Restore Regulatory News (RST)

26 March 2018

Restore plc

Acquisition of TNT Business Solutions and

Placing of new Ordinary Shares to raise up to £51.5 million

Restore plc ("Restore" or the "Company"), the UK office services provider, today announces that it has entered into an agreement to acquire TNT Business Solutions ("TNT BS"), the records management business of TNT UK Limited, for a total consideration of £88 million, on a cash and debt free basis (the "Acquisition"). Completion is scheduled for 1 May 2018.

The Company also announces a placing, conditional on the completion of the Acquisition, with institutional investors to raise up to £51.5 million before expenses (the "Placing") through the issue of up to 10,100,000 new ordinary shares of 5 pence each (the "Placing Shares") at 510 pence (the "Placing Price") per Placing Share. The Placing was significantly oversubscribed with demand from new and existing institutional shareholders.

The Acquisition will be financed partly from the funds raised by the Placing and partly through new debt facilities with Barclays, Royal Bank of Scotland, Lloyds Bank and Bank of Ireland. These new facilities comprise a £160 million Revolving Credit Facility, with an additional £30 million accordion facility.

Background to and reasons for the Acquisition

TNT BS operates from five sites in the Midlands and the outskirts of London, including two freehold sites at Swadlincote, Derbyshire and Thurrock, Essex. These sites are operating at close to full capacity utilisation overall. TNT BS currently employs over 250 staff, who will transfer to Restore upon completion of the Acquisition.

The Acquisition will further strengthen the Company's position in UK records management, particularly with public sector customers who represent the majority of TNT BS's revenues. It is expected that there will be operational and property synergies deriving from the Acquisition, as well as cross-selling opportunities. Key management is expected to remain with the business, and the Acquisition is expected to be earnings enhancing.

About TNT BS

TNT BS is a trading subdivision of TNT UK Limited whose ultimate owner is FedEx Corporation (NYSE: FDX) of Memphis, Tennessee. TNT BS primarily provides records management services and also has a presence in scanning. The Acquisition is an asset purchase and accordingly the financial information set out below has been extracted from the unaudited management information of TNT UK Limited.

For the 12 months to 31 December 2017, TNT BS recorded EBIT of £7.7 million (2016: £9.3 million) on revenues of £23.2 million (2016: £26.7 million). The book value of the assets being acquired, including the two freehold sites, was £23.0 million at 30 November 2017.

The Placing

The Company proposes to raise approximately £51.5 million gross proceeds (approximately £50 million net of expenses) from the issue of the Placing Shares at the Placing Price through Cenkos Securities plc ("Cenkos") pursuant to a conditional agreement dated 26 March 2018 (the "Placing Agreement"). The net proceeds of the Placing will be used to part fund the Acquisition.

The issue of the Placing Shares is not subject to shareholder approval of related resolutions, and the Placing is not underwritten. The issue and admission to trading on AIM of all Placing Shares ("Admission") is conditional on completion of the Acquisition occurring immediately upon Admission. The Placing Agreement contains certain warranties and indemnities from the Company in favour of Cenkos and is conditional, inter alia, upon:

(a) 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

(b) the asset purchase agreement to be entered into between the Company and TNT UK Limited ("TNT") in connection with the purchase by the Company of the business and assets of TNT BS not having lapsed or been terminated, and no material breach (in the good faith opinion of Cenkos) having occurred; and

(c) Admission becoming effective not later than 8.00 a.m. on 1 June 2018.

The Placing Agreement is conditional on the completion of the Acquisition. It 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 Company in the context of the Placing or Admission.

The Placing is conditional on, amongst other things, Admission.

Martin Towers, Chairman, also intends to subscribe for 10,000 New Ordinary Shares in the Placing. A further announcement will be made in due course following his acquisition of Placing Shares.

New Debt Facilities

The Company has put in place new debt facilities with Barclays, Royal Bank of Scotland, Lloyds Bank and Bank of Ireland, comprising a £160 million Revolving Credit Facility with an additional £30 million accordion facility.

Total Voting Rights

Application will be made for the Placing Shares to be admitted to trading on AIM, and it is expected that Admission will occur at 8.00 a.m. on or around 1 May 2018. Following admission of the Placing Shares, the Company's issued ordinary share capital will comprise 123,081,086 ordinary shares, of which none are held in treasury. Therefore, the total number of ordinary shares with voting rights in Restore following Admission will be 123,081,086.

The above figure of 123,081,086 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Charles Skinner, Chief Executive of Restore plc, said:

"TNT Business Solutions' records management business is strong operationally with excellent sites and facilities from which it services many major UK public sector institutions and other customers. We have been tracking this opportunity for some time and we are excited by the additional potential it brings to our business. We are also confident of realising synergies from this transaction that will drive increased returns for Restore's shareholders."

For further information please contact:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.