Begbies Regulatory News (BEG)

12 December 2014

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION IN IT, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR AN INVITATION TO ACQUIRE OR DISPOSE OF ANY SECURITIES.

Begbies Traynor Group plc

Strategic acquisition of a specialist consultancy business to enhance Begbies Traynor Group's market-leading insolvency practice

Placing of 13,094,982 New Ordinary Shares to raise approximately £5.3 million

Acquisition highlights

· Acquisition of Eddisons, a leading UK-based national firm of chartered surveyors offering a wide range of specialist services to banks, insolvency practitioners, and owners and occupiers of commercial property

· Initial consideration of £5 million funded through a Vendor Placing; further earn-out consideration of up to £3.5 million payable in cash or shares

· Acquisition in line with the Group's stated strategy to enhance its market-leading insolvency practice through developing complementary service offerings including valuation consulting

· Transaction expected to be earnings enhancing in the current financial year

Placing highlights

· Equity fundraising to raise approximately £5.3 million (before costs)

- £5 million via vendor placing to satisfy initial consideration

- £0.3 million via cash placing for transaction costs

· Certain directors of the Company and a senior partner in the Group's insolvency business have agreed to subscribe for 1,123,455 Placing Shares in aggregate

· It is expected that admission of the Placing Shares to trading on AIM will become effective, and dealings in the Placing Shares will commence on AIM, on 17 December 2014, at which time the Acquisition will become unconditional in all respects

· The Placing Shares will be eligible for receipt of the interim dividend of 0.6p per share, payable in May 2015

Acquisition of Eddisons Commercial (Holdings) Limited

Begbies Traynor Group plc ("Begbies" or the "Company" or the "Group") is pleased to announce that it has conditionally agreed to acquire (the "Acquisition") the entire issued share capital of Eddisons Commercial (Holdings) Limited ("Eddisons" or the "Firm"), a leading UK-based national firm of chartered surveyors with a specialism in the valuation and disposal of property and business assets.

Overview of Eddisons

Eddisons is a leading UK firm of chartered surveyors, offering a wide range of specialist services to banks, insolvency practitioners, and owners and occupiers of commercial property. The core services offered are valuation and disposal of property including fixed charge property receiverships; valuation and disposal of machinery and business assets; auctions; insolvency insurance brokerage; property and facilities management; and building consultancy and ratings valuations.

The Firm, which was founded in 1844, has approximately 200 full time employees and has UK-wide coverage with offices in Leeds, London, Manchester, Birmingham, Bristol, Glasgow and Nottingham. The Firm is led by an experienced and well-regarded management team, who have owned and managed the business since completing an MBO in 2008 and have existing professional relationships with the Group.

Upon completion, Eddisons will continue to be run by members of the current management team, with the key shareholder directors contracted to remain with the business for at least five years. The Firm will maintain its existing trading brands and will operate as a separate division within the Group.

The business has a strong financial track record with compound annual growth in EBITA* of 21% over the six years since the MBO. Financial results for the year ended 31 March 2014 were revenue* of £13.4 million (2013: £13.1 million) and EBITA* of £1.3 million (2013: £1.3 million). (* from continuing operations normalised to exclude non-recurring items.) The business is being acquired on a cash free/debt free basis.

Reasons for and benefits of the transaction

The transaction is in line with the Group's stated strategy to enhance its market-leading insolvency practice through developing complementary service offerings, including valuation consulting.

Eddisons bring expertise in the valuation and disposal of property and business assets for insolvency, which is intrinsic to the Group's core insolvency practice, and over recent years has been appointed as receiver to over 200 property insolvencies per annum.

The acquisition will enable the Group to utilise Eddisons' expertise on its existing caseload rather than subcontractors, together with marketing the Group's enhanced competencies and service offerings to the combined client base, including banks and other financial institutions. In addition, the Group anticipates that the combination of the two businesses will provide operating synergies through shared property and other overhead costs, with identified savings of £0.5 million fully realisable from March 2016 onwards.

