D4T4.L Regulatory News (D4T4)

23 Jul 2008 07:00



Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: Wednesday, 23 July 2008

IS Solutions plc

("IS" or the "Company)

Acquisition of Chapter26 Ltd

IS Solutions plc, the AIM-listed provider of a range of internet design, website development and systems support services to both the public and private sector, announces that on 22 July 2008 it entered into an agreement to acquire the entire issued share capital of Surrey-based Chapter26 Ltd ("Chapter26") for an initial consideration of £719,723 consisting of £447,000 cash and the allotment of 1,239,650 new ordinary shares of 2p each (the "New ordinary Shares") at a price of 22p per share.

Deferred consideration of up to £550,000 may also be payable by the Company subject to achievement of certain financial targets in the period ending 30 June 2009. If paid, this deferred consideration will be paid in equal parts of cash and the allotment of shares in the Company (either by the issue of new ordinary shares or the transfer of existing ordinary shares out of treasury), at a price per share equal to the average mid-market price over the five trading days prior to the end of the relevant period.

Chapter26 is a specialist solutions provider that designs and builds enterprise wide Content Management Solutions ("CMS") that enables people both in and between organisations to collaboratively create, manage, deliver and archive the structured and unstructured information that drives business, from email to video. This is achieved by utilising leading technologies from companies such as EMC Documentum, BEA, Microsoft and VMware with which it has formed strong partnerships.

In the past 12 months Chapter26 generated £112,000 of pre-tax profits on a turnover of £1.93 million (unaudited).

The New Ordinary Shares, which represent approximately 5% of the issued share capital of the Company, will rank pari passu in all respects with the existing ordinary shares in the Company. Application will be made for the New Ordinary Shares to be admitted to trading on the AIM market of the London Stock Exchange and it is expected that dealings will commence on 29 July 2008.

In addition, the Company has cancelled, with effect from 22 July 2008, 1,239,650 ordinary shares currently held in treasury. Accordingly, the Company now holds a total of 423,468 ordinary shares as treasury shares out of a total issued share capital of 24,793,190. The total voting rights of the Company are now 24,369,722 ordinary shares and this number should be used to determine any announceable holdings under the Disclosure and Transparency Rules. John Lythall, Managing Director of IS Solutions, commented:

"IS has a Content Management practice that addresses the small to medium sized/departmental business and with the addition of Chapter26 this will extend our offering into the enterprise market allowing us to capitalise on the fast growing CMS market. With both IS and Chapter26 being Microsoft Gold~Partners our shared skills within the Microsoft practices will complement the technologies between the companies.

"The complimentary client bases of the two operations should also lead to increased sales opportunities for the combined operation and we look forward to working with the new team."

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