7 Nov 2011 12:51
7 November 2011
PORTA COMMUNICATIONS PLC
Result of General Meeting
Reverse Takeover of Threadneedle Communications Limited, Share Consolidation, Issue of Equity and Admission to trading on AIM
Further to the announcement of 12 October 2011, the Directors are pleased to announce that at the General Meeting, held earlier today, all Resolutions were duly passed. These Resolutions included, amongst other things, the proposed acquisition of 80 per cent. of the issued share capital of Threadneedle Communications Limited, a transaction which constitutes a reverse takeover under the AIM Rules for Companies, a share consolidation and a placing to raise £2.32 million.
The Share Consolidation is being performed on the basis that every 100 Existing Ordinary Shares of 0.1p each will be consolidated into one New Ordinary Share of 10p each. Accordingly, on Admission, the Enlarged Share Capital will total 70,757,008 New Ordinary Shares of 10p each; comprising the 37,625,000 New Ordinary Shares arising from the Share Consolidation, and 33,501,008 New Ordinary Shares to be issued following completion of the Share Consolidation, consisting of the 10,305,958 Consideration Shares and the 23,195,050 Placing Shares.
Application has been made to the London Stock Exchange for the Admission to trading on AIM of the Enlarged Share Capital, which is expected to take place at 8.00 a.m. tomorrow, 8 November 2011.
Background
On 20 September 2011, the Company announced that it had signed a contract to acquire 80 per cent. of the issued share capital of Threadneedle, a financial public relations company focussed on the AIM quoted and small cap market. The total consideration of £3.8 million for the Acquisition will be satisfied by the allotment to the Vendors of the Consideration Shares together with £2,520,000 in cash. The Consideration Shares will represent approximately 14.57 per cent. of the Enlarged Share Capital. £2.32 million has been conditionally raised pursuant to the Placing. In conjunction with the Acquisition, the Company will consolidate its Existing Ordinary Shares into New Ordinary Shares in accordance with which every one hundred Existing Ordinary Shares shall be consolidated into one New Ordinary Share.
Background to and reasons for the Acquisition
David Wright took over as Chief Executive Officer of Porta in November 2010, following a refocusing of the AIM quoted TSE Group PLC and the subsequent disposal of the Group's principal trading subsidiary, TSE Consulting SA, at which time the Directors set out a clear strategy to create an international communications and marketing business. The acquisition of Threadneedle represents the first acquisition for the Company as it seeks to build a group with a wide range of services and skill sets that provide clear synergies for its client base.
The Directors believe that the Acquisition will give Porta a leading position in the financial public relations sector focussed on AIM quoted and small cap companies while at the same time providing strong recurring revenues and reliable cash flows. Over the 12 months to 31 August 2011, Threadneedle has been one of the fastest growing PR companies by number of clients in the AIM sector and is now currently ranked third in terms of number of clients listed in the Hemscott Financial Adviser tables. Porta intends to build upon the quality of Threadneedle (to be renamed "Newgate Threadneedle" following completion of the Acquisition) and the strength of its management team to create a strong brand in the small-mid cap market.
Information on Threadneedle
Threadneedle was incorporated in August 2003 and offers a full range of communications services, including advising financial services and other capital markets companies on company flotations, admissions, mergers and acquisitions and corporate and business media relations.
Threadneedle is currently a successful exponent of the small/mid cap listed companies public relations model and is looking to develop this offering with a range of products.
Information on Porta
Porta is admitted to trading on AIM and acts as a holding company with the mandate to build an international communications and marketing business where there is clear synergy between the services offered, with the objective of maximising Shareholder value.
Porta currently has three trading operations: Impact34, Newgate Trading and Newgate Public Relations.
Impact34 was previously the Turkish office for TSE Consulting SA. Impact34 concentrates on marketing and consultancy services in the sports and entertainment sectors.
Newgate Trading is a media bartering company which offers clients the ability to use their obsolete or slow moving stock to finance their future advertising and marketing programmes via a barter transaction.
Newgate Public Relations is being established under the direction of Jonathan Clare, who joined the Group on 23 September 2011 to be Executive Chairman of Newgate Public Relations.
Principal terms and conditions of the Acquisition
Under the terms of the Acquisition Agreement:
(a) the Company has conditionally agreed to acquire 80 per cent. of Threadneedle from the Vendors for a total consideration of £3,800,000 payable as to £2,520,000 in cash on completion of the Acquisition and £1,280,000 to be satisfied by the issue to the Vendors of the Consideration Shares; and
(b) completion of the Acquisition is conditional on the conditions of the Acquisition Agreement being satisfied.
