, other than pursuant to the takeover offer, in accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act. These purchases could occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases would be disclosed as required in the UK, would be reported via an RIS notification and would be available on the London Stock Exchange website at http://www.londonstockexchange.com/prices-and-news/pricesnews/home.htm.

Forward-Looking Statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition and other information published by Bidco and/or Allocate may contain statements which are, or may be deemed to be, "forward-looking statements". Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "will", "shall", "may", "should", "continue", "believe", "expect", "intend", "anticipate", "forecast", "plan" and "project" or similar expressions. Such statements reflect the relevant company's or person's current views with respect to future events and are subject to risks, assumptions and uncertainties that could cause the actual results to differ materially from those expressed or implied by such forward-looking statements.

Many of these risks, assumptions and uncertainties relate to factors that are beyond the companies' or relevant persons' abilities to control or estimate precisely, including the following: future market conditions, changes in general economic and business conditions, regulatory changes, the behaviour of other market participants, litigation, weak, volatile or illiquid capital and/or credit markets, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Bidco and Allocate operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could also cause actual results to differ materially from those in the forward-looking statements. Neither Bidco nor Allocate can give any assurance that the forward-looking statements will prove to have been correct. You should not, therefore, place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. Neither Bidco nor Allocate undertakes any obligation to update or revise publicly any of the forward-looking statements set out in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

None of Allocate, Bidco or HgCapital, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement (including the information incorporated by reference into this announcement) will actually occur. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof.

No profit forecasts or estimates

No statement in this announcement or incorporated by reference into this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Allocate, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Allocate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Electronic Communications

Please be aware that addresses, electronic addresses and certain other information provided by Allocate Shareholders and other relevant persons for the receipt of communications from Allocate may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Code.

Publication on Website and Availability of Hard Copies

In accordance with Rule 30.4 of the Code, a copy of this announcement together with all information incorporated into this announcement by reference to another source will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on HgCapital's website (www.acornbid.com) and on Allocate's website (www.allocatesoftware.com) by no later than 12 noon (London time) on the Business Day following the publication of this announcement. For the avoidance of doubt, the contents of those websites are not incorporated by reference and do not form part of this announcement.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.10 Disclosure

In accordance with Rule 2.10 of the Code, Allocate confirms that as at the date of this announcement, it has in issue and admitted to trading on AIM 68,300,539 ordinary shares of £0.05 each (excluding ordinary shares held in treasury). The International Securities Identification Number (ISIN) of the ordinary shares is GB0004368766.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

14 October 2014

RECOMMENDED CASH OFFER

for

Allocate Software Plc ("Allocate")by

Acorn Bidco Limited ("Bidco")

to be effected

by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

1 Introduction

The boards of Bidco and Allocate are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco shall acquire the entire issued and to be issued ordinary share capital of Allocate. The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

2 The Acquisition

Under the terms of the Acquisition, which is subject to the satisfaction (or, where applicable, waiver) of the Conditions and to the further terms set out in Appendix I, Allocate Shareholders will be entitled to receive:

for each Allocate Share 153.55 pence in cash

In addition, Allocate Shareholders on the register on 14 November 2014 will receive the Final Dividend of 1.45 pence per Allocate Share, assuming this is approved by the Allocate Shareholders at the Annual General Meeting to be held on 27 November 2014.

The terms of the Acquisition value Allocate's entire issued and to be issued share capital at approximately £109.6 million.

The price of 153.55 pence in cash for each Allocate Share represents a premium of approximately:

· 35.3 per cent. to the Closing Price per Allocate Share of 113.5 pence on 13 October 2014, being the last Dealing Day prior to the date of this announcement;

· 31.6 per cent. to the average Closing Price per Allocate Share of 116.7 pence for the three months prior to the date of this announcement; and

· 37.3 per cent. to the average Closing Price per Allocate Share of 111.9 pence for the 12 months prior to the date of this announcement,

and exceeds by over 30 per cent. the highest Closing Price of an Allocate Share in over ten years.

As a result of the Acquisition, the Allocate Board will be recommending to Allocate Shareholders at the Annual General Meeting to be held on 27 November 2014 that the Final Dividend only be paid in cash and will no longer be recommending that Allocate Shareholders have the option to receive Allocate Shares instead of a cash dividend.

It is a condition of the Acquisition that Allocate does not declare, make or pay any dividends or distributions other than the Final Dividend prior to the Effective Date.

3 Information relating to Bidco and HgCapital

HgCapital LLP, parent of the HgCapital Group, has significant experience and a strong track record of investing in the UK technology sector.

HgCapital believes that in order for Allocate to maximise its future potential, a period of further consolidation and investment is required which is best achieved under private ownership, such that the Company can prioritise strategic development focused on longer-term goals over the demands of a public listing such as consistency of earnings and predictability of revenue growth.

HgCapital believes that Allocate's ability to achieve its future growth potential, both organic and inorganic, will be enhanced under its ownership. HgCapital has longstanding experience of assisting technology companies such as Allocate in creating sustainable value over the longer-term and HgCapital believes it is well placed to assist Allocate as it continues to develop and execute its longer-term strategy. HgCapital intends to support the Company in integrating prior acquisitions while supporting investment for enhanced sales growth and new product development.

4 Recommendation

The Allocate Directors, who have been so advised by William Blair, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Allocate Directors, William Blair has taken into account the commercial assessments of the Allocate Directors. William Blair is providing independent financial advice for the purposes of Rule 3 of the Code to the Allocate Directors.

The Allocate Directors consider that the Acquisition is in the best interests of the Company as a whole and, accordingly, intend to recommend unanimously that Allocate Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting, as the Allocate Directors who hold Allocate Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of 1,604,984 Allocate Shares (representing, in aggregate, approximately 2.3 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the publication of this announcement).

5 Background to and reasons for the Recommendation

In evaluating the Acquisition, the Allocate Directors have considered the interests of Allocate's employees and customers, as well as the economic benefits to its shareholders.

The financial year ended 31 May 2014 represented a successful year for Allocate, during which the Company reported total revenue of £40.0 million, representing an 8.0 per cent. growth on prior year, and pre-tax profit of £2.9 million, from a pre-tax loss of £2.4 million in the prior year. A continued shift in the Company's business model also resulted in recurring revenues reaching 47.0 per cent. Although the Company continued to benefit from new business wins, in both its core Healthroster application and new offerings, this improved performance was achieved in the context of the Healthroster renewals cycle being at its five-year peak. Additionally, strong adoption of certain new products, such as Allocate Cloud and SafeCare, should be considered alongside much lower than expected demand in the Patient Flow and Emergency Department product lines.

The Allocate Board continues to believe that the Company's core healthcare offering remains closely aligned to the needs of the NHS and broader healthcare community, thereby creating the potential for on-going demand in both domestic and overseas markets. However, sustained future revenue growth will not be without challenge and the achievement of the Allocate Board's long-term strategic ambitions will ideally require further committed investment in products, technology and markets. The Healthroster renewals cycle will result in a lower number of renewals in 2015 and 2016, and therefore renewal revenues, which alongside potential political changes in key markets, with a planned general election in the core UK market next year, and proposed legislative changes in Sweden affecting the role of private companies in the Healthcare industry, means an element of risk and uncertainty to Allocate's business is emerging.

In HgCapital, the Allocate Board believes the business would have a partner with a shared long-term vision for the continuation of Allocate's strategy to drive broader and deeper into the Healthcare market. The Allocate Board believes that HgCapital will bring to Allocate the benefits of committed investment in strategic product and market initiatives at a time of change. These benefits will be combined with a greater willingness on HgCapital's part to accept medium-term downside risk in order to secure the long-term growth that both parties believe is achievable. Additionally, HgCapital's track record of investing in and successfully growing software businesses in similar market sectors to Allocate, including the provision of capital to support further acquisitions and growth in new markets, is expected to optimally position the Company to meet its long term objectives.

The Allocate Directors consider that the offer price of 153.55 pence per share represents full and fair value to Allocate Shareholders, providing certainty through the opportunity to realise value now for their current holdings in cash. The price also represents an attractive 35.3 per cent. premium to the Closing Price of 113.5 pence per Allocate Share as at 13 October 2014, being the last Dealing Day prior to the date of the Announcement, exceeds by over 30 per cent. the highest Closing Price of an Allocate Share in over ten years, and takes appropriate account of the future growth prospects of Allocate on a standalone basis.

6 Irrevocable undertakings

Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from the Allocate Directors and certain other Allocate Shareholders as described below.

The irrevocable undertakings from the Allocate Directors who hold Allocate Shares are in respect of their entire beneficial holdings of (i) Allocate Shares; and (ii) Allocate Shares under the Allocate Option Schemes. The 1,604,984 issued Allocate Shares in respect of which the irrevocables have been provided represent, in aggregate, approximately 2.3 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the publication of this announcement.

The irrevocable undertakings from Herald Investment Management Ltd, Kabouter Management LLC, Hargreave Hale and GVO Investment Management Ltd are in respect of 30,585,280 Allocate Shares representing, in aggregate, approximately 44.8 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the date of this announcement.

In total, therefore, Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of 32,190,264 issued Allocate Shares representing, in aggregate, approximately 47.1 per cent. of the issued ordinary share capital of Allocate on 13 October 2014, being the last practicable date prior to the date of this announcement.

Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

7 Information on Bidco and HgCapital

7.1 Bidco

Bidco is a limited liability company incorporated in England and Wales for the purposes of making acquisitions on behalf of the HgCapital Funds. Bidco is indirectly wholly owned by Topco. Topco is an investment vehicle owned by the HgCapital Funds.

The directors of Bidco are Matthew Brockman and David Issott, both of whom are appointees of the HgCapital Funds.

Bidco has not traded since its date of incorporation, nor has it entered into any obligations, other than in connection with the implementation of the Acquisition. As Bidco was incorporated on 1 May 2014 for the purpose of making acquisitions on behalf of the HgCapital Funds, no financial information is available or has been published in respect of Bidco.

7.2 HgCapital

HgCapital LLP, which is the ultimate parent of HgCapital, is an independent provider of private equity finance to European companies, with a focus on companies in the TMT, Services, Industrials and Renewable Energy sectors.

HgCapital has offices in the UK, Germany and Luxembourg. HgCapital LLP has assets under management of approximately £5.2 billion.

Since 2002, HgCapital has backed 18 TMT companies, investing over £1.7 billion in equity. In its investments, HgCapital is a strong and collaborative partner for management teams and looks to support them on executing business strategy and enhancing operational effectiveness in order to maximise long term value.

In December 2000, HgCapital LLP was spun out of Mercury Private Equity, a division of Merrill Lynch Investment Managers that was established in 1985 as the private equity arm of Mercury Asset Management. HgCapital LLP has completed 118 European buyout investments since its formation in 1990, of which 97 have been realised.

HgCapital (which is regulated in the United Kingdom by the FCA) manages the HgCapital Funds on a discretionary basis (subject to certain prescribed restrictions). The HgCapital Funds comprise limited partnerships and, in general, each of the HgCapital Funds invests in each of HgCapital's investments on a pro rata basis.

The commitments of the investors in the HgCapital Funds as at the date of this document are approximately £380 million of which approximately 30 per cent. has been drawn. The investors in the HgCapital Funds comprise private individuals and UK and overseas institutional investors, such as pension funds and their investment vehicles. In addition, partners, executives and professional staff of HgCapital LLP participate in HgCapital Mercury Executive Co-Invest L.P., which forms part of the HgCapital Funds.

Investec is acting as financial adviser to Bidco and HgCapital.

8 Information relating to Allocate

Allocate is a leading provider of workforce optimisation and assurance software and services, enabling its customers to manage and optimise large multi skilled workforces in complex, fast changing environments. Over the past ten years, the leadership team has transformed Allocate from a loss-making company focused on the Maritime and Defence sectors with revenues of £4.0 million, into a profitable, international business, which has successfully developed a market leading position in the Healthcare industry.

Allocate's largest and fastest growing sector is Healthcare, accounting for £34.7 million of £40.0 million total revenue for the year ended 31 May 2014. With over 360 healthcare customers across eleven countries, Allocate's HealthSuite provides a comprehensive and complementary product suite across rostering and assurance, enabling organisations to optimise people, processes, performance and assurance, freeing time for healthcare professionals to focus on improved outcomes for their patients. HealthRoster, Allocate's flagship solution, remains the UK's most widely used e-rostering solution.

Defence is Allocate's second largest sector, accounting for £3.6 million of revenue for the year ended 31 May 2014. Allocate's industry leading DefenceSuite is designed to meet the complex and changing requirements of modern defence forces. With the ability to plan, cost and deploy complex forces scenarios across changing theatres of engagement, DefenceSuite has now been deployed in numerous defence organisations.

Allocate also continues to derive revenue from other sectors requiring the management of workforces with complex shift and capability requirements. Historically this has mainly consisted of Maritime and Offshore engineering customers, but with the acquisitions of Time Care in Sweden and RosterOn in Australia, this has been extended to a broader customer base across security services, transport, mining, retail, education and government.

Allocate is headquartered in London and provides services and support to an international customer base through regional offices in the UK, Sweden and Australia.

9 Allocate current trading

Allocate's final results for the year ended 31 May 2014 were released on 21 July 2014, in which the Allocate Directors reported a highly successful year. Total revenue of £40.0 million was 8.0 per cent. up on prior year, with all growth organic. Profitability also showed strong improvement with Statutory Profit before tax increasing to £2.9 million from a pre-tax loss of £2.4m in 2013. 

Since 31 May 2014, revenues have been broadly in line with the Allocate Directors' expectations, despite some adverse foreign exchange impacts. Over the same period operating costs have been below plan, also due in part to foreign exchange movements, but principally to lower staff costs arising from a cautious approach to recruitment.

