R4E.L Regulatory News (R4E)

14 Sep 2005 07:01

First Artist Corporation PLC14 September 2005 14 September 2005 First Artist Corporation plc Acquisition of The Finishing Touch (Corporate Events) Limited Placing of new Ordinary Shares to raise £350,000 at 5.25 pence per share Summary First Artist Corporation plc ("FAC"), a leading pan-European entertainment andplayer representation group, has today agreed the acquisition of The FinishingTouch (Corporate Events) Limited ("FTL") for a maximum consideration of £3.36million to be satisfied in cash and by the allotment of ordinary shares of 0.25peach in the Company ("Ordinary Shares"). The initial consideration comprises the issue and allotment by the Company tothe vendors of one million new Ordinary Shares (the "Initial ConsiderationShares") and the payment of £1.36 million in cash. Deferred consideration willbe payable dependent on the achievement by FTL of certain financial performancetargets over the next three years. In addition, the Company today announces a placing of 6,666,666 new OrdinaryShares at 5.25p per share ("Placing Shares") by Shore Capital StockbrokersLimited ("Shore Capital") to raise £350,000, before expenses ("Placing").Completion of the acquisition is subject to admission of the InitialConsideration Shares and the Placing Shares to trading on the AIM Market. The Finishing Touch (Corporate Events) Limited Based in Richmond, Surrey, FTL was established in 1989 by Mel Atkins, who is themanaging director and is remaining with the business. Its principal activity isthe provision of a range of high quality events for the blue-chip corporate andgovernment market, including conferences, corporate team building, family fundays and summer parties. FTL has established a reputation for creative flair, professionalism andquality, achieving high levels of repeat business. FTL has been grantedpreferred supplier status to work with various governmental bodies, such aslocal education authorities, to supply venue and events management andconference co-ordination. In the financial year ended 30 April 2005, FTL had turnover of £4.0 million(2004, £3.43 million) and profit before tax of £0.47 million (2004, £0.32million). Net assets of FTL at 30 April 2005 amounted to £0.49 million. FAC has a long history as an events promoter having previously brought the majorUS sporting bodies to the UK including the NFL ("National Football League"), theNBA ("National Basketball Association") and the NHL ("National Hockey League")and promoted many events including the Horse of the Year Show, the World SportsAwards, the Evening Standard five-a-side football tournament at Wembley and theGorbachev UK lecture tour. FAC will use the acquisition of FTL to relaunch itsevent promotion business. FTL's executive team are to remain with the business. The Enlarged Group The Board believes the acquisition of FTL by First Artist is an excellentstrategic fit (together, the "Enlarged Group") and, in particular, that theacquisition: • represents a significant step in FAC's strategy to enhance and strengthen the Group's service offering to its clients by adding an events management capability to the range of services already available; • satisfies FAC's strategic objective of diversifying and reducing its dependence on the seasonal football market by developing a broader business in the key areas of events management, wealth management, sports player representation, talent and personality management and events and promotion management; and • as with the acquisition of ABG Financial Management Limited ("ABGFM") in August 2005, enables FAC to cross-refer respective clients throughout the Enlarged Group. Financing the acquisition The acquisition and ongoing working capital requirements of the Enlarged Grouphave been funded through a new committed banking facility totalling £0.5 millionprovided by AIB Group (UK) plc, a £0.4 million convertible loan note ("Convertible Loan Note") provided by Montgomery Equity Partners, LP ("MEP") andthe net proceeds of the Placing. Under the terms of the Placing, Shore Capital has placed 6,666,666 PlacingShares at 5.25p per share to raise £0.35 million, before expenses. Applicationhas been made for the Initial Consideration Shares and the Placing Shares,amounting to, in aggregate, 7,666,666 new Ordinary Shares, to be admitted totrading on the AIM Market of the London Stock Exchange plc and dealings areexpected to commence on 16 September 2005. The Convertible Loan Note will carry a coupon of 6% per annum. After 90 days,MEP has the option to commence the conversion of this loan into new OrdinaryShares in FAC. The conversion price will be at the lower of either 85% of theprevailing FAC share price or 120% of the FAC share price on completion. Thisconversion will be capped at no more than £20,000, plus any applicable coupon,per week. This cap shall continue until such time as the weekly trading volumein FAC shares exceeds £140,000 for three consecutive weeks. FAC has also issued to MEP 400,000 warrants to purchase new Ordinary Shares witha two year term, exercisable at a price equal to the lower of 90% of the FACshare price at completion and 90% of the FAC's share price on the date thewarrants are exercised. Commenting on the acquisition, Jon Smith, Chief Executive of First Artist, said: "The Finishing Touch is a leading operator in the events management business andthe acquisition is a natural strategic fit for the enlarged First Artist group.Following the successful acquisition of ABG Financial Management and TheFinishing Touch, we will continue to seek opportunities to grow and diversifythe enlarged group through further synergistic acquisitions. As one of the world's leading player representation agencies, First Artist hasenjoyed its most successful football Summer trading window for some years and wewill continue to develop this position. Our stated objective, however, is toreduce our dependence on the seasonal football market by some 60%. These recentacquisitions demonstrate our commitment to this strategy, we look forward toproviding our clients with the most comprehensive range of services availableand our investors with enhanced shareholder value." For further information: First Artist Corporation plcJon Smith, Chief Executive Tel. + 44 (0) 20 8900 1818Richard Hughes, Finance Director Shore CapitalAlex Borrelli Tel: + 44 (0) 20 7408 4090 Smithfield ConsultantsGeorge Hudson Tel. + 44 (0) 20 7360 4900 Notes to Editors First Artist Corporation plc (FAN.LN) was founded by Chief Executive Jon Smithin 1986. It has offices in London, Milan, the USA and Middle East. Its playerrepresentation division, First Artist Management ("FAM") is one of world'sleading football management groups and is one of a handful of agencies whosepersonnel hold both FIFA match and transfer licences. FAM is working with otherleading European agencies, senior European clubs and leagues to enhance theposition, reputation and transparency of the football transfer market and inparticular the role of agents. The group joined the AIM market in December 2001. In August 2005 the groupsuccessfully acquired FSA registered IFA, ABG Financial Management Ltd. for amaximum consideration of £3 million in cash and shares. First Artist also offers a complete in-house management service with specialistdivisions for Financial Management, Marketing, Media Management, Television /Media Production, Event Production and Sponsorship. The Media/CommercialDivision represents top sporting and TV personalities. First Artist's clientroster exceeds 200 individuals primarily involved with the sports and televisionindustry. This information is provided by RNS The company news service from the London Stock Exchange