Kazera Global Regulatory News (KZG)

Managed Support Services plc

("MSS" or the "Company")

Proposed disposal of the Building Services Division

Proposed New Investing Policy

and

Notice of General Meeting

The Board of MSS today announces that the Company has agreed, conditionally upon the approval of shareholders in General Meeting, to dispose of the entire issued share capital of MSS Facilities Management (comprising the Building Services Division, (the "Division")) to Initial Facilities Management Limited for a consideration of up to £6.5 million (subject to a net asset adjustment at completion).

Further details of the Disposal, including details of the Consideration are set out below under the heading "Principal Terms of the Disposal".

Following Completion, the Group will have no meaningful trading activities. As a result, the Disposal will constitute a fundamental change of business of the Company. Under Rule 15 of the AIM Rules, this change requires shareholder approval and, in accordance with the AIM Rules and the Act, the Company is required to send a circular (the "Circular") to Shareholders setting out the reasons for, and the principal terms of, the Disposal.

The Circular also provides details of the proposed Investing Policy which the Company intends to adopt. The Disposal and the adoption of the Investing Policy are conditional on the approval of shareholders at a General Meeting to be held on 5 December 2011 at which the appropriate Resolutions will be proposed.

The Circular containing details of the Disposal is being posted to Shareholders today and will be available on the Company's website: www.managedsupportservicesplc.com.

Background to and reasons for the Disposal

Following material trading losses in 2007 and 2008, that led to the appointment of a new management team, the Group undertook a significant restructuring and a reduction in operations. The commercial activities remaining, following these management actions, were in the building services markets. It was therefore decided to expand these residual activities by acquisition in order to create a nationwide supplier of building services, ideally with sufficient market scale to appeal to larger customers than the Group enjoyed at the time.

In pursuit of this policy, the Group undertook two principal acquisitions to increase the Group's building services activities, being the acquisitions of Status and ECS, for a total net cost of £6.1m.

The businesses acquired by the Group and the small existing operations were consolidated into two primary trading units based in Manchester and Wembley during the current year to form the Division. The Division also enjoyed considerable new business success gaining larger corporate customers during 2010 and 2011.

However, whilst the Division has been profitable on a stand-alone basis, before Group costs, the Board believes the Division has made insufficient progress particularly in current markets, in creating a building services division of scale. The Board therefore decided that the prospects for the Division would be realised more rapidly if the Division became part of a larger trading group.

Accordingly, following the receipt of unsolicited approaches, the Board circulated financial information on the Division to a number of potential offerors and subsequently agreed terms with the Purchaser as set out below.

Investing Company Status, Proposed Investing Policy

In view of the inevitable delays required to satisfy the Group's outstanding liabilities after completion and the warranty periods arising from previous disposals, the Board will not be in a position to distribute immediately the ultimate net proceeds remaining within the Company.

The Board therefore believes it is in Shareholders' interests during this interim period to examine possible investment opportunities for reinvestment and development, whilst the process of satisfying residual contractual liabilities continues and the warranty claim periods elapse. This will also allow the Ordinary Shares to remain trading on AIM.

Proposed Investing Policy

Following Completion, and the passing of the Resolutions, under Rule 15 of the AIM Rules, the Company will become an Investing Company with no material trading activities.

The Board is therefore seeking shareholder permission for the Investing Policy set out below.

Shareholders should be aware that, under the terms of the Disposal, the Group will not be able to compete with any of the activities within the Division being sold under the proposed Disposal. However, save for this restriction, the Board is seeking permission from shareholders to examine potential opportunities in the broadly based Support Services sector, consistent with the previous experience of the Board.

The Board has experience of operating in a broad range of Support Services markets including the provision of compliance services, building services, software and billing management and an extensive range of business to business services. In considering investment opportunities, the Board believes it would be helpful to take advantage of the previous commercial experience of Board members.

The Board was also able to review a wide range of Support Services opportunities over the last two years as the Group's Compliance Division was built up, prior to its sale in August 2011.

In the event that such an opportunity is identified, the Board believes that the potential acquisition or acquisitions will be exclusively based in the United Kingdom. It would be the intention that the initial financing would come from the residual net proceeds within the Group. If a larger but attractive acquisition was identified and the transaction received in principle support from shareholders, third party financing or an equity fundraising could be considered.

In accordance with AIM Rule 15, the Investing Policy must be approved by Shareholders in a general meeting and the Company must implement the Investing Policy or make an acquisition or acquisitions constituting a reverse takeover under Rule 14 of the AIM Rules within 12 months of the Company becoming an Investing Company.

Failure to do so will result in the suspension of the Ordinary Shares on AIM pursuant to AIM Rule 40. If, following suspension of the Ordinary Shares, they have not been re-admitted to trading on AIM within six months, the admission of the Ordinary Shares to trading on AIM will be cancelled. The Directors will consider whether they should convene a general meeting of the shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to shareholders. To complete this process, any liquidation will need to allow time for the settlement of all creditors and inter alia, agreement of the Group's tax computations with HMRC.

The assessment of whether or not the Investing Policy has been implemented must be made to the satisfaction of AIM.

