Restore Regulatory News (RST)

4 November 2015

Restore plc

Acquisition of Wincanton Records Management and Placing of new Ordinary Shares to raise£34 million

Restore plc ("Restore" or the "Company"), the UK office services provider, today announces that it has agreed to acquire the records management business of Wincanton plc, Wincanton Records Management ("Wincanton Records Management" or "WRM"), for an enterprise value of £60 million, on a cash and debt free basis (the "Acquisition"). The consideration will be approximately £55.7 million, which is after deductions for retained working capital of £2.4 million and certain tax costs of £1.9 million incurred by Wincanton plc. The Acquisition will be financed from funds raised by a placing with certain institutional investors and partly through new debt facilities of £80 million with Royal Bank of Scotland and Barclays.

The Company also announces a firm placing with institutional investors to raise approximately £34 million before expenses (the "Placing") through the issue of 13,076,924 new ordinary shares of 5 pence each ("New Ordinary Shares") at 260 pence per share. The Placing was significantly oversubscribed with demand from new and existing institutional shareholders.

Background to and reasons for the Acquisition

Wincanton Records Management is one of the largest records management businesses in the UK as well as having a significant presence in the Republic of Ireland records management market. It operates from two major sites in London and Dublin as well as having operations in Bristol, Telford and Motherwell. Collectively, the business currently employs 167 employees, who will transfer to Restore upon completion of the Acquisition.

In line with Restore's stated strategy of consolidating the UK records management market, the Acquisition will strengthen the Company's market position in UK records management and create a significant presence in the Republic of Ireland's records management market. The Company estimates that the existing premises of WRM have an occupancy level of 71% providing opportunity for future growth. It is also expected that there will be significant synergy benefits through property and operational savings, particularly in the UK.

The Board believes the Acquisition will:

· extend Restore's position as the second largest records management business in the UK;

· create a presence for Restore in the Republic of Ireland;

· enable the combined businesses to increase their overall occupancy rate;

· materially increase the scale and customer base of the enlarged Group;

· realise significant synergies through the integration of two major records management businesses;

The Acquisition is expected to be earnings enhancing in its first full year of ownership.

About Wincanton Records Management

Wincanton Records Management is a trading subdivision of Wincanton plc and provides document management, scanning and shredding services. Two companies were incorporated for the purpose of the Acquisition which now hold the UK and Irish assets of Wincanton Records Management. Historically these companies did not exist as a separate operating group for the purpose of financial reporting within Wincanton plc. Accordingly, the financial information set out below has been extracted from the unaudited management information of Wincanton plc.

For the 12 months to 31 March 2015, Wincanton Records Management recorded EBITDA before central support charges of £6.8m (2014: £6.8m) on revenues of £22.4m (2014: £21.1m) and EBIT of £3.5m after central support charges (before central charges EBIT was £4.9m). The fixed assets of Wincanton Records Management at 31 August 2015 were £16.7m and the net assets being acquired were estimated to be £16.8m.

The Placing and Placing Agreement

The Company proposes to raise approximately £34 million gross (approximately £33 million net of expenses) through the issue of the Placing Shares at the Issue Price through Cenkos Securities plc. The Placing is not underwritten. The Placing Agreement contains certain warranties and indemnities from the Company in favour of Cenkos Securities and is conditional, inter alia, upon:

(a) Shareholder approval of the resolutions at the General Meeting;

(b) the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission; and

(c) Admission becoming effective not later than 8.00 a.m. on 8 December 2015 or such later time and/or date as the Company and Cenkos Securities may agree, being not later than 31 December 2015.

The Placing Agreement contains customary warranties and an indemnity from the Company in favour of Cenkos together with provisions which enable Cenkos to terminate the Placing Agreement in certain circumstances prior to Admission (as applicable), including where any warranties are found to be untrue, inaccurate or misleading in any material respect or in the event of a material adverse change in the financial position or prospects of the Group in the context of the Placing or Admission.

Application will be made for the New Ordinary Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will occur at 8:00am on 8 December 2015.

The Placing is conditional on, amongst other things, the agreement providing for the Acquisition becoming unconditional save in respect of conditions relating to the Placing, shareholder approval and admission of the Placing Shares to trading on AIM.

Following Admission, the total number of voting rights of the Company's ordinary shares will be 95,919,021.

Current trading

Restore announced its half year results for the six month period ended 30 June 2015 on 15 September 2015. Since this date, Restore has continued to trade in line with expectations.

General Meeting

Shareholders will shortly be sent a circular regarding the Placing and Acquisition and a notice convening the General Meeting to be held at 66 Grosvenor Street, London W1K 3JL, on 7 December 2015 at which the Resolutions will be proposed as ordinary or special resolutions. A copy of the Circular will be available on the Company's website at www.restoreplc.com.

Related Party Transaction

Hargreave Hale Limited and Blackrock Investment Management are considered Substantial Shareholders under the AIM Rules and are subscribing for 1,867,000 and 1,282,000 respectively in the Placing. Their Placing participation constitutes related party transactions under Rule 13 of the AIM Rules. The Directors consider that, having consulted with Cenkos, the terms of their participation in the Placing are fair and reasonable insofar as Shareholders are concerned.

Recommendation

The Board believe the Acquisition and the Placing to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommend Shareholders to vote in favour of the Resolutions as they intend so to do in respect of their beneficial shareholdings amounting to 893,968 Existing Ordinary Shares.

Charles Skinner, Chief Executive of Restore plc, said:

"The acquisition of Wincanton Records Management is a significant next step in our stated strategy of continuing to consolidate the UK records management market. We have been tracking this opportunity for some time and we are excited by the potential to combine two businesses of scale to materially expand our platform for growth. We have consistently achieved substantial post-acquisition cost savings and we are confident of realising significant synergies from this transaction that will drive increased returns for Restore's shareholders."

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