PHD.L Regulatory News (PHD)

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

FURTHER, THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY NEW SHARES OR OTHER SECURITIES OF PROACTIS HOLDINGS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER, ISSUE OR SOLICITATION WOULD BE UNLAWFUL.

PROACTIS Holdings PLC

Acquisition of Millstream Associates Limited

Proposed placing to raise up to £12.5 million

PROACTIS Holdings PLC ("PROACTIS", the "Group" or the "Company"), the specialist Spend Control software provider, is pleased to announce that it has entered into a conditional agreement (the "Acquisition Agreement") to acquire the entire issued share capital of Millstream Associates Limited ("Millstream"), for a consideration of £15.5 million on a cash free/debt free and normalised working capital basis (the "Acquisition").

The Acquisition is to be funded by the combination of a proposed placing of up to 9,259,260 new ordinary shares of 10 pence each (the "Placing Shares") in PROACTIS at a placing price of 135 pence per Placing Share (the "Placing Price") to raise up to approximately £12.5 million (the "Placing") and a revolving credit facility of £6.0 million.

The board of directors of the Company (the "Board") believes that Millstream, a provider of eProcurement systems and services to the public sector, is complementary to PROACTIS' existing business and that the rationale for the Acquisition is compelling and, at the same time, consistent with the Company's stated strategy of growing organically and through carefully selected acquisitions that meet the Company's specific criteria.

Highlights of the Acquisition

· The Acquisition is in line with PROACTS' growth and acquisition strategy

· Millstream has a track record of conservative revenue growth with strong profit and cash generation, reporting revenues of £4.9 million and adjusted EBITDA (unaudited) of £2.0 million for the year ended 30 June 2016

· The Company has conditionally agreed to acquire Millstream for a consideration of £15.5 million on a cash free/debt free and normalised working capital basis

· Millstream provides eProcurement solutions to:

o Over 4,000 customers for its Tenders Direct product

o Over 50 public sector customers and more than 500 contributors for its bespoke portals and myTenders products

· The acquisition broadens the PROACTIS product offering and further expands its customer base providing cross-sell opportunities

· The Board expects the Acquisition to be immediately earnings enhancing

Highlights of the Placing

· Assuming all the Placing Shares are subscribed, the Placing is expected to raise gross proceeds of approximately £12.5 million to part-fund the Acquisition

· Assuming all the Placing Shares are subscribed, they will represent approximately 18.9 per cent. of the Company's enlarged issued share capital immediately following Admission (as defined below)

· The Placing will be conditional upon, amongst other things, admission of the Placing Shares to trading on AIM ("Admission"). It is expected that Admission will become effective on 15 November 2016

The Placing is being conducted through an accelerated bookbuild process which will be launched immediately following this announcement (the "Bookbuild"). finnCap Ltd ("finnCap" or the "Bookrunner") is sole broker in connection with the Placing.

Rod Jones, Chief Executive of PROACTIS, said:

"The acquisition of Millstream represents a significant step in our growth strategy, substantially increasing the scale of the Group. The acquisition broadens both the product offering and the customer base on the buy side of the procurement process whilst also bringing scale of operation on the strategically important supply side of the procurement process. Millstream is a clear complementary fit to the Group and provides some potential upside with cross-selling opportunities into both the PROACTIS and Millstream customer bases."

Enquiries:

Additional information on the Placing is included below. Attention is drawn to the section headed 'Important Information' below and to the Appendix containing the terms and conditions of the Placing (representing important information for Placees only). The number of Placing Shares to be issued in connection with the Placing will be agreed by the Company and finnCap at the close of the Bookbuild, and the results of the Placing will be announced as soon as practicable thereafter. The timing of the closing of the book, pricing and allocations is at the absolute discretion of the Company and finnCap.

Terms used but not defined in this announcement shall have the meanings given to such terms in the Appendix.