Proposed Changes to the Board

It is proposed that Jamie Reynolds, the Group's Chief Operating Officer resign from the Board at Completion. The Group has also taken steps to reduce central costs in order to minimise expenditure until either an acquisition is completed or it is agreed to distribute the cash assets of the Group to shareholders.

Principal terms of the Disposal

Prior to the Disposal, the trading activities of the Division were transferred to MSS Facilities Management, a relatively recently formed trading subsidiary on the terms of the Business Sale Agreement. MSS Facilities Management now owns all of the building services activities of the Group.

Pursuant to the Sale Agreement between the Company and the Purchaser, the Company has conditionally agreed, inter alia, following shareholder approval, to sell the entire share capital of MSS Facilities Management to the Purchaser.

The total consideration receivable by MSSBS in respect of the Disposal of MSS Facilities Management and the Business Sale Agreement is a maximum amount of £6.5 million in cash, payable as follows:

·; Cash at completion of £4 million, being consideration for the sale of the issued share capital of

MSS Facilities Management Limited for £1, together with the repayment of an amount of £3,999,999 owed by MSS Facilities Management Limited to MSSBS, which represented part of the consideration receivable by MSSBS under the Business Sale Agreement. The level of cash at Completion will be reduced pro rata to the extent that total novations do not exceed £8.4 million at that date. Reductions arising from this adjustment will instead be paid three months after Completion, as part of the further consideration, if satisfactory novation is received by that date.

·; A further consideration payment of up to £1.5 million, which is dependent upon the satisfactory

novation of customer contracts to MSS Facilities Management in respect of the Building Services contracted customer base. In the event that contracts with a value of not less than £10.5 million (by way of annualised contract value) are novated satisfactorily, the full amount of £1.5 million will become payable. In the event that contracts with a value of less than £8.4 million (by way of annualised contract value) are novated satisfactorily, no further payment will be made. A sliding scale of additional consideration will operate where the value of contracts novated to MSS Facilities Management is between £8.4 million and £10.5 million. The agreements relating to the Disposal provide that the novations are required to be satisfactorily established within 3 months following Completion.

·; The Sale Agreement provides for retentions by the Purchaser in respect of the consideration totalling £1 million, of which up to £0.5 million will be released following satisfactory agreement of the completion balance sheet (expected to be within three months of Completion) and £0.5 million is to be retained for a maximum of six months by the Purchaser as a retention in respect of potential general warranty and indemnity claims.

·; The Sale Agreement includes normal restrictive covenants, together with customary warranties and indemnities which have been provided in favour of the Purchaser by the vendor Group, MSSBS and the Company. The Purchaser is entitled to terminate the Disposal prior to Completion under certain circumstances

Details relating to the Division

The Division has an approximate current annual turnover of £22 million and operates from two principal trading sites, located in central Manchester and Wembley, North West London.

The Division employs approximately 200 people with the senior management team being led by Jamie Reynolds, a Director of the Company, who will be resigning at Completion. He will become a full time employee of an affiliate of the Purchaser. The Division, now operating within the legal entity of MSS Facilities Management, provides a broad range of Mechanical and Electrical engineering services to occupiers of corporate real estate. The services are either provided directly to owner occupiers or indirectly via established managing agents operating on behalf of occupiers.

Typically, the Division provides the full range of management and maintenance services for the clients' building in order to maintain the operation of that building, including sub contracting services not available in-house and services delivered in a partnership structure such as cleaning, guarding and ancillary non engineering services.

In addition, the Division has an important in-house capacity to deliver major, air conditioning related projects works, exclusively to existing customers. These works are an important addition to the offering for the Group and the specialist engineering skills required to deliver major projects are frequently used by existing customers.

The Division comprises primarily the previous acquisitions of Status in December 2009 and ECS which was acquired in September 2010. The balance of the Division is made up of the small residual amounts of turnover retained within the Group following the restructuring conducted in 2008/09.

In the year ended 31 March 2011, the Division had sales of £21.4 million. Operating profit was £1.6 million. Net assets at completion are estimated to be approximately £2.5 million.

Use of Proceeds

The proceeds arising from the Disposal will be used to repay the remaining liabilities of the Group including third party bank indebtedness. The Board will also take steps to redeem the outstanding Loan Notes with a nominal value of £500,000. The Board estimates that the repayment of bank indebtedness, the redemption of the Loan Notes, transaction fees and payments arising in relation to Completion will amount to approximately £3 million.

General Meeting

Set out at the end of the circular to shareholders is a notice convening the General Meeting to be held at the offices of Osborne Clarke, One London Wall, London EC2Y 5EB at 10.00 a.m. on 5 December 2011 for the purposes of considering and, if thought fit, passing the following Resolutions:

Resolution 1, which will be proposed as an ordinary resolution, is to approve the Disposal.

Resolution 2, which will also be proposed as an ordinary resolution, will be for the approval of the new Investing Policy.

Directors' Recommendation

The Directors consider the Disposal and the adoption of the proposed Investing Policy to be in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do so in respect of their own beneficial holdings amounting, in aggregate, to 4,252,536 Ordinary Shares, representing approximately 2 per cent. of the existing issued share capital of the Company.

Definitions

The following definitions apply throughout the circular to shareholders, unless the context requires otherwise:

Expected Timetable of principal events

FOR FURTHER INFORMATION, PLEASE CONTACT: