Restore Regulatory News (RST)

14 Apr 2005 13:10

Mavinwood PLC14 April 2005 Mavinwood Plc ("Mavinwood" or "the Company") Proposed Acquisition of ReStore Proposed Placing and Clawback Offer of 35,850,000 New Ordinary Shares at 11p pershare on the basis of 3 New Ordinary Shares for every 2 Existing Ordinary Shares Admission to trading on AIM Notice of Extraordinary Meeting The Board of Mavinwood announces that it has conditionally agreed to acquireReStore Group Holdings Limited ("ReStore"), a document storage and recordmanagement company. ReStore presently manages the archiving, storage, retrievaland other document management services for a wide range of clients, includingsubstantial law firms, banks, insurers and food manufacturing, engineering,property and construction companies. The acquisition constitutes a reversetakeover under the AIM Rules and, as such, requires the approval ofShareholders, to be sought at the EGM of the Company on 10 May 2005.The Company also proposes to raise £3,943,500 (before expenses) by means of aPlacing and Clawback Offer of 35,850,000 New Ordinary Shares at the 11p pershare ("the Issue Price"). Geraldton Services Inc. ("Geraldton"), of which LordAshcroft KCMG is the ultimate beneficial owner, has agreed to subscribe for theNew Ordinary Shares, subject to clawback to satisfy valid applications fromQualifying Shareholders under the Clawback Offer, which is conditional, interalia, on the passing of the resolutions at the EGM ("Resolutions") and onadmission of the Company to AIM ("Admission"). Background Mavinwood was admitted to trading on AIM on 5 November 2004 as a companyestablished for the purpose of acquiring, or making investments in, companies orbusinesses involved primarily in the support services sector, and which areconsidered by the Directors to have the potential to create substantialshareholder value. The acquisition of ReStore will be the first such acquisitionmade by Mavinwood.The Directors have identified ReStore as a suitable acquisition target, whichthey believe offers potential for growth and improved profitability. As suchthey believe that ReStore will provide a solid platform from which to grow theMavinwood Group to achieve their aim of becoming a market-leading UK supportservices group. Information on ReStore ReStore was established in 1995 by its two founders, John Minton and RichardHunt. It fulfils an outsourcing role in the management of its clients' documentsthrough computer-aided archiving, storage and retrieval of their businessrecords. ReStore offers a range of services to its clients, which includes: - Archive box storage with rapid and efficient retrieval;- Computer media and film storage;- Secure door-to-door deliveries, whether same day, overnight or next day;- File and box bar coding, enabling retrieval of files as well as boxes;- On-line access to view or request files and boxes;- Secure destruction service;- Storage of wills, plans, drawings, medical records, insurance certificates in secure and/or private areas;- Turnkey/consultancy solutions;- Off-site storage for computer tapes and magnetic media as part of clients' back up/disaster recovery procedures;- Document fax back service;- Client reading/research rooms;- Record retention programmes to conform with legal or regulatory compliance requirements; and- Document scanning to optical disks. The audited financial results of ReStore for the three years ended 31 December2002, 2003 and 2004 are summarised below: 2004 2003 2002 £'000 £'000 £'000Turnover 3,188 2,783 2,181Operating Profit 723 571 177Profit before tax 713 559 139 Principal terms of the Acquisition The Company has conditionally agreed to purchase the entire issued share capitalof ReStore from the vendors for an initial consideration of approximately £6million. Additional consideration of up to £5 million may also be payable,depending on the performance of ReStore during the year ending 31 March 2006. Inthis respect, £8 of additional consideration will be payable in respect of each£1 of EBIT in excess of £730,000 achieved by ReStore. The initial consideration will be satisfied entirely in cash and the additionalconsideration will be satisfied as to 50 per cent. in cash and 50 per cent. bythe issue of new Ordinary Shares, calculated by reference to the issue price of11p per share. The Acquisition Agreement is conditional, inter alia, on the passing of theResolutions at the EGM and on Admission. Directors' and Certain Shareholders' Intentions Kevin Mahoney and Michael Vincent intend to subscribe for 2,250,000 and50,000 New Ordinary Shares respectively pursuant to their entitlements under theClawback Offer. They also intend