The information communicated in this announcement (including the Appendix) contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

1. Background to and strategic rationale for the Acquisition and Placing

The Acquisition is in line with PROACTIS' stated growth strategy, with Millstream having strategically complementary solutions and technology, along with an attractive customer base. The historical financial profile of Millstream has included conservative revenue growth, with the majority of revenue being recurring in nature, with strong profit margins and cash generation. The Board anticipates cross selling opportunities to develop following the completion of the acquisition ("Completion") and the Board believes that Millstream's supply side expertise and knowhow will support PROACTIS' supplier commerce offering. The Acquisition is expected to be immediately earnings enhancing following its Completion. The Board looks forward to working with the Millstream management team through the integration process and, further forward, to realising the potential synergies of the combination.

The Placing will assist the Company in delivering on its growth strategy through the acquisition of Millstream, with the balance of the consideration being funded through a new revolving credit facility, details of which are set out in paragraph 5 below.

2. Terms of the Acquisition Agreement

Pursuant to the terms of the Acquisition Agreement, consideration of £15.5 million (on a cash free/debt free and normalised working capital basis) will be paid to the vendors of Millstream (the "Vendors"). A cash payment will be made by the Company on Completion (exclusive of the amount attributable to the property, as referred to below) of approximately £16.5 million, being the £15.5 million plus approximately £1.0 million pursuant to a cash/debt free and working capital adjustment. Following agreement or determination of completion accounts in accordance with the Acquisition Agreement an adjusting payment (either to or by the Company) will be made on a £ for £ basis.

Completion of the Acquisition is conditional upon payment of the purchase price under the Acquisition Agreement, following receipt of the net Placing proceeds and receipt of £6.0 million under the new revolving credit facility by the Company.

In addition to the payment of approximately £16.5 million referred to above, the Company has also agreed to pay a further £2.0 million to the Vendors to reflect the value of the freehold property owned by Millstream, and from where it operates. Immediately following Completion, a company connected with certain of the Vendors will purchase that property from Millstream for £2.0 million (plus VAT) and then immediately lease it back to Millstream (the "Sale and Leaseback"). This lease will be for an initial term of five years (with options for Millstream either to terminate the lease after two years, or to extend it for a further five years after expiry of the initial term) and at an initial rent of £150,000 per annum (subject to an open market review at the start of the second five year term (if it is renewed)).

3. Background to Millstream

Millstream is a UK technology driven business that was established in 1989 and which provides eProcurement solutions to large buying organisations, principally in the public sector, and tailored tender notification information to suppliers looking for new business opportunities. Millstream's eProcurement solutions support both buyers and suppliers primarily in the UK, through four solutions:

• Tenders Direct: an annual subscription based service for suppliers (supply side) that are targeting the public sector for new business opportunities. For the financial year to 30 June 2016 ("FY16"), Tenders Direct accounted for approximately 70.0 per cent. of Millstream's revenue, is recurring in nature and had over 4,000 supply side customers.

• Bespoke Portal Services: delivered under multi-year contracts for the Scottish Government (Public Contracts Scotland) and Welsh Government (Sell2Wales), these services accounted for approximately 15.0 per cent. of revenue in FY16. 

• myTenders: annual subscription based services for procurement portals for buying organisations, predominately in the UK, these services accounted for approximately 10.0 per cent. of revenue in FY16 and is recurring in nature.

• Training: addressing topical issues within the eProcurement domain, these workshops and seminars are designed to assist attendees on how to implement procurement best practice. These services accounted for approximately 5.0 per cent. of revenue in FY16.

4. Millstream summary financials

The profit and loss account below includes certain one-off costs and other costs which are not expected to be recurring. Accordingly, an unaudited normalised EBITDA is provided below in order to give what the Board believes to be a better illustration of the profitability of the underlying business acquired.

5. New debt facilities

The Company is pleased to announce that it has agreed a new £15.2 million debt facility with HSBC Bank plc ("HSBC"), through a £4.2 million senior loan, repayable over three years with a coupon rate of 1.95 per cent. over LIBOR, and an £11.0 million revolving credit facility, repayable after four years with a ratcheted coupon rate no lower than 1.75 per cent. over LIBOR and no higher than 2.5 per cent. over LIBOR (together the "Facilities"). The Facilities replace the Company's three existing term loan facilities with HSBC, £3.35 million of which was drawn down in aggregate, as at 9 November 2016, being the latest practicable date prior to this Impact Announcement.