Terms of the Acquisition

Under the terms of the Acquisition, an initial £5 million consideration in cash is payable on completion funded through a Vendor Placing and further potential payments, in cash or equity, of up to £3.5 million may become payable contingent on financial performance, namely:

· £1.5 million cash payable on account over four years, with historic payments subject to claw back if the business subsequently underperforms;

· £1.5 million cash or equity payable after four years, based on Eddisons' cumulative performance over the four year review period;

· £0.5 million cash or equity payable between five and eight years post Acquisition.

The Acquisition is conditional (amongst other things) on the Vendor Placing Shares being admitted to trading on AIM.

Placing

Begbies also announces that Canaccord Genuity Limited ("Canaccord Genuity") and Shore Capital Stockbrokers Limited ("Shore Capital") (together the "Joint Bookrunners") have conditionally placed 12,345,680 new Ordinary Shares of 5 pence each in the capital of Begbies (the "Vendor Placing Shares") at a price of 40.5 pence per Placing Share (the "Placing Price"), raising £5 million to fund the initial consideration due under the Acquisition (the "Vendor Placing"). In addition, the Joint Bookrunners have conditionally placed a further 749,302 new Ordinary Shares of 5 pence each in the capital of Begbies (the "Cash Placing Shares") to raise approximately £0.3 million for transaction costs (the "Cash Placing"). The Vendor Placing and the Cash Placing together are the "Placing". To the extent that the Joint Bookrunners do not procure placees for the Placing Shares they have agreed to subscribe for such Placing Shares themselves, as principal, in accordance with the terms of the Placing Agreement.

The Vendor Placing Shares and the Cash Placing Shares (together the "Placing Shares") represent approximately 14.3 per cent. of the Company's existing issued share capital.

The proceeds of the Vendor Placing will be paid directly to the Vendors pursuant to the terms of a cash realisation agreement between the Joint Bookrunners and the Vendors.

Ric Traynor, Executive Chairman of Begbies, has agreed to subscribe for 617,283 new Ordinary Shares under the Placing at the Placing Price, which will on admission of the Placing Shares to trading on AIM result in a beneficial interest of 27,178,980 shares equating to 26.0 per cent. of the issued share capital of the company.

Graham McInnes, non-executive director, has agreed to subscribe for 61,728 new Ordinary Shares under the Placing at the Placing Price, which will on admission of the Placing Shares to trading on AIM result in a beneficial interest of 917,432 shares equating to 0.9 per cent. of the issued share capital of the company.

John May, non-executive director, has agreed to subscribe for 74,074 new Ordinary Shares under the Placing at the Placing Price, which will on admission of the Placing Shares to trading on AIM result in a beneficial interest of 276,574 shares equating to 0.3 per cent. of the issued share capital of the company.

In addition, Andrew Dick, a senior partner in the Group's insolvency business, has agreed to subscribe for 370,370 Placing Shares.

The Placing Agreement contains provisions (including customary market related provisions) entitling the Joint Bookrunners to terminate the Placing Agreement at any time prior to Admission of the Placing Shares to AIM in certain circumstances.

The Placing Price represents a discount of approximately 8.7 per cent. to the middle market price of 44.375 pence per Ordinary Share at the close of business on 11 December 2014, being the latest practicable date prior to the date of this announcement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares. The issue of the Placing Shares is to be effected by way of a Vendor Placing and a Cash Placing and will be made on a non-pre-emptive basis.

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Admission is expected to become effective on 17 December 2014 and dealings in the Placing Shares will commence at that time. Following admission to trading of the Placing Shares, Begbies will have 104,597,096 Ordinary Shares in issue.

The Appendices to this announcement (which form part of the announcement) set out the terms and conditions of the Placing and expressions used in this announcement shall have the meanings set out in the Definitions section of the Appendices.

Ric Traynor, Executive Chairman of Begbies, commented:

"We are pleased to announce the acquisition of Eddisons today; it brings expertise in the valuation and disposal of property and business assets for insolvency, which is intrinsic to the Group's core insolvency practice; over recent years Eddisons has been appointed as receiver to over 200 property insolvencies per annum.