10 Employees, pensions, management and locations

Bidco recognises the skills, technical ability and experience of the existing management and employees of Allocate. Bidco has not sought to create a new strategic plan for the Company and intends to support Allocate in continuing to develop and execute and, if possible, accelerate, management's existing short-term and longer-term strategies. Bidco does not currently have any intention to change the locations of Allocate's places of business, redeploy the fixed assets of Allocate or to effect a material change in any conditions of employment of Allocate employees.

If the Scheme becomes effective, Bidco intends that the existing employment rights, including pension rights, of the management and employees of Allocate will be safeguarded. Each of Terry Osborne, Richard King, Andrew Pringle, Lynn Drummond and Graham Rich has agreed to resign from the Allocate Board conditionally upon the Scheme becoming effective and with effect from the Effective Date (and at which time payment will be made to them in lieu of their notice). Chris Gale, Chief Financial Officer of Allocate, will remain employed by the Company until the Scheme becomes effective and will then step down from the Allocate Board. David Gibbon is due to join the Company on 17 November 2014 and will replace Mr Gale as Chief Financial Officer.

No proposals have been made on the terms of any incentive arrangements for relevant managers or the continuing Allocate Directors and there have been no discussions in respect of the terms of these arrangements.

As set out above, Bidco intends to support management's existing short-term and longer-term strategies. In particular, Bidco does not intend to pursue a strategy of head count reduction. However, throughout the due diligence process, Bidco has not had the opportunity to evaluate individual suitability for specific roles and anticipates that there may be some substitutions and role reallocations. Bidco does not have any plans to make any other material change in the conditions of employment of the management and employees of the Company and its subsidiaries.

11 Allocate Option Schemes

Participants in Allocate's Option Schemes shall be contacted regarding the effect of the Allocate Acquisition on their rights under Allocate's Option Schemes. All outstanding awards (whether or not they are currently vested) will become exercisable as a result of the Acquisition becoming effective. Further details of the terms of such proposals shall be included in the Scheme Document.

12 Financing

The consideration payable by Bidco under the Acquisition will be partially funded using either (i) a term and revolving credit loan facilities agreement provided by Hayfin pursuant to the Hayfin Facilities Agreement, or, in the event that the Hayfin Facilities Agreement has not been signed as at the date that Bidco is required to pay the consideration under the Acquisition, (ii) an interim term facilities agreement provided by Hayfin pursuant to the Hayfin Interim Facilities Agreement. In respect of both the Hayfin Facilities Agreement and the Interim Facilities Agreement, Bidco has agreed that it will not waive the Conditions and certain further terms contained in Appendix I to this announcement without the consent of Hayfin Services LLP.

The balance will be funded through financing provided by the HgCapital Funds.

Investec, financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to enable it to satisfy in full the Cash Consideration payable to Allocate Shareholders under the terms of the Acquisition.

13 Acquisition-related Arrangements

In the course of discussions relating to the Acquisition, each of Allocate and HgCapital has received or will receive confidential information relating to the other party.

Allocate and HgCapital entered into an agreement on 27 June 2014 (the "First Confidentiality Agreement"). Pursuant to the First Confidentiality Agreement, HgCapital undertook to keep confidential such information and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. Allocate and HgCapital subsequently entered into an agreement on 17 July 2014 (the "Second Confidentiality Agreement") which restated the obligations (the "Confidentiality Obligations") contained in the First Confidentiality Agreement but imposed them on each of Allocate and HgCapital.

The Confidentiality Obligations will remain in force until the earlier of (a) a period of 12 months from the date of the Second Confidentiality Agreement, or (b) the date the Scheme becomes effective.

14 Opening Position Disclosures and Interests

Bidco confirms that it is making an Opening Position Disclosure on the date of this announcement, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code. The Opening Position Disclosure does not include all relevant details in respect of Bidco's concert parties and Bidco confirms that a further disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Code will be made as soon as possible, if required.

As at the close of business on 13 October 2014, being the last practicable date prior to the publication of this announcement, save for: (i) the disclosures in this paragraph 14; and (ii) the irrevocable undertakings referred to in paragraph 6 above, none of Bidco or any of its directors or HgCapital or any of its partners or, so far as HgCapital and the Bidco Directors are aware, any person acting, or deemed to be acting, in concert with Bidco:

· had an interest in, or right to subscribe for, relevant securities of Allocate;

· had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of Allocate;

· had procured an irrevocable commitment or letter of intent to accept the Cash Offer in respect of relevant securities of Allocate;

· had borrowed or lent any Allocate Shares.

Furthermore, no arrangement exists with Bidco, HgCapital or Allocate or an associate of Bidco, HgCapital or Allocate in relation to Allocate Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Allocate Shares which may be an inducement to deal or refrain from dealing in such securities.

15 Structure of the Acquisition

It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement between Allocate and the Scheme Shareholders, under Part 26 of the Companies Act. The procedure involves, among other things, an application by Allocate to the Court to sanction the Scheme and to confirm the cancellation of the existing Allocate Shares through the Capital Reduction. The purpose of the Scheme is to provide for Bidco to become the owner of the entire issued and to be issued share capital of Allocate.

Upon the Scheme becoming effective, the Allocate Shares subject to the Scheme will be cancelled and the reserve arising from such cancellation will be applied in paying up in full such number of New Allocate Shares as is equal to the number of Allocate Shares cancelled and issuing them to Bidco, in consideration of which Bidco will pay to the holders of those Allocate Shares so cancelled 153.55 pence in cash per Scheme Share held at the Scheme Record Time. Allocate will make an application to the Court to sanction the Scheme and then to confirm the related Capital Reduction.

It is intended that one Deferred Share in the capital of Allocate will be issued to Bidco prior to the Scheme Record Time and that this Deferred Share will not be subject to the Scheme so that there is no requirement for an independent valuation of the Allocate Shares under the Companies Act.

The Acquisition is subject to the satisfaction or (where relevant) waiver of the Conditions and certain further terms contained in Appendix I to this announcement and will only become effective if, among other things, the following events occur on or before 14 April 2015 (being six months from the anticipated posting of the Scheme Document, or such later date (if any) as Bidco and Allocate may, with the consent of the Panel and the Court (if required), agree):

· a resolution to approve the Scheme is passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares held by those Scheme Shareholders (which, for the avoidance of doubt, excludes Bidco and its connected parties);

· the Special Resolution necessary to implement the Scheme and to sanction the related Capital Reduction is passed by the requisite majority of Allocate Shareholders required to pass such a special resolution at the General Meeting;

· the Scheme is sanctioned (with or without modification, on terms agreed by Bidco and Allocate) and the related Capital Reduction confirmed by the Court; and

· copies of the Court Orders are delivered to the Registrar of Companies and, if ordered by the Court, the Reduction Court Order is registered by the Registrar of Companies.

Bidco may cause the Acquisition to lapse if: (i) the approval of the requisite majorities of Scheme Shareholders at the Court Meeting is not obtained on or before the 30th day after the expected date of such meeting to be set out in the Scheme Document; (ii) the approval of the requisite majority of Allocate Shareholders to pass the Special Resolution to be proposed at the General Meeting is not obtained on or before the 30th day after the expected date of such meeting to be set out in the Scheme Document; or (iii) the Scheme is not sanctioned by the Court and/or Capital Reduction is not confirmed by the Court on or before 30th day after the expected date of such hearing to be set out in the Scheme Document, or in each case such later date as may be agreed between Allocate and Bidco.

Upon the Scheme becoming effective: (i) it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and, if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Allocate Shares will cease to be valid and entitlements to Allocate Shares held within the CREST system will be cancelled.

It is expected that the Scheme will become effective on 8 December 2014. If the Scheme does not become effective on or before 14 April 2015, it will lapse and the Acquisition will not proceed (unless Bidco and Allocate agree it may be extended with the consent of the Panel and (if required) the Court).

16 Conditions to the Acquisition

The Acquisition shall be subject to the Conditions and further terms set out in Appendix I to this announcement and to be set out in the Scheme Document.

17 De-listing and re-registration

The last day of dealings in Allocate Shares on AIM is expected to be the Dealing Day immediately prior to the Effective Date and no transfers shall be registered after 6:00 p.m. on that date.

An application will be made to the London Stock Exchange for Allocate Shares to cease to be admitted to trading on AIM to take effect as of or shortly after the Effective Date.

On the Effective Date, share certificates in respect of Allocate Shares will cease to be valid and should be destroyed. In addition, entitlements to Allocate Shares held within the CREST system will be cancelled.

It is also intended that, as part of the Scheme, Allocate will be re-registered as a private limited company pursuant to the relevant provisions of the Companies Act.

18 General

Bidco reserves the right to elect to implement the Acquisition by way of a takeover offer (as defined in Part 28 of the Companies Act), subject to the Panel's consent. Subject to the receipt of such consent, in such event, such Offer will be implemented on the same terms and conditions (subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent., or such lesser percentage (being more than 50 per cent.) as Bidco may decide (in each case, subject to the Panel's consent) of the shares to which the Offer relates), so far as applicable, as those which would apply to the Scheme.

If the Acquisition is effected by way of an Offer and such Offer becomes or is declared unconditional in all respects and sufficient acceptances are received in respect of such Offer, Bidco intends to: (i) procure that Allocate makes an application to the London Stock Exchange to cancel the trading of Allocate Shares on AIM; and (ii) exercise its rights (to the extent such rights are available) to apply the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Allocate Shares in respect of which such Offer has not been accepted.

19 Documents available on website

Copies of the following documents shall be made available on Allocate's website which can be accessed directly at the address www.allocatesoftware.com up to and including the Effective Date (or the date on which the Scheme lapses or is withdrawn, whichever is earlier):

· the articles of association of Allocate;

· a draft of the articles of association of Allocate as proposed to be amended at the General Meeting;

· the irrevocable undertakings referred to in paragraph 5 above;

· the Confidentiality Agreement referred to in paragraph 13 above;

· this announcement.

Copies of the following documents shall be made available on Bidco's website which can be accessed directly at the address www.acornbid.com up to and including the Effective Date (or the date on which the Scheme lapses or is withdrawn, whichever is earlier):

· the articles of association of Bidco;

· the irrevocable undertakings referred to in paragraph 5 above;

· documents related to the financing of the Scheme as referred to in paragraph 12 above;

· this announcement.

Investec, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting for Bidco and HgCapital and no one else in connection with the Acquisition and will not be responsible to anyone other than Bidco and HgCapital for providing the protections afforded to clients of Investec or for providing advice in relation to the Acquisition, the contents of this announcement or any other matters referred to in this announcement.

William Blair, which is regulated by the FCA in the United Kingdom, is acting as lead financial adviser to Allocate and no-one else in relation to the subject matter of this announcement and will not be responsible to anyone other than Allocate for providing the protections afforded to clients of William Blair nor for providing advice in relation to the subject matter of this announcement.

Numis, which is authorised and regulated by the FCA in the United Kingdom, is acting as joint financial adviser, nominated adviser and corporate broker to Allocate and no-one else in relation to the subject matter of this announcement and will not regard any other person as its client in relation to the subject matter of this announcement and will not be responsible to anyone other than Allocate for providing the protections afforded to clients of Numis nor for providing advice in relation to the subject matter of this announcement.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise. The Acquisition shall be made solely by means of the Scheme Document or any document by which the Acquisition is made which shall contain the full terms and Conditions of the Acquisition, including details of how to vote in respect of the acquisition.

This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Allocate shall prepare the Scheme Document to be distributed to Allocate Shareholders. Allocate and Bidco urge Allocate Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Acquisition.

The Acquisition shall be subject to the applicable requirements of the Code, the AIM Rules, the Panel, the London Stock Exchange and the Financial Conduct Authority.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this announcement in or into any jurisdiction other than the United Kingdom may be restricted by law and the availability of the Acquisition to Allocate Shareholders who are not resident in the United Kingdom may be restricted by the laws of the relevant jurisdiction in which they are located. Such persons should inform themselves of, and observe, all applicable legal and regulatory requirements of their jurisdictions. Any failure to comply with the requirements of such jurisdictions may constitute a violation of the securities laws of such jurisdictions. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purposes of complying with English law, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions other than England and Wales.

This announcement is not intended to and does not constitute, or form part of, any offer to sell or issue or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful.

The Acquisition will not be made, directly or indirectly, in or into, any Restricted Jurisdiction. Accordingly, copies of this announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, transmitted, distributed, sent or accessed in or into or from any Restricted Jurisdiction. Persons receiving this announcement (including without limitation custodians, nominees and trustees) should observe these restrictions and must not mail or otherwise forward, transmit, distribute or send it in or into or from any Restricted Jurisdiction.

Notice to US Holders

US Holders should note that the Acquisition relates to the securities of an English company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules under the US Exchange Act and the proxy solicitation rules under the US Exchange Act will not apply to the Acquisition. Accordingly, the Scheme will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules.

The information contained in this document has neither been approved or disapproved by the US Securities and Exchange Commission (the "SEC") or any US state securities commission. Neither the SEC, nor any state securities commission, has passed upon the fairness or merits of the proposal described in, nor upon the accuracy or adequacy of the information contained in, this document.

The financial information included in this announcement has been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. US generally accepted accounting principles (or "GAAP") differ in certain respects from International Financial Reporting Standards used in the United Kingdom. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Accounting Oversights Board (United States).

The receipt of cash pursuant to the Acquisition by a US Holder as consideration for the cancellation of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Allocate Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him or her.

It may be difficult for US Holders to enforce claims arising out of US laws, since Bidco and Allocate are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US. US Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of certain US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

If Bidco were to exercise its right to implement the acquisition of the Allocate Shares by way of a takeover offer, Bidco or its nominees, or its brokers (acting as agents), could make certain purchases of, or arrangements to purchase, Allocate Shares outside of the US, other than pursuant to the takeover offer, in accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act. These purchases could occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases would be disclosed as required in the UK, would be reported via an RIS notification and would be available on the London Stock Exchange website at http://www.londonstockexchange.com/prices-and-news/pricesnews/home.htm.