The financing raised under these Facilities is to be used in part to fund the Acquisition and also to provide working capital for the enlarged Group. Following completion of the Acquisition and the Sale and Leaseback, the Company expects that approximately £7.7 million will be drawn down under the Facilities.

6. Details of the Placing

PROACTIS is proposing to raise up to approximately £12.5 million of gross proceeds from the Placing, through the issue by the Company of up to 9,259,260 Placing Shares at a price of 135 pence per Share in order to part-fund the Acquisition, from institutional investors. Assuming all the Placing Shares are subscribed, they will represent approximately 18.9 per cent. of the Company's enlarged issued share capital immediately following Admission.

The Placing Price of 135 pence per Share represents a premium of 9.3 per cent. to the closing mid-market price of 123.5 pence per Share on 9 November 2016, being the last practicable date prior to the announcement of the Placing and the Acquisition.

finnCap will carry out an accelerated bookbuild offering for the Placing. The Bookbuild will open immediately following this announcement and may close at any time thereafter. The closing of the book shall be determined by finnCap in its absolute discretion and will be announced as soon as is practicable by way of an announcement on a Regulatory Information Service in the UK.

The Placing will be conditional upon (amongst other things) Admission becoming effective, upon the Placing Agreement becoming unconditional in all respects and not being terminated in accordance with its terms and the Acquisition Agreement not having been terminated in accordance with its terms and conditions before Admission.

The Placing will not be conditional on completion of the Acquisition. As a result, it is possible that the Placing Shares could be issued without the Acquisition proceeding.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. By choosing to participate in the Placing and by making an oral or written offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be subscribing for Placing Shares subject to the terms and conditions in it, and to be providing the confirmations, agreements, representations, warranties and acknowledgements contained in the Appendix. The Placing will be made by way of a "cash box" structure, summarised below, and will be on a non-pre-emptive basis.

Under the "cash box" structure, the Company and finnCap agree to subscribe for ordinary shares in a newly-incorporated Jersey company ("Newco"). Payments from Placees pursuant to the Placing must be made directly to finnCap. The funds will be used by finnCap to subscribe for redeemable preference shares ("RP Shares") in Newco. The Company will allot and issue the Placing Shares on a non-pre-emptive basis to Placees in consideration of finnCap transferring its holdings of ordinary shares and RP Shares in Newco to the Company. Accordingly, instead of receiving cash as consideration for the issue of Placing Shares, immediately following Admission, the Company will own the entire issued share capital of Newco whose only asset will be its cash reserves, which will represent an amount equal to the net proceeds of the Placing. The Company will be able to use this amount by redeeming the RP Shares it holds in Newco and, during any interim period prior to redemption, by procuring that Newco lends the amount to the Company (or any other member of its Group).

The Company has given certain customary warranties and indemnities to finnCap in the Placing Agreement and pursuant to other agreements entered into in connection with the "cash box" Placing. In addition, NewCo has given certain customary warranties to finnCap under such other agreements.

7. Admission, settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that such Admission will occur at 8:00 am on 15 November 2016. Admission is subject to the Placing Agreement becoming unconditional in all respects (save only for Admission) and not being terminated in accordance with its terms.

The Placing Shares will, when issued, rank in full for all dividends with a record date on or after the date of Admission and otherwise equally with the existing Shares from the date of Admission.

Following Admission (and assuming all the Placing Shares are issued and no other Shares are issued between the date of this announcement and Admission) the Company's issued share capital will comprise 49,094,419 Shares. The Company does not hold any Shares in treasury. Therefore (unless otherwise announced), following the issue of the Placing Shares (and assuming that they are all issued), the total number of voting rights in the Company will be 49,094,419. This figure of 49,094,419 may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority ("FCA").