"The acquisition will enable the Group to utilise Eddisons' expertise on its existing caseload rather than subcontractors, together with marketing the Group's enhanced competencies and service offerings to the combined client base, including banks and other financial institutions. The transaction is expected to be earnings enhancing in the current financial year."

Anthony Spencer, Executive Director of Eddisons, commented:

"We are delighted to become part of the Begbies Traynor Group and believe it represents the next stage in the development of Eddisons with a good cultural fit between the two organisations.

"We are retaining our brand identity and will operate as a discrete business within the combined Group, whilst taking advantage of the opportunities represented by being part of a significant, financially robust, national business."

There will be a call for analysts at 9.30 a.m. today. Analysts who wish to join the call should email MHP on begbies@mhpc.com to register.

For enquiries, please contact:

Information on Begbies Traynor Group can be accessed via the Group's website at www.begbies-traynorgroup.com

Important Information

Canaccord Genuity, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser, joint bookrunner and joint underwriter exclusively for Begbies and is acting for no-one else in connection with the Placing and will not be responsible to anyone other than Begbies for providing the protections afforded to clients of Canaccord Genuity nor for providing advice in connection with the Placing, or any other matter referred to herein.

Shore Capital, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as joint bookrunner and joint underwriter exclusively for Begbies and for no one else in connection with the Placing and will not be responsible to anyone other than Begbies for providing the protections afforded to clients of Shore Capital or for affording advice in relation to the Placing, or any other matter referred to herein.

This summary should be read in conjunction with the full text of the following announcement. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this announcement in its entirety (including the Appendices), and to be making such offer on the terms and subject to the terms and conditions herein, and to be providing the representations, warranties and acknowledgements contained in Appendix I.

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on Begbies' current expectations, estimates and projections about its industry, its beliefs and assumptions. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond Begbies' control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These factors include, amongst others, the ability to consummate the transaction; the ability of Begbies to successfully integrate Eddisons' operations and employees; the ability to realise anticipated synergies; dependence on key personnel; and financial and insurance risk management. Begbies cautions its shareholders not to place undue reliance on these forward-looking statements, which reflect the view of Begbies only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. Begbies will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.

APPENDIX I

Terms and Conditions of the Placing

IMPORTANT INFORMATION FOR PLACEES ONLY

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS DOCUMENT AND THE TERMS AND CONDITIONS SET OUT AND REFERRED TO HEREIN ARE DIRECTED ONLY AT PERSONS SELECTED BY CANACCORD GENUITY LIMITED ("CANACCORD GENUITY") AND/ OR SHORE CAPITAL STOCKBROKERS LIMITED ("SHORE CAPITAL") (CANACCORD GENUITY AND SHORE CAPITAL TOGETHER BEING THE "PLACING AGENTS") WHO ARE "INVESTMENT PROFESSIONALS" FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "FPO") OR "HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC" FALLING WITHIN ARTICLE 49(2) OF THE FPO OR TO PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS DOCUMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.

DISTRIBUTION OF THIS DOCUMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW. PERSONS DISTRIBUTING THIS DOCUMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.

THE ORDINARY SHARES THAT ARE THE SUBJECT OF THE PLACING (THE "PLACING SHARES") ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION, OTHER THAN TO "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE"), WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (THE "FCA") OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States absent registration except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. No public offering of the Placing Shares is being made in the United States. The Placing (as defined below) is being made outside the United States in offshore transactions (as defined in Regulation S under the Securities Act ("Regulation S")) meeting the requirements of Regulation S under the Securities Act. Persons receiving this document (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing.

This document does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United States, Canada, Australia, Japan, the Republic of South Africa or any other jurisdiction in which such offer or solicitation is or may be unlawful (a "Prohibited Jurisdiction"). This document and the information contained herein are not for publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

The distribution of this document, the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law and/or regulation. No action has been taken by the Company, the Placing Agents or any of their respective Affiliates (as defined below) that would permit an offer of the Placing Shares or possession or distribution of this document or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this document are required to inform themselves about and to observe any such restrictions.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this document should seek appropriate advice before taking any action.