Forward-Looking Statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition and other information published by Bidco and/or Allocate may contain statements which are, or may be deemed to be, "forward-looking statements". Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "will", "shall", "may", "should", "continue", "believe", "expect", "intend", "anticipate", "forecast", "plan" and "project" or similar expressions. Such statements reflect the relevant company's or person's current views with respect to future events and are subject to risks, assumptions and uncertainties that could cause the actual results to differ materially from those expressed or implied by such forward-looking statements.

Many of these risks, assumptions and uncertainties relate to factors that are beyond the companies' or relevant persons' abilities to control or estimate precisely, including the following: future market conditions, changes in general economic and business conditions, regulatory changes, the behaviour of other market participants, litigation, weak, volatile or illiquid capital and/or credit markets, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Bidco and Allocate operate and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could also cause actual results to differ materially from those in the forward-looking statements. Neither Bidco nor Allocate can give any assurance that the forward-looking statements will prove to have been correct. You should not, therefore, place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. Neither Bidco nor Allocate undertakes any obligation to update or revise publicly any of the forward-looking statements set out in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for Allocate, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Allocate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Electronic Communications

Please be aware that addresses, electronic addresses and certain other information provided by Allocate Shareholders and other relevant persons for the receipt of communications from Allocate may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Code.

Publication on Website and Availability of Hard Copies

In accordance with Rule 30.4 of the Code, a copy of this announcement together with all information incorporated into this announcement by reference to another source will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on HgCapital's website (www.acornbid.com) and on Allocate's website (www.allocatesoftware.com) by no later than 12 noon (London time) on the Business Day following the publication of this announcement. For the avoidance of doubt, the contents of those websites are not incorporated by reference and do not form part of this announcement.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.10 Disclosure

In accordance with Rule 2.10 of the Code, Allocate confirms that as at the date of this announcement, it has in issue and admitted to trading on AIM 68,300,539 ordinary shares of £0.05 each (excluding ordinary shares held in treasury). The International Securities Identification Number (ISIN) of the ordinary shares is GB0004368766.

 APPENDIX ICONDITIONS AND CERTAIN FURTHER TERMS OF THE SCHEME AND THE ACQUISITION

Part A: Conditions of the Acquisition

The Acquisition is conditional upon the Scheme becoming unconditional and becoming effective by no later than the Long Stop Date, or such later date (if any) as Bidco and Allocate may (with the consent of the Panel) agree and, if required, the Court may allow.

1 The Scheme is conditional upon:

1.1 approval of the Scheme at the Court Meeting and at any separate class meeting which may be required by the Court (or at any adjournment of any such meeting) by a majority in number of the Scheme Shareholders (or the relevant class thereof, if applicable) present and voting, either in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares held by those Scheme Shareholders on or before the 30th day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date as may be agreed by Bidco and Allocate, and the Court may allow);

1.2 all resolutions in connection with or required to approve and implement the Scheme as set out in the notice of the General Meeting (including, without limitation, the Special Resolution) being duly passed by the requisite majority or majorities required to pass such resolutions at the General Meeting or at any adjournment of that meeting on or before the 30th day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date as may be agreed by Bidco and Allocate, and the Court may allow);

1.3 the sanction of the Scheme and the confirmation of the Capital Reduction involved therein by the Court (in either case, without modification or with modification on terms acceptable to Bidco and Allocate) on or before the 30th day after the expected date of the Court sanction hearing to be set out in the Scheme Document (or such later date as may be agreed by Bidco and Allocate, and the Court may allow), and:

(a) the delivery of office copies of the Court Orders (with the Statement of Capital attached thereto) to the Registrar of Companies; and

(b) in relation to the Capital Reduction, if required by the Court, the Reduction Court Order being registered by the Registrar of Companies.

2 Subject to Part B of this Appendix I and the requirements of the Panel in accordance with the Code, Bidco and Allocate have agreed that the Acquisition is also conditional upon the following conditions, and accordingly the necessary actions to make the Scheme effective will not be taken unless the following conditions (as amended if appropriate) have been satisfied (and continue to be satisfied pending the commencement of the Scheme Court Hearing) or, where relevant, waived prior to the Scheme being sanctioned by the Court:

(a) all necessary notifications, filings and applications having been made, all regulatory and statutory obligations in any relevant jurisdiction having been complied with, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulations of any relevant jurisdiction having expired, lapsed or been terminated in each case in respect of the Acquisition or any aspect of the Acquisition, the acquisition or proposed acquisition of any shares or other securities in, or control of, Allocate or any other member of the Wider Allocate Group by any member of the Wider Bidco Group or the carrying on by any member of the Wider Allocate Group of its business;

(b) except as Disclosed, there being no provision of any agreement, arrangement, lease, licence, permit or other instrument to which any member of the Wider Allocate Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject, which in each case as a consequence of the Acquisition, the acquisition or proposed acquisition of any shares or other securities in Allocate or because of a change in the control or management of any member of the Wider Allocate Group or otherwise, could reasonably be expected to result in (in each case to an extent which is material in the context of the Wider Allocate Group taken as a whole):

(i) any such agreement, arrangement, lease, licence, permit or other instrument or the rights, liabilities, obligations, interests or business of any member of the Wider Allocate Group under any such agreement, arrangement, lease, licence, permit or other instrument or the interests or business of any such member in or with, any person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being or becoming capable of being terminated, modified or affected or any obligation or liability arising or any action being taken or arising thereunder;

(ii) any asset owned or used by any member of the Wider Allocate Group, or any interest in such asset, being or falling to be disposed of or charged or ceasing to be available to any member of the Wider Allocate Group or any right arising under which any such asset or interest could be required to be disposed of or charged or cease to be available to any member of the Wider Allocate Group;

(iii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interest of any member of the Wider Allocate Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

(iv) the business, assets, liabilities, value or operational performance of any member of the Wider Allocate Group or its financial or trading position or profits being prejudiced or adversely affected;

(v) any member of the Wider Allocate Group ceasing to be able to carry on business under any name which it at present uses;

(vi) the creation or acceleration of any liability (actual or contingent) by any member of the Wider Allocate Group other than to trade creditors in the ordinary course of business;

(vii) any liability of any member of the Wider Allocate Group to make any severance, termination, bonus or other payment to any of its directors or other officers;

(viii) any requirement on any member of the Wider Allocate Group to acquire, subscribe, pay up or repay any shares or other securities; or

(ix) monies borrowed by or any other indebtedness (actual or contingent) of, or any grant available to any member of the Wider Allocate Group, being or becoming repayable or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of such member to borrow monies or incur any indebtedness becoming or being withdrawn or inhibited;

(x) and no event having occurred which, under any provision of any agreement, arrangement, lease, licence, permit or other instrument to which any member of the Wider Allocate Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, could reasonably be expected to result in any of the events or circumstances as are referred to in paragraphs 2(b)(i) to 2(b)(ix) (inclusive) of this condition;

(c) no government or governmental, quasi-governmental, supranational, statutory, regulatory, fiscal, environmental or investigative body (including without limitation, any national or supranational anti-trust or competition authority), court, trade agency, association, institution, employee representative body or any other person or body whatsoever in any relevant jurisdiction (each a "Third Party") having decided to take, institute, implement or threaten in writing any action, proceeding, suit, investigation, enquiry or reference, or having required any action to be taken or otherwise having done anything or having made, proposed or enacted, any statute, regulation, decision, order or change to published practice, or taken any other steps which in each case would reasonably be expected to:

(i) require, prevent, limit or delay the divestiture, or alter the terms for any proposed divestiture, by any member of the Wider Allocate Group or by any member of the Wider Bidco Group of all or any part of their respective businesses, assets, undertakings or properties or impose any limitation on the ability of any of them to conduct all or any part of their respective businesses or to own or control all or any part of their respective assets or properties;

(ii) require, prevent, limit or delay the divestiture by any member of the Wider Bidco Group of any shares or other securities (or the equivalent) in any member of the Wider Allocate Group;

(iii) impose any limitation on, or result in a delay in, the ability of any member of the Wider Bidco Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider Allocate Group or on the ability of any member of the Wider Allocate Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities (or the equivalent) in any member of the Wider Allocate Group or to exercise voting or management control over any such member of the Wider Allocate Group;

(iv) other than pursuant to the implementation of the Acquisition, require any member of either the Wider Bidco Group or the Wider Allocate Group to acquire, offer to acquire, redeem or repay any shares or other securities (or interest in) and/or any indebtedness of any member of either the Wider Allocate Group or the Wider Bidco Group owned by or owed to any third party or any asset owned by any third party;

(v) make the Acquisition, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, any member of the Wider Allocate Group void, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, prevent, restrain, restrict, prohibit, or delay the same, or otherwise impose any additional conditions or financial or other obligations with respect thereto, or otherwise challenge, hinder or interfere therewith or require amendment to the Acquisition or its implementation;

(vi) otherwise affect any or all of the business, assets, liabilities, value, operational performance, financial or trading positions or profits of any member of either the Wider Allocate Group or the Wider Bidco Group;

(vii) impose any limitation on the ability of any member of either the Wider Bidco Group or the Wider Allocate Group to conduct or integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of either the Wider Bidco Group or the Wider Allocate Group;

(viii) require any member of the Wider Allocate Group to relinquish, terminate or amend in any way any contract to which any member of the Wider Allocate Group is a party; or

(ix) result in any member of the Wider Allocate Group ceasing to be able to carry on business under any name under which it presently does so,

to an extent in each case which is material in the context of the Acquisition, Wider Allocate Group or the Wider Bidco Group in each case taken as a whole, and all applicable waiting and other time periods (including extensions thereof) during which any Third Party could take, institute, implement or threaten in writing any action, proceedings, suit, investigation, enquiry or reference or any other step under the laws of any relevant jurisdiction in respect of the Acquisition or the proposed acquisition of any Allocate Shares or otherwise intervene having expired, lapsed or been terminated;

(d) all notifications, notices, filings or applications in connection with the Acquisition or any aspect of the Acquisition that are deemed by Bidco to be necessary or appropriate having been made and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation having expired, lapsed or been terminated (as appropriate) and all authorisations, orders, grants, consents, clearances, licences, confirmations, permissions and approvals which are deemed by Bidco (acting reasonably) to be necessary or appropriate ("Authorisations"), in any jurisdiction, for and in respect of the Acquisition or any aspect of the Acquisition, or the acquisition or proposed acquisition by any member of the Wider Bidco Group of any shares or other securities in, or control or management of, any member of the Wider Allocate Group by any member of the Wider Bidco Group having been obtained in terms and in a form reasonably satisfactory to Bidco from all appropriate Third Parties and persons or bodies with whom any member of either the Wider Allocate Group or the Wider Bidco Group has entered into contractual arrangements, and all such Authorisations together with all authorisations, orders, grants, consents, clearances, licences, confirmations, permissions and approvals ("Business Authorisations") deemed by Bidco (acting reasonably) to be necessary or appropriate for any member of the Wider Allocate Group to carry on its business in any jurisdiction having been obtained and remaining in full force and effect and all filings necessary for such purpose have been made and there being no notice to revoke, suspend, modify, restrict or not to renew any of the same at the time at which the Acquisition becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having been complied with to an extent in each case which is or would be material in the context of the Wider Allocate Group or the Wider Bidco Group taken as a whole;

(e) no temporary restraining order, preliminary or permanent injunction, preliminary or permanent enjoinment, or other order threatened in writing or issued and being in effect by a court or other Third Party which has the effect of making the Acquisition or any acquisition or proposed acquisition of any shares or other securities or control or management of, any member of the Wider Allocate Group by any member of the Wider Bidco Group, or the implementation of either of them, void, voidable, illegal and/or enforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, prohibiting, preventing, restraining, restricting, delaying or otherwise interfering with the consummation or the approval of the Acquisition or any matter arising from the proposed acquisition of any shares or other securities in, or control or management of, any member of the Wider Allocate Group by any member of the Wider Bidco Group to an extent in each case which is or would be material in the context of either the Wider Allocate Group or the Wider Bidco Group taken as a whole;

(f) since 31 May 2014 and save as Disclosed, no member of the Wider Allocate Group having:

(i) save as between Allocate and any wholly owned subsidiary of Allocate or between the wholly owned subsidiaries of, agreed to issue, authorised or announced its intention or a proposal to authorise the issue of additional shares of any class, or securities or of securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or redeemed, purchased or repaid or announced any proposal to redeem, purchase or repay any of its own shares or other securities or reduced or made any other change to any part of its share capital;

(ii) other than (i) the Final Dividend; or (ii) lawfully paid or made by any wholly owned subsidiary of Allocate to Allocate or any of its wholly owned subsidiaries, recommended, declared, paid or made or announced a proposal to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;

(iii) save for transactions between members of the Wider Allocate Group, merged with (however effected) or demerged from or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or announced any intention or proposal to do so, in each case, other than in the ordinary and proper course of its trade;

(iv) made, authorised or announced an intention or a proposal to any change in its loan capital;

(v) issued, authorised or announced an intention or a proposal to authorise or propose the issue of or made any change in or to the terms of any debentures or (save as between Allocate and any of its wholly owned subsidiaries or between such subsidiaries) incurred or increased any indebtedness or become subject to any liability (actual or contingent);

(vi) other than pursuant to the Acquisition (and except for transactions in the ordinary course of its business or between Allocate and any wholly owned subsidiary of Allocate or between the wholly owned subsidiaries of Allocate), entered into, implemented, effected, or authorised, or announced its intention or a proposal to enter into or implement or effect, any reconstruction, amalgamation, joint venture, asset or profit sharing scheme, partnership, commitment, composition, assignment or other transaction or arrangement otherwise than the Acquisition;