IMPORTANT INFORMATION

The distribution of this announcement (including the Appendix) and the offering of the Placing Shares in certain jurisdictions may be restricted or prohibited by law or regulation. Persons distributing this announcement (including the Appendix) must satisfy themselves that it is lawful to do so. No action has been taken by the Company or finnCap that would permit an offering of such shares or possession or distribution of this announcement (including the Appendix) or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement (including the Appendix) comes are required by the Company and finnCap to inform themselves about, and to observe, such restrictions.

This announcement (including the Appendix) contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by any such forward-looking statement. Statements contained in this announcement (including the Appendix) regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement (including the Appendix) is subject to change without notice and neither finnCap nor, except as required by applicable law, the Company assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

finnCap, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as nominated adviser and broker to the Company in relation to the Placing and Admission and is not acting for any other persons in relation to the Placing and Admission. finnCap is acting exclusively for the Company and for no one else in relation to the matters described in this announcement (including the Appendix) and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of finnCap, or for providing advice in relation to the contents of this announcement (including the Appendix) or any matter referred to in it. The responsibilities of finnCap as the Company's nominated adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc and are not owed to the Company or to any director or shareholder of the Company or any other person, in respect of his decision to acquire shares in the capital of the Company in reliance on any part of this announcement (including the Appendix), or otherwise.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by finnCap or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement (including the Appendix) or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

APPENDIX - IMPORTANT INFORMATION FOR PLACEES ONLY

This announcement, including this Appendix, and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland or any other jurisdiction in which such release, publication or distribution would be unlawful (a "Prohibited Jurisdiction").

Members of the public are not eligible to take part in the Placing. This appendix and the terms and conditions set out herein are for information purposes only and are directed only at persons selected by finnCap who fall within the description that, if they were clients of finnCap, could be categorised as a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the Financial Conduct Authority's Conduct of Business Sourcebook and therefore fall within the provisions of point (1) of section (i) of Annex (III) to the Markets in Financial Instruments Directive and furthermore, who are: (a) persons in Member States of the European Economic Area who are qualified investors as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended ("FSMA"), ("qualified investors") being persons falling within the meaning of Article 2(1)(e) of the EU Prospectus Directive (which means Directive 2003/71/EC and includes any relevant implementing directive measure in any member state) (the "Prospectus Directive"); (b) in the United Kingdom, qualified investors who are persons who (i) have professional experience in matters relating to investments who fall within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the "Order"); (ii) fall within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order and are qualified investors; or (iii) are persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons"). This Appendix and the terms and conditions set out herein must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Appendix and the terms and conditions set out herein relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

This announcement, including this Appendix, is for information purposes only and does not itself constitute an offer for sale or subscription of any securities in the Company. This announcement, including this Appendix, has been issued by and is the sole responsibility of the Company.

This announcement, including this Appendix, is not an offer for sale or subscription in any jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of any such jurisdiction. This announcement, including this Appendix, is not an offer of or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Neither the United States Securities and Exchange Commission nor any securities regulatory authority of any state or other jurisdiction of the United States has approved or disapproved of an investment in the securities or passed upon or endorsed the merits of the Placing or the accuracy or adequacy of the contents of this announcement, including this Appendix. Any representation to the contrary is a criminal offence in the United States. No public offering of securities is being made in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this announcement, including this Appendix, will not be accepted.

Each Placee should consult with its own advisers as to legal, tax, business and related aspects of an investment in Placing Shares.

The price of shares in the Company and the income from them (if any) may go down as well as up and investors may not get back the full amount invested on disposal of shares.

1. Definitions

In this Appendix:

a) "Admission" means the admission of the Placing Shares to trading on AIM;

b) "finnCap Person" means any person being (i) finnCap Ltd ("finnCap"), (ii) an undertaking which is a subsidiary undertaking of finnCap, (iii) a parent undertaking of finnCap or (other than finnCap) a subsidiary undertaking of any such parent undertaking, or (iv) a director, officer, agent or employee of any such person;

c) "Impact Announcement" means the Company's regulatory announcement (set out above) of the Placing (including this Appendix);

d) "Group" means the group comprising the Company and its subsidiary undertakings;

e) "Placee" means any Relevant Person who is or becomes committed on a conditional basis to subscribe for Placing Shares under the Placing;

f) "Placing Agreement" means the conditional placing agreement relating to the Placing entered into between the Company and finnCap;

g) "Placing Price" means the fixed price at which each Placing Share is to be made available for subscription under the Placing, as stated elsewhere in this Impact Announcement;

h) "Placing Shares" means new ordinary shares of 10p each in the capital of the Company ("Shares"); and

i) terms defined elsewhere in this Impact Announcement (including this Appendix) have the same meanings, unless the context requires otherwise.

2. Placing

finnCap has entered into the Placing Agreement under which it has, on the terms and subject to the conditions set out in the Placing Agreement, agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price.

finnCap is acting as the Company's agent in respect of the Placing and will today commence an accelerated bookbuilding process in respect of the Placing. finnCap will determine the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee. No commissions will be paid to or by Placees in respect of their agreement to subscribe for any Placing Shares.

Each Placee will be required to pay to finnCap the Placing Price as the subscription sum for each Placing Share that it is required to subscribe for in accordance with the terms set out in or referred to in this Appendix. Each Placee will be deemed to have read this Appendix in its entirety. Neither finnCap nor any other finnCap Person will have any liability (subject to applicable legislation and regulations) to Placees or to any person other than the Company in respect of the Placing.

Various dates referred to in this Impact Announcement (including this Appendix) are stated on the basis of the expected timetable for the Placing. It is possible that some of these dates may be changed. The date for the release of this Impact Announcement is today. The expected date for Admission is 15 November 2016 and, in any event, the latest date for Admission is 30 November 2016 (the "Long Stop Date").

The Placing has been structured as a cash-box placing. The Company and finnCap agree to subscribe for ordinary shares in a newly-incorporated Jersey company ("Newco"). Payments from Placees pursuant to the Placing must be made directly to finnCap. The funds will be used by finnCap to subscribe for redeemable preference shares ("RP Shares") in Newco. The Company will allot and issue the Placing Shares on a non-pre-emptive basis to Placees in consideration of finnCap transferring its holdings of ordinary shares and RP Shares in Newco to the Company. Accordingly, instead of receiving cash as consideration for the issue of Placing Shares, immediately following Admission, the Company will own the entire issued share capital of Newco whose only asset will be its cash reserves, which will represent an amount equal to the net proceeds of the Placing. The Company will be able to use this amount by redeeming the RP Shares and, during any interim period prior to redemption, by procuring that Newco lends the amount to the Company (or any other member of its Group).

Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this Impact Announcement (including this Appendix) and on the terms and conditions contained in it. No admission document for the purposes of the AIM Rules for Companies, or prospectus, is required to be published, or has been or will be published, in relation to the Placing or the Placing Shares.

3. Participation and settlement

Participation in the Placing is only available to persons who are invited to participate in it by finnCap.

A Placee's commitment to subscribe for a fixed number of Placing Shares under the Placing will be agreed orally with finnCap. Such agreement will constitute a legally binding commitment on such Placee's part to subscribe for that number of Placing Shares at the Placing Price on the terms and subject to the conditions set out or referred to in this Appendix and subject to the Company's constitution. After such agreement is entered into a written confirmation will be dispatched to the Placee by finnCap stating (i) the number of Placing Shares for which such Placee has agreed to subscribe, (ii) the aggregate amount such Placee will be required to pay for those Placing Shares, (iii) relevant settlement information, and (iv) settlement instructions. A settlement instruction form will accompany each written confirmation and, on receipt, should be completed and returned by the date and time stated in it.

The expected timetable for settlement will be as follows:

Please refer to the instruction form for the CREST ID of finnCap.

Settlement of transactions in the Placing Shares will take place within the CREST system, subject to certain exceptions, on a "delivery versus payment" (or "DVP") basis. finnCap reserves the right to require settlement for and/or delivery to any Placee of any Placing Shares by such other means as it may deem appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Impact Announcement (including this Appendix).