Persons needing advice should consult an independent financial adviser. No statement in this document is intended to be a profit forecast and no statement in this document should be interpreted to mean that the earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Begbies Traynor Group plc and for no one else in connection with the Placing and will not be responsible to anyone other than Begbies Traynor Group plc for providing the protections afforded to clients of Canaccord Genuity Limited or for affording advice in relation to the Placing, or any other matters referred to herein.

Shore Capital Stockbrokers Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Begbies Traynor Group plc and for no one else in connection with the Placing and will not be responsible to anyone other than Begbies Traynor Group plc for providing the protections afforded to clients of Shore Capital Stockbrokers Limited or for affording advice in relation to the Placing, or any other matters referred to herein.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral offer to take up Placing Shares is deemed to have read and understood this document in its entirety and to be providing the representations, warranties, undertakings, agreements and acknowledgements contained herein.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, REGULATORY, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES.

Details of the Placing Agreement and the Placing Shares

The Company has entered into a placing agreement (the "Placing Agreement") with Canaccord Genuity and Shore Capital as placing agents, under which the Placing Agents have, subject to the terms set out therein, agreed to use reasonable endeavours, as agents of the Company, to procure Placees for the Placing Shares (the "Placing"). To the extent that the Placing Agents do not procure Placees for the Placing Shares, the Placing Agents agree severally, and not jointly and severally, to themselves subscribe for the Placing Shares, as principal, on and subject to the terms of the Placing Agreement.

The Placing is conditional upon, inter alia, Admission becoming effective and on the Placing Agreement becoming unconditional and not being terminated in accordance with its terms. The Placing is also conditional upon, inter alia, the conditional agreement pursuant to which the Acquisition is to be effected (the "Acquisition Agreement") becoming wholly unconditional save for any condition relating to the Placing Agreement becoming unconditional.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with each other.

The Placing Shares will be issued free of any encumbrance, lien or other security interest.

The Company, subject to certain exceptions, has agreed not to allot, issue or grant any rights in respect of its Ordinary Shares in the period of 90 days from the date of Admission without the prior written consent of the Placing Agents (such consent not to be unreasonably withheld or delayed).

Application for admission to trading

Application will be made to the London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on the AIM market of the London Stock Exchange ("Admission"). It is expected that Admission will become effective and that dealings will commence on 17 December 2014, and in any event no later than 24 December 2014.

Participation in, and principal terms of, the Placing

Each of the Placing Agents and its respective Affiliates (as defined below) is entitled to participate as a Placee.

The placing price will be a fixed price of 40.5 pence per Placing Share (the "Placing Price") and will be payable to either Canaccord Genuity or Shore Capital (as appropriate) by all Placees.

Prospective Placees will be identified and contacted by Canaccord Genuity and/ or Shore Capital.

Canaccord Genuity or Shore Capital will re-contact and confirm orally to Placees the size of their respective allocations and a trade confirmation will be dispatched as soon as possible thereafter. Canaccord Genuity's or Shore Capital's oral confirmation of the size of allocations and each Placee's oral commitments to accept the same (whether occurring before or after the publication of this Announcement) will constitute a legally binding agreement pursuant to which each such Placee will be required to accept the number of Placing Shares allocated to the Placee at the Placing Price and otherwise on the terms and subject to the conditions set out herein and subject to the articles of association of the Company.

The Placing Agents reserve the right to scale back the number of Placing Shares to be subscribed by any Placee. The Placing Agents also reserve the right not to accept offers to subscribe for Placing Shares or to accept such offers in part rather than in whole. The Placing Agents shall be entitled to effect the Placing by such method as they shall in their sole discretion determine. To the fullest extent permissible by law, neither of the Placing Agents nor any holding company thereof, nor any subsidiary, branch or affiliate of the Placing Agents (each an "Affiliate") nor any person acting on behalf of any of the foregoing shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of the Placing Agents nor any Affiliate thereof nor any person acting on its or their behalf shall have any liability to Placees in respect of its conduct of the Placing. No commissions will be paid to Placees or directly by Placees in respect of any Placing Shares.

