Rosslyn Data Regulatory News (RDT)

Rosslyn Data Technologies plc

("Rosslyn" or the "Company")

Acquisition

Proposed placing to raise up to £ 4.5 million

Open offer to raise up to £0.5 million

Notice of General Meeting

Rosslyn announces that it has conditionally agreed to acquire Integritie (UK) Limited for a total initial consideration of £2.588 million and has conditionally raised a total of £2.29 million, before expenses, by way of a placing of up to 50,955,000 new ordinary shares at 4.5 pence (the "Firm Placing"). In addition the Company has conditionally raised £2.21 million before expenses by way of a placing of up to 49,045,000 new ordinary shares at 4.5 pence each (the "VCT/EIS Placing") and also announces an Open Offer to raise up to approximately £0.5 million.

Acquisition Highlights

· Initial consideration of £2.588 million plus an earn out of up to £750,000 on revenue targets

· Complementary products and customers with Rosslyn's existing business

· Firm and VCT/EIS Placings to raise up to £4.5 million to satisfy initial consideration and to provide general working capital

· Enlarged recurring revenue base expected to enhance Company's quality of earnings

· Expected near term cost synergies

· Cross selling opportunities

 Transaction Highlights

· The Transaction, which is subject to Shareholder approval, will raise gross proceeds of up to £5.0 million*

· Placing of up to 100,000,000 Ordinary Shares at the Placing Price of 4.5 pence per share

· Open Offer for an aggregate of 11,142,031 Offer shares on the basis of 5 new Ordinary Shares for every 34 Existing Ordinary Shares at 4.5 pence each

* On the assumption that the Open Offer is fully subscribed

The net proceeds of the Firm Placing and Open Offer will be used to part fund the acquisition of Integritie and the net proceeds of the VCT/EIS placing will go towards general working purposes.

Roger Bullen, CEO commented: "We are delighted to announce the acquisition of Integritie. Integritie is a strategically important acquisition for us giving us the ability to analyse unstructured as well as structured data. Integritie's customer base is complementary to our own and the acquisition will enable us to cross sell both structured and unstructured data services to an enlarged customer base. In due course, the acquisition should enable us to extract significant synergies not only through cross selling but also operational efficiencies and cost savings as a result of the increased scale."

An explanatory circular (the "Circular") is today being posted to Shareholders in relation to the Transaction. The same definitions apply throughout this announcement as are applied in the Circular. The Circular will be sent to shareholders today and will be available on the Company's website: www.rosslynanalytics.com

Notes to Editors

Rosslyn Data Technologies plc, (AIM: RDT), a leading provider of a Cloud-based enterprise data analytics platform, was founded in 2005 by Charles Clark and Hugh Cox. Business Intelligence was ranked first in the top ten technology priorities for Chief Information Officers in 2012 by Gartner. The Company provides analytical services by combining four key technologies: data extraction; cleansing; enrichment; and visualisation, through a single cloud platform enabling users with detailed data to make more informed decisions. Rosslyn's RAPid platform is the Group's primary product available to its multinational customers, including Aberdeen Asset Management plc, Babcock Corporate Services plc, Xerox Business Services and Coca-Cola Enterprises, Inc. Rosslyn Data Technologies plc is the ultimate holding company of the Group and owns 100 percent of Rosslyn Analytics Limited.

Further information can also be found on the Company's website at: www.rosslynanalytics.com

1. INTRODUCTION

The Company has today announced a conditional VCT/EIS Placing to raise approximately £2.21 million (before fees and expenses) by the issue of 49,045,000 new Ordinary Shares at the Placing Price of 4.5 pence per Ordinary Share.

The Company also proposes to raise £2.29 million (before fees and expenses) through a conditional Firm Placing by the issue of 50,955,000 new Ordinary Shares at the Placing Price.

Furthermore, in order to provide Shareholders who have not taken part in the VCT/EIS Placing and Firm Placing with an opportunity to participate in the proposed issue of new Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Placing Price for an aggregate of 11,142,031 Offer Shares, to raise up to £0.5 million, on the basis of 5 New Ordinary Shares for every 34 Existing Ordinary Shares held on the Record Date, at the Placing Price, payable in full on acceptance.

The Transaction is conditional, inter alia, upon Shareholders approving the Resolutions at the General Meeting, compliance by the Company in all material respects of its obligations under the Placing Agreement and the admission of the VCT/EIS Placing Shares, the Firm Placing Shares, the Offer Shares and the Consideration Shares to trading on AIM.