A Placee whose Placing Shares are to be delivered to a custodian or settlement agent should ensure that the written confirmation is copied and delivered promptly to the appropriate person within that organisation.

4. Placing conditions

The Placing is conditional on, among other things, (i) the Company having complied with its obligations and satisfied all conditions to be performed or satisfied by it under the Placing Agreement that fall to be performed or satisfied on or before Admission (unless waived by finnCap, where capable of waiver), (ii) the warranties in the Placing Agreement and in the Acquisition Agreement being true and accurate as at the date of Admission by reference to the facts and circumstances then subsisting, (iii) finnCap's obligations under the Placing Agreement not being terminated in accordance with its terms, (iv) the Acquisition Agreement and the Facilities not being terminated or rescinded before Admission, and (v) Admission taking place by the relevant time and date stated in this Impact Announcement. finnCap may extend the time and/or date for the fulfilment of any of the conditions referred to above to a time no later than 8.00 a.m. on the Long Stop Date. If any such condition is not fulfilled (and, if capable of waiver under the Placing Agreement, is not waived by finnCap) by the relevant time, the Placing will lapse and each Placee's rights and obligations in respect of the Placing will cease and terminate at such time.

finnCap's obligations under the Placing Agreement may be terminated by finnCap at any time prior to Admission in certain circumstances including, among other things, following a material breach of the Placing Agreement by the Company, following a material breach of the Acquisition Agreement by the Vendors or the occurrence of certain force majeure events. The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by finnCap whether or not to extend the time for satisfaction of any condition in the Placing Agreement will be within finnCap's absolute discretion (as is the exercise of any right or power of finnCap that is referred to in this Appendix). finnCap will have no liability to any Placee or to anyone else in respect of any such termination, waiver or extension or any decision to exercise or not to exercise any such right of termination, waiver or extension.

5. Principal terms of the Placing

a) finnCap is arranging the Placing as broker and agent for and on behalf of the Company. finnCap is regulated by the FCA, is acting exclusively for the Company and no one else in connection with the matters referred to in this Impact Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of finnCap or for providing advice in relation to the matters described in this Impact Announcement.

b) Participation in the Placing will only be available to persons who may lawfully be, and are, invited by finnCap to participate. finnCap and its respective affiliates are entitled to participate in the Placing as principal.

c) The Placing Price is fixed at 135 pence and is payable to finnCap by all Placees.

d) Each Placee's allocation in the Bookbuild will be determined by finnCap in its discretion following consultation with the Company and will be confirmed orally by finnCap and a contract note will be dispatched as soon as possible thereafter. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of finnCap and the Company, under which it agrees to acquire the number of Placing Shares allocated to it on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with finnCap's consent, such commitment will not be capable of variation or revocation at the time at which it is submitted.

e) The Bookbuild is expected to close no later than 1:00 p.m. (London time) on 10 November 2016, but may be closed earlier or later at finnCap's discretion. The Company reserves the right (upon agreement of finnCap) to reduce or seek to increase the amount to be raised pursuant to the Placing in its absolute discretion. finnCap and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their absolute discretion, determine.

f) Each Placee's allocation and commitment will be confirmed and evidenced by a contract note issued to such Placee by finnCap which will confirm the number of Placing Shares allocated to them, the Placing Price and the aggregate amount owed by them to finnCap. The terms of this Appendix will be deemed incorporated in that contract note.

g) Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to finnCap (as agent for the Company), to pay on Admission to finnCap (or as it 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 and the Company has agreed to allot and issue to that Placee.

h) Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained above under "Participation and settlement".

i) All obligations under the Placing will be subject to fulfilment of the conditions and to the Placing not being terminated on the basis referred to above under "Placing Conditions".

j) By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

k) To the fullest extent permissible by law and applicable FCA rules, none of (a) finnCap, (b) any finnCap Person (c) to the extent not contained within (a) or (b), any person connected with finnCap as defined in FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of finnCap) shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, none of finnCap, or any of its respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of finnCap's conduct of the Placing or of such alternative method of effecting the Placing as finnCap and the Company may agree.

6. Placees' warranties and undertakings to the Company and finnCap

By agreeing with finnCap to subscribe for Placing Shares under the Placing a Placee (and any person acting on a Placee's behalf) will irrevocably acknowledge, confirm, warrant, represent and undertake to, and agree with, each of the Company and finnCap, in each case as a fundamental term of such Placee's application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to it or at its direction (save where finnCap expressly agrees in writing to the contrary), that:

a) it agrees to and accepts all the terms and conditions set out in this Appendix;

b) its rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this Appendix and will not be subject to rescission or termination by it in any circumstances;

c) this Impact Announcement (including this Appendix), which has been issued by the Company, is the sole responsibility of the Company;

d) it is not a client of finnCap in relation to the Placing and finnCap is not acting for it in connection with the Placing and will not be responsible to it in respect of the Placing for providing protections afforded to its clients;

e) it has not relied on any representation or warranty in reaching its decision to subscribe for Placing Shares under the Placing;

f) it has not been, and will not be, given any warranty or representation by any finnCap Person in relation to any Placing Shares, the Company or any other member of its Group and no finnCap Person will have any liability to it for any information contained in this Impact Announcement (including this Appendix) or which has otherwise been published by the Company or for any decision by it to participate in the Placing based on any such information or on any other information provided to it;

g) it will pay the full subscription sum at the Placing Price as and when required in respect of all Placing Shares for which it is required to subscribe under its Placing participation and will do all things necessary on its part to ensure that payment for such shares and their delivery to it or at its direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that it has in place with finnCap or puts in place with finnCap;

h) it is permitted to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it and it has complied, and will fully comply, with all such laws (including where applicable, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007) and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription, and it will provide promptly to finnCap such evidence, if any, as to the identity or location or legal status of any person which finnCap may request from it in connection with the Placing (for the purpose of complying with any such laws or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by finnCap on the basis that any failure by it to do so may result in the number of Placing Shares that are to be allotted and/or issued to it or at its direction pursuant to the Placing being reduced to such number, or to nil, as finnCap may decide;

i) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done or to be done by it in relation to any Placing Shares in, from or otherwise involving the United Kingdom and it has not made or communicated or caused to be made or communicated, and it will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;

j) it is a Relevant Person 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;

k) it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or finnCap for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a qualified investor acting as agent for such person, and (iv) such person is either (1) a FSMA qualified investor or (2) its "client" (as defined in section 86(2) of FSMA) that has engaged it to act as his agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

l) nothing has been done or will be done by it in relation to the Placing or to any Placing Shares that has resulted or will result in any person being required to publish a prospectus in relation to the Company or to any Shares in accordance with FSMA or the Prospectus Rules or in accordance with any other laws applicable in any part of the European Union or the European Economic Area;

m) it will not treat any Placing Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of its participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Company or finnCap to contravene any such legislation in any respect;

n) (in this paragraph "US person" and other applicable terms have the meanings that they have in Regulation S made under the US Securities Act of 1933, as amended) (i) none of the Placing Shares have been or will be registered under that Act or under the securities laws of any State of or other jurisdiction within the United States, (ii) subject to certain exceptions, Placing Shares may not be offered or sold, resold, or delivered, directly or indirectly, into or within the United States or to, or for the account or benefit of, any US person, (iii) it is (unless otherwise expressly agreed with finnCap) neither within the United States nor a US person, (iv) it has not offered, sold or delivered and will not offer, sell or deliver any of the Placing Shares to persons within the United States, directly or indirectly, (v) neither it, its affiliates, nor any persons acting on its behalf, has engaged or will engage in any directed selling efforts with respect to the Placing Shares, (vi) it will not be subscribing Placing Shares with a view to resale in or into the United States, and (vii) it will not distribute this Impact Announcement (including this Appendix) or any offering material relating to Placing Shares, directly or indirectly, in or into the United States or to any persons resident in the United States;