Each Placee's obligations will be owed to the Company and to the Placing Agents. Following the oral confirmation referred to above, each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Company and the relevant Placing Agent as agent of the Company, to pay to the relevant Placing Agent (or as such Placing Agent may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire. The Company shall allot such Placing Shares to each Placee following each Placee's payment to the relevant Placing Agent of such amount.

All obligations of the Placing Agents under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing".

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of the Placing Agents under the Placing Agreement are conditional, inter alia, on:

1. Admission occurring by no later than 8.00 a.m. on 17 December 2014 (or such later date as may be agreed between the Company and the Placing Agents, not being later than 24 December 2014);

2. the Company delivering, on the day of (and prior to) Admission, to the Placing Agents a certificate confirming, inter alia, that none of the warranties and undertakings given by the Company in the Placing Agreement has been breached or was untrue, inaccurate or misleading when made or would cease to be true and accurate were it to be repeated by reference to the facts subsisting on the date of the certificate;

3. the Company allotting, subject only to Admission, the Placing Shares to Placees in accordance with the Placing Agreement;

4. there having been no Material Adverse Change (as defined in the Placing Agreement); and

5. the Acquisition Agreement becoming wholly unconditional save for any condition in it as to the Placing Agreement becoming unconditional and as to Admission.

If (a) the conditions are not fulfilled (or to the extent permitted under the Placing Agreement waived by the Placing Agents), or (b) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and each Placee's rights and obligations hereunder shall cease and determine at such time and no claim may be made by a Placee in respect thereof. Neither of the Placing Agents, nor the Company, nor any of their respective Affiliates shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement or in respect of the Placing generally.

By participating in the Placing, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described above and under "Right to terminate under the Placing Agreement" below, and will not be capable of rescission or termination by the Placee.

Right to terminate under the Placing Agreement

The Placing Agents may, at any time before Admission, terminate the Placing Agreement by giving notice to the Company if:

a) in the opinion of the Placing Agents (acting in good faith) any Warranty (as defined in the Placing Agreement) is not or has ceased to be true and accurate (in any respect which is material in the context of the Placing) or not misleading by reference to the facts and circumstances then existing; or

b) in the opinion of the Placing Agents (acting in good faith) the Company fails to comply with any of its obligations under the Placing Agreement or the Acquisition Agreement; or

c) in the opinion of the Placing Agents (acting in good faith) there has been a Material Adverse Change (as defined in the Placing Agreement); or

d) in the opinion of the Placing Agents (acting in good faith) there has been a change in national or international financial, political, economic or stock market conditions (primary or secondary); an incident of terrorism, outbreak or escalation of hostilities, war, declaration of martial law or any other calamity or crisis; a suspension or material limitation in trading of securities generally on any stock exchange; any change in currency exchange rates or exchange controls or a disruption of settlement systems or a material disruption in commercial banking as would be likely to have a materially prejudicial effect on the Placing or make it impracticable or inadvisable to proceed with the Placing; or

e) in the opinion of the Placing Agents (acting in good faith) there has occurred a material adverse change or a prospective material adverse change in United Kingdom taxation affecting the Placing Shares or the transfer thereof or exchange controls have been imposed by the United Kingdom, the United States or a member of the European Union.

By participating in the Placing, each Placee agrees with the Placing Agents that the exercise by the Placing Agents of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Placing Agents and that neither of the Placing Agents need make any reference to the Placees in this regard and that, to the fullest extent permitted by law, the Placing Agents shall not have any liability whatsoever to the Placees in connection with any such exercise.

No Prospectus

No offering document or prospectus has been or will be prepared in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this document and any information previously published by or on behalf of the Company by notification to a Regulatory Information Service (as defined in the AIM Rules for Companies of the London Stock Exchange). Each Placee, by accepting a participation in the Placing, agrees that the content of this document is exclusively the responsibility of the Company and confirms to the Placing Agents and the Company that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of the Placing Agents (other than the amount of the relevant Placing participation in the oral confirmation given to Placees and the trade confirmation referred to below), any of their respective Affiliates, any persons acting on their behalf or the Company and neither the Placing Agents nor any of their respective Affiliates, nor any persons acting on their behalf, nor the Company will be liable for the decision of any Placee to participate in the Placing based on any other information, representation, warranty or statement which the Placee may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons). By participating in the Placing, each Placee acknowledges to and agrees with the Placing Agents for themselves and as agents for the Company that, except in relation to the information contained in this document, it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN GB00B0305S97) following Admission will take place within the CREST system, using the DVP mechanism, subject to certain exceptions. The Placing Agents reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means that they deem necessary, if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this document or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to it, the Placing Price, the aggregate amount owed by such Placee to the relevant Placing Agent and settlement instructions. Placees procured by Canaccord Genuity should settle against CREST ID: 805 and Placees procured by Shore Capital should settle against CREST ID: 601. It is expected that such trade confirmation will be despatched on 12 December 2014 and that this will also be the trade date. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which it has in place with the relevant Placing Agent.

It is expected that settlement will be on 17December 2014 on a T+3 basis in accordance with the instructions set out in the trade confirmation, unless otherwise notified by the Placing Agents.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of 2 percentage points above the base rate of Barclays Bank Plc.

Each Placee is deemed to agree that if it does not comply with these obligations, the Placing Agents may sell any or all of the Placing Shares allocated to the Placee on such Placee's behalf and retain from the proceeds, for their own account and profit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The Placee will, however, remain liable for any shortfall below the aggregate amount owed by such Placee and it may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, the Placee should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in the Placee's name or that of its nominee or in the name of any person for whom the Placee is contracting as agent or that of a nominee for such person, such Placing Shares will, subject as provided below, be so registered free from any liability to PTM levy, stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax is payable in respect of the issue of the Placing Shares, neither the Placing Agents nor the Company shall be responsible for the payment thereof. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and Warranties

By participating in the Placing, each Placee (and any person acting on such Placee's behalf):

1. represents and warrants that it has read and understood this document in its entirety and acknowledges that its participation in the Placing will be governed by the terms of this document;

2. represents and warrants that it has the power and authority to subscribe for the Placing Shares to be issued to it under the Placing and to execute and deliver all documents necessary for such subscription and the person orally committing to subscribe for the Placing Shares on its behalf has been duly authorised to do so;

3. acknowledges that no prospectus or offering document has been prepared in connection with the placing of the Placing Shares;

4. acknowledges that the Placing is conditional upon, inter alia, the Acquisition Agreement becoming wholly unconditional save for the condition in it relating to the Placing Agreement becoming unconditional;

5. agrees to indemnify on an after-tax basis and hold harmless each of the Company, the Placing Agents, their respective Affiliates and any person acting on its behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this document and further agrees that the provisions of this document shall survive after completion of the Placing;

6. acknowledges that the new Placing Shares of the Company will be admitted to the AIM market of the London Stock Exchange, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the London Stock Exchange (collectively, the "Exchange Information") and that the Placee is able to obtain or access the Exchange Information without undue difficulty;

7. acknowledges that neither the Placing Agents, nor any of their respective Affiliates nor any person acting on their behalf has provided, and will not provide it with any material or information regarding the Placing Shares or the Company; nor has it requested the Placing Agents, nor any of their respective Affiliates nor any person acting on its or their behalf to provide it with any such material or information;

8. acknowledges that the content of this document is exclusively the responsibility of the Company and that neither of the Placing Agents, nor any of their respective Affiliates nor any person acting on their behalf will be responsible for or shall have any liability for any information, representation or statement relating to the Company contained in this document or any information previously published by or on behalf of the Company and neither of the Placing Agents, nor any of their respective Affiliates nor any person acting on its or their behalf will be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this document or otherwise. Each Placee represents and warrants that it has not relied on either of the Placing Agents nor any of their respective Affiliates nor any person acting on its or their behalf in connection with any investigation as to the accuracy of any information contained in this document or any Exchange Information. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing to subscribe for the Placing Shares is contained in this document and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares, and that it has relied on its own investigation with respect to the Placing Shares and the Company in connection with its decision to subscribe for the Placing Shares and acknowledges that it is not relying on any investigation that the Placing Agents, any of their respective Affiliates or any person acting on their behalf may have conducted with respect to the Placing Shares or the Company and none of such persons has made any representations to it, express or implied, with respect thereto;