(vii) entered into, varied, authorised or announced its intention or a proposal to enter into, or vary any contract, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which could reasonably be expected to involve an obligation of a nature or magnitude or which is, in any such case, material in the context of the Wider Allocate Group as a whole;

(viii) taken or announced an intention or proposal to take any steps, any corporate action or had any legal proceedings instituted or threatened in writing against it or petition presented or order made in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, manager, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed to an extent in each case which is material in the context of the Wider Allocate Group taken as a whole;

(ix) been unable, or admitted that it is unable, to pay its debts as they fall due or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(x) entered into any licence or other disposal of intellectual property rights of any member of the Wider Allocate Group which are material in the context of the Wider Allocate Group and outside the ordinary and proper cause of its trade;

(xi) waived or compromised or settled any claim otherwise than in the ordinary and proper course of its trade;

(xii) entered into any contract, commitment, arrangement or agreement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention or proposal to effect any of the transactions, matters or events referred to in this condition (f);

(xiii) made any alteration to its memorandum or articles of association (in each case, other than an alteration in connection with the Scheme and agreed to by Bidco);

(xiv) announced a proposal to or agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Allocate Group or entered into or changed, or announced its intention or a proposal to enter into or change the terms of any contract, commitment, arrangement or contract with any director or senior executive of the Wider Allocate Group;

(xv) terminated or varied the terms of any agreement or arrangement between any member of the Wider Allocate Group and any other person in a manner which would or might be expected to have a material adverse effect on the financial position of the Wider Allocate Group taken as a whole; or

(xvi) taken (or agreed to take or announced any intention or proposal to take) any action which requires, or would require, the consent of the Panel or the approval of Allocate Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code;

(g) since 31 May 2014 and save as Disclosed:

(i) there having been no adverse change or deterioration in the business, assets, liabilities, value, financial or trading position or profits of any member of the Wider Allocate Group to an extent which is material to the Wider Allocate Group (taken as a whole);

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened in writing, announced or instituted by or against (or remaining outstanding) by any member of the Wider Allocate Group or to which any member of the Wider Allocate Group is or may become a party (whether as a claimant, defendant or otherwise) and no enquiry, review, investigation or enforcement proceedings by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Allocate Group having been instituted, announced, implemented or threatened by or against (or remaining outstanding) any member of the Wider Allocate Group in each case to an extent which is or might reasonably be expected to be material to the Wider Allocate Group (taken as a whole);

(iii) no contingent or other liability having arisen, increased or become apparent that might reasonably be likely adversely to affect the business, assets, value, liabilities, financial or trading position or profits, operational performance or prospects of any member of the Wider Allocate Group to an extent which is or might reasonably be expected to be material to the Wider Allocate Group (taken as a whole);

(iv) other than in the ordinary course of its business, no amendment or termination of any joint venture or partnership to which any member of the Wider Allocate Group is a party having been agreed or permitted; and

(v) no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Allocate Group which is necessary for the proper carrying on of its business to an extent which is material to the Wider Allocate Group (taken as a whole);

(h) since 31 May 2014 and save as Disclosed, Bidco not having discovered:

(i) that any financial, business or other information concerning the Wider Allocate Group as contained in the information publicly announced or disclosed to any member of the Wider Bidco Group or any of their advisers at any time by or on behalf of any member of the Wider Allocate Group or any of their advisers, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make that information not misleading and was not subsequently corrected before the date of this announcement by disclosure either publically (via an RIS) or in writing to Bidco;

(ii) that any member of the Wider Allocate Group is subject to any liability (actual, contingent or otherwise) which is not disclosed in the published annual report and accounts of Allocate for the year ended 31 May 2014; or

(iii) any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Allocate Group,

in each case, to an extent or in a manner which is or might reasonably be expected to be material in the context of the Allocate Group;

(i) save as Disclosed, Bidco not having discovered that:

(i) since 31 May 2014, any circumstance has arisen or event has occurred in relation to any intellectual property owned or used by any member of the Whole Allocate Group which would have a material adverse effect on the Whole Allocate Group (taken as a whole) or is otherwise material in the context of the Acquisition, including:

A. any member of the Wider Allocate Group losing its title to any intellectual property material to its business, or any intellectual property owned by the Wider Allocate Group and material to its business being revoked, cancelled or declared invalid;

B. any claim being asserted in writing by any person challenging the ownership of any member of the Wider Allocate Group to, or the validity or effectiveness of, any of its intellectual property; or

C. any agreement regarding the use of any intellectual property licensed to or by any member of the Wider Allocate Group being terminated or varied;

(ii) any past or present member of the Wider Allocate Group has failed to comply with any and/or all applicable legislation or regulation, of any jurisdiction with regard to the disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part of any member of the Wider Allocate Group to an extent which is material in the context of the Wider Allocate Group as a whole;

(iii) there is, or is likely to be, for that or any other reason whatsoever, any liability (actual or contingent) of any past or present member of the Wider Allocate Group to make good, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the Wider Allocate Group, under any environmental legislation, regulation, notice, circular or order of any Third Party in any jurisdiction or indemnify any person in relation thereto to an extent which is material in the context of the Wider Allocate Group as a whole;

(iv) circumstances exist (whether as a result of the Acquisition or otherwise):

A. which would be likely to lead to any Third Party instituting; or

B. whereby any member of the Wider Allocate Group or any present or past member of the Wider Allocate Group would be likely to be required to institute,

an environmental audit or take any other steps which would in any such case be reasonably likely to result in any liability (whether actual or contingent) to improve, modify existing or install new plant, machinery or equipment or carry out changes in the processes currently carried out or make good, remediate, repair, re instate or clean up any land or other asset currently or previously owned, occupied or made use of by any past or present member of the Wider Allocate Group (or on its behalf) or by any person for which a member of the Wider Allocate Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest to an extent which is material in the context of the Wider Allocate Group as a whole;

(v) there is, or is likely to be expected to be, or there has been, any claim brought against any member of the Wider Allocate Group by a person or class of persons in respect of any liability (actual or contingent) of any member of the Wider Allocate Group as a result of or relating to, any material, chemical, product or process of manufacture or materials now or previously held, used, sold, manufactured, carried out or under development or research by any past or present member of the Wider Allocate Group to an extent which is material in the context of the Wider Allocate Group as a whole;

(vi) any member of the Wider Allocate Group or any person that performs or has performed services for or on behalf of any such company is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010 or any other applicable anti-corruption legislation;

(vii) any member of the Wider Allocate Group is ineligible to be awarded any contract or business under section 23 of the Public Contracts Regulations 2006 or section 26 of the Utilities Contracts Regulations (2006) (each as amended); and

(viii) any asset of any member of the Wider Allocate Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition).

These conditions are inserted for the benefit of Bidco. Each of these conditions shall be regarded as a separate condition and not be limited by reference to any other condition.

To the extent permitted by law and subject to the requirements of the Panel, Bidco reserves the right to waive:

(i) any of the deadlines set out in the above Conditions 1.1 to 1.3 for the timing of the Court Meeting, General Meeting and the Court hearing to sanction the Scheme;

(ii) in whole or in part, all or any of conditions 2(a) to 2(i) (inclusive) of this Appendix I.