to vote in favour of the Resolutions to beproposed at the EGM in respect of their existing beneficial holdings, whichamount to 2,500,000 Ordinary Shares representing approximately 10.46 per cent.of the voting rights currently exercisable at a general meeting of the Company. Geraldton, which currently has a beneficial interest in 29.3 per cent. of theissued share capital of the Company, has agreed to subscribe for the NewOrdinary Shares, subject to clawback to satisfy valid applications fromQualifying Shareholders under the Clawback Offer. Qualifying Shareholders areinvited to apply for New Ordinary Shares at the Issue Price on the basis of: 3 New Ordinary Shares for every 2 Existing Ordinary Shares registered in their name on the Record Date and so on in proportion for anyother number of Existing Ordinary Shares so registered. Qualifying Shareholdersmay apply for their pro rata entitlement or less than their pro rataentitlement, by inserting the number of New Ordinary Shares being applied for inthe relevant box on the Application Form. On Completion and Admission, Geraldton will hold up to 42,850,000 OrdinaryShares in aggregate, representing approximately 71.72 per cent. of the EnlargedIssued Share Capital. In those circumstances Geraldton may be able to exert asignificant degree of control over the future conduct of the Company. The Panel has agreed, subject to Resolution 2 being passed on a poll at the EGM,to waive the requirement for Geraldton to make a general offer subject to theapproval of the Shareholders. Accordingly Shareholders approval will be soughtto approve the Waiver. Geraldton shall, as a non-independent shareholder, beexcluded from voting on this Resolution at the EGM. The Acquisition isconditional on the Waiver being approved. Extraordinary General Meeting The Placing and the Open Offer are conditional, inter alia, on the approval ofShareholders which is to be sought at an EGM convened for 11.00 a.m. on 10 May2005. At this meeting ordinary resolutions will be proposed to: 1. approve the Acquisition; 2. approve the waiver by the Panel on Takeovers and Mergers of the obligation that would otherwise fall on Geraldton to make a general offer pursuant to Rule 9 of the City Code on Takeovers and Mergers; 3. authorise the Directors pursuant to section 80 of the Companies Act 1985 (as amended) to allot up to 85,000,000 ordinary shares and a special resolution will be proposed to disapply statutory pre-emptionrights of Shareholders in accordance with section 95 of the Companies Act 1985in relation to the New Ordinary Shares to be issued in connection with thePlacing and Clawback Offer, the issue of Ordinary Shares in connection withrights issues and other pre-emptive issues, the grant of LTIP awards to PhilipReid and otherwise in relation to the issue of up to 12,000,000 Ordinary Shares. Commenting on the proposed acquisition, Chief Executive Kevin Mahoney said: "We said at the time of listing on AIM in November 2004 that our strategy was toacquire and consolidate a range of support services businesses in the UK. Sincethen we have refined our strategy and identified the document storage sector asone of our key target business areas for acquisitions. We are delighted to havereached agreement to acquire ReStore, a quality company with a strong customerbase and excellent growth prospects." EXPECTED TIMETABLE OF PRINCIPAL EVENTS Record Date for the Open Offer 12 April 2005 Prospectus published 14 April 2005 Latest time and date for splitting Application Forms to satisfybona fide market claims under the Open Offer 3.00 p.m. 6 May 2005 Latest time and date for receipt of Form of Proxy 11.00 a.m. 8 May 2005 Latest time and date for receipt of completed ApplicationForms and payment in full under the Open Offer 3.00 p.m. on 9 May 2005 EGM 11.00 a.m. on 10 May 2005 Admission effective and dealings commence in the NewOrdinary Shares on AIM and (where applicable) CRESTstock accounts expected to be credited 8.00 a.m. on 11 May 2005 Despatch of definitive share certificates forNew Ordinary Shares no later than 17 May 2005 Further details of the proposed acquisition and Placing and Clawback Offer arecontained in the admission document that is today being sent to all shareholdersand will be available for one month from the offices of Seymour Pierce,Bucklersbury House, 3 Queen Victoria Street, London EC4N 8EL. Contacts: Kevin Mahoney, Chief Executive 020 7661 9650 Michael Vincent, Finance Director 020 7661 9651 John Coles, Weber Shandwick 020 7067 0749Louise Carpenter, Seymour Pierce Limited: 020 7107 8000 This information is provided by RNS The company news service from the London Stock Exchange