The Resolutions are contained in the Notice of General Meeting which can be found at the end of the Circular. Admission is expected to occur no later than 8.00 a.m. on 15 May 2017 or such later time and/or date as Cenkos and the Company may agree. The VCT/EIS Placing and the Firm Placing are not underwritten.

The Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of the New Ordinary Shares on a pre-emptive basis whilst providing the Company with additional capital to invest in the business of the Group. The Placing Price is at a discount of 42.9 per cent. to the closing middle market price of 7.88 pence per Existing Ordinary Share on 25 April 2017 (being the last practicable date before announcement of the Transaction).

The purpose of the Circular is to explain the background to and reasons for the Transaction, the use of proceeds, and the details of the Transaction. The Circular also explains why the Board considers the Transaction to be in the best interest of the Company and its Shareholders, and why the Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting.

2. BACKGROUND TO THE TRANSACTION

Roger Bullen became Chief Executive in June 2016 and since that time the Board's strategic focus has been on developing a multi-purpose dynamic data architecture and building a scalable technology platform. The Board believes that the Company's platform is now technologically advanced with deep functionality such that it is scalable for a variety of modules and capabilities.

Whilst Rosslyn has attracted a number of important partnerships and is being increasingly recognised as a key player in the data analytics space this has not been matched by sales traction. A limited sales resource, long sales cycles and unpredictable partner revenues have all, the Board believes, been contributing factors to the Company's revenue performance over the last three years. This has led to an extended period of negative cash flow within the Group which, in turn, has put pressure on the Company's balance sheet.

In light of these challenges and the resources the Directors believe that additional data streams and applications are needed to bring the Group to critical mass, the Board's strategy is to accelerate the development of the Group both organically and inorganically. In addition, the Directors believe that a significant consolidation opportunity exists for Rosslyn to acquire companies that are heavily geared towards sale and delivery and that could leverage the Rosslyn platform. The Directors believe that the Proposed Acquisition represents the first step towards building a dynamic data analytics group. Rosslyn's principal expertise is in the extraction, transformation, integration, cleansing, enrichment and visualization of structured data sources, primarily from complex financial and enterprise resource planning systems.

Integritie is a UK based, on premise, data mining company which principally uses third party platforms, including but not limited to IBM Filenet, to capture and interrogate large customer data sets. It specializes in unstructured and semi-structured data processing and has a blue chip customer base which the Directors believe is highly complementary to Rosslyn's. Integritie has its own proprietary analysis tools for extracting data from unstructured sources.

2.1 Reasons for the Proposed Acquisition

Rosslyn's strategy is to complement organic growth with the acquisition of suitable companies to enhance its product and customer base. The Directors believe that there is a strong opportunity to become a leading consolidator of data analytics companies and that the Proposed Acquisition will be a key step in this process and at the same time increase Rosslyn's critical mass and scale. The Directors believe that the Proposed Acquisition is strategically compelling for the following reasons:

· Integritie's customer base is complementary to that of Rosslyn. The Directors therefore believe that the Proposed Acquisition will add scale to Rosslyn and will allow the cross sale of unstructured/structured data services to an enlarged customer base.

· The Directors believe that the Proposed Acquisition will generate a substantial increase in Rosslyn's recurring revenues, thereby enhancing the Group's quality of earnings and reducing overall risk from the reliance on the sale of cumbersome revenue items, the timing of which is always difficult to predict. The Directors believe that an enlarged recurring revenue base will be more closely aligned to the Group's cost base.

· The Directors have identified cost savings/synergies of approximately £0.8 million that they expect Rosslyn to be able to make within a year from completion of the Proposed Acquisition. In due course the Directors expect that there will be further synergies in respect of platform and development costs.

· The Directors believe that the Proposed Acquisition will enable the enlarged group to offer unstructured and structured data mining on Rosslyn's platform in the cloud and will allow Rosslyn to position itself as one of the foremost providers of technologies that enable enterprises to harness their structured and unstructured data simultaneously in one place. In addition to the separate companies' inherent growth prospects on a standalone basis, the addition of Integritie to the Group would offer a strong opportunity to cross-sell and leverage Rosslyn's platform

· The Directors believe that the combination of the Integritie and Rosslyn sales teams will enable the enlarged Group to sell both RDT's existing products and Integritie's current offering as part of a complete and comprehensive suite. The Directors also believe that the increase in scale that Integritie would bring to the Group would drive cost savings and synergies in administration, development, data and project management.