Further information in respect of the Acquisition and the Acquisition Agreement is provided in paragraph 16.1 of Part VII of the Admission Document.
The Consideration Shares will represent approximately 14.57 per cent. of the Enlarged Share Capital.
The Placing
In order to finance part of the cash consideration payable in respect of the Acquisition, to cover the costs of the Acquisition and Admission, and to provide additional working capital for the Enlarged Group, the Company proposes to raise £2,319,505 before expenses, through the issue of Placing Shares at the Placing Price pursuant to the Placing to supplement the Group's existing cash resources.
The Board
On Admission, the Directors will be as follows:
David Ernest Wright (Executive Chairman and Chief Executive)
David began his career as a journalist and left the Financial Times in 1978 to start a new career in Financial Public Relations. He became Chief Executive of Streets Financial Strategy from 1986 to 1988, before establishing Citigate in late 1988. In 1997, Citigate reversed into Incepta Plc and David became chief executive of the enlarged group, later becoming Chairman. In October 2002 David left Incepta Plc and in December 2003 he joined Bartercard UK Limited, the B2B trade exchange operating from 120 offices in 16 countries, as a non-executive director. In March 2005, Incepta Plc was merged with Huntsworth Plc in a transaction worth £195 million, with Incepta shareholders holding approximately 67 per cent. of the enlarged business.
Keith John Springall (Finance Director)
Keith, a chartered accountant, is an experienced AIM company director. Keith was finance director of AIM quoted Bulgarian Property Developments plc and was Group Finance Director in 2005 of AIM quoted Bartercard plc. Prior to that he held a number of senior financial positions including that of Commercial and Finance Director of Hi-Tec Sports International Limited, the £100m turnover footwear and clothing brand, and Finance Director of Jardine Matheson in Hong Kong, the Philippines and Australia.
Brian John Blasdale (Non-Executive Director)
Following an early career with P&O Shipping Company, Brian held a number of senior sales and marketing roles with blue chip companies including Kodak Limited. Thereafter he formed his own IT outsourcing company, achieving success in attracting a number of major blue chip companies as clients. Subsequently, he co-founded I-B Net Limited, which was admitted to the AIM market in March 2000, and is now known as Deal Media Group plc. Since this time Brian has actively been involved with a number of companies as Chairman and non-executive director for and on behalf of Lloyds Development Capital Private Equity.
Following Admission it is the Company's current intention to strengthen the Board with the appointment of one or more additional Non-Executive Directors.
Consolidation
The Company currently has a very large number of Existing Ordinary Shares. Therefore, prior to Admission, the Existing Ordinary Shares will be consolidated into New Ordinary Shares of a larger nominal value on the basis described below and with the intention that, following such consolidation, the number of shares in issue and the likely share price will be more appropriate for a company of the Company's size in the UK market.
The effect of the Share Consolidation will be that Shareholders on the Company's register of members at the Record Date will, on the implementation of the Share Consolidation, hold:
one New Ordinary Share of 10p
for every one hundred Existing Ordinary Shares of 0.1p each
and in that proportion for any other number of Existing Ordinary Shares then held.
Enquries
Porta Communications plc www.portacomms.com | ||
David Wright, Chief Executive | +44 (0) 20 7065 7045 | |
Keith Springall, Finance Director | +44 (0) 20 7065 7045 | |
Northland Capital Partners | ||
(Nominated Adviser) | Tim Metcalfe / Rod Venables | +44 (0) 207 796 8800 |
(Corporate Broker) | Katie Shelton | +44 (0) 207 796 8800 |
Definitions
"Acquisition" | the proposed acquisition by the Company of 80 per cent. of the issued share capital of Threadneedle
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"Acquisition Agreement" | the conditional share purchase agreement dated 19 September 2011 between the Company and the Vendors, further details of which are set out in Part I and in paragraph 16.1 of Part VII of the Admission Document
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"Admission" | the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules for Companies
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"Admission Document" | the admission document, which contains further information on the Proposals and which was published and sent to Shareholders on 12 October 2011
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"AIM" | the market of that name operated by the London Stock Exchange
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"AIM Rules" or "AIM Rules for Companies"
| the AIM Rules for Companies published by the London Stock Exchange, as amended from time to time which sets out the rules, responsibilities and guidance notes in relation to companies whose shares are admitted to trading on AIM
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"AIM Rules for Nominated Advisers"
| the AIM Rules for Nominated Advisers published by the London Stock Exchange, as amended from time to time
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"Board" or "Directors" | the directors of the Company (each a "Director") as listed on page 5 of the Admission Document
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"Companies Act" | the Companies Act 2006, as amended
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"Company" or "Porta" | Porta Communications plc, a company incorporated in England and Wales with registered number 05353387
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"Consideration Shares" | the 10,305,958 New Ordinary Shares to be issued pursuant to the Acquisition Agreement
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"Enlarged Group" | the Group, as enlarged following the Acquisition
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"Enlarged Share Capital" | the issued Ordinary Shares at Admission following the Share Consolidation, the issue of the Consideration Shares and the issue of the Placing Shares
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"Existing Ordinary Shares" or "Existing Share Capital"
| the 3,725,600,000 Ordinary Shares in issue at the date of this announcement
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"General Meeting" or "GM" | the general meeting of the Company which was held at 11.00 am on 7 November 2011 at the offices of Northland at 60 Gresham Street, London EC2V 7BB for the purposes of approving the Proposals, notice of which was set out at the end of the Admission Document
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"Group" | the Company and its Subsidiaries as at the date of the Admission Document
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"Impact34"
| Impact34 Reklam ve Organizasyon Danişmanlik Hizmetleri Limited
|
"London Stock Exchange"
| London Stock Exchange plc |
"New Articles"
| the new articles of association to be adopted pursuant to the Proposals by the Company in substitution for the Articles
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"New Ordinary Shares"
| the ordinary shares at Admission following the Share Consolidation, the issue of the Consideration Shares and the issue of the Placing Shares
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"Newgate Public Relations"
| Newgate Public Relations Limited |
"Newgate Trading"
| Newgate Trading Europe Limited |
"Nomad" or "Northland"
| Northland Capital Partners Limited, the Company's nominated adviser and broker
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"Notice of General Meeting"
| the notice convening the holding of the General Meeting for the purposes of considering and approving the Resolutions
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"Ordinary Shares"
| ordinary shares of 0.1 p each in the capital of the Company
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"Placing"
| the conditional placing by Northland and Hub Capital of the Placing Shares at the Placing Price pursuant to the terms of the Placing Agreement
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"Placing Agreement"
| the conditional placing agreement dated 11 October 2011 between the Company, the Directors, Northland and Hub Capital in relation to the placing arrangements, details of which are set out in paragraph 16.2 of Part VII of the Admission Document
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"Placing Price"
| 10p per Placing Share |
"Placing Shares"
| the 23,195,050 New Ordinary Shares to be issued pursuant to the Placing
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"Proposals"
| the Acquisition, the Placing, the Share Consolidation, the adoption of the New Articles, the passing of the Resolutions and Admission
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"Record Date"
| 6.00 pm on 7 November 2011 or, such later date as the Directors may determine and communicate to Shareholders via an appropriate Regulatory Information Service
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"Regulatory Information Service"
| a service approved by the London Stock Exchange for the distribution to the public of AIM announcements
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"Resolutions"
| the resolutions to be proposed at the General Meeting (and each a "Resolution") set out in the Notice of General Meeting at the end of the Admission Document
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"Share Consolidation" | the consolidation of every 100 Existing Ordinary Shares of 0.1p each into 1 New Ordinary Share of 10p pursuant to the Proposals
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"Shareholders"
| holders of Existing Ordinary Shares or the New Ordinary Shares, as the case may be
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"Subsidiary"
| a subsidiary undertaking (as defined by section 1162 of the Companies Act) of the Company and "Subsidiaries" shall be construed accordingly
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"Threadneedle"
| Threadneedle Communications Limited, a company incorporated in England & Wales with registered number 4880361
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"UK" or "United Kingdom"
| the United Kingdom of Great Britain and Northern Ireland |
"Vendors"
| Graham Herring, Felicity Herring, Jonathan Royston and Laurence Read, the shareholders of Threadneedle
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"£" or "Pound"
| UK pounds Sterling |
About Porta Communications
Porta Communications plc, the international marketing and communications business, is led by David Wright, Chief Executive and Chairman. David is well known for establishing Citigate in late 1988. In 1997 he reversed Citigate into Incepta plc and David became Chief Executive of the enlarged Group, later becoming Chairman. By 2003, when David left Incepta, he had built one of the largest international financial communications companies in the world, through a series of key acquisitions and an active recruitment programme. Prior to Citigate he was Managing Director of Streets Financial Strategy from 1986 to 1988. David began his career as a journalist.
For further information, please visit www.portacomms.com