o) finnCap may itself agree to become a Placee in respect of some or all of the Placing Shares or by nominating any other finnCap Person or any person associated with any finnCap Person to do so;

p) time is of essence as regards its obligations under this Appendix;

q) it will indemnify on an after-tax basis and hold the Company, finnCap and their respective affiliates harmless 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 Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

r) it is an institution that 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 and it is experienced in investing in securities of this nature and in this sector and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

s) to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in this Impact Announcement (including this Appendix);

t) its participation in the Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and Mergers;

u) it irrevocably appoints any director of finnCap 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;

v) this Appendix and any contract which may be entered into between it and finnCap and/or the Company pursuant to this Appendix or the Placing, and all non-contractual obligations arising between the Placee and finnCap and/or the Company in respect of the Placing, will be governed by and construed in accordance with the laws of England, for which purpose it submits (for itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute, or matter arising out of or relating to this Appendix or such contract, except that each of the Company and finnCap will have the right to bring enforcement proceedings in respect of any judgement obtained against such Placee in the English courts or in the courts of any other relevant jurisdiction;

w) each right or remedy of the Company or finnCap provided for in this Appendix is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part will not preclude the subsequent exercise of any such right or remedy;

x) any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to finnCap;

y) nothing in this Appendix will exclude any liability of any person for fraud on its part, and all times and dates in this Impact Announcement (including this Appendix) are subject to amendment at the discretion of finnCap except that in no circumstances will the date scheduled for Admission be later than the Long Stop Date; and

z) none of its rights or obligations in respect of the Placing is conditional on any other person agreeing to subscribe for any Placing Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing will affect any of its obligations in respect of the Placing.

The acknowledgments, confirmations, warranties, representations and undertakings contained in this Appendix are given to finnCap and the Company and are irrevocable and shall not be capable of termination in any circumstances.

7. Payment default

A Placee's entitlement to receive any Placing Shares under the Placing will be conditional on finnCap's receipt of payment in full for such shares by the relevant time to be stated in the written confirmation referred to above, or by such later time and date as finnCap may determine, and otherwise in accordance with that confirmation's terms. finnCap may waive this condition, and will not be liable to any Placee for any decision to waive it or not.

If any Placee fails to make such payment by the required time for any Placing Shares (1) the Company may release itself, and (if it decides to do so) will be released from, all obligations it may have to allot and/or issue any such Placing Shares to such Placee or at its direction which are then unallotted and/or unissued, (2) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any such Placing Shares to the full extent permitted under its constitution or by law and to the extent that such Placee then has any interest in or rights in respect of any such shares, (3) the Company or, as applicable, finnCap may sell (and each of them is irrevocably authorised by such Placee to do so) all or any of such shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of finnCap to be applied in satisfying the payment undertaking given to finnCap to Newco in respect of the RP Shares (i) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares and (ii) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale, and (4) such Placee will remain liable to the Company and to finnCap for the full amount of any losses and of any costs which it may suffer or incur as a result of finnCap (i) not receiving payment in full for such Placing Shares by the required time, and/or (ii) the sale of any such Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it. Interest may be charged daily in respect of payments not received by finnCap for value by the required time referred to above at the rate of two percentage points above prevailing LIBOR as determined by finnCap.

8. Overseas jurisdictions

The distribution of this Impact Announcement (including this Appendix) and the offering and/or issue of shares pursuant to the Placing in certain jurisdictions is restricted by law. Persons who seek to participate in the Placing must inform themselves about and observe any such restrictions. In particular, this Impact Announcement (including this Appendix) does not constitute or form part of any offer or invitation, or a solicitation of any offer or invitation, to subscribe for or acquire or sell or purchase or otherwise deal in Shares in the United States, Canada, Japan or Australia or in any other Prohibited Jurisdiction.

9. Placing Shares and general

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

References to time in this Impact Announcement (including this Appendix) are to London, England time, unless otherwise stated.

All times and dates in this Impact Announcement (including this Appendix) are subject to amendment at the discretion of finnCap.