For the purposes of these conditions, "Disclosed" shall mean any information which has been fairly disclosed (i) in the annual report and accounts of Allocate for the year ended 31 May 2014; (ii) in writing by or on behalf of Allocate to HgCapital on or before 13 October 2014; (iii) in the Scheme Document; or (iv) has otherwise been announced publicly and delivered by or on behalf of Allocate through an RIS prior to the date of this announcement.

Part B: Certain further terms of the Acquisition

1 Allocate Shares which will be acquired under the Acquisition will be acquired with full title guarantee, fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of the announcement.

2 If Bidco is required by the Panel to make an offer for Allocate Shares under the provisions of Rule 9 of the Code, Bidco may make such alterations to any of the above conditions as are necessary to comply with the provisions of that Rule.

3 Conditions 2(a) to 2(i) (inclusive) of this Appendix I must be fulfilled, or be determined by Bidco to be or remain satisfied or (if capable of waiver) be waived prior to the commencement of the Scheme Court Hearing, failing which the Acquisition will lapse and the Scheme will not proceed. Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or treat as fulfilled, any of the conditions 2(a) to 2(i) (inclusive) of this Appendix I at any time prior to the Long Stop Date, notwithstanding that the other conditions (or any of them) may at an earlier date have been waived (if capable of waiver), satisfied or fulfilled and that there are, at such earlier date, no circumstances indicating that any such condition may not be capable of satisfaction or fulfilment.

4 The Acquisition will lapse and the Scheme will not proceed if, prior to the date of the Court Meeting and the General Meeting, there is a Phase 2 CMA Reference or if Phase 2 European Commission proceedings are initiated or if, following a referral of the Acquisition by the European Commission under Article 9(1) of the European Council Merger Regulation to a competent authority in the United Kingdom, there is a Phase 2 CMA Reference in respect of the Acquisition, or any matter arising from the Acquisition.

5 Bidco reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a takeover offer (as defined in section 974 of the Companies Act) as it may determine in its absolute discretion. In such event, such offer will be implemented on the same terms (subject to the availability of an exemption (if required) from the registration requirements of the US Securities Act and such amendments (if any) as Bidco deems necessary in connection with US securities laws), so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition, but with an acceptance condition which will be set by reference to shares carrying 90 per cent. (or such lower percentage (being not less than 50 per cent.) as Bidco may decide or the Panel may require) in value of the Allocate Shares to which the Offer relates (the "Takeover Offer Acceptance Condition").

6 The availability of the Scheme to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

7 The Acquisition and Scheme will be governed by English law and will be subject to the exclusive jurisdiction of the English courts. The Scheme is subject to the applicable requirements of the Panel, the London Stock Exchange, the FCA and the Code, including:

(a) under Rule 13.5 of the Code, Bidco may not invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. The Conditions contained in paragraph 1 of Part A and, if applicable, the Takeover Offer Acceptance Condition set out in Part B are not subject to this provision of the Code; and

(b) under Rule 13.6 of the Code, Allocate may not invoke, or cause or permit Bidco to invoke, any Condition unless the circumstances which give rise to the right to invoke the Condition are of material significance to the Allocate Shareholders in the context of the Acquisition.

APPENDIX IISOURCES OF INFORMATION AND BASES OF CALCULATION

(i) The value placed by the Acquisition on the existing issued and to be issued share capital of Allocate is based on 68,300,539 Allocate Shares in issue on 13 October 2014, being the last dealing day prior to the date of this announcement and options over 4,052,330 Allocate Shares under the Allocate Option Schemes. The EBT currently holds 892,099 Allocate Shares which are expected to be used to satisfy some of these options. The Company also expects to either request that the EBT purchases a further 107,901 Allocate Shares to satisfy options that will be exercisable as a result of the Acquisition or to cash cancel options over such number of Allocate Shares. Accordingly, the issued and to be issued share capital of Allocate for the purposes of this announcement is 71,352,869 Allocate Shares.

(ii) The Closing Prices for 13 October 2014 and for the calculation of average Closing Prices are taken from the AIM appendix to the Daily Official List.

(iii) Unless otherwise stated, the financial information relating to Allocate is extracted from the audited consolidated financial statements of Allocate for the financial year to 31 May 2014, prepared in accordance with IFRS.

(iv) The number of Allocate Shares in respect of which options shall become exercisable (to the extent they are not already exercisable) as a result of the Acquisition is 4,052,330 Allocate Shares.

APPENDIX IIIIRREVOCABLE UNDERTAKINGS

Allocate Directors' Irrevocable Undertakings

The irrevocable undertakings given by the Allocate Directors named in the table above will remain binding if a higher competing offer for the entire issued and to be issued share capital of Allocate is made, but will cease to be binding: (i) unless the Scheme is announced substantially on the terms and subject to the conditions set out in the Announcement; (ii) if the Announcement is not released on or before 5 p.m. on 14 October 2014 (or such later time and date as the Company and Bidco may agree); (iii) if the Scheme Document (or offer document, as applicable) is not published within 28 days of the date of issue of this announcement (or such later date as the Panel may agree); (iv) if the Scheme does not become effective (or the Offer, as applicable, does not become wholly unconditional) on or before 22 April 2015; or (v) if the Scheme lapses or is withdrawn.

Other Allocate Shareholders' Irrevocable Undertakings

The irrevocable undertakings from Herald Investment Management Ltd, Kabouter Management LLC and GVO Investment Management Ltd, in respect of their respective holdings of 10,536,477, 7,690,108 and 5,691,535 Allocate Shares, representing in aggregate approximately 44.8 per cent. of the ordinary share capital of the Company in issue on 13 October 2014 (being the last practical date prior to the publication of this announcement), will cease to be binding if, inter alia, (i) in the case of the undertaking given by Herald Investment Management Limited, a third party makes or announces a firm intention to make an offer for the Scheme Shares on terms which represent an improvement of more than 16.95 pence per share on the value of the Cash Consideration; (ii) in the case of the undertaking given by Kabouter Management LLC, a third party makes or announces a firm intention to make an offer for the Scheme Shares on terms which represents an improvement of more than 16.95 pence per share on the value of the Cash Consideration; (iii) in the case of the undertaking given by GVO Investment Management Ltd, a third party makes or announces a firm intention to make an offer for the Scheme Shares on terms which represent an improvement of greater than 15.5 pence per share to the value of the Cash Consideration not later than 21 days after the date of the Scheme Document; and (iv) in the case of the undertaking given by Hargreave Hale, a third party makes or announces a firm intention to make an offer for the Scheme Shares on terms which represents an improvement of more than 16.95 pence per share on the value of the Cash Consideration.

APPENDIX IVDEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

For the purposes of this announcement, subsidiary, subsidiary undertaking, undertaking and associated undertaking have the meanings given by the Companies Act.

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this document.

All references to time in this document are to London, UK time unless otherwise stated.