9. acknowledges that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has had sufficient time to consider and conduct its own investigation with respect to the offer and subscription for the Placing Shares, including the tax, legal and other economic considerations and has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

10. acknowledges that it has not relied on any information relating to the Company contained in any research reports prepared by either of the Placing Agents, their respective Affiliates or any person acting on their or any of their Affiliates' behalf and understands that (i) neither of the Placing Agents, nor any of their respective Affiliates nor any person acting on its or their behalf has or shall have any liability for public information or any representation; (ii) neither of the Placing Agents, nor any of their respective Affiliates nor any person acting on its or their behalf has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of this document or otherwise; and that (iii) neither of the Placing Agents, nor any of their respective Affiliates nor any person acting on its or their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of publication, the date of this document or otherwise;

11. represents and warrants that (i) it is entitled to acquire the Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it; (ii) it has fully observed such laws and regulations and obtained all such governmental and other guarantees and other consents and authorities which may be required thereunder and complied with all necessary formalities; (iii) it has all necessary capacity to commit to participation in the Placing and to perform its obligations in relation thereto and will honour such obligations; (iv) it has paid any issue, transfer or other taxes due in connection with its participation in any territory and (v) it has not taken any action which will or may result in the Company, the Placing Agents, any of their Affiliates or any person acting on its or their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing;

12. represents and warrants that the issue to the Placee, or the person specified by the Placee for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance system;

13. represents and warrants that it understands that the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States (as defined below) and that the Company has not been registered as an "investment company" under the United States Investment Company Act of 1940, as amended;

14. represents and warrants that neither it nor its Affiliates nor any person acting on its or their behalf have engaged or will engage in any "directed selling efforts" with respect to the Placing Shares;

15. represents and warrants that it will be, (a) the beneficial owner of such Placing Shares and is neither a person located in the United States of America, its territories or possessions, any state of the United States or the District of Columbia (the "United States") nor on behalf of a person in the United States, (b) acquiring the Placing Shares in an offshore transaction (as defined in Regulation S under the Securities Act) and (c) will not offer or sell, directly or indirectly, any of the Placing Shares in the United States except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

16. represents and warrants that, if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of the Managers has been given to the offer or resale;

17. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to "qualified investors" as defined in Article 2.1(e) of the Prospectus Directive;

18. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission of Placing Shares except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (which means Directive 2003/71/EC, as amended, and includes any relevant implementing measure in any member state);

19. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which it is permitted to do so pursuant to section 21 of FSMA;

20. represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom;

21. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-terrorism Crime and Security Act 2001 and the Money Laundering Regulations (2007) (the "Regulations") and, if it is making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

22. represents and warrants that it is (a) a person falling within Article 19(5) of the FPO or (b) a person falling within Article 49(2)(a) to (d) of the FPO and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

23. represents and warrants that it is a qualified investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;

24. undertakes that it (and any person acting on its behalf) will pay for the Placing Shares acquired by it in accordance with this document on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as the Placing Agents may, in their absolute discretion, determine and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this document) which may arise upon the sale of such Placee's Placing Shares on its behalf;

25. acknowledges that neither of the Placing Agents, nor any of their respective Affiliates nor any person acting on its or their behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Placing, and acknowledges that neither of the Placing Agents, any of their Affiliates nor any person acting on its or their behalf has any duties or responsibilities to it for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of the Placing Agents' rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

26. undertakes that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) the Placee or (b) the Placee's nominee, as the case may be, (ii) neither of the Placing Agents nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement and (iii) the Placee and any person acting on its behalf agrees to acquire the Placing Shares on the basis that the Placing Shares will be allotted to the CREST stock account of one of the Placing Agents which will hold them as settlement agent as nominee for the Placees until settlement in accordance with its standing settlement instructions with payment for the Placing Shares being made simultaneously upon receipt of the Placing Shares in the Placee's stock account on a delivery versus payment basis;

27. acknowledges that any agreements entered into by it pursuant to these terms and conditions, and any non-contractual obligations arising out of or in connection with such agreements, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the courts of England and Wales as regards any claim, dispute or matter arising out of any such contract;

28. acknowledges that it irrevocably appoints any director of the relevant Placing Agent as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;

29. represents and warrants that it is not a resident of any Prohibited Jurisdiction and acknowledges that the Placing Shares have not been and will not be registered nor will a prospectus be cleared in respect of the Placing Shares under the securities legislation of any Prohibited Jurisdictions and, subject to certain exceptions, may not be offered, sold, taken up, renounced, delivered or transferred, directly or indirectly, within any Prohibited Jurisdiction;

30. represents and warrants that any person who confirms to either Placing Agent on behalf of a Placee an agreement to subscribe for Placing Shares and/or who authorises either Placing Agent to notify the Placee's name to the Company's registrar, has authority to do so on behalf of the Placee;

31. acknowledges that the agreement to settle each Placee's acquisition of Placing Shares (and/or the acquisition of a person for whom it is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company of the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Placing Agents will be responsible. If this is the case, the Placee should take its own advice and notify the Placing Agents accordingly;

32. acknowledges that the Placing Shares will be issued and/or transferred subject to the terms and conditions set out in this document;

33. acknowledges that when a Placee or any person acting on behalf of the Placee is dealing with a Placing Agent any money held in an account with the relevant Placing Agent on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Canaccord Genuity and/ or Shore Capital (as appropriate) money in accordance with the client money rules and will be used by Canaccord Genuity and/ or Shore Capital in the course of its business; and the Placee will rank only as a general creditor of Canaccord Genuity and/ or Shore Capital (as the case may be);

34. acknowledges and understands that the Company, the Placing Agents, and others will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, undertakings and acknowledgements;

35. acknowledges that the basis of allocation will be determined by the Placing Agents at their absolute discretion. The right is reserved to reject in whole or in part and/or scale back any participation in the Placing;

36. confirms that it irrevocably authorises the Company and the Placing Agents to produce this announcement pursuant to, in connection with, or as maybe required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein; and

37. acknowledges and confirms that its commitment to subscribe for Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing.

The acknowledgements, agreements, undertakings, representations and warranties referred to above are given to each of the Company and the Placing Agents (for their own benefit and, where relevant, the benefit of their respective Affiliates and any person acting on their behalf) and are irrevocable.

No claim shall be made against the Company, the Placing Agents, their respective Affiliates or any other person acting on behalf of any of such persons by a Placee to recover any damage, cost, charge or expense which it may suffer or incur by reason of or arising from the carrying out by it of the work to be done by it pursuant hereto or the performance of its obligations hereunder or otherwise in connection with the Placing.

No UK stamp duty or stamp duty reserve tax should be payable to the extent that the Placing Shares are issued or transferred (as the case may be) into CREST to, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee.

Any arrangements to issue or transfer the Placing Shares into a depositary receipts system or a clearance service or to hold the Placing Shares as agent or nominee of a person to whom a depositary receipt may be issued or who will hold the Placing Shares in a clearance service, or any arrangements subsequently to transfer the Placing Shares, may give rise to stamp duty and/or stamp duty reserve tax, for which neither the Company nor the Placing Agents will be responsible and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such stamp duty or stamp duty reserve tax undertakes to pay such stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Placing Agents in the event that any of the Company and/or Canaccord Genuity and/ or Shore Capital has incurred any such liability to stamp duty or stamp duty reserve tax.

In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

All times and dates in this document may be subject to amendment. Canaccord Genuity and/ or Shore Capital shall notify the Placees and any person acting on behalf of the Placees of any such changes.

This document has been issued by the Company and is the sole responsibility of the Company.

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Placing Agents do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

The rights and remedies of the Placing Agents and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise or partial exercise of one will not prevent the exercise of others.

Each Placee may be asked to disclose in writing or orally to the Placing Agents:

a) if he is an individual, his nationality; or

b) if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

APPENDIX II

Definitions

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