2.2 Information on Integritie

Integritie is an information capture and management company based in Portsmouth. It principally uses on-premises (non-cloud) IBM solutions to handle unstructured and semi structured data and deal with many varied sources and document types.

Integritie is a private limited company incorporated in England and Wales (with registration number 03842863). Integritie was founded by Michael Veenswyk in 2000 and has developed a suite of image, social media and email capture automation solutions. Integritie has a broad range of content management solutions and has delivered capture and content solutions in a number of jurisdictions.

2.3 Financial information on Integritie

The trading record of Integritie for the three years ended 31 December 2015, as extracted from Integritie's consolidated financial statements is summarized below:

2.4 Terms of the Proposed Acquisition

Under the terms of the Acquisition Agreement Rosslyn has conditionally agreed to acquire the entire issued share capital of Integritie from its shareholders, Electronic Archive Solutions Holdings Limited, Peter James Lewis and Bernard Paul Quinn. Electronic Archive Solutions Holdings Limited is owned by a family trust, one of the beneficiaries of which is Michael Veenswyk.

The initial consideration for the Proposed Acquisition is £55,000, together with the assumption and repayment of debt of £2.533 million, making a total of £2.588 million. In addition, there is an earn-out element to the consideration, based on the achievement of recognised revenue between £5 million and £7 million during the earn-out period (of 12 calendar months), which might become payable. If any earn-out is payable, the maximum amount that Rosslyn would have to pay is £750,000, payable in Ordinary Shares (at a price per Ordinary Share ranging from 7.9 pence to a maximum of 26 pence). Therefore, the total payable for the Proposed Acquisition could be £3.339 million.

It is anticipated that the initial £2.588 million payable for the Proposed Acquisition on completion thereof will be allocated as follows:

· approximately £1.267 million to repay certain outstanding debt and loan notes of Integritie;

· the assumption (by way of retention by Rosslyn) of approximately £1.266 million of loans on Integritie's balance sheet ("Retained Integritie Debt"); and

· the allotment and issue of the Consideration Shares at the Placing Price.

There may also be an adjustment to the consideration (upwards or downwards) if, and to the extent to which, the net working capital (which includes, as a current liability, a line item for deferred income equal to approximately £1.287 million) and/or the debt of Integritie is different from the agreed target figures in the Acquisition Agreement. Any potential upwards adjustment to the consideration as described above shall be capped at £1,000,000.

Approximately £628,000 of the Retained Integritie Debt shall be amended such that, to the extent it remains outstanding on the second anniversary of completion of the Proposed Acquisition, it shall, along with any interest accrued but unpaid, be capable of being converted into new Ordinary Shares in the Company on the basis of one new Ordinary Share for every 25 pence owed to a creditor.

It is expected that post completion of the Proposed Acquisition, Michael Veenswyk, the founder of Integritie, will be appointed to the board of Rosslyn as an executive director (a sales director). Mr Veenswyk will have an employment contract with Rosslyn (the "Contract"). This Contract includes a fee of £120,000 per annum and is for an initial term of 12 months. The Company is entitled to terminate the Contract on 60 days' notice. A further announcement with regard to his appointment will be made when he is appointed to the board of Rosslyn.

2.5 Lock-Ins and Orderly Market Agreements

Electronic Archive Solutions Holdings Limited, one of the Sellers, has undertaken to the Company and Cenkos that, without the prior written consent of the Company or Cenkos and subject to certain limited exceptions:

3. CURRENT TRADING AND OUTLOOK OF THE COMPANY

On 26 January 2017 Rosslyn announced its unaudited interim results for the six months to 31 October 2016, an extraction of which is included in the table below:

On 1 March 2017 the Company announced a Pilot Project with a leading UK Financial Services Firm which marked an important milestone for the Group being RDT's first inroad into the financial services market and, the Board believes, validates the versatility and applicability of the Rosslyn platform across different verticals outside of the spend analytics arena.

The Company's sales pipeline remains healthy and the Directors were pleased that the Group's US subsidiary recently won a contract from a US Global Industrials Metals Company. The contract is phased with a $100,000, three month proof of value, followed, if successful, with a further $200,000 implementation and annual subscription fee, giving a first year value of approximately $300,000.

As reported in the Company's interim results, the Group remains in contract negotiations with a number of large enterprises. The Board continues to expect opportunities to be converted into contract wins during the current financial year and, in some cases, work has already commenced in relation to these projects. The Company takes a prudent approach and does not recognise any revenue until the contracts have been signed. Management continue to work hard to ensure that three contracts, which together are worth more than £1 million, are signed by the end of April. Should none of these contracts be signed in time to be recognised in the 2016/17 financial year, it would have a consequential effect on Group revenues for 2016/17, which would then be at or around the same level as the previous year. The Company will update Shareholders should any of the contacts be signed before the end of the financial year. The Directors remain confident in the long term growth prospects of the Company and believe that the Proposed Acquisition would provide additional and diversified routes to growth and reduce the Group's exposure to large contract wins.

4. THE VCT/EIS PLACING, FIRM PLACING AND OPEN OFFER

The Board believes that raising the majority of the equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate and optimal structure for the Company at this time. This combined with the Open Offer (which is on a pre-emptive basis) allows both existing Shareholders and new institutional and other investors the opportunity to participate in the equity financing. The maximum amount to be raised by the Open Offer is below the threshold which would require a prospectus, which is a costly and time consuming process.

Subject to the satisfaction of the conditions referred to below, the Company will issue and allot the VCT/EIS Placing Shares first, then the Firm Placing Shares, the Offer Shares and, finally, the Consideration Shares. The use of proceeds raised from the VCT/EIS Placing and the Firm Placing are detailed below in paragraph 4.3.

The New Ordinary Shares when issued will rank pari passu with the Existing Ordinary Shares and will rank in full for any dividends and distributions paid or made in respect of the Ordinary Shares.

4.1 Details of the VCT/EIS Placing and the Firm Placing

The Company is proposing to raise approximately £4.5 million (before fees and expenses) by way of the VCT/EIS Placing and the Firm Placing at the Placing Price. The Placing Price represents a discount of approximately 42.9 per cent. from the closing mid-market price of 7.88p on 25 April 2017, , being the latest practicable date prior to the announcement of the Transaction.

In order to broaden the Company's institutional shareholder base and to minimise the time and transaction costs of the VCT/EIS Placing and the Firm Placing, the VCT/EIS Placing Shares and the Firm Placing Shares are only being placed by Cenkos with a limited number of existing and new institutional shareholders. The VCT/EIS Placing Shares and the Firm Placing Shares are not being made available to the public.

In accordance with the terms of the Placing Agreement, both the VCT/EIS Placing and the Firm Placing are conditional, inter alia, upon:

The VCT/EIS Placing Shares and the Firm Placing Shares will be issued credited as fully paid and will be identical to and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares following the date of Admission.

Application will be made to the London Stock Exchange for the VCT/EIS Placing Shares, the Firm Placing Shares, the Offer Shares, and the Consideration Shares to be admitted to trading on AIM. Subject, inter alia, to the passing of the Resolutions at the General Meeting, it is expected that admission to AIM will become effective in respect of, and that dealings on AIM will commence in, the VCT/EIS Placing Shares and the Firm Placing Shares, on or around 15 May 2017, or such later time and/or date (being no later than 8.00 a.m. on 23 May 2017) as Cenkos Securities and the Company may agree.

It is expected that CREST accounts of the investors in the VCT/EIS Placing Shares and the Firm Placing Shares who hold their Ordinary Shares in CREST will be credited with their VCT/EIS Placing Shares and their Firm Placing Shares on 15 May 2017. In the case of investors in the VCT/EIS Placing Shares and Firm Placing Shares holding their Ordinary Shares in certificated form, it is expected that, where applicable, certificates will be dispatched within 10 business days of Admission. Pending dispatch of the share certificates or the crediting of CREST accounts, the Registrar will certify any instruments of transfer against the register.

4.2 Details of the Open Offer

The Company is proposing to raise up to approximately £0.5 million before expenses under the Open Offer. A total of 11,142,031 new Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Placing Price, payable in full on acceptance. Any Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.

Qualifying Shareholders may apply for Offer Shares under the Open Offer at the Placing Price on the following basis:

5 Offer Shares for every 34 Existing Ordinary Shares

and so in proportion for any number of Existing Ordinary Shares held on the Record Date.

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer.

Application has been made for the Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST on 27 April 2017. The Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on 11 May 2017. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Offer Shares must be paid in full on application. The latest time and date for receipt of completed Application Forms or CREST applications and payment in respect of the Open Offer is 11.00 a.m. on 11 May 2017.

The Open Offer is conditional on the VCT/EIS Placing and the Firm Placing becoming or being declared unconditional in all respects and not being terminated before Admission (as the case may be).

Accordingly, if the conditions of the Placing Agreement are not satisfied or waived (where capable of waiver), the Open Offer will not proceed and the Offer Shares will not be issued and all monies received by Capita will be returned to the applicants (at the applicants' risk and without interest) as soon as possible, but within 14 days thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

Application will be made for the Offer Shares to be admitted to trading on AIM. It is expected that dealings in the Offer Shares will commence on AIM on 15 May 2017.

Part 3 and Part 4 of the Circular contain further necessary information on the Open Offer.

4.3 Use of net proceeds

The net proceeds from the VCT/EIS Placing will be used to further develop the Company's platform and to grow the Company's sales and marketing capabilities both in the UK and USA.

The net proceeds of the Firm Placing and the Open Offer are expected to be approximately £4.47 million and it is proposed that such proceeds shall be used as follows:

4.4 Placing Agreement and the Warrants

In connection with the VCT/EIS Placing and the Firm Placing, the Company has entered into the Placing Agreement pursuant to which Cenkos has conditionally agreed to act as placing agent to the Company and to use reasonable endeavours to procure placees to acquire the VCT/EIS Placing Shares and the Firm Placing Shares at the Placing Price. The VCT/EIS Placing and the Firm Placing have not been underwritten.

The Placing Agreement contains certain warranties from the Company in favour of Cenkos in relation to, inter alia, the accuracy of the information contained in this document and certain other matters relating to the Group and its business. In addition, the Company has given certain undertakings to Cenkos and has agreed to indemnify Cenkos in relation to certain liabilities they may incur in respect of the VCT/EIS Placing and the Firm Placing.

Cenkos has the right to terminate the Placing Agreement prior to Admission, in certain circumstances including, inter alia: (i) for certain force majeure events or other events involving certain material adverse changes or prospective material adverse changes relating to the Group; or (ii) in the event of a breach of the warranties or other obligations of the Company set out in the Placing Agreement.

The Warrants are exercisable at any time from the first anniversary of Admission up to the fifth anniversary of Admission, provided that the closing mid-market price for the Company's Ordinary Shares shall be at least 8 pence per Ordinary Share.

The terms of the Warrants are subject to adjustment in certain circumstances including a share capital reorganisation of the Company.

4.5 Directors' dealings

Certain of the Directors have indicated that they intend to subscribe for, in aggregate, up to 5,111,110 new Ordinary Shares under the Open Offer, if such amount is available. A further announcement with regard to their participation in the Open Offer will be made in due course.

5. GENERAL MEETING

A notice convening the General Meeting is set out at the end of the Circular. A summary and explanation of the Resolutions to be proposed at the General Meeting is set out below. Please note that the summary and explanation is not the full text of the Resolutions and Shareholders should review the full text of the Resolutions before deciding whether or not to approve them.

The first and second Resolutions propose to grant to the Directors a general authority pursuant to section 551 of the Act to allot shares in the Company or to grant rights to subscribe for or convert any security into shares in the Company.

The third Resolution proposes to confer upon the Directors a general power under section 570 of the Act to allot equity securities on a non pre-emptive basis pursuant to the authority granted to the Directors by the first and second Resolutions. The third Resolution is a special resolution. Accordingly, for the third Resolution to be passed, not less than 75 per cent. of votes cast must be in favour.

If passed, the Resolutions will confer upon the Directors the authority to issue the New Ordinary Shares and the Warrants as well as certain additional shares as described therein. The Transaction is conditional upon the passing of the Resolutions and, accordingly, if the Resolutions are not passed, the Transaction will not complete. If the Resolutions are passed, the authority and power conferred will, to the extent not used, expire at the end of the next annual general meeting of the Company to be held in 2017.

The Directors do not, at present, intend to issue any share capital other than in connection with the Transaction and the Warrants.

6. RECOMMENDATION AND IRREVOCABLE UNDERTAKINGS

The Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do in respect of their own beneficial holdings amounting collectively to approximately 33,454,729 Ordinary Shares representing approximately 44 per cent. of the existing issued ordinary share capital of the Company.

Expected timetable of